Vote For Milton

On Tuesday we’ll be voting on a Governor’s race and ballot questions. Each of these votes has implications for Milton.

The 2010 mid-term election is being waged against the backdrop of an economy struggling to recover from the worst recession since the Great Depression. Anxiety, frustration and anger abound. Having been turned out of power in 2008 in the wake of economic disaster, an amnesic Republican party seeks a partial return to power touting the identical economic and fiscal philosophy that resulted in massive deficits and a lessening of proper government regulation of business.

Governor’s Race

Republican challenger Charlie Baker is running on lowering taxes. He wants to lower the income tax from 5.25% to 5%; the sales tax from 6.25% to 5%; and the corporate tax from 8.75% to 5% over four years. Much like the national Republican claims for “trickle down” economics, Baker believes this will spur business growth. He blames Governor Patrick for our unemployment rate, even implying that jobs are leaving the state because of the tax situation. He characterizes Patrick as a tax and spender who should have cut the budget rather than raise the sales tax.

Mr. Baker’s tax cuts would eliminate about $2.5 billion from state revenues. This would be added to the $3.24 billion loss in revenue that occurred when the country sank into a near depression in 2008, an amount the Massachusetts Taxpayers Foundation called, “the most severe two-year decline in tax collections in the state’s history”. Needless to say, removing $7.24 billion from a $29.4 billion state budget, a significant portion of which is non-discretionary, cannot be accomplished by vague and cynical references to waste, welfare recipients and illegal immigrants.

It is simply not possible to accommodate this level of revenue loss without significant, painful, and unprecedented cuts to programs like Chapter 70 Funding for Education and Aid to Cities and Towns (potential consequences for Milton will be discussed under Question 3 commentary). Other than the “Baker’s Dozen” list of reforms and changes, representing a small fraction of the cuts that would have to be made, Mr. Baker has carefully avoided telling us how cutting the budget by this amount can be done without severe reductions in services at the state and local level.

But is Mr. Baker right in pinning our fiscal situation on Governor Patrick? Is he a “tax and spender”? Are businesses moving out of the state? Must we sacrifice adequate funding of our schools and other town services to fund tax cuts that will miraculously save a moribund economy?

Governor Patrick took office with many plans for moving this state forward. He wanted to encourage key industries that leverage our strengths as a state; increase funding for education to improve outcomes; provide property tax relief; among many others. Less than mid-way through his term he was faced with a national economic situation worse than any Massachusetts Governor has faced since the 1930’s. In spite of this he made significant progress in key areas.

While every state was impacted by the economic situation, not every state has been recovering at the same pace. In Massachusetts the unemployment rate has declined from 9.5% in January to 8.4% in September. The latest quarterly economic report shows our state continuing to grow at twice the national rate. And contrary to Mr. Baker’s claim that Massachusetts is inhospitable to business, the most recent annual study by CNBC places Massachusetts 5th in the nation in friendliness to business against a broad range of key factors.

http://www.cnbc.com/id/37554006/

On the education front the news is very good. Massachusetts ranks at the top nationally in mathematics and reading at both the 4th and 8th grade level according to the National Assessment of Educational Progress. Perhaps even more impressive was our students’ performance on the international TIMSS test of mathematics and science against students from around the world. In the 2007 test, Massachusetts 4th graders ranked 2nd in science and tied for 3rd in mathematics. Massachusetts 8th graders tied for 1st in science and finished 6th in mathematics. Despite the recession, Governor Patrick continues to fund Chapter 70 at historically high levels.

Property tax relief has been more difficult to deliver with revenue losses from the recession. Despite this, property taxes under Patrick have increased annually at 4.1%, 3.7%, 3.3% and 3.2%. Under the previous Governor Mitt Romney they increased 6%, 6%, 5%, and 5.6%. Imagine what the Governor could have done with even an average economy. And imagine what these rates will be if Baker’s tax cuts go into effect.

