Municipal Officials Urge State House Leaders to Cut Broad Based Taxes and Help Cities and Towns Lower Property Taxes to Bring More Economic Competitiveness for 2024

Municipal Officials Urge State House Leaders to Cut Broad Based Taxes and Help Cities and Towns Lower Property Taxes to Bring More Economic Competitiveness for 2024

  

BOSTON, MA The Massachusetts Fiscal Alliance along with about a dozen municipal officials from across the state held a press conference today with a message to State House leaders, that more can be done in the New Year to push for the state’s economic competitiveness. The local officials were Mayor Robert Hedlund of Weymouth, Plymouth County Commissioner Jared Valanzola, Jonathan Tavares an At-Large Attleboro City Councilor, Ed Dombroski a Wakefield Town Councilor, Carlo Bacci a Town Selectman of Reading, Linda Vacon a Ward 5 City Councilor of Holyoke, Toby Burr a Selectman of Marion, Brendan Sweeney an At-Large Beverly City Councilor, and Todd Taylor a District 1 Chelsea City Councilor.

With the narrow passage of Question 1 in 2022, and the income surtax implementation this year, the legislature and Governor responded by passing a very modest tax reform. Today, local officials warned that this modest tax relief package is not meeting the need for the state’s overall lack of economic competitiveness. The local officials urged the Governor, Speaker, and Senate President to go back to the drawing board and use the New Year to advocate for broad-based tax cuts to make our state more competitive, and more municipal reimbursements with the goal of lowering property taxes.

According to the Tax Foundation, the income surtax dropped the state’s “business tax climate index” by 12 state rankings from 34th best to 4th worst (46th best). This year, in their tax relief package, the legislature also passed a marriage penalty, further penalizing high income earners, small business owners, retirees, and home sales. As a result, New Hampshire and Florida, both no-income tax states, are the top destinations for where taxpayers have decided to relocate to. The outward migration of taxpayers due to the state’s overall lack of competitiveness is having an impact on the main streets of many towns and cities. The Tax Foundation provided Massachusetts State House leaders some advice for how to counter the negative economic consequences to the income surtax which you may read by clicking here.

Also released this morning, the Tax Foundation has a new report that shows several states taking steps on January 1st to be more economically competitive, including New Hampshire, their state’s budget was enacted in June 2023 and accelerates the phaseout of the tax on interest and dividends income, which is now set to be eliminated in 2025, rather than 2027. In 2024, the rate will be 3 percent, down from 4 percent. The new Tax Foundation report may be found by clicking here.

“Weymouth needs Massachusetts to become more economically competitive. Massachusetts needs cites like Weymouth to thrive. The income surtax is proving to have a very significant negative economic impact for municipalities across the state and our leaders at the State House need to make economic competitiveness their first, second and third priorities for the new year. I hope for the sake of Massachusetts, the Governor, the Speaker, Senate President can find agreement on this,” stated Robert Hedlund, the Mayor of Weymouth.

“County government and its services are uniquely impacted by the slightest of changes to the state’s overall competitiveness. When state revenues start to fall, county government feels it. That has been a concern for me all year and will continue to be a worry into next and beyond until State House leaders get more serious about the state’s overall economic competitiveness. For northern Plymouth County, many of our constituents rely on the overall economic engine of greater Boston for their jobs and careers. For our southern half, many of our coastal and rural communities feel the consequences and these middle-class hard-working taxpayers feel like they are just barely hanging on,” stated Jared Valanzola, a Plymouth County Commissioner.

“As an Attleboro At Large City Councilor and small business real estate business owner, I hear first hand how the state’s overall lack of competitiveness is impacting home sales and small businesses in the city. The income surtax is impacting homeowners who didn’t think they were considered millionaires when they go sell their home. This year, I’ve had a lot of conversations about this new tax, and I see a lot of people moving to Florida and New Hampshire,” stated Jonathan Tavares, At Large City Councilor of Attleboro.

