TAXES: Impact of Gov. Patrick's Proposed Tax Increase on Groton Residents
State Representative Sheila Harrington and State Senator Eileen Donoghue met with Selectmen Monday night to update them on the state of the Commonwealth's budget and to advise, based on their current information, what the town and taxpayers might expect, especially in light of Gov. Duval Patrick's proposal for a $1.9B tax increase. The increase is earmarked to support major new spending on transportation and education.
Patrick is proposing an increase in income taxes for state residents moving from the current 5.25 percent to 6.25 percent. According to Rep. Harrington this means that Groton families with two children making an average of $118,000 will see an increase of $962 in income taxes. Those earning $60,000 with two children will pay $381 more in taxes on an annual basis. Massachusetts has a flat rate for income tax across all income levels.
Rep Harrington said that a significant portion of the $1.9M increase in taxes would go to Massport, to address the overspending issues. She noted that there are several serious situations such as the Worcester Airport that is no longer in operation yet has six-figure staff members on the payroll, and in that the future the airport will probably be on the chopping block.
Sen. Donoghue added that the money for transportation clearly has the "T" issues as part of it. Selectman Josh Degen said he felt that those who ride the 'T' should pay for it and not look to towns like Groton for a bailout. Sen. Donoghue pointed out that "Many of the areas of the state don't benefit from the MBTA, but the restructuring is part of the package."
Selectman Degen quickly calculated that, based on the governors proposed tax increase, an average income tax increase for the 3300 households in Groton, would result in close to an additional $2.8M going from Groton to the state,. It also appears that the level of contribution back to the town, in the form of state reimbursement would be an estimated $31K.
Rep Harrington added that the governor's proposal of a $1.9B more represents a 7 percent increase in the overall state budget.
Sen. Donoghue pointed out that there are other changes as well - the reduction of the state sales tax from 6.25 to 4.25 percent, but Rep Harrington noted that this has little impact on border towns like Groton where residents use New Hampshire for big purchases. There are also changes in the short term and long term capital gains taxes and the elimination of many deductions that will also affect Groton taxpayers.
Neither the House nor the Senate has officially weighed on the Patrick proposal and are working to look at developing their own proposals.
Selectman Degen thanked Rep. Harrington and Sen. Donoghue for all their work to bring a very successful Job Fair to Devens recently with over 65 employers present and a wait list as the conference center ran out of space. They both said they were pleased with the result as well.
