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Frequently Asked Questions
About Outside Section 548
Q: Isn’t the sale of state property necessary to balance the budget?
A: No. The Legislature has many less harmful ways to balance the budget. Selling off invaluable property, including irreplaceable open space, for a one-time infusion of cash does not solve the “structural deficit” – the gap between current state expenses and revenue. To solve that problem, the legislature needs to have an open debate about the various ways to solve the budget problem. Quick fixes – devised without public input – are not a solution.
Q: Does income from the sale of state property help lower tax rates?
A: Not necessarily, when all taxes and expenses are considered. When property is sold to a developer, local communities must often expend more for road improvements, accommodating additional students in schools, sewer improvements, water supply protection, etc. And citizens can also pay more because of health impacts (air pollution) and loss of recreational resources. Generating quick revenue by selling off state land does not solve the underlying “structural” budget deficit, which should be solved by raising state revenues fairly and/or cutting state expenditures in a fair and rational way (by eliminating health insurance waste, for example). And even when the fiscal revenues from a given land sale outweigh the costs, there should be a deliberate public decision that the gains outweigh the negative impacts to the community, including loss of open space and/or sites for affordable housing development.
Q: What is the “right of first refusal”?
A: This refers to the right of the community – within which a property lies – to purchase the property at a fair market value. This means that the property goes to auction only if the community declines its right of purchase. It also means the purchase price is based on current zoning, and the community knows in advance how much money must be budgeted for the purchase. Under Outside Section 548, this “right of first refusal” has been ended. Instead communities must rush to auction and bid against developers, with the property often selling for an inflated speculative price. This makes it very difficult for communities to acquire surplused state land for public purposes.
Q: Who determines which properties are suitable for auction?
A: Under Outside Section 548, the decision is made by the Commissioner of the Division of Capital Asset Management, the state agency that is responsible for disposing of surplus state property. The primary concern of DCAM has usually been to produce the maximum revenues from the auction process, and to conduct auctions quickly to provide revenue for balancing the current state budget. Public participation is informal, and local concerns have had little visible effect on the process. The result is that properties that are highly unsuitable for auction are often sent to the auction block without conditions for open space preservation, affordable housing development, or traffic mitigation, for example.
Q: Are the auctions under Outside Section 548 consistent with local land use planning?
A: The result of the auction is often flagrantly at odds with local planning for open space protection, affordable housing, and smart growth. The auction is a roll of the dice that tends to favor overdevelopment and high-end residential housing. It is impossible for a community to carry out a plan for conservation land acquisition, affordable housing development and smart growth if local properties are going to the auction block without consideration of established planning goals.
Q: What is an “outside section” to the budget?
A: The state budget is a massive document that is supposed to allocate funding for a particular year. “Outside sections” are attachments to the budget document that are not actually a part of the budget. Unfortunately, these sections are frequently used to create substantive policy “under the radar,” bypassing legislative due process. The legislation creating the policy is simply attached to the budget as an “outside section,” instead of going through the usual public review process that would be required if the legislation was not attached to the budget.
Q: What’s wrong with using outside sections to pass laws?
A: The text of the budget is often available only days before it is voted upon. Because the budget is so massive, the public is often unaware of measures in outside sections. In addition, there are no public hearings and no opportunity for constituents who might be affected to contact their legislators or alert the public. Development of amendments is usually precluded by time pressure. In addition, legislative accountability is avoided since outside sections are not voted on directly. Instead, the budget in its entirety receives a single up or down vote, and the outside sections automatically become law. When legislative accountability is eliminated, favors for special interests can more easily sneak into law.
Q: How can the fiscal impact of a sale be determined?
A: Understanding the financial impacts of a reuse requires examination of particular reuse plans and estimation of the tax revenues and costs associated with such reuse. Once the impact is understood, citizens should be allowed to decide whether the net income – or cost – is justified in light of the harm or benefits associated with the development. The fast-track auction process does not require any such studies. Developers can walk away with the property without having provided any information regarding their intentions.
Q: Does development of a “reuse plan” ensure proper reuse of a site?
A: A reuse plan is an essential tool for guiding the reuse of larger, more complicated properties. But currently there is no consistent way to secure effective reuse planning. Reuse committees are usually appointed by the legislature on a parcel-by-parcel basis, with DCAM representatives sitting on the committee and drafting the documents. Even when communities are successful in getting a reuse committee appointed and a reuse plan written, the resulting reuse plans are only advisory documents. They have no force of law unless their provisions are written in special legislation. This legislation in turn must be voted into law by the state legislature in order to take effect. Under section 548, at any point in the process, DCAM can simply walk away from the reuse committee and auction the property.
Q: Will repeal of Section 548 produce a good process for disposing of land no longer of interest to the state?
A: Repeal of Outside Section 548 will improve the process by restoring certain safeguards, and preventing the permanent loss of critical open space. But many additional improvements are needed before we can say that we have a good land reuse policy that consistently protects the public interest. To do this we need a process for community-driven planning that meets simultaneous, urgent needs for open space preservation, affordable housing, and alternative transportation. The American Planning Association has identified Massachusetts as one of the states with the most outdated land use laws. After repealing Section 548, more work must be done to advance the concepts of community-driven smart growth and to secure reforms such as those in the Massachusetts Land Use Reform Act.