Left In Lowell

The news is reporting that MA home sales last month were up incredibly from last November, by a whopping 59% for single family homes. Of course, November 2008 was a terrible month for home sales, but that is still a very good trend. This is in addition to the encouraging, though fragile news that the state’s revenues are also on the rise, beyond previous gloomy projections.

The conservatives have attempted to label the stimulus efforts of the last year as more than fruitless - they state it has been a huge waste of taxpayer money. For instance, they constantly cite their favorite sets of numbers with regards to the Cash for Clunkers program - that each “clunker” cost far too much to be useful as a stimulus.

But here’s what I know. I know a family member of mine who works in the auto parts industry went from a dismal reduction in hours a year ago, to working full time again in the last few months. I know his company is now working on electric car technology, partly due to a bigger emphasis on green transportation and getting ourselves rid of “clunkers.” I know that my own brother proudly purchased his first home to take advantage of the first-time buyers program last summer, one more notch in the stabilization of home prices. He has a good steady job and was a perfect candidate for someone who just needed a little incentive take the plunge to being a home owner.

I also know that I myself have expanded my business as a direct result of stimulus money which is going to a program intending to help people gain the skills necessary to become more financially responsible. My business is doing so well I have less time for blogging.

I know there’s construction going on around the state and I know that the Hamilton Canal District’s Appleton artist live-work rentals had their groundbreaking and is keeping people employed for 18 months. I know that MA’s unemployment numbers are looking better every month, and I know that our schools have dodged a huge bullet when it comes to losing budget in the last year, thanks largely to the priorities of our Governor.

Maybe today’s just a glass half full day because my Christmas shopping is done and mostly wrapped and we’re headed for a three day weekend and I get to watch my excited nieces unwrap gifts, but I’m feeling that 2010 is definitely looking up, and I think that the policies enacted to deal with the Main Street worries, such as the stimulus bill and the incentive programs, did what they were supposed to do. Could they have been more efficient? Sure. For instance, we wasted a 1/3 of the stimulus in pointless tax breaks for special interests and big business. It’s well known* that you do not get back the same economic activity from tax cuts as you do direct spending.

But overall, I think we’re in better shape than we could have been, and averted a worse economic crisis. Now we need to fix what was broken, namely, the regulation of industries in which greed played and still plays such a powerful roll. We need to go back to having a firewall between lending activity and investing, among other things.

I’m not optimistic about health care reform (in that I think that the Senate bill subsides for Big Insurance are just going to become tomorrow’s boondoggle) but at least restricting the ability of insurers to deny you care for a preexisting condition or kicking you off care is a good step (we do that in MA by the way). We need fast action on carbon reduction, and though Copenhagen was a tough nut I hope people are not done fighting for it. If we can build these three pillars - economic reform, heath care reform, and environmental reform - we will have gone a long way towards transforming our country to thrive for the next 9 decades of this century.

* Known except to those who cannot let facts get in the way of their theory binkie called “trickle down.”

Lowell blogger, kad barma at Choosing a Soundtrack, post on yesterday’s Globe story, “Recycling doubles, but many left out/City program excludes apartment dwellers” speaks to a lot of us who live in condos.

I believe his comments are a direct response to those made to the Globe by Gunther Wellenstein, Lowell’s Recycling Coordinator and Solid Waste Manager.

Globe: ” Wellenstein said it would be a ‘nightmare’’ for the town to provide trash pickup to the roughly 12,000 residents now not served. ‘We’d charge each household the $125, so for every customer we take on, we’d lose money,’ he said. ‘For every thousand new customers we take on, we would lose $155,000 a year because what we collect would not fully fund the service’.”

kad baram: “first of all, taxes are taxes, and for mine to be collected just as assiduously as all my trash-pickup-served neighbors, but not extend to provide me with basic trash-hauling services like all of them enjoy, stinks.”

Residents who do have access to municipal waste removal are assessed $125 a year, the actual cost is $280. And the balance is taken from the general fund. So in effect, the rest of us help pay, through our real estate tax, a service which we are not allowed to receive.

I do not think this issue is going to go away soon. I know in my own condo association (115 townhouses) this topic is continuously discussed. As the cost of waste removal increases, we are beginning to wonder how long do we have to be punished for not owning and living in a “conventional” home?

I haven’t had as much breathing space to post on this, but kudos on Governor Patrick for getting what he wanted - transit, pension, and ethics reform, before the allotted deadline (signing the budget bill with the sales tax increase).

When he started playing hardball with the lege this year, I heard a lot of, frankly, whining from some corners of the legislature (also genuine concern from other corners). The hack wing fled to the newspapers and cried on reporters’ shoulders about how Patrick wasn’t working with them, that they do all the real hard work.

Well, previous to the hardball moves by the Governor this spring, ethics reform appeared stalled and actually weakened the State Ethics Commission, transit reform looked like it wasn’t going to have all the elements of pulling together the “quasi-independent” failure agencies back under the executive branch so they could be held accountable, and pension reform was slated to not apply to current employees.

