Governor Deval L. Patrick
Municipal Partnership Day on the Hill
June 22, 2007
Lieutenant Governor Murray:
As the former Mayor of Worcester, the second largest city in Massachusetts, I am familiar with the fiscal challenges that are facing our cities and towns. We're all facing gut wrenching decisions; local leaders having to face decisions about cutting critical local services such as schools and police and fire and on the other hand, having to deal with property tax increases, which is the most regressive and unfair form of tax that there is.
Governor Patrick and I heard that on the campaign trail. And because of the unique kind of campaign that he ran over two years Governor Patrick sitting down with so many municipal officials heard that concern and felt the impact of those decisions and delivering educational services. Making sure that libraries were open, that police and fire could do the job they need to do, that our libraries could stay open. And so, it's an issue that effects cities and towns of all sizes. We have offered a plan that says we can fund vital services and stabilize the property tax. And we're going to need your help to implement that plan today. Local government, as you all know, is where the rubber meets the road.
It is the police and firefighters, who protect the lives and the homes.
It's the teachers who educate our children,
The librarians who preserve our collective culture,
And it's those public work crews that keep our streets, sidewalks and parks maintained.
It is the work of local government that most directly shapes the quality of life in our communities throughout the state.
That is why Governor Patrick and I filed the Municipal Partnership Act as one of our first major steps towards rebuilding the partnership between state and local governments.
Joseph A. Curtatone, Mayor of Somerville:
From the earliest days of historic campaign, Governor Patrick has been clear and consistent on the need to repair the badly strained relationship between the Commonwealth and its cities and towns. No one has done a better job of explaining the urgent need for a mechanism to restore fiscal stability to communities that have been starved of local aid. Communities left with no alternative but to raise revenues, using the most regressive, least efficient tax imaginable: the property tax.
Long before he became Governor, Deval Patrick also voiced strong support for investing in the basic local infrastructure and essential public services that ensure healthy local economies, a skilled work force, and a kind of quality of life that helps us retain and grow our population and our business investment. In Massachusetts, these are issues that people understand and care about. These are the issues that helped to propel Deval Patrick into the corner office. These are issues that the legislature and the business community cannot afford to ignore. Ladies and Gentlemen, the Municipal Partnership Act represents a well designed and extremely valuable tool kit that will help cities and towns address the need for fiscal stability, a more equitable revenue stream, long term investment and essential public infrastructure and services. Now in those single communities likely to use all these tools but every single element in the Governor's proposal is important to multiple cities and towns across the state. And the entire tool kit deserves, the entire tool kit, deserves the legislatures full consideration and support.
Kathleen Polanowicz, Northborough Housing Authority Deputy Moderator:
But when there's only so much money to go around, the sense of common purpose becomes lost. My community and communities across the Commonwealth are torn apart every year by budget and override discussions that put teachers and fire fighters and police officers and senior citizens against each other. That's why the Community Partnership Act is so important. Decreased reliance on property taxes will allow us to recall our common purpose as communities. The telecommunication portion of the act alone will provide ninety-one thousand dollars to my community and seventy-eight million to towns across the Commonwealth. It will allow my community to choose to take advantage of opportunities to raise revenue and decrease expenses in a way that works for us. It is time that we look beyond our own back yard. Please join me in supporting the Community Partnership Act because we are all partners and the Commonwealth in our community. A stronger community should be our common purpose.
You ready to go to work? We have work to do.
Thank you, Kathleen for a warm introduction, and especially for the testimonial about what you, a parent and homeowner are facing in your own community. And thank you, Mayor Curtatone for speaking so eloquently on behalf of all the mayors gathered here and those represented here, who wanted to be, who are not looking for a handout, but are looking for help and a willingness to partner; to move their own communities forward. The Lieutenant Governor and I thank all of you for coming to join us today: all of the mayors and other local officials, all the parents of school kids, and teachers and community activists and seniors who are here. All of the representatives and senators who have stepped away from other pressing business right now-they are in the middle of session-to show their support, and to represent the support of many others in the legislator. We welcome you to this State House. It is your House, and don't let anybody tell you it is not appropriate for you to show up and make your voices heard. [cheers and applause]
All over this Commonwealth, I hear from you and people like you about rising property taxes and the strain that they put on our cities and towns, and ultimately on you.
Almost every day I hear about another town with a budget problem, another prop two and a half override on the ballot, another cut in basic services like fire and police, and teachers and libraries.
