Drugs and Taxes

As you probably know by now, the Police Department dropped warrants on 30 street-level drug dealers this week. Also, Councilor Dean Tran is advocating for a tax cut for homeowners and businesses.

First, the Tran proposal. Tran has been an advocate of returning tax money to property tax payers since the got into office. He has always been very upfront and very honest in that he sees that as a top priority, and that he'll do whatever he can to make that happen.

However, Tran said this week money shouldn't be placed in free cash or stabilization, and instead returned to taxpayers. It's not a crazy idea, but is this the time?

The municipal finance geeks say a community's stabilization fund should equal 10 percent of the annual budget. I'm no economist (of course), but that seems very high, and pretty much unattainable for most communities. Hell, Leominster isn't even at that level. Fitchburg, in the meantime, is just over 1 percent.

That stabilization figure plays into bond ratings and all that stuff, and is supposed to be around for when times get bad. Sure, times are bad now, but you get the drift.

Here's the rub: Is the stabilization fund a luxury, or a necessity, like other parts of the budget? I'd say a stabilization fund of the above-mentioned 10 percent is a luxury. I think a realistic stabilization fund of several million dollars is a necessity (imagine if the city had a good stabilization fund before now. Could the library have stayed open? Could contracts and raises be settled?).

Complicating the thinking here is the relatively small discount of $5. It's the point that counts perhaps (and if you make that argument Tran here, shouldn't it apply to Wong's pay cut proposal?), but at this point, I'm willing to pay $5 for the prospect of some fiscal stability.

As for the drug sweep, it's good news that 30 drug dealers were targeted. The better news is that Police Chief Robert DeMoura is pushing other city departments to smother the buildings they live in with any building infraction they can find.

Pride reporter Karen Mann hit Wednesday's press conference, and when she was filling me in, I muttered "He didn't just steal from the Lowell playbook, he just took a copy with him." Karen said DeMoura has admitted as much.

When I worked in Lowell, these efforts were big deals. The city manager, the chief (maybe even DeMoura, for all I remember), the Building Department, the Board of Health, the Fire Department, and some others all stomped down the street, taking notes, writing tickets when possible, and later sending out letters. I tagged along as they pointed out what was wrong and what they were going to do about it. I took some time -- a year or more -- but I'd drive those side streets later and it was obvious things improved dramatically.

DeMoura noted that change won't come overnight, that it takes time for the landlords to get the message and get their act together. But hopefully city departments make it a priority and help the PD out on this one. It would be huge for some neighborhoods if this was done the right way and got the potential impact that is there.

A Couple of Things

Getting back from vacation and still sort through the rubble, but here's a handful of things.

First, two days later, the lead story from Sunday's Globe continues to bug me. If you missed it, the story basically says that while property assessments are going down, property taxes are going up.

It's a nice showoff for computer-assisted reporting, and shows that the DOR stuffs a lot of interesting information on its website. Honestly, if I had the time, I'd dig around there more often, but too often just go to find something specific. But the problem with the Globe story is that it relates two things that don't really have anything to do with each other.

This has been discussed here before, but it bears repeating: Property values are only part of the equation when it comes to property taxes. The real focus needs to be on the tax levy.

The levy is the total amount a city or town can collect. As you may have heard, that amount can increase 2.5 percent plus new growth each year. As you may also have heard, most communities increase that full amount each year.

From there, the tax man calculates the total property value, and sets the tax rate. Then the tax rate is assessed on your property value. If you property value holds steady (as seems to be the case pretty much in some areas of Fitchburg lately), you're likely to pay more in taxes if the tax rate goes up (which, I belive, it did).

Simply, communities are taxing more under the provisions of 2 1/2, and with assessments declining, the tax rate gets bumped higher, which creates a higher tax bill. The tax levy is created without assessments in mind, and tying the two together is disingenuous. Sure, it sucks to see your property devalued while shelling out more in taxes, but the two really don't have anything to do with each other.

End of that particular rant.

*****

While the Save Fitchburg Family was away, Brian Knuuttila lawn signs sprouted up all over the place it seems like. Shockingly, this race is less than a month away. It's stealthy crept up, it seems like.

I honestly am not excited about Knuuttila's chances in this one. The Memorial Day Disaster sticks out in my mind, not just in the bizarre circumstances, but also his admittance that he's going to get horribly outspent. So there's that. I also see better visibility from Flanagan at big events. Despite all that, I wonder if Knuuttila can pull off the upset, although it will be very difficult.

