| Letter Excerpts
on 40T sent to Legislators |
Click here for
Testimony of Shirley Kressel – Feb. 13th, 2008 |
Chapter
40-T would establish private sub-cities in which residents are
taxed not only by city, state, and federal government, but also
by real estate speculators to repay their construction debts.
Citizens have recourse over city, state, and federal taxes via
their elected officials, but they would have no recourse over
40-T taxes – or "assessments," because the developers
whose debts the citizens must repay remain essentially accountable
to no one.
The legislation was drafted to sound harmless and fair – in fact,
to sound irresistible. It is not.In fact, here’s what Chapter 40-T
really does:
- 40-T turns over parks, streets,
utilities, and the public realm to real estate speculators.
- 40-T lets speculators take over
public property without public consent, and take over private
property for their project use, without the due process and
compensation of eminent domain.
- 40-T grants governmental powers
to sub-cities, but with little transparency, and virtually
no accountability, regulation, or oversight.
- 40-T finances development projects
with bonds that residents must spend decades repaying, in addition
to all customary city, state, and federal taxes.
- 40-T imposes sub-cities upon citizens
who do not expect or want them, places liens on their property
for developer debts that they did not incur, and forecloses
upon homeowners who don’t repay those speculator debts.
- 40-T debt payments never decrease,
even when economies sour or property values decline, as long
as bond service continues.
- 40-T relieves developers from
complying with many of the laws created to protect the public
regarding government records, open bidding, prevailing wage,
conflict of interest, and public liability.
- 40-T and to allows real estate
developers to govern districts in which they aren’t residents,
and where they are not elected, but self-appointed for self-specified
terms.
- 40-T has no modification or repeal
mechanism for 40-T sub-cities that fail.
The claimed advantages of 40-T
— faster permitting, cheaper development — benefit no one except
the bond industry and the speculators who borrow through it. . The
claimed benefits of "free" infrastructure and "free" growth
do not exist, because residents must spend decades paying for that
infrastructure and growth, but with none of the accountability that
citizens are entitled to under democratic government.
The Commonwealth made a mistake nearly one half century ago that
is nearly identical to 40-T, and everyone is still paying the price.
Today, decades after the state toll road was paid for, the Massachusetts
Turnpike Authority continues to perpetuate its own existence by taking
on more debt, operating in secrecy, and ignoring mandates for reform.
For over half a decade, our Turnpike has proven expensive to operate,
difficult to manage, impossible to dissolve, and answerable to no
one.
Chapter 40-T includes even worse flaws, so I urge you to not repeat
these errors, and reject this reckless financing scheme.
Boston, MA
From:
Citizens for Limited Taxation Post Office Box 1147 Marblehead, Massachusetts
01945 [email protected] – www.cltg.org
Barbara Anderson (781) 639-0096 Chip Ford (781) 631-6842 Chip Faulkner
(508) 384-0100
To: The Joint Committee on Bonding, Capital Expenditures & State
Assets
February 13, 2008
Re: Proposed Chapter 40T, HB.159/S.B 146
CLT hopes that the Legislature will not create more “independent” entities
until the Commonwealth has found a way to deal with the fiscal problems
of the existing “independent” agencies like the Mass Turnpike Authority
and the MBTA.
We understand the original reason for creating “independent”authorities:
to let elected officials wash their hands of responsibility when
things go wrong. But we suspect citizens see it all as one big government
that so often doesn’t work, and the governor and legislators as its
most visible representatives.
The 40T District “developers in lieu of government” exist outside
of the voter-controlled local government system, issuing tax-exempt
bonds and collecting “assessments” from those who buy homes in their
district. While it is true that the buyers should know what they
are getting into, we have noticed that “caveat emptor” didn’t work
with the sub-prime mortgage market.
We appreciate that the “eminent domain” language was removed from
the original stealth legislation, and that we are now getting public
hearings and more legislative input. But we find it hard to trust
people who would even think of putting it in there and quietly slipping
the bill through, in the first place. Eventually, we suspect, they
will get the eminent domain power they wanted, and the homeowners
abutting the new development will be threatened. Even with the present
legislation, the minority property owners – the 20% that do not want
to be included in this “quasi government” – will be assessed despite
their objections and, as nearly as we can tell, could lose their
homes if the developers default.
There are already provisions to get betterment payments for services
that benefit only a limited area of property owners, keeping the
process in the hands of elected local officials.
With the current market, there is no need to make this legislation
a priority. Regardless if who is elected President, we are already
experiencing “change” – and it’s happening too fast for most of us
to control. Let’s not “change” the structure of local government
until we are sure we haven’t passed another law of unintended results.
…I am already suffering under
the burden of yearly increases of my property taxes to keep my city
functional. This bill will increase property taxes – whatever they
are called — purely for the benefit of private developers. Would
you kindly put this bill to rest for good and let us think of creative
ways to develop our cities and towns for the benefit of all residents.
Medford, MA
… This legislation would create
uncharted new forms of private governance, without critical public
interest protections like transparency, accountability, and public
participation in decision-making.