Last year almost 90 communities put override votes on their ballots - some of your own hometowns, I'm sure. Most of those were rejected by the voters, the lowest passage rate since 1999. This year, 64 communities so far are already considering overrides and exclusions, communities as diverse as Saugus, and Uxbridge, and Rockland, and Dartmouth, and Northbridge, and Canton, and Randolph, and Middleborough and the list goes on, and on, and on.
We see these votes year after year, and the corrosive debates that they create; the kinds of things the Lieutenant Governor and Kathleen were talking about: pitting neighbors against neighbors competing for resources not adequate for any of their interests. We have got to face this and start to turn it around. [applause]
Our reliance on the property tax to meet the needs of local citizens is unusually high in Massachusetts. A typical city in the Eastern part of this country relies on property taxes for about 20% of its local budget. Boston relies, for example, on property taxes for about 50% of its local budget. Framingham: 70% for its local budget.
In the last 7 years, the average family's property tax bill has increased $1,200. Have any of you noticed that? Have you seen that in your own lives? We're all feeling the pinch.
People in Massachusetts are increasingly paying more and getting less. In communities all over the state it is becoming harder for seniors and young families to stay in their homes, for small businesses to stay and to grow, and for investors to bring their jobs here.
One of the hazards of running a grass-roots campaign and of trying to govern in a grass-roots way is that it is impossible for me to hide. I can't hide from those parents in Winchester who are raising money privately to keep teachers on the public school payroll. I can't hide from those families in Marlborough who are locked in a dispute between those with kids in district schools and those with kids in charter schools, both of them excellent, but none of them-neither-with adequate resources. I can't hide from those seniors in Holden who told me, how at 80 and 90 years old, they had to go back to work in the cafeteria of the local schools to raise the money they need to meet their property tax obligations. I can't hide from 64 override petitions. And you know what? Neither should we. Let's stop hiding. Let's face it.
Mayors and selectmen and teachers and school kids, they can't hide either. For those of you who manage municipal affairs, you have a responsibility to manage wisely, to be prudent, to be efficient, to cut waste. You understand that. And there is no substitute for that. But for those of us here on Beacon Hill, we have a responsibility, too. And our responsibility is to hear you, to help where we can, and to do so without waiting for a crisis to land on these steps. That's the kind of partnership we mean when we proposed the Municipal Partnership Act. This bill provides cities and towns with tools, tools on both the cost and the revenue sides, to relieve the pressure on property taxes and the homeowners who pay them.
That begins with savings. Managing cost is absolutely key to solving long-term, local budget problems. Today, the costs for local health insurance and pensions are growing faster than revenue in many communities. And the ability of the state significantly to increase contributions to cities and towns in the short run is very limited. You know that, and I have been candid with you about that. Even after important steps taken by our legislator, and many of those reps and senators here, to uncap the lottery or increase Chapter 70 funding, state aid is down in the last 10 years as a percentage of municipal revenue.
The Municipal Partnership Act begins by giving cites and towns cost saving options, like the ability move municipal workers into the state's Health Insurance program. Why is that important? Because from 2001 to 2005, health insurance costs for municipalities grew nearly twice as fast as for state government. We want our share our success with you. It's as simple as that.
We also want local communities to move low performing local pension funds into the higher performing State Pension System. Why? Because over the last 21 years, PRIT rate of return amongst the best in the country. The best in the country. So moving low performing local plans over to PRIT not only relieves municipalities from management costs, but gives retirees better returns. It's as simple as that.
On the revenue side, we want to trust you to make good decisions with revenue options. One of those options is to give you the opportunity to impose a modest increase-one or two pennies-for meals and lodging, to use as you see fit, but mainly to relieve the pressure we know is out there on local property taxes. You know that if Boston raises its meals tax by 2%, the maximum provided for in our proposal, we would still have a meals tax lower than New Hampshire, than Chicago, than New York, than San Francisco, than Austin, than Seattle, than Denver. We are not talking about breaking the bank. We are talking about modernizing our revenue streams. It's as simple as that.
As a final step, the MPA proposes to eliminate a 92 year-old law exempting phone companies from paying the same property taxes that the rest of us pay. That law was written in 1915 to expand telephone coverage in Massachusetts, in fact to create universal telephone coverage in Massachusetts. Now with communities everywhere all over the Commonwealth struggling to provide services, and homeowners suffering from high property taxes, I think it's time to retire that law. It's done its job.