You'd have to think Knuuttila is going to easily carry Gardner and the towns between there and here. He has to. Absolutely has to. You'd have to think Flanagan is going to destroy Leominster and carry the towns to east and south. That leaves Fitchburg.

Knuuttila, however, can't just win Fitchburg. He has to win by huge numbers. Maybe 3-1. Maybe more.

Consider: Flanagan's chief core community is Leominster, which is twice the size of Gardner, Knuuttila's home community. Also, the only other contest race around the area is in ... Leominster, where there's a House seat (Flanagan's) being contested. So you have to think there will be more turnout there than there will be in any other community. And you's have to think that's good news for Flanagan.

So, Knuuttila is depending on a huge win in Fitchburg, where turnout could be a problem in that there's nothing else on the ballot worth noting. I would think he'll need to make up thousands of votes in Fitchburg. I wouldn't be surprised if it's 2,000 or 3,000.

Then, consider that 8,000 came out last year for the gigantic mayoral election. Will that many people come out for a state Senate race they've been paying no attention to -- and one without a local candidate (yes, Knuuttila fans, begin outburst here)? Let's say 6,000 people come out, a fairly ambitious number. Knuuttila would need to win, 4,500-1,500. Is that even possible?

Knuuttila has shown some strength in Fitchburg, and it's not silly to think he's going to win the city. But for him to win this race he's going to have to absolutely dominate in Fitchburg. If you like him, you'd better get out and vote for him.

*****

Finally, while away, I read the RFP for North and Main has been extended. If you're a conspiracy theorist on that particular situation, you're beside yourself. I wonder what exactly is going on here (part of coming back from vacation means you can't track stuff down immediately, only wonder what's up). If you want a CVS in there tomorrow, this is not good news in that you'd have to think that bid proposal was pretty easy to write. In theory, this delay keeps the door open for some other kind of development. I don't know what the deal is, but sometimes even though there are good intentions, appearances make things look a sketchy. I think this might be one of those times where appearances look bad. Who knows, maybe in a month there will some private developer making a bid that blows everyone way. But if there's a low-ball, non-pharmacy developer who ends up winning this process, let the howling begin.

Some Late-Game Pressure

The Donnelly campaign sent out a press release late this afternoon, once again talking taxes and Lisa Wong. You can check out a story at the Fitchburg Pride website.

Seeing how you mentioned the Pride, this is a good time for a little promo of this week's paper.

There's a "20 questions" feature highlighting both candidates, and it's pretty interesting. One favors Charles Barkley, the other Pearl S. Buck. Both are fans of FOX television series. One likes steaks on the grill, the other salmon. Check it out.

While you're there, both Donnelly and Wong give thoughts through op-ed pieces. There's a story on the first petitions at-large councilors would file if they win this fall. And a harbinger of the election results might be found at the Crocker School.

Finally, there's a sparkling "Hidden Gems" special section in the paper. It's time to leave self-promotion behind and move to self-congratualtions. The gems section is pretty stinking solid. Pick it up when you get a chance.

In the Mail

Sadly, I didn't get the mail others did today, but to get caught up on the most recent Tom Donnelly mailer, check out the latter-day Lincoln at Hello Fitchburg.

The mailer focuses on property taxes, once again tying foreclosures to high property taxes. This mailer, of course, comes two days after Donnelly said he hadn't heard of a foreclosure due to not paying taxes. Also, check out this little nugget:

"In fact, (Donnelly) voted against raising your taxes at the October 9th City Council Meeting."

That, of course, is true. What also is true: Donnelly has said the city must increase the property tax levy the full 2.5 percent. What also is true: Donnelly has voted for the full 2.5 increase every year as a city councilor.

Fair enough for Donnelly to raise this as an issue, and in fact, he's right: Lisa Wong's desire to shift the property tax balance would increase residential property taxes. And, Donnelly has been pretty strident about not wanting an override. And he's right again, the city needs to keep up the 2.5 percent increases as a matter of fiscal policy.

That said, Donnelly's stance as the "anti-tax" candidate would go down a lot easier if he had, say Dean Tran's experience of proposing an increase of less than 2.5 percent -- or if he had voted for Tran's measure. For another take on this one, check out the Unicow.

Donnelly Hammers away on Tax Rate

Tom Donnelly argued again today that the city should maintain its split tax rate in order to protect homeowners. However, Donnelly also said the city should continue to raise the tax levy the full 2.5 percent each year. Donnelly held a press conference outside a home that had been foreclosed and is being auctioned off today to hammer home his message. To read more about all of it, check out the Fitchburg Pride website.