So despite a terrible national economy Governor Patrick made progress toward some important goals. Far from relying on taxing and spending, the average annual increase in state spending under Patrick was 1.7%. Mitt Romney’s budgets increased 6.6% annually and when Charlie Baker was in charge of the state budget in the 1990’s they increased by 5% annually. Patrick has managed a tough fiscal climate with budget cuts (approximately $1.4 billion according to the Massachusetts Tax Foundation) judicious use of the rainy day fund, Federal stimulus money, and an increase in the sales tax.

We have a stark choice on Tuesday. We can continue the progress we’ve seen in Governor Patrick’s first term and maintain as many core services as possible while the state economy continues to improve, or we can turn to Charlie Baker’s drastic remedy for a misdiagnosed economic situation, putting money in your pocket that you’ll then need to spend at the local level in increased property taxes to avoid devastation of services. One choice is progress, the other a cynical shell game to get elected.

Questions 3 and 1

Carla Howell, Massachusetts best known Libertarian is back trying to throw a monkey wrench into the government budget and state services. Question 3 proposes rolling back the sales tax, not from 6.25% to 5% where it was, but to 3%. This proposal is so extreme that even Charlie Baker is opposed to it. The revenue loss if this measure passes would be $2.5 billion, similar to the cost of Mr. Baker’s entire package of tax cuts. Proponents of this measure continue to maintain that we are a particularly tax burdened state, justifying draconian cuts in taxes. Of course Carla Howell also maintains we can cut this amount from the budget with no loss of core services. At one time Massachusetts deserved the title of “Taxachusetts”, but that was long ago. In 1978 our total state tax burden was 11.5% of income and we ranked 4th nationally. The latest figures from 2008 put our tax burden at 9.5% of income, ranking us 23rd in the country.

http://www.taxfoundation.org/taxdata/show/460.html

The Massachusetts Taxpayers Foundation, in a report called “Question 3, Heading Over the Cliff” has detailed the disaster this ballot question would cause, and demonstrates perhaps why businesses in Massachusetts oppose this measure. You can read the report here:

http://www.masstaxpayers.org/sites/masstaxpayers.org/files/MTF%20Question%203%20Report.pdf

Simulations of the size of needed cuts to Chapter 70 Aid and General Aid to Cities and Towns have been run. Milton would stand to lose just under $1 million. You can see the simulation data by clicking on the link at the bottom of this page.

http://www.mma.org/local-aid-and-finance/4976-sales-tax-ballot-question-threatens-local-aid

Question 1 would eliminate the sales tax on alcohol which was included in the bill increasing the sales tax. Funds from this component of the sales tax largely go to funding substance abuse treatment programs around the state. Massachusetts was one of only 6 states in the country that didn’t impose a sales tax on alcohol. Proponents of repeal, funded by $2 million from the liquor industry, complain that this represents double taxation on alcohol and is driving business to New Hampshire. But all of the states taxing alcohol also have an excise tax at the wholesale level, so Massachusetts is hardly doing anything unusual. As for alcohol sales, they are up in Massachusetts since the tax was imposed.

It’s over but for the voting folks. Those who show up, win. I urge you to vote for a second term for Governor Patrick and reject Questions 1 and 3. Otherwise, there will be severe repercussions on our own struggle with fiscal affairs right here in Milton.

Letter to Representative Timilty on Ulin Rink

Rep.WalterTimilty@hou.state.ma.us

Dear Representative Timilty,

I heard with dismay your comments at the Milton Board of Selectmen Meeting on the subject of the Ulin Rink. You stated, and Representative Scaccia agreed, that you would not support Senator Joyce’s 25 year lease because it could lead to “privatization” of the rink.
It’s very important to use words carefully, especially when they might mislead people about issues. No matter who leases or obtains a permit to Ulin rink, and no matter who operates the rink (municipality, non-profit, or private operator) Ulin Rink will remain the property of the Commonwealth and oversight of its operations will remain under the purview of DCR.

