Higgins groupthink breaking bad

The Boston Globe is reporting on a dismal future indeed for the state's fiscal capacity. Years of a contracting budget scenario are projected. During times like this communities must scale back ambitious plans that don't contribute to the bottom line. Northampton's proposed new police station is a prime example. If we don't have the funds, we should not build it and take on new debt.

With that in mind I watched the recent public forum Mayor Mary Clare Higgins held on the pending Proposition 2 1/2 override. People on both sides spoke, some rather demandingly, in favor of or in opposition to permanently raising local property taxes beyond what the current law permits. The spectacle left me nonplussed more or less as politicians across the board are proposing many varieties of new taxes and fees, from gasoline to candy to sales to meals to hotels to income taxes to car inspection fees. Ironically though people argue about the importance of the downtown area to all of Northampton, the backbone of the city's local tax revenues are ordinary residential property taxes which comprise about 80% of local tax receipts.

Basic economic theory holds that taxes impair commerce. See deadweight loss for example. Increased taxes generally result in blocked transactions as people spend less and the government takes more. Though I don't favor an unbridled free market system, there is an appropriate time and place for taxes, and the proposed override isn't one of them.

In fact a goal for communities is to induce people who own property to invest in that property through building improvements for instance. These improvements build capital and fuel the economy through employment in the building trades. Thus the idea should be to reduce property taxes rather than increase them which penalizes the desired behavior.

As an alternative how about local representatives of the people take up some new taxes or fees to account for the negative impacts created by certain behaviors?

Here are just a few examples. For one, let's start charging for parking at the high school which would induce more teenagers to take the bus to school instead of wheeling in with mom-and-dad's car. (My child is kicking me under the table right now!)

How about increasing the fees for dumping trash in the city and doing away with the volume discounting offered to major trash haulers? The city should be phasing out of the trash business and seeking other alternatives for our waste management.

The city could increase the inspection fees for residential development which generally harms a city's bottom line. You'll see in Table 1 below that the number of single family parcels has grown by 169 during the past nine years while the average tax burden has increased 51.9% over the same time period for that class of housing.

Why don't we look at inclusionary zoning which would require developers to include a certain percentage of affordable housing in their plans which would reduce the public's financial burden in this area with regards to construction/acquisition costs.

How about removing the full health insurance option for part-time elected members of the school committee, city council and Smith Vocational board of trustees? This might save a few dollars and some insurance claims.

I'm sure there are many other suggestions yet to be heard.

As I've said before, the mayor and the council in my view have avoided making difficult decisions in the run-up to this current fiscal environment. Up until the police station, the council has approved every funding and budget request as put forth by Higgins, bar none. There have been no checks or balances or fiscal discipline exhibited by our elected officials when it comes to what we would like as opposed to what we need.

The mayor said spend free cash to keep us afloat, and the council complied with nary a whimper increasing the city's budget by 4.7% in 2007. This played well to the special interests that help keep local politicians in office, but not for the betterment of our community overall.

Moreover, I'm still perplexed about the $55 thousand settlement the city paid to an abutter of the proposed Hilton Garden Inn adjacent to Pulaski Park. Without the benefit of an economic marketability study, the city sold the parcel for one dollar and then paid an abutter thousands of dollars in damages.

To me the override is not just about the schools and public safety/works as the mayor and the YES and NEAT people are framing it. It is about an administration that pushes and pulls the levers of government to advance sometimes questionable policy decisions, and then blames everyone else for our fiscal problems, from the federal and state governments to the teachers' unions. Please, if ever there was an example of groupthink breaking bad, this is it.

The evidence is clear. According to the Mass. Dept. of Revenue the average single family tax bill in Northampton has increased from $2,314 in 2000 to $3,514 in 2009. That's about a 51.9% increase in nine years, or an average of about 5.8% per year. Northampton's residential property taxpayers have contributed an increasingly unsustainable share of their personal finances toward the city's fiscal burden which has allowed decision makers to act with almost no spending restraint. The time to change that ideology may soon come before us in the form of an override vote. I encourage voters to think twice before voting to perpetuate the status quo.

Table 1. Northampton Single Family Tax Bills 2000-2009