“Being a suburb of Boston and in the 128 corridor, economic competitiveness is a major driving force behind the good paying jobs that many of my constituents and their families rely on. While downtown Wakefield has a solid small business community, most residents rely on the economic engine of greater Boston to make their livings. The state’s overall lack of competitiveness is a concern I’m hearing increasingly more often from constituents, especially as they see costs of consumer goods and property taxes rising much faster than any wage increases. They simply can’t keep up. Despite these economic realities, my state senator was undeterred in advocating for this major income surtax last year, soon followed by his push for the marriage penalty this year. This sort of out-of-touch leadership hurts our community and, unfortunately, makes Massachusetts one of the least economically competitive states in the country. Our leaders in the Legislature must do better,” stated Ed Dombroski, a Wakefield Town Councilor. 

 “As a long time former small family retail business owner that was located on Main Street, and a municipal elected official, we see the consequences of Beacon Hill’s decisions at our business, through our customers, and as a town elected official. Our current chocolate factory is in Swampscott, and we are considering looking outside the state to move our operations. If we stay in Massachusetts and decide to sell for our retirement, then the extra tax will hurt all our life's work. Our State House leaders need to speak to more small business owners, and specifically the small business owners who make up main streets like mine, that deal with customers, to fully understand the negative consequences to last year’s ballot question. There is no doubt Massachusetts is less competitive as a result. Our State House leaders need to spend next year finding ways to cut broad taxes and eliminate other taxes all together to be economically competitive again,” stated Carlo Bacci, a Select Board member from Reading.

“Western Massachusetts often gets forgotten at the State House and even Connecticut is eating our lunch right now. For a lot of people who live west of the Quabbin, Connecticut is a very desirable place to consider. Their Governor suspended the gas tax when our State House refused to follow and more recent reports have shown that a lot of people are moving to Connecticut, and I get the feeling they are leaving western Massachusetts. Our State House leaders need to realize the state’s overall lack of competitiveness gives people a lot of options to get out if they want a better living,” stated Linda Vacon, Ward 5 City Councilor of Holyoke.

“This is my first term on the Select Board, and I am shocked by the high cost of operating a town government. We are about to start construction on a building costing $900 per square foot, because state mandates for prevailing wage and flood plain construction hike up costs. Small towns like mine are hard pressed for funds. We can’t afford to fix roads, and when the school budget gets squeezed, we’re forced to cut teachers. We depend on state money to offset state mandates. Lawmakers should have sent back the income surtax funds, because we could have used it to maintain our schools and our roads. Instead they created new programs, like free community college and free school lunches. I think everything should be free, but it isn’t. Someone has to pay, and the income surtax has a lot of people declaring they live in Florida. Fewer taxpayers paying for more free programs is not going to keep our roads paved,” stated Toby Burr, a Selectman of Marion. 

“I fear the major construction boom you see around the Boston area is mostly funded by deals that were done before the passage of the income surtax. What happens to the Boston area once these projects are done? While the state’s overall economic competitiveness dropped this year, I am really worried about what that will look like in a year or two down the road unless our State House politicians do more on broad tax cuts and competitiveness. At the moment, Massachusetts cannot compete with Florida and New Hampshire for major economic development dollars,” stated Todd Taylor a District 1 Chelsea City Councilor.

"One of the best ways that State House leaders can address the state’s overall lack of competitiveness is by sending more money back to cities and towns to support the essential services of public safety, transportation, and education that municipalities provide. This increased revenue sharing will allow cities and towns to curb future property tax increases and will make Massachusetts more economically competitive. Otherwise, without the support of State House leaders, the rising costs of providing core services at the local level will result in property tax increases that will further worsen the state's economic competitiveness. The Tax Foundation made the recommendation to address rising property taxes in order to make Massachusetts more economically competitive and its sound advice for the new year,” stated Brendan Sweeney, an At-Large Beverly City Councilor.

“There is no single greater issue facing Massachusetts than its lack of economic competitiveness. The income surtax of last year, and the marriage penalty of this year, will continue to make Massachusetts uncompetitive next year unless Governor Maura Healey, Speaker Ron Mariano and Senate President Karen Spilka make it a priority in the New Year to cut broad tax cuts. They don’t need to look far for how to do that, the Tax Foundation gave them the blueprint for which taxes to cut and local municipal officials are warning them to take action. These problems will not go away next year, it will continue to get worse,” concluded Paul D. Craney, spokesperson for Massachusetts Fiscal Alliance.

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Massachusetts Fiscal Alliance advocates for fiscal responsibility, transparency, and accountability in state government and increased economic opportunity for the people of our Commonwealth


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