…Giving private parties these governmental powers would diminish
our democratic rights and safeguards. It would also open the door
to taxation without representation, especially for any tenants within
these development districts. Unaccountable financing schemes are
causing much of the economic problems we are currently facing, and
this law promises to leave tenants and homeowners footing the bills
for private development projects.
… seek solutions for the infrastructure and financing needs of
the Commonwealth through existing laws, which already have provisions
for special development districts.
… speak to House Speaker DiMasi and Senate President Murray, and
ask them to defeat this privatization effort, once and for all.
Wrentham, MA
… purports to enable a "local
improvement district", which in fact is not a piece of geography,
but rather a for-profit corporation having many of the same powers
as a local government, including:
- levying special assessments for
public infrastructure;
- raising money by issuing bonds,
to be paid off by homeowners;
- tax exemption.
Unlike other public bodies, this
local improvement corporation … can apparently escape from various
public strictures, like public bidding and prevailing wage. It
has seemingly broad powers to buy, sell, and build on property, both
within its defined "development zone", and also outside
the zone, if it makes the case that such exterior interventions are
necessary and appropriate to the goals and purposes of the zone.
It can over-ride local laws and zoning ordinances with which it conflicts.
… It does not seem likely to me that the 40T entity can simply
take over a public park within the zone and have its way with it.
However, it can certainly enter into "agreements" with
the rightful local or state owner regarding said public lands, since
it is a quasi-public entity, then perhaps argue that an office park
plaza, or its roof garden, is an authentic public space, just like
the local greenspace it replaced….
Cambridge, MA
…Chapter 40T is a move in the wrong direction in our state to create
new forms of private governance, without critical public interest
protections like transparency, accountability, and public participation
in decision-making. I’m sure we can imagine better ways of developing
the commonwealth than this. Ashfield, MA
… the effort to pass Chapter 40T has used whatever means available
to sneak this bill by the citizens of the Commonwealth. After passing
through the State
Legislature in 2006 attached to the Economic Stimulus Bill, the bill
was vetoed by the Governor. The State House overrode the Governor’s
veto, though thankfully the State Senate never took up the veto override.
The bill’s authors then took out some of the most
inflammatory language, including explicit powers of eminent domain,
and have been working to get the new bill approved….
… dangerous steps toward uncharted private governance. The powers
that 40T grants to private sub-municipalities and their unelected "prudential
committees" are extensive, and bear too close a resemblance
to municipal government, without any of the public interest protections
we demand of municipal governments. The proponents of the bill try
to justify it based on needs that can be adequately addressed by
existing law, and are currently overreaching their rights as private
developers.
…a leap into this new form of private governance … implications
of this bill are frightening, and I fear its intended consequences
as well as any unintended consequences
… seek solutions for the infrastructure and financing needs of
the Commonwealth through existing law…
… speak to House Speaker DiMasi and Senate President Murray, and
ask them to defeat this privatization effort, once and for all.
Cambridge, MA
… seems to create city-like cities within already defined cities,
allow private developers raise funds through "municipal bonds" and
to make rules that could affect already existing cities and neighborhoods….
….many obligations for infrastructure … would remain undefined
and carry a risk of no one being responsible for implementing these
services….
…another business venture that would not benefit all citizens.
Brighton, MA
… would allow developers to form their own municipalities, sell
tax-exempt bonds for project infrastructure, and collect assessments
from the new property buyers to pay the bonds. Such ill-advised legislation
would create more problems that it would solve by (1) creating a
parallel governmental body with absolutely no accountability, (2)
potentially saddling unsuspecting buyers with significant loan debt,
and (3) including public land in private development zones without
the consent of taxpayers.
Boston, MA
… we have infrastructure needs that we are hard-pressed to meet,
but we know that "creative" financing often comes with
costs and trade-offs can make these "solutions" less than
ideal.
… the legislation is extremely complex… communities will have
a difficult time assessing its costs and benefits…. calls for transferring
public infrastructure planning, funding and implementation responsibilities
to developers, together with many heretofore public powers.
…creates an entity that mirrors many public responsibilities, but
without the same public controls and accountability…
…makes landowners subject to "taxation" from separate
entities, one public, the other private, that will make it more difficult
for municipalities to tax the same landowners to meet needs that
have broader public benefit…
…will accelerate municipal growth by making it easier for developers
to fund large projects, while continuing to relieve them of any of
other burdens of growth, such as schools.
… there are other funding mechanisms that accomplish much of what
is proposed here, and that could be amended to meet many of the same
needs 40T attempts to address…explore these options before embarking
on this piece of complex bonding legislation.
Plymouth, MA
… essentially private governments without voter control.
…giving private parties these governmental powers would diminish
our
democratic rights and safeguards. It would also open the door to
taxation without representation, especially for any tenants within
these development districts.
…Unaccountable financing schemes are causing much of the economic
problems we are currently facing, and this law promises to leave
tenants and homeowners footing the bills for private development
projects.
… seek solutions for the infrastructure and financing needs of
the Commonwealth through existing laws, which already have provisions
for special development districts. |
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