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Politics In Springfield: Taxation with Misrepresentation?

by Bill Dusty

Last year the Springfield City Council made the rather unpopular decision to raise the tax rates in Springfield for both residents and businesses. It was the winter of 2008/2009, and with the plummeting value of homes throughout the region, we were told that a tax increase was necessary in order to make up revenue shortfalls. Even so, layoffs were eventually handed out to city workers as state cuts in local aid further depleted the city’s coffers.

In Springfield, like many other cities and towns, there are two tax rates – one set for residential property and the other for commercial property. Last year the City Council, under the watchful eye of the state-mandated Finance Control Board, approved a residential tax rate of $17.89 per $1,000 valuation and a commercial tax rate of $36.98 per $1,000 valuation. That made Springfield the highest taxed municipality, overall, in all of Massachusetts (with Holyoke following close behind).

This year, the City Council again went to work determining the city’s tax rates. And, predictably, some of them came to the same conclusion as last year: taxes would have to be raised. This time, though, they hit a couple of stumbling blocks. The first delay came from the Massachusetts Department of Revenue, which recommended the City Council delay their vote in order to provide residents with more time for input. The second snag developed in the week leading up to the end of December, after five city councilors – Timothy Rooke, Bud Williams, James Ferrara III, Rosemarie Mazza-Moriarty, and Patrick Markey – sponsored a recently enacted piece of state legislation, Chapter 183 of the Acts of 2009, which would give the city a 30-day extension to get through the tax setting and collection process.

And so the political battle was on. The five sponsoring city councilors found themselves at odds with then-City Council President William Foley, City Councilors Kateri Walsh and Jose Tosado, and Mayor Domenic Sarno – all of whom pushed to have the vote on tax rates finished by December 31, 2009.

Walsh herself argued that to delay the vote would be “totally irresponsible” since it would pass off the vote to the newly sworn-in Ward City Councilors.

But the five councilors in favor of the extension argued otherwise. The vote on the tax rates, they contended, even if it took place before December 31, 2009, would still come too late. The city Collector’s Office had already stated that sending out tax bills would take up to three weeks’ time – long after the December 31st legal deadline for issuing them. Such a delay without an extension might have also resulted in taxpayers being stuck with just a single, lump-sum payment option, rather than the usual 3 or 4 payment plan options. And so an extension under Chapter 183 would be a necessity, regardless. The additional time would also allow for more public review of the City Council debate.

But such was not to be.

Rooke explained that the extension effort was held up by political roadblocks thrown out by out-going Council President William Foley in the form of little-used City Council rules.

The first rule held that all sponsoring city councilors were to contact the City Clerk’s office to confirm they indeed sponsored the item. “Never in thirteen years was this ever used,” complained Rooke. But even so, the five councilors complied.

That rule was followed by an additional requirement that all sponsoring city councilors physically sign the sponsoring letter. And again, that rule was met by the five councilors.

Finally, a third obstacle was placed before the five councilors when it was demanded that all nine city councilors receive hand-delivered copies of the sponsoring letter – a requirement that could not be met since City Councilor Bruce Stebbins was away on a planned family vacation.

“So our efforts were blocked,” said Rooke.

The vote finally came on December 31, 2009, with the new rates set at $19.50 per $1,000 valuation for residential property and $39.25 per $1,000 valuation for commercial property. City Councilor Pat Markey reluctantly switched his vote in order to avoid extending the vote into the term of the new City Council.

Rooke said he and his sponsoring colleagues were told by Foley, Walsh, the Assessors Office, the city’s Finance Team and the Law Department that enacting the extension could have potentially resulted in the downgrading of the City’s bond rating. He was further warned that the delay could cost the city up to $500,000 in spending money (for the time lapsed without cash flow coming in from the bills), and that the Department of Revenue would “not look favorably on the adoption.”

Responding to those dire predictions, Rooke said that one of the City’s bond rating companies, Moody’s, had been contacted and that a representative there explained that they had no problem with the extension – and in fact encouraged it if it meant avoiding interest charges and penalties from the state DOR. As far as losing cash flow due to a delay in sending out the tax bills, Rooke countered by asking about the status of the long-delayed trash fee bills.

“The trash fee bills generate about $44.6 million in revenue,” said Rooke. “So I asked where was that anticipated revenue coming from and wasn’t that irresponsible and reckless to delay those bills?

“Things went quiet.”

And on the matter of the state Department of Revenue frowning on any extension, Rooke said the DOR encouraged its adoption in cities and towns. “They were instrumental in the adoption [of the extension].”

In the end, said Rooke, it was all about pushing through a desired tax hike in order to avoid having to deal with the newly-elected City Council, which might have other ideas on what rates to approve.

Finally, after all the dire warnings about the costs of delay, Springfield Mayor Domenic Sarno sponsored an item on the January 11, 2010 City Council agenda to accept Chapter 183 provisions to allow for an extension of time in order to mail out tax bills – an extension that could have been enacted last month, barring politics as usual in the city.

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Posted by Bill Dusty on Jan 11th, 2010 and filed under Feature Stories, Latest Posts, Politics, Springfield. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.