On Nov. 2 the citizens of Beverly and all other Massachusetts communities will go to the polls to cast their votes. On the ballot will be Question 3 which, if a majority vote yes, would roll back the state sales tax from 6.25 percent to 3 percent.
It's clear almost everyone would like to have their taxes reduced. It's also clear that many folks are hurting financially. Thus a yes vote on Question 3 has real appeal.
I am also aware that there are inefficiencies at every level of government operations. But while I, too, believe there should be constant, steady pressure to cut the expense of government and to make it as efficient as possible, we must be careful not to take a major step backward.
The current state budget is supported by $2 billion in one-time revenues from the federal government and the state rainy-day fund. That means that $2 billion of the revenues in the current budget simply will not be there next year. A yes vote on Question 3 would further reduce state revenues by another $2.5 billion. Thus, in total, the state would have to operate with $4.5 billion less next fiscal year.
Where would that come from? Nearly all of it would have to come from job reductions and a drastic reduction in services at the state and local levels.
Local aid, which is the return to Beverly of some of the taxes we pay to the state, is the city's second largest revenue source, second only to real-estate taxes. Despite recent reductions, local aid still amounts to $12 million annually.
If Question 3 passes, our total reduction in local aid could exceed $2.5 million for FY 2012. On that basis, if we assume that each job reduced saves $50,000, that would mean a reduction of over 50 jobs. These would be firefighters, police, teachers, public services employees, etc. Here in Beverly, we would certainly have to close a fire station and reduce the number of police officers on patrol at all times. All services would be negatively impacted from snow plowing to fixing broken water pipes.
Beyond the loss in all our public services, we need to realize that similar actions would be necessary in communities across the state.
This would make it very unattractive for people or businesses to move to or remain in Massachusetts.
What would this mean to the value of your home?
I anticipate the value of all property would drop markedly, thus destroying your hard-earned equity.
If the sales tax reduction were to save you $325 per year, assuming you spend $10,000 annually subject on products subject to the tax, you might lose 10 to 100 times that in equity.
I admit this is only my opinion, but I have given this issue a lot of thought.
My advice is simple: Vote no on Question 3 and convince everyone you know to do the same thing. At the same time, continue to insist we make government better.
There are many opportunities — pension reform, better health care cost-sharing, consolidation of municipal functions, regionalization, part-time benefits for part-time work, etc.
Constant, steady pressure to reduce expenses is important; but drastic, knee-jerk reactions such as the sudden elimination of $2.5 billion in state revenue will cause many unintended and unfortunate consequences, and in the end will cost you money while impacting your safety and quality of life.
If you agree with me on this issue, urge everyone you know to vote no on Question 3.
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Bill Scanlon is mayor of Beverly and president of the Massachusetts Municipal Association.