Subsequent to the backbone Patrick showed after all that occurred, despite the screaming from the hack wing of the legislative branch, we got bills that were a lot stronger and more meaningful. Now, Patrick has signed the budget, having accomplished three important things in his agenda, which many people pronounced dead.

Sure, the bills are only a start. We need more transit funding, so we can get rid of the Big Dig debt and increase public transit services. We need further reform of the pension system and how it is funded. And ethics will always be on the agenda - we also need to enforce those laws that are already on the books. However, anyone who says Patrick is a do-nothing governor or that state government isn’t balanced because it’s all Democrats needs to reexamine the evidence.

On another note, I still also endorse a future gas tax hike. For all the reasons I’ve argued since this debate began. The first argument is that this is NOT a tax that goes up with inflation, unlike a percent tax, and therefore has lost a lot of value. The gas tax, had it been indexed to inflation since its last increase, would be about $.30 higher, from what I’m given to understand. So I am sick of people whining it’s a tax increase. It’s not. It’s catching up to what we should have been paying for a couple of decades.

Not to mention, like cigarettes, we need to get the hell off this oil addiction before it’s too late. Do you like our wet, cold spring and early summers? You might have to get used to them. This has been our weather pattern, building for years. I noticed it back the year or two before the big flood. It’s happened pretty much every year since. It’s certainly not normal, and it’s looking less and less “cyclical” as time wears on.

Tax the hell out of oil. Use the money to build transit and green, renewable energy infrastructure. Our children and grandchildren will thank us for our sacrifice.

Reported first on BMG, then the Globe.

Though such a local option tax really benefits more developed nonrural cities and towns, in Lowell, adding such an increase would have very little actual impact and do a lot of good.

I’d pay $.10-.20 more on my $10 lunch to go to our local schools and other services. Maybe we could avoid closing the Rogers.

So, House, whatayagonnado?

This op-ed by Sonia Chang-Diaz and Jamie Eldridge says it all: we are completely avoiding the real discussion about taxes in this state.

“Taxes” is often thought of as the dirtiest word in politics. Yet taxes are the way that we, as a society, pay for the things we value: education, police and firefighters, and public transportation. Each day we rely upon government services, public infrastructure, and state regulation, paid for by our taxes, in order to allow us to work and raise a family. What’s so dirty about that - and why are we so afraid to talk about it?

A fair tax system asks residents to contribute to the cost of government services based on their ability to pay - and few people would consider a tax system to be fair if the poorer you are, the greater proportion of your income you pay in taxes. But that’s exactly what more regressive taxes - such as a sales or cigarette tax - do. They ask those who can least afford it to pay more.

The crux of the matter:

There are also ways we could modify the income tax to make it even more progressive. Over the long haul, an amendment to the Constitution would allow the Commonwealth to join 34 states and the federal government in establishing a tiered, progressive tax rate system. But even this year, we could raise the personal exemption, increase the state Earned Income Tax Credit, or expand the Property Tax Circuitbreaker, so that more of the revenue we raise is coming from taxpayers with higher incomes, while lowering taxes for those near the bottom.

Even as someone in a not-so-low tax bracket these days, I heartily endorse an income tax increase, with a progressive regime to ensure those least able to pay are paying less, proportionately, of their income. And I endorse a constitutional amendment to allow true progressive taxation. The article is correct in that we are in the bottom half of states in regards to taxes paid as a percentage of personal income. We’ve gotten into that bottom half by the aggressive and short-sighted policies last few administrations and legislatures. But we got to be a strong Commonwealth, a wealthy Commonwealth, because of our prior history of investing in our citizens through education, entrepreneurship, and services to help those who need it help raise themselves up. That investment is waning, and so is our state. We’re losing population, our educational prowess is declining, and our universities becoming unaffordable and unattainable.

It takes investment in ourselves to make us strong. The loss of that is making us weaker. We need a fair and honest tax system NOW.

Via comments in a month-old post on the state of our fire department fleet, “tryin to stay anonymous” gives some context to a recent news item:

You know the DPW truck that burned yesterday? The Sun stated the fire department had trouble getting water on the fire. What the story didn’t say was that it was because the spare engine currently in service at Pine St malfunctioned for a few moments. Their regular engine has brake problems.

Not a big deal if its an ancient city truck burning outside. A very big deal if your inside someone’s burning home holding a hose with no water.

To me, this goes beyond politics and hits us right where we live, literally and figuratively. (I wouldn’t mind if someone confirmed that this is true, not that “tryin” hasn’t been a credible commenter, because he/she has.)

We live in this city, and many of us own homes, and even renters have a lot to lose (their possessions, at the least, and their lives, at the worst) if our fire fighters cannot have the response time that most people would deem essential, due to faulty equipment or the closures of fire houses.

One can hardly blame the firefighters, so who is to blame? The economy…well, certainly money is tight. But we are all to blame, for allowing politically motivated people to demonize government at every turn, to make us believe we don’t need these services, that the cuts won’t hurt - much. Well, they do, and they have, and your house, or your neighbor’s, could be the next victim. This is a problem that has been building for years, and we have cut our nose to spite our face.

This is a prime example. And of course, your medias are pretty dumb, too.

Did these people fall off the stupid train? Or is our education system just that bad?

[Via DK.]

