UPDATE: I’ve heard from Barbara Anderson that this take may not be right. in Real Estate school they teach you that the actual value of the house doesn’t matter for taxes. That cities and towns just mess with the tax rate to keep the levy from rising more than the prop 2 1/2 amount it can rise. But Prop 2 1/2 also says that you can’t levy more than 2.5% of the total property value, that would be a maximum tax rate of $25/$1000 valuation. In Springfield, Chicopee, and Holyoke where many homes go for way under $100,000 that means tax bills of under $2,500. Which may not be able to run the city.
First Martha Coakley didn’t know what the gas tax was. Now, from “trickleup” at Blue Mass Group we find out that Martha Coakley doesn’t even know how the property tax system in Massachusetts works.
I tuned into the debate late so I did not hear the question, which I gather was about the economy.
Coakley set up her reply by referring to Wall Street “gambling” with our money, with the result that many lost their homes and homes lost value. Deft enough way to claim some Elizabeth Warren cred, and kudos to the team that prepped her. But then she said,
Cities and town are suffering from a lower return on their property taxes because of that.
This is fundamentally wrong and suggests that the likely next Governor of the Commonwealth is ignorant of perhaps the most basic fiscal fact of state government.*
Local property-tax revenues do not rise and fall with property values. If property values appreciate, the tax rate declines. If the values drop, the tax rate grows.
Cities and towns are where the Commonwealth delivers most of its services, including schools, sanitation, and protection from crime and fire. Each municipality in Massachusetts is responsible for executing important state programs and mandates.
It boggles my mind that any serious candidate for governor, let alone the frontrunner, could be so completely wrong about how those services are paid for.
We are not talking about fiscal minutia but about the heart muscle of Massachusetts. And she is exactly wrong.
I do not want Charlie Baker to make mincemeat of Martha Coakley, but I cannot escape the feeling that if he does it will be justified.
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