A few facts about Gov. Deval Patrick’s property-tax relief package, which he unveiled yesterday. (Globe coverage here and here; Herald coverage here.)
1. The plan would reportedly provide property-tax relief for as many as 100,000 Massachusetts homeowners. According to the U.S. Census Bureau, there are about 2.45 million households in Massachusetts, and 64 percent are owner-occupied. I’ll take that as a rough approximation that there are 1.57 million homeowners in Massachusetts. (I’ll concede that there may be an apples-and-oranges problem in here somewhere. Among other things, the 100,000 figure apparently includes “families and individuals,” so it’s really more than 100,000.)
Anyway — using my admittedly imperfect methodology, fewer than 7 percent of homeowners would benefit under the Patrick plan. In other words, something like 94 percent would not benefit. This from a guy who made property-tax relief a major part of his gubernatorial campaign.
The people who’d benefit are obviously those who need it the most. But Patrick would do nothing to prevent the flight of middle-class families to lower-tax states — at least not with this plan.
2. Patrick would pay for the $75 million annual cost of this proposal with business-tax increases that would eventually total some $500 million a year. Now that doesn’t add up, does it? Indeed. He would use the leftover money to pay down a budget deficit that, as Joan Vennochi has pointed out, he knew about as early as last September — back when he kept insisting he had “no plans” to raise taxes.
3. Massachusetts Taxpayers Foundation president Michael Widmer, a pro-business moderate who regularly skewered Patrick’s Republican predecessor, Mitt Romney, is outraged. “This adds significantly to the competitiveness disadvantage facing Massachusetts businesses,” Widmer told the Globe.
4. State Rep. Daniel Bosley, D-North Adams, a liberal who nearly joined Patrick’s cabinet, is dubious, telling the Globe, “I applaud the fact that he wants to standardize our corporate tax policy and have everyone pay their fair share, but you can’t entice businesses here if they don’t know what our tax policy is going to be next year. Every year we’re closing loopholes, and good, bad, or indifferent, those loopholes are part of the business balance sheet.”
5. Article 44 of the Massachusetts Constitution prohibits a graduated income tax. The most recent effort to change that went down to defeat in 1994. Could Patrick’s proposal be construed as a backdoor effort to establish a grad tax? Maybe not. The constitution does allow for exemptions and credits that benefit low- and moderate-income taxpayers. But at what point does such tinkering begin to run afoul of the flat-rate constitutional mandate?
It’s going to be interesting to watch this play out, that’s for sure.