I rarely travel the Pike, and so the debate about toll hikes and paying off the Turnpike’s Big Dig debt doesn’t really affect me. But for commuters on that road and others with tolls, it gets very expensive. Just the few times I’ve gone only three exits (and read down the card about the fees on traveling further) I cringe imagining having to do this every day, all the way in to Boston.

It may be that the Turnpike is responsible for a lot of the Big Dig debt (and we are not going to debate the Big Dig here right now) but is it fair to sack a subset of commuters with tolls hikes when the state as a whole has benefited from the infrastructure added in Boston? (Yes, even western MA benefits when our state has better infrastructure to offer businesses and citizens in its largest city.)

It finally appears there’s movement from the Governor to consider the gas tax. If there needs to be a revenue increase to pay down that debt, let it be that. For one, I’m all for gas being a little more expensive than not. Sure, it hurts us all when we’re paying $4/gallon, but a whole lot of good came out of that - US automakers woke up suddenly, that’s for sure, and though I’m certain they have the capacity to go back to sleep again and screw us, I think the political will might exist to find a permanent solution, like going to electric and hybrids via CAFE standards. The more costly gas actually is, the more likely these changes will occur.

But also, a few cents on the gallon is not going to kill even the poorest commuter. I’m sorry, but I have no sympathy. Whether gas is $1.70 or $1.80 - an increase of $1 for 10 gallons - it doesn’t break anyone’s bank. And if you have a 20+ gallon tank to fill, that was your choice when you bought your vehicle. My car gets good gas mileage (especially for a 12-year-old car) and we use public transportation, and therefore I reap the benefits of not filling my tiny tank more than maybe once a week.

And beyond that, Patrick says he’s considering the gas tax hike as a compromise to go with reforming the whole Turnpike/T/transportation system, which we all know needs to have some feathered nests upset, and that there are efficiencies to be found. Besides the fairness issue of spreading the responsibility to all commuting citizens and businesses, this is a perfect opportunity to do this, and I encourage the Governor to pursue this with the same vigor he’s pursued less viable revenue-earning changes such as casinos.

State Rep Will Brownsberger, writing at Blue Mass Group, has an excellent idea on how to give tax relief to most of us reg’lar folks while maintaining the state’s revenue stream - in essence, faking a progressive tax scheme which most other states that have income taxes employ. In MA, progressive tax structures are outlawed in the state constitution, which commands a “flat” tax. (Bold red text my emphasis.)

Some in the legislature are discussing a proposal to dramatically increase the personal exemption, so as to provide complete income tax exemption for families who make less than the eligibility thresholds for major public assistance programs — housing, heating and health care. To pay for this exemption without net revenue loss, it would be necessary to increase the tax rate. The net effect would be reductions in taxes for families up to a fairly high level, with increases for families at the highest income levels ($150,000 and up).
…
The reform concept: Families that have incomes below a livable level — as judged by the legislature and the agencies responsible for the various subsidy programs — shouldn’t be paying income tax. Yet, they do. Under current law, a family of four with an income of $50,000 — eligible for housing, heating and health subsidies — pays 5.3% on a taxable income of roughly $30,000 ($50,000 less roughly $20,000 in exemptions and deductions) or roughly $1,500 per year.

Background — tax computations: The tax rate for most income in Massachusetts is 5.3%. Income tax liability is computed based on taxable income — actual income less exemptions and deductions. For a family of four, the personal exemption would be $8,800 plus $1,000 for each child; additional deductions might total approximately $10,200 if the family were living in rental housing. So, under current law, a family of four might have a total of $21,000 in exemptions and deductions which would reduce their taxable income.
…
Possible specifics for the reform: If a married couple’s exemption were increased from $8,800 to $40,000, and dependent exemptions were increased from $1,000 to $5,000, our family of four with income of $50,000 would pay no income tax and save $1,500 per year. Based on on DOR simulation of similar proposals, to pay for this relief, the tax rate would have to go to somewhere close to 7.5%. The combined effect of the increased exemptions and the increased rate would be to reduce taxes on families up to a breakeven level of approximately $140,000. Families above that level would see an increase which would work out to approach almost 2.5% of their income for the wealthiest families. For a tax impact calculator, click here. Exemptions for a single person would be $20,000 (for a head of household, $30,000) if we wished to preserve the current proportionality of exemptions. In a scenario along these lines, the vast majority of taxpayers would see a decrease in taxes paid — only the top 15 to 20 percent would see an increase.

Please click and read that tax calculator. Even a family making $100K would see their taxes drop $1053 under this calculation. Families making $150K would see their taxes go up only about $235. And do go read Rep. Brownsberger’s full post.

I think if this is truly found to be revenue-neutral or maybe even a slight revenue gain to the state (so we can stop bleeding from cuts to essential services, local aid, and schools), this is a good alternative to changing the state constitution (a years-long process), at least in the short run. It’s not truly a progressive tax structure, but it simulates one, given the circumstances of the state. Heck, my husband and I, with no kids and with a decent family income, stand to get a substantial tax cut under this plan as Rep. Brownsberger lays it out.

Unless serious caveats are found, count me as completely on board!