This oversight is extensive. All state owned rinks must adhere to uniform guidelines. These include:

• Minimal requirements for public skating
• Mandatory ice scheduling meetings
• Restrictions on fee increases
• Minimum maintenance and capital expenditure requirements
• Regular Inspections by DCR
• Insurance and performance bond requirements

Your use of the term privatization is not only wrong technically, it also fails to expose any negative consequences from private companies actually operating rinks. In practice, their ice rental rates are less than municipally operated rinks or the one rink operated by a non-profit. Almost 20 state owned rinks are now operated by private companies. If there were any problems with this arrangement, surely you or someone else would be citing these problems by now. Instead, we hear the repetition of claims, or the use of buzzwords like “privatization” even though no evidence supports them, and much evidence refutes them. If you have specific evidence to the contrary, you owe it to your constituents to present it.

Both you and Senator Joyce have introduced bills that could lead to the Town of Milton leasing Ulin Rink. Provided the Town wishes to get the lease, there is no difference between the bills except that your bill provides for a 20 year lease while Senator Joyce’s is for a 25 year lease. Since the town has indicated it wants to execute a long term lease, what possible reason can you have for not supporting the Joyce bill if it becomes the alternative with the best chance of passage? As you must know, Selectman Shields characterization of the Joyce bill as one that doesn’t guarantee Milton preference is wrong.

Your failure to support a Joyce alternative bill could lead to the worst outcome for users of the rink as well as state taxpayers, who now see a $330,000 drain on rink operations. Each of the Selectmen finds a 5 year permit an inferior option for the town. And yet if you fail to support Senator Joyce’s bill and neither bill passes, the default outcome is the DCR’s 5 year permit.
It’s difficult to understand your opposition since it doesn’t seem to be supported by anything. It leads people to wonder if you are simply unwilling to see Senator Joyce get some credit for the many years he has spent on this issue. Failure to resolve this years ago has cost the Massachusetts taxpayers a great deal of money, and users (and potential users) of the Ulin rink have been served less well than residents of those communities who have embraced non-state operational status.

I urge you to reconsider your position and support whichever of the two bills will pass to allow Milton to proceed under a long term lease.

Sincerely,

Philip Mathews

P.S. This letter will be posted to my blog.

www.miltonview.blogspot.com

Ulin Rink Fiasco

On January 11th, the Division of Conservation and Recreation issued an RFP for 5 five state-owned skating rinks, including Milton’s Ulin rink, currently operated by the DCR. This RFP was but the latest step in an almost 10 year process to remove the state from the management of ice rinks. The operation of these rinks, together with the high capital costs associated with them, were the impetus. To-date, 29 of the 43 state owned rinks have gone through the same or a similar process with great success. The economic crisis of the last few years creates a greater sense of urgency as budget cuts have seriously impacted the DCR. The Ulin Rink in Milton, for example, loses $334,000 per year, and no money is being banked for capital maintenance.
I suspect that the DCR anticipated a relatively smooth process given their many rounds of permitting and leasing successes. The specifics of the RFP had been refined over many years. The use of private operators (19 of 29 rinks) has been shown to be a huge win/win for the state, communities and the skating public (see link to Pioneer Institute Study). The towns in the latest round of RFP’s were given the same right of first refusal that all other communities were given. Guarantees of rate restraint and preservation of current allocations of ice time were made. There is a wealth of experience and data to relatively quickly assess the options and choose a prudent course of action.
And yet at the latest discussion of Ulin Rink by the Board of Selectman we hear Selectmen Shields and Sweeney blaming the state for the predicament the town now finds itself in -- facing a deadline and not really knowing what it will do. How did we get to this point? Why hasn’t the Board talked to private rink operators as an option? Why do the Ulin rink discussions cover the same ground over and over again, beginning to resemble a send up of the movie Ground Hog Day? Why, after 6 months, must we depend on Senator Brian Joyce to get us a fifth deadline extension to June 30th?
The answer is simple. From the very beginning Selectman John Shields has stated his opposition to having a private operator involved with the town. Since his arrival on the Board, Selectman Sweeney has echoed this same theme. They claim that under a private operator ice time will not be guaranteed for Milton Youth Hockey and other non-profits. They claim that private operators will jack up prices making it unaffordable. Without the private operator option, the town is left with either operating the rink ourselves, a risk the Selectmen understandably do not want to take, or finding a non-profit to take it over. And it is this option, and this option alone, that has been pursued, largely by a great commitment of time by volunteers. Meanwhile, the Board of Selectman has failed to fully explore the option of a private operator.
Had the private operator route been examined, the Board would have discovered that fears of lost ice time and unreasonably high prices are without foundation. After all, there is a lengthy record involving numerous communities. Readily available public information exists demonstrating the high degree of success of private operators in expanding access, maintaining reasonable rates, ensuring ice time, securing financial stability, and making ongoing investments in maintenance and capital improvements.
In 2006 the Pioneer Institute published a study on the success of competitive contracting of state owned ice rinks. As part of that study they included a survey of ice rink rental fees for 96 ice rinks conducted by Facilities Management Corp. a private rink operator. Here are the results.

