10/08/08

THINKING OUTSIDE THE BOX
It's your money ... end the state income tax

Dr. Charles Ormsby

On November 4th you will have an opportunity to reclaim an average of $3,700 of YOUR money every year, year after year after year. This is money that you have earned and that is currently taken out of your paycheck every payday by the Massachusetts Department of Revenue. It is your money. But it is being taken from you to line the pockets of special interests.

Over the next month you will hear the panicked screams of those who have become comfortable at your expense. They will threaten to take away police and fire protection and they will tell you that your children will no longer have teachers, books or … well, they may not even be fed!!

They will tell you every lie they can manufacture to scare you into parting with your earnings while continuing to fund their gravy train. These lies will be broadcast in ads paid for almost exclusively by union contributions. As of August 31st, the “Vote No” coalition had received over $1.5 million from public employee unions, but only $100 from a single individual.  More than $5 million in union ads urging a “no vote” is expected before November 4th. 

Of course, these unionized government employees and government contractors are screaming bloody murder! They have arranged a sweet deal that they could never command in a free market … and they want to stick you, your children, and your grandchildren with the bill.

Is this the kind of government you want to support?

* Guaranteed jobs that can’t be lost even based on pathetic performance or a lack of attendance1
* Jobs with extravagant healthcare coverage paid 80-90% by the taxpayers
* High, guaranteed-benefit pensions with full healthcare coverage after a mere 20 years of service
* Thousands out on questionable disabilities2
* Guarantees of “prevailing wages” which only prevail in government contracts because real competition is absent
* Make-work jobs doled out to special interests without competitive bidding and often staffed at overtime wage rates (e.g., police road details)

Extravagant, wasteful, non-competitive personnel costs, driven up by government unions, are only the tip of the iceberg. The special interests also recognize that many government programs paid for with your income tax dollars are not needed at any price. These expenditures represent pure waste: No-show jobs for the brother-in-laws of politicians, overlapping police forces, and agencies/programs for every conceivable purpose. In fact, many programs actually cause substantial harm!

You might ask yourself: How does our Division of Insurance make your life better when we have nearly the highest car insurance and health insurance premiums in the nation?

Call your state representative and ask him or her why the state agencies/departments listed in the nearby box should be more important to you than keeping the $3,700 currently taken from you in income taxes. 

This list of departments/agencies could go on for pages … If you go to the Mass.gov Web site you will find  500 such entities listed.

Some of you may read this list (or the whole list) and say, “These sound worthwhile.”

Do you support spending on all these departments/agencies? Really? Are you sure?

OK, I confess. One of those listed in the box (but only one) is a fake. Can you pick it out? The answer is at the end of this article. I wonder if your state representative or senator can tell you which one doesn’t exist?

But they all sound like good ideas, don’t they? Do you think anyone will ever create an agency called The Massachusetts Department of Does-No-Good? Of course not. Every department and agency has penned a name that seems important, valuable, and even indispensable. That is how they build a constituency and protect themselves from budget cuts or, heaven forbid, elimination.

Elimination! Oh my God! So how often are Massachusetts agencies eliminated? Almost never. But one was recently eliminated: The Office of Educational Quality and Accountability.

It makes sense doesn’t it? We spend over $10 billion every year on education in Massachusetts, but we wouldn’t want quality or accountability would we? Do you think the teachers unions or superintendents association might have wanted this agency eliminated? Do you smell foxes in the chicken coop?

Just consider these statistics: 5,500 new state employees over the last five years; 2,000 just in the last year; prison guards earning over $100,000; thousands of government employees enjoying lifetime disability gravy trains, on and on. Noone has a complete list. It would take a government agency just to catalogue … well, I guess that is a bad idea!

It is embarrassingly obvious: Massachusetts government is bloated, wasteful, corrupt, and run for the benefit of government employees and special interests. NOT for the average citizen like you and me.

But that still leaves a question that must be answered: What budget level would be adequate for Massachusetts?

There is only one way to figure this out. Clearly, the average citizen can’t research every department, agency and program to decide where funding should be reduced or eliminated. We certainly can not depend on advice from those working in these organizations or those who benefit from related funding because they have a conflict of interest. The only way to determine an adequate budget/spending level is to look at the best of the other 49 states. (We do want to be “the best,” don’t we?)

Arkansas or Mississippi may not appeal to Massachusetts voters as good models, but New Hampshire does provide as good an example as one could have. We are contiguous states, we have a similar climate, and we share similar lifestyles. In fact, New Hampshire seems very attractive to Massachusetts residents as evidenced by a substantial migration out of Massachusetts and into New Hampshire.

So how does New Hampshire’s government spending, corrected for population, compare to Massachusetts?

If the Massachusetts income tax is eliminated, the total of our state and local taxes, on a per capita basis, will merely drop to just above (YES, ABOVE) the level that currently exists in New Hampshire, the fastest growing state in New England.

Here are the current state and local per capita tax burdens in New Hampshire and Massachusetts from the U.S. Department of Commerce and the Census Bureau:

• Massachusetts: $5,203
• New Hampshire: $3,321
• Difference: $1,882 more in Massachusetts for every man, woman and child.

When you multiply this difference by the population of Massachusetts, you get over $12 billion, which is more than the projected reduction in tax revenues if our state income tax is eliminated.

Your representatives will tell you that they can’t do it. Tell them, “Do it or get out.”

Current spending by the Massachusetts state government totals approximately $47 billion including “off-budget” expenditures. This total includes revenues received from federal reimbursements/grants, lottery proceeds, license fees, investment earnings, etc. … all of which will continue if the income tax is eliminated.

If Question 1 passes, spending by our state government would drop to $35 billion. This amount does not count local spending based on property taxes totaling approximately $20 billion. Thus, a grand total of $55 billion in government spending will still be available in Massachusetts for essential services if the income tax is eliminated.

Shouldn’t $55 billion be sufficient to fund police, fire, and education - with substantial sums left over?

After Question 1 passes, our state Legislature needs to create a zero-based budget strategy. Start by funding police, the courts, fire, and education. Then prioritize what is left. When the money runs out … STOP!!

If our legislators need to create greater savings to fund these essentials, then eliminate compulsory bargaining and the prevailing wage scam. Our Legislature needs to work for the taxpayers, not for the special interests. Passing Question 1 is the only way to force them to do so. 

It is as simple as that.

Don’t be intimidated by threats and lies.

VOTE YES ON QUESTION ONE. Then, enjoy your hard-earned money and insist that essential services be funded.

Oh, yes, there is no Division of Minority Health Services. But if Question 1 does not pass, I’m sure there will be.

(Footnotes) 1 One state cop was recently caught calling in sick to run his fishing business on Cape Cod. 2 A fireman on long-term disability was recently caught in a body-building competition.

Dr. Ormsby is a member of the North Andover School Committee. He is a graduate of Cornell and has a doctorate from MIT. You can contact Dr. Ormsby via email: ccormsby@comcast.net

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