MMA outlines municipal positions on bills affecting local taxes

The Honorable Adam G. Hinds, Senate Chair
The Honorable Mark J. Cusack, House Chair
Joint Committee on Revenue
State House, Boston

Submitted electronically

Dear Chair Hinds, Chair Cusack and Distinguished Members of the Joint Committee on Revenue:

On behalf of cities and towns across the Commonwealth, we are writing to submit comments on several measures that were heard at your public hearing on October 18, 2021.

Local-Option Gas Tax
We support House 3039, An Act establishing a local option gas tax. This bill would allow cities and towns to adopt a local-option tax on sales of gasoline and diesel fuel of up to 5 cents per gallon that would be collected in the same manner as the state excise. Approval would be by vote of the local legislative body and the revenue would be dedicated to help pay for local transportation programs (infrastructure and services) and stormwater programs.

With the property tax and other local revenues strictly limited by state law, municipal officials are seeking alternative ways to help pay for local road and bridge projects and public transit services, and begin to cover the cost of stormwater management. A recent analysis by the MMA found that cities and towns need to spend more than $685 million annually to maintain local roads and bridges in a state of good repair.

While the MMA will continue to advocate for desperately needed increases in Chapter 90 local roads and bridges funding, which continues to be level-funded at $200 million, a local-option motor fuels excise would generate additional complementary funds. Well-maintained roads and bridges support local economies and economic development plans, and help to protect the safety of motorists, cyclists and pedestrians. We respectfully request your support for House 3039.

Collection of Delinquent Property Tax Revenue
We respectfully urge the Committee to create a special commission to examine current law and practice around the collection of delinquent property tax revenue, prior to the Committee advancing any legislation that would alter this fundamental municipal function. To that end, we urge you to delay action on several legislative items before your committee, to allow time for further study, including: Senate 1802, An Act relative to providing better notices and protections in the process for collecting delinquent property taxes, and Senate 1887, An Act relative to providing better notices and protections in the process for collecting delinquent property taxes.

These measures, along with several other proposals that were heard before your Committee earlier this year, would mandate several changes to the way municipal treasurers and collectors pursue the collection of property taxes from those property owners who fail to pay in response to quarterly or semi-annual tax bills.

Due to the complexity and significance of these proposed legislative changes, prior to any action advancing these bills, we urge the Committee to form a special commission to examine current law and practice around the collection of delinquent property taxes and the sale of liens to third-party investors. This special commission should include a representative of the Massachusetts Municipal Association, a representative of the Massachusetts Collectors and Treasurers Association, a representative of the Office of the Attorney General, a representative of consumer advocates, and a representative of third-party investors, among others.

The commission could examine and assess current local property tax collection processes, including property owner notification and communication, property tax deferral options or exemptions that exist for special classes, the laws governing the purchase of tax liens by a third-party investor and any subsequent foreclosure proceedings, the consumer outcomes associated with the purchase of tax liens by third party investors, and the potential impacts of the proposed legislation on municipalities.

We appreciate this opportunity to submit testimony on these important municipal revenue issues. If you have any questions or require additional information, please do not hesitate to contact us at any time. Your office may reach out to me or MMA Senior Legislative Analyst Jackie Lavender Bird at jlavenderbird@mma.org at any time.

Thank you very much.

Sincerely,

Geoffrey C. Beckwith
MMA Executive Director & CEO