The Dual Tax Rate

Suddenly, it's all the rage again -- or the focus of the rage -- after the City Council decided to keep things right where they are last week.

Fitchburg Follies (see link over on the right side, don't be so lazy to expect it here) got into it over the weekend, and the Sentinel argues for a flat tax rate today on the editorial page.

Personally, I'm starting to come around on one tax rate. I used to think the city should encourage residential development and built a core, vibrant residential mass to lure business. But from all accounts, businesses are getting slaughtered, and something needs to be done.

So, why doesn't something happen? Just look at the calendar, and the voter registration list.

Shifting the tax rates to closer to even means higher property taxes for homeowners, and a bit less for business owners. But, of course, homeowners are voters. Why on God's green Earth would a politician, exactly four weeks away from an election, approve a tax hike on his or her voters? It makes zero political sense.

I don't know how many of the eight councilors who voted against moving the rates closer to even actually think it's a good idea, but you have to figure one or two would if they didn't have to worry about being re-elected next month. And considering the mood for change, why give someone one more reason to vote you out, right?

There's an underlying problem here, and it's the lack of a long-term plan when it comes to getting the tax rates back to even. There's no "let's do in this five/seven/10 years." It's "let's start now, and try to do more later." And there's minimal -- at least from what I've seen -- long-term discussion. It comes up a few weeks before the rates are set, a short-sighted discussion ensues, and nothing happens. If you think that's wrong, go back and look at how the last few weeks went down, and show where that's off base. I'll wait... I thought so.

I'll give Ted DeSalvatore credit: This was something he actually had a plan about, even though he didn't really talk very much about it. After the Sept. 20 debate, we discussed it for a good 15 minutes. He wanted to create a long-term plan as mayor and get the tax rates level after five years or so. For some reason, he didn't talk about this much on the campaign trail, but he recognized the need for something to happen.

The next mayor and council can't make this a seasonal issue. As it tries (hopefully) to create some long-term financial planning, it should make -- outside of the annual setting of the tax rate -- a policy decision on whether or not balancing the tax rate (or at least closing the gap) is the thing to do or not, and then it should start doing what it needs to do over the long term to make it happen. It would help if there was some kind of relief for residential owners through a meals tax or some other kind of other revenue (not advocating for a meals tax, exactly, just mentioning it) to offset some of the increased burden, but that's what a long-term plan is for.

Shifting the tax rates to level at this point essentially means a tax increase for homeowners. City councilors are going to be instinctively pretty opposed to that every year. But based on its spot on the calendar, it's going to be a vote taken close to the election every other year. The city needs, away from the pressure of the ballot box, to make a decision on a dual tax rate, stick with it, and do the right thing in the long term.

Politicians at all levels around here like to talk about "profiles in courage" on votes. It might be the second most annoying political cliche in Massachusetts behind "all politics are local." This is a case, however, where it would actually take some courage for a councilor to do what might in fact be the right thing. Some planning and some big onions are going to be needed if the tax rates are ever balance.

A Good Idea

Check this one out, from today's Globe. What a great idea.

If you don't want to read the whole thing, the City of Boston is trying out a program that will give property tax breaks to older residents in exchange for some basic office work -- answering phones, filing, that kind of stuff.

Gov. Deval Patrick spent all of last year promising property tax relief, especially for seniors. Local officials of every shape and size have been wringing their hands over this issue for years. Here's a simple, basic, good (partial) solution to the problem.

Yes, yes, I can hear it now: We're giving away jobs, we're giving away money, will they squeeze someone out of a job, blah, blah, blah. Considering how personnel-strapped the city is, shouldn't this be a no-brainer for consideration? Can't good, honest, hard-working retired folks help out in just about area of city government -- including (especially?) the schools?

This seems like such an easy, simple way to help the city, the community, and older property owners getting smacked by property tax hikes. Will someone in City Hall please start talking about this?

I'm with Bailey

Boston Globe business writer Steve Bailey is simply one of the best in the business. He is a decent writer and just one hell of a reporter. He also is usually pretty smart and clear-thinking. I have no problem admitting I admire his greatness, and he's a lot better than me. Anyway, here's his offering today (and you really should read his "Downtown" column every Wednesday and Friday) about property taxes and the opportunity for Gov. Deval Patrick to make a "down payment" on his promise to lower property taxes. It'll never happen in a million years, maybe 2 million years, but Bailey has a point here. Enjoy.