Operator------------------------------------------------------Cost Per Hour

State-owned rinks under long-term lease,-pvt. operator-------------$160
State-owned rinks under long-term lease,-munic. operator-----------$172
Municipal Rinks----------------------------------------------------$189
Non-Profit Rinks---------------------------------------------------$199
College Rinks------------------------------------------------------$204
School Rinks-------------------------------------------------------$215
Private Rinks------------------------------------------------------$240

In March of this year I did a quick survey of DCR rinks and a few others covering the area inside Route 495. Most have a two tier rate system –one rate for non-profits, and one for everyone else. Since the concern is about youth hockey and school hockey, these are the non-profit rates.

DCR Operated Rinks-------------------------------------------------$175

Boston (7rinks)
Medford (2 rinks)
Milton
Quincy
Somerville
Weymouth

Municipal Operated Rinks

Arlington-------------------------------------------------$225
Haverhill-------------------------------------------------$210
Peabody---------------------------------------------------$190
Canton----------------------------------------------------$200
Everett---------------------------------------------------$180
Waltham---------------------------------------------------$180

Non-Profit Operated Rinks

Boston Daly Mem. Rink/Newton Country Day School-----------$235

Private Operated Rinks

Facilities Management Corp. (9 rinks)---------------------$180
North Shore Rink Mgt. Assoc. (2 rinks)--------------------$210

Non-DCR Rinks

Stoneham Arena--------------------------------------------$210
Quincy Youth Arena (oper. by Quincy Youth Hockey)---------$290*

*Sept.1 – March 30 Prime (5pm-10pm) Non-prime $250

As you can readily see, the claim of higher rates by private operators of DCR rinks is a myth. They are more than competitive with other forms of management. FMC, the largest operator and the one to have already contacted the town about discussing an operating arrangement, is as competitive as any non-DCR operated location, and only $5 per hour higher than the DCR rates.
I’m not a champion of privatizing government functions. Often the savings are illusory and providers are less responsive to citizens. But this is a special circumstance. The economic model used by DCR cannot be successful. The employees of the DCR can only devote 4-6 months per year to rink management. The rest of the year they must manage 450,000 acres of forests, parks, greenways, historic sites, seashores, lakes, ponds, and other state owned properties. The financials for a 4-6 month season do not work while maintaining reasonable prices. But a 9 or 10 month season can, and private operators have lead the way in showing how this can be done. The results over and over have been reasonable prices, preserved ice time, large expansion of public use, and capital investment to preserve these important assets. Some private operators do all this and also make not so modest payments to the communities they serve.
The Board of Selectmen needs to get serious about this issue. The track record for success for non-profits operating ice rinks in Massachusetts is paper thin. It’s time to put aside the petty politics and the attempts to protect certain members of Youth Hockey. The Board has a responsibility to the Town and to all who use the rink today and in the future. Talk to some of the many communities with private operators. Meet with private operators and get their perspective while asking them to address concerns they may have. This shouldn’t be this hard, and wouldn’t be if the process had been undertaken with complete openness rather than being constrained by a desired outcome based on unreasonable fears of change. This multi-million dollar asset should be managed by professionals who have the best chance to be successful while protecting both the town and the state from what is currently a money losing proposition.

http://www.pioneerinstitute.org/pdf/06_04_skatingrink.pdf