Last year we criticized the Governor's proposal for resort casino gambling. In contrast, this resolution commends the Governor's attempt to raise revenue for our communities by closing a corporate tax loophole.

Governor Patrick is asking the Legislature to make telephone companies pay property tax on the real estate their poles occupy. At the moment, the companies enjoy an exemption.

As the Massachusetts Budget & Policy Center explains: "Though telephone companies are classified, under Massachusetts law, as utilities, their poles and wires are tax-exempt, unlike those of other types of utilities. For example, if electric and telephone wires are carried on the same pole, the electric company pays taxes on their share of the pole's value while the telephone company's share is tax-exempt."

Closing the loophole could generate $78 million annually, which would help bridge the budget gap in many of our communities.

The resolution has another component: At present Massachusetts has a flat tax, the kind of tax millionaire Republican Steve Forbes was promoting a few years ago when he was running for President. With a flat tax everybody pays the same rate, regardless of income. So as well as supporting the "pole tax" proposal, the resolution calls for a progressive income tax to replace the flat tax.

Text of the approved resolution (drafted by Peter Vickery), as motioned by Leo Maley, follows... 

AMHERST DEMOCRATIC TOWN COMMITTEE

RESOLUTION

WHEREAS the platform of the Massachusetts Democratic Party provides that “Massachusetts Democrats condemn the tax cuts that leave cities and towns to fend for themselves with only the regressive property tax as the primary source of revenue”;

WHEREAS the Massachusetts Budget and Policy Center reports that after adjusting for inflation unrestricted state aid for cities and towns contained in the FY 2008 budget is 11.7% below the FY 2001 level; state K-12 education funding is 2.8% below the FY 2001 level of funding; and public higher education funding is 18.9% below the FY 2001 level of funding;

WHEREAS current law exempts telecommunications companies from paying property tax to cities and towns on their above-ground poles and wires, which exemption (according to the Massachusetts Association of Assessing Officers) accounts for approximately $78 million per year;

WHEREAS House Bill 3075 would close this corporate tax loophole and require telecommunications companies to pay their fair share of property tax to cities and towns just like any other for-profit corporation in the Commonwealth;

WHEREAS an analysis of the Massachusetts tax system by the Institute on Taxation and Economic Policy (ITEP) shows that while taxpayers with the lowest 20% of incomes pay 9.3% of their income in taxes, the wealthiest 1% of taxpayers pay an effective rate of only 4.6%;

WHEREAS Massachusetts has a flat income tax rate of 5.3%; and

WHEREAS a progressive income tax would be more equitable than the current flat tax:

WHEREAS Article XLIV of the Constitution of the Commonwealth of Massachusetts disallows a graduated income tax:

The Amherst Democratic Town Committee supports House Bill 3075; and

Be it further resolved that the Committee supports the revision of Article XLIV of the Massachusetts Constitution so as to permit the Legislature to establish a progressive income tax.