Mihos's Big Idea

Published Mar 01 2006, 08:37 PM by Adam Reilly

Still no word on whether he's running as an independent or a Republican--but we just got Christy Mihos's first policy proposal.

The name--"Proposition One"--is nice and dramatic. So's the idea. Mihos wants to limit property tax growth by jettisoning the current tri-annual assessment system. Instead, homes would be assessed each time they're sold. Mihos says he'd propose this change in his first gubernatorial budget, and try to pass it as a ballot initiative if the legislature balked. (A similar ballot initiative, called Proposition 13, passed in California in 1978.)

Mihos admits that cities and towns would lose a ton of property-tax revenue as a result. His solution? Allocating 40 percent of the state's tax revenues for local aid. (According to the Mihos Campaign, that number's currently less than 30 percent.)

What goes unsaid is that this local aid hike would leave far less money for a host of other government programs. Liberals won't like this. But independents and conservatives who want to shrink government probably will.

My quick reaction? It's irresponsible, and probably unfair, to ignore the realities of the housing market as Mihos is proposing. (If you bought a condo for $80,000 in 1994, and it's worth $400,000 today, shouldn't your property taxes reflect this appreciation?) And given the way the world works, it's likely that the most vulnerable members of society would end up bearing the brunt of the reallocation Mihos is proposing.

Having said that, given the truly obscene home prices here in MA, this is an ingenious idea that's going to play very, very well with voters.

Here's the full press release:

CHRISTY MIHOS PROPOSES BROAD PROPERTY TAX REFORM

LINKS INCREASED AID TO STABLE PROPERTY TAXES

CAMBRIDGE - Citing the Bay State's declining population, gubernatorial candidate Christy Mihos today announced a plan to stabilize property taxes for homeowners across Massachusetts. Mihos made the announcement before a large audience of biotech companies, research labs, and academic institutions at a forum sponsored by the Massachusetts Biotechnology Council.

Detailing the fact that Massachusetts localities are more dependent on property taxes today than they've been at any point in nearly 25 years, Mihos pointed to skyrocketing property taxes as one of the major reasons people are leaving the Bay State.

"Over the past few weeks," Mihos stated, "I've spent lots of time with families that have moved elsewhere in New England, and nearly every single one of them said they would move back in a heartbeat if they could afford it."

Calling his proposal Proposition One, Mihos pledged to introduce it in the very first budget he submits as Governor, promising to organize and promote efforts to get it on the ballot by 2008 if the Legislature fails to act.

"As it stands today in Massachusetts," Mihos explained, "property taxes can increase by 2.5 percent each year, and a house is usually reassessed every three years. This has created a system whereby property taxes are as volatile as the real estate market. That's why so many Bay State residents are finding themselves taxed out of their homes."

Under Mihos's proposal - which is similar to California's Proposition 13, a ballot initiative that passed in 1978 - property values would remain constant from the time of purchase and would be reassessed when the property is sold. Thus, the system will provide more certainty to homeowners as to what their tax bills will be in future years.

To compensate for the revenue limitations that may result, Mihos pledged to set aside 40 percent of the state's annual tax revenues for local aid. Today, less than 30 percent of tax receipts go to support localities.

"When it comes to state aid, municipal officials deserve a degree of certainty as they develop their annual budgets," Mihos said. "Dedicating 40 percent of tax revenues to municipalities will be an extraordinary commitment, but an extraordinary commitment is essential to our future success."

To make sure that the Bay State's priorities remain straight, the third component of Proposition One would stipulate that public schools in Massachusetts be free of all fees. By the time Mihos's 40 percent proposal goes into effect, local schools must remove all academic and activity fees.

"There's simply no excuse for such fees," Mihos declared, "and the state shouldn't be putting localities in a position where they feel as if they have to penalize their own children for being active and involved in school activities."