A letter to the President (of the Massachusetts Senate)

97 John Parker Road
East Falmouth, MA 02536
February 28, 2010


The Honorable Therese Murray
Office of the President
Massachusetts Senate
State House
Boston, MA 02133-1007


Dear President Murray;

A belated thank you for your letter dated January 21, 2010 inviting me, as a member of the Falmouth Board of Selectmen, to attend the Fiscal Year 2011 Budget Forum in Hyannis. Unfortunately, I was unable to attend the February 12 meeting.

According to the invitation, the goals were to answer any budget related questions, to review the budgetary process and discuss funding requests. However, with the Commonwealth's ongoing budget issues, I hope that some time was given to discuss ways of addressing the shortfall, especially as it relates to the municipalities.

Therein is the purpose of this letter.

I was heartened to read your recent editorial in the Cape Cod Times. Your statement, "...we have to make a better effort to encourage business development in Massachusetts," hit the nail on the head.

Business passes its costs onto the customer, with a margin - profit - attached to reward the entrepreneur for their risk. The unspoken truth is that the cost of business is always paid by the individual. When government increases the cost of doing business, it increases the cost paid by the customer. When that cost exceeds the reward, business will cease to exist; entrepreneurs will not work for nothing. As you noted, the average size of businesses in Massachusetts has been steadily decreasing, and jobs have been lost. This trend is reflected in the exodus of Massachusetts residents who have sought work and lower costs of living elsewhere.

Taxes are not the only cost. Complying with rules and regulations - i.e., "red tape" - levies an indirect cost. For example, here in the town of Falmouth, businesses which apply for a sign must appear before a committee in order to get a permit. Defenders of this practice note that the committee has helped businesses navigate the town's regulations.

However, it would be better to simplify those regulations so that there is no need to navigate anything. Entrepreneurs who work 60, 80 – and more – hours a week cannot afford to spend yet more time before a committee defending a sign application. Indeed, one applicant told me that the committee questioned the color of a sign - something the town does not regulate, and over which the committee has no jurisdiction.

There are similar barriers at the state level which hamper businesses; you have identified several and I applaud you for it. Please follow through, cut the red tape, and make it easier and less expensive to do business in Massachusetts. Doing so will put more people to work. As you know, when more people are working, more taxes get collected.

At the local level, municipalities need more control over their own destiny. With every cut in local aid or the Payments In Lieu Of Taxes (PILOT), cities and towns struggle to balance their budgets.

Ironically, you describe tourism as "one of our top industries in this state," yet the only mechanism the Commonwealth has given municipalities to compensate for these cuts is the ability to increase local options taxes. Communities such as Falmouth are caught between a rock and a hard place. Increasing the rooms and meals taxes might help us balance our budget in the short term, but in the long run we are hurting the competitiveness of one of our top industries.

A better option would be to plug loopholes, such as the boat excise tax. As you may know, the excise tax on boats is not based on value - as it is with autos - but rather on age. There are 50-year old boats in pristine condition that are taxed at a rate lower than 10-year old boats that have been neglected and abandoned. The boat owners benefit, but the Commonwealth, and the common wealth, suffer.

Increasing costs - be they direct taxes, or indirect regulation - only makes it more difficult for individuals and businesses to survive here. The citizens of the United States have choices, and Massachusetts residents have voted overwhelmingly - with their feet - to find work and a lower cost of living in other states. Your mantra of "reform before revenue" is the key to solving the Commonwealth's current budget woes and improving its fiscal health.

As a footnote, please note that I offer these comments as an individual; they do not represent the collective opinion of the Falmouth Board of Selectmen.

Thank you for your time and consideration.

Respectfully,




Brent Putnam
Vice-Chairman
Falmouth Board of Selectmen




cc: Representative Matt Patrick
Representative Tim Madden
Falmouth Board of Selectmen