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HARVARD — Cities and towns have long complained about getting unfunded mandates from the state government, but freshman State Rep. Jennifer Benson, D-Lunenburg, has suggested that dynamic could change because of the rough economy.

Speaking to constituents at the Harvard Public Library on Dec. 1, Benson said relieving unfunded mandates was one of the few available measures for the Legislature to help struggling municipalities.

Given the economic circumstances, Benson said the idea could have some traction in the Legislature and that she’s asked all six of her constituent communities to provide lists of unfunded mandates, which would be submitted to the House Ways and Means Committee during the upcoming budget process.

“I would encourage Boards of Selectmen, Finance Committees and School Committees to brainstorm about how this has impacted you,” she said. “Right now we don’t have the money, but what we can do is alleviate some of the burden.”

Benson’s comments came during a “revenue hearing,” which brought House Joint Committee on Revenue Chairman Jay Kaufman, D-Lexington, to Harvard to discuss possibilities for reforming and possibly increasing the efficiency of the state tax code.

While a handful of ideas along those lines were discussed during the hearing, the topic of unfunded mandates was brought to the fore by Shirley Town Administrator Kyle Keady. He listed several occasions where the legislature had foisted costly obligations statewide onto communities without benefit of any financial support, saying Beacon Hill needs to acknowledge their culpability in the challenges facing many communities.

“My point is, if you keep pushing unfunded mandates down our throats, you are going to see these towns going belly up,” he said. “You have to take the responsibility for some of the issues us communities are realizing right now.”

Benson said she’s already collected “mandate” lists from Lunenburg, Boxboro and Acton, and was awaiting submissions from the rest of her communities before taking action. Speaking briefly, Harvard Board of Selectmen Chairman Ron Ricci sounded open to the idea, saying anything the state could do to relieve financial burdens would be greatly appreciated.

The discussion opened with a brief presentation from Kaufman, who conceded that he sometimes views the current tax system as fundamentally bankrupt, but added it’s nonetheless very difficult to reform into something better. He described the forum as an “experiment” toward that end, making no claim to having answers, but hoping the current budget crisis could prompt serious discussion of adopting a fairer and more consistent system.

Kaufman said a key factor for the state was a drastic fall in capital gains tax revenues, which dropped from $2,113 million in fiscal 2008 to $527 million in fiscal 2009. He added those numbers aren’t expected to rebound anytime soon — nor has a way been devised to make them more predictable.

On the whole, Kaufman said the term “Tax-achuestts” was outdated, saying Massachusetts had the third highest tax burden (average 13.7 percent of personal income) in the United State when that term was coined in 1977, but has since dropped into the bottom half, with taxes taking an average of 10.5 percent of the average personal income in 2007, compared with the national average of 11.3 percent.

In terms of tax burden, Kaufman said the Massachusetts model was moderately progressive, though he added it was increasingly generous to the top 20 percent of earners. The state’s flat-level income tax was listed as a key factor behind that trend.

In terms of local communities, Kaufman said they’re often put between a rock and hard place by the current tax code, which essentially restrict communities to raising property taxes to collect additional revenue. While Kaufman indicated that a graduated income tax — which would fluctuate according to income, like the one used at the federal level — may be able to help there, he said the state’s supreme judicial court has consistently ruled that option outside the state constitution.

Nonetheless, Harvard residents Bruce Leicher and Stu Sklar pressed for consideration of a “local option” graduated income tax, which would permit towns the option of installing that sort of tax to help meet rising education costs.

According to calculations presented by Leicher, the town could raise half its annual levy — $7.5 million — by installing a two percent income tax. Sklar added that option sounded fairer because it would shift the tax burden from those who are on fixed incomes to those who are gainfully employed. He asked that the legislature consult the Supreme Judicial Court on the matter, or consider a constitutional amendment to make it legal,

Kaufman responded that he remembers five previous attempts to introduce a graduated income tax in Massachusetts, adding the closest failed by 2-1, adding he wasn’t sure that measure would happen in his lifetime.

Leicher said he understood, but added that people may have a different outlook on such a tax, both because of problems with the current system and by introducing the possibility that any additional income taxes would stay local.

“We’re at a point now where I think people are willing to look at it,” he said. “People may feel better about doing it locally … other than having it go the state delegations.”

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