Push starts for a local income tax

Advocates say measure would help homeowners

By Jennifer Fenn Lefferts
Globe Correspondent / February 14, 2010

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As part of an effort to make Concord more affordable and diverse, local officials want to shift the tax burden off most property owners and onto the town’s wealthiest residents.

The long-shot proposal, which some say is unconstitutional, calls for imposing a local income tax to help offset the town’s dependence on property taxes to fund its operations.

“It’s not a tax increase, but a shifting of the burden,’’ said Jonathan Keyes, chairman of the town’s Local Option Local Income Tax Committee, which has drafted a proposal that will go before residents at Town Meeting this spring. “It all adds up to the same amount.’’

The article, slated for discussion during a Finance Committee meeting at 7:30 p.m. Feb. 22, asks selectmen to work with lawmakers to adopt enabling legislation that would give communities the option of approving a local income tax. Keyes said it’s an idea that would likely be more attractive to affluent communities that don’t receive much state aid, and rely largely on property taxes for revenues.

The idea is that instead of raising money for the town only through property taxes, a community with a local income tax could collect only about half of its revenues through the levy on real estate, Keyes said. To make up the difference, Concord’s draft proposal calls for the town to impose a 2 percent income tax on residents.

Citing the cost of real estate in town, and the size of local tax bills, Keyes said, “It’s getting difficult for young people to come and for older people to stay, so we’re trying to respond to that problem.’’

The average value of a single-family home in Concord is $835,697, and the average tax bill is $10,128.

While a number of municipalities across the country, including New York City, enact local income taxes, Massachusetts does not grant that right to its cities and towns. Some state lawmakers say a local income tax would be unconstitutional, and also question whether the public would support the change.

State Representative Jay Kaufman, a Lexington Democrat who serves as the House chairman of the Legislature’s Committee on Revenue, said he’s sympathetic to the plight of communities with tight budgets and few means of raising revenue. But while a local income tax may have some merit, he said, legal authorities have said that the state constitution would have to be amended in order for one to be created.

“The bigger question, though, is would there be any appetite among the public to do it?’’

Kaufman said there have been five ballot attempts to change the state’s income-tax structure to a graduated system, and each has been rejected.

“Change for any of us is difficult, change on a large scale is difficult, and change in taxes is more difficult still,’’ he said.

Despite his lack of optimism for the proposal, Kaufman said, it’s still worth looking at ways communities can raise revenue beyond property taxes.

“We need to have that conversation, and a local income tax is one of the ideas we should be considering,’’ Kaufman said.

State Representative Cory Atkins, a Concord Democrat who has advised town officials on the proposal, also said she thinks there’s little hope of the idea going anywhere quickly. She said the only way it could move forward is if residents get behind it.

“It’s an interesting concept and I’m delighted towns are taking it upon themselves to experiment,’’ she said.

Atkins said residents would not support such a change if it was suggested by politicians.

“Most people would think it’s an added tax,’’ Atkins said.

She said the state’s wealthier communities, such as Acton, Carlisle, Dover, Lexington, Lincoln, Sherborn, and Wellesley, need to work together to gain support, hold informational meetings, and try to spread the word. She said some officials in Harvard have expressed interest, but there appears to be little momentum elsewhere.

Daniel Keyes, Sherborn’s town administrator, said the idea hasn’t come up and he’s not sure residents would support it.

Hans Larsen, Wellesley’s executive director, said he doesn’t think the idea would go over well in his town.

“I think people would be resistant to a new form of taxation,’’ he said. “It’s another tax mechanism and taxation is a contentious topic.’’

Barbara Anderson, the head of Citizens for Limited Taxation, said while reducing property taxes sounds like a good idea, a local income tax would only mean one more tax on residents.

“We have plenty of taxes in Massachusetts and it’s wasted enough already,’’ Anderson said. “We certainly don’t want to open this Pandora’s box.’’

Keyes said towns wouldn’t have to adopt the income tax, but it would give them another option, similar to the Community Preservation Act. He said the law gives communities the option to apply a surcharge on property taxes to raise money for certain local projects, but residents choose whether to participate.

Keyes said the property tax system was adopted when the country was formed because real estate was a measure of a person’s wealth.

But times have changed and taxes should reflect those changes, he said.

But even he admits any immediate change is unlikely.

“If we’re lucky, this could happen in 15 to 20 years. But if you don’t start somewhere, it would never ever happen.’’

Jennifer Fenn Lefferts can be reached at