This old law just make no sense today. It did once, it doesn't now. You and I pay property taxes. Most other businesses pay property taxes. The electric company pays property taxes on it's poles. Even the same poles, by the way, that it shares with the phone company. So understand the point: the electric company pays taxes on those same poles that the phone company does not. No one is asking the phone company to do more than to pay it fair share.
Now, the phone company claims that if they have to pay what everyone else has to pay, they will raise our rates, cut jobs, and slow down with broadband investment, which is hugely important, particularly in western Massachusetts. I just don't but it. And neither should you. Let's look at the facts.
Here are the facts. From 2003 to 2005, while your and my homeowner property taxes steadily rose, the phone company's total Massachusetts tax bill went down almost 46%. Over that same period, our average monthly phone bills went up almost 30%. There is no correlation between taxes paid and rates charged. If there were, they would have passed that savings on to us as phone company consumers; it hasn't happened.
Here are the facts. The fact is Verizon pays higher taxes in Texas, Washington, New Jersey and California and others, and guess what? In those places rates are lower than they are for us here in Massachusetts. They charge less where they pay more taxes, it turns out, than they do right here in Massachusetts. Let's focus on the facts. No other state has this kind of property tax exemption for phone companies, and yet employment has grown in all of those other states, not fallen off like they threaten here. And as for that claim about broadband investment? We've had this exemption for 92 years. We still don't have broadband investment in the western part of the Commonwealth. The fact is we are going to have to deliver on broadband access in the western part of this Commonwealth and all across the Commonwealth without waiting for the phone company.
Now look. I didn't come here to pick on Verizon-I didn't-or any other company for that matter, and neither should you. I want companies here to flourish, to make a lot of money, and to employ a lot of people. None of us here should ever take, or ever hear me as taking, the question of taxes lightly. But when you listen to some of the arguments for maintaining the status quo, when homeowners are burdened by skyrocketing property taxes other businesses have stepped up to do what they can to meet the need, and municipal leaders doing everything they can to manage prudently, then I just find it hard to hide. I just find it hard to look away. I think it's time for us to act.
The Municipal Partnership Act is not a silver bullet. But it is a way we can help. And where we can help, we should help. The time is now to begin providing real property tax relief. .
I know and I thank many of you for coming here today because you understand this issue personally; because it touches you in one way or another. That is why we need your help. The Municipal Partnership Act is before our legislature right now.
If you care about this, if you want lower property taxes, if you don't want to see more schools closed, come and tell us, show up, make your voices heard. The folks here from the legislator-senators and representatives-who stand with us represent themselves and others who want to know that you care about this. They don't want to be bullied, they don't want to be patronized, they don't want to be trivialized. These are hard issues. But they do want to know, and they need to know, that you demand these reforms now. Not later, now.
I ask you to go around, visit your representatives, visit your senators, show them the facts, tell them your stories, and above all, ask for action. Because none of us is here to hide. Thank you for being here.
David B. Cohen, Mayor of Newton:
The Municipal Partnership Act will have a tremendous impact. Most importantly, the revenue items will be the difference between Newton deciding about what important basic programs it can add, and what important basic programs it's going to have to cut. We have a problem of a deteriorating infrastructure. We have a problem of rising classroom sizes. We have a problem of having to cut back on important courses to teach our young people. We should be looking to what we can add and how we can enhance educational opportunities, not what we'll have to cut back on. The governor's advocacy of this bill would be the difference between a Newton that is looking forward in hope, or looking backward with uncertainty.
Joseph A. Curtatone:
I talked a little bit about it in my speech, it's great to have an administration, a Governor and Lieutenant Governor, that not only listen to the needs of municipalities, but hear what they're saying. And they're obviously taking action to support the needs and really create a partnership. It's refreshing.
Kevin J. Dumas:
People can get involved in various aspects of this bill. But the easiest thing for people to do is to be able to reach out and be able to say to people, whether they're State Representatives, "place the call, write a letter." It's the easiest thing that people can do for us. To be able to say, "listen, this can help all 351 municipalities in the Commonwealth. Take the time to place the phone call to your Representatives, to your Senators." For us in the city of Attleboro, we're very fortunate. We have two Representatives and two Senators who represent the city. Take the time, please, tell them how important this is to be able to help all of us not only manage our current budgets going forward in order for us to strive to be the best place to live in the Commonwealth of Massachusetts.