I’m a member of the Massachusetts Audubon Society, part of a larger group criticized in a management consultant’s report for being perceived as “having a narrow bird-oriented focus”. I received a spam from the group yesterday urging me to vote in favor of preserving Massachusetts’s permanently temporary 6.25 percent sales tax. The sales tax had been 5 percent for decades, was raised by Governor Deval Patrick to 6.25 percent in 2009, and a ballot proposition would push it down to 3 percent in order to make Massachusetts retailers more competitive with online and New Hampshire stores (public employee unions are fighting this one, as you might imagine).
The push for higher taxes goes beyond birds, as the Audubon president notes “Along with many other nonprofits across the state, we urge you to Vote No on Question 3.”
The Audubon’s argument against the tax cut is that all state agencies would have less money. In particular, they cite possible cuts to budgets for running parks and monitoring compliance with federal “health and environmental standards” (the federal EPA has quite of a few of its 18,000 full-time workers here, so I’m actually not sure what state workers do to supplement the efforts of the 18,000 federal employees).
I thought it was odd that a non-profit organization would lobby for higher sales taxes at all. You could argue that high death or income taxes might help a non-profit organization by encouraging tax-deductible donations. But a sales tax that leaves everyone with a little less money to spend would be likely to reduce donations to non-profit organizations, no?
Another possible explanation comes from the fact that taxes reduce economic activity and growth. A society made poorer through higher taxation wouldn’t have as much money to destroy bird habitat through development. We wouldn’t have as many SUVs and McMansions. I don’t think this argument makes sense, though, because there are plenty of poor countries, e.g., Haiti, that are very poor and simultaneously have very degraded environments.
The one explanation that I can come up with is that Audubon is mostly funded by rich people whereas the burden of sales taxes falls most heavily on poor people. Were the sales tax to be cut, it is not credible that government spending in Massachusetts would be cut (most of our spending is determined by public employee union contracts and pensions). Therefore, income and property taxes would be raised and that would hit the folks who tend to donate to Audubon.
I am very bothered by the local K-5 school spending so much time and effort pushing ballot measures to increase their budget. I would support a ballot measure that would make it illegal for public entities to spend their man-hours on any ballot measure. I’m pretty sure a private-sector employee lobbying for a raise and more co-workers in this fashion would get them fired.
Shouldn’t that kind of advocacy threaten their non-profit status?
Rob Sama: Shouldn’t that kind of advocacy threaten their non-profit status?
No, that only happens when they participate in partisan political activities, such as endorsing candidates. Ballot measures are not considered partisan, even though they may be supported by a party.
Actually if you delve into the Audubon’s website, the explanation is clear, this quote talks about funding from public treasuries: “Audubon’s Policy Office has full-time staff who closely tracks and advocates for these important funding issues. Our job is to make sure that dozens of conservation programs get the highest funding levels possible.” http://policy.audubon.org/funding-conservation-programs
I’m willing to bet that there are also sizable grants directly to the Audubon used to fund its operations. The motivation for keeping tax rates high is the perception that there will be more funds available to promote their agenda.
More reading here: http://www.massaudubon.org/advocacy/priorities.php
Phil, your main point seems to be that you find it odd that a non-profit would support higher taxes, because higher taxes means less disposable income to spend on donations. I think this is an odd thing to say- practically the entire point of non-profit entities is to allow groups of people to pursue courses of action that are not motivated solely by optimizing revenue, and are instead motivated (hopefully) by a desire to achieve some other goal.
You suggest that it would make more sense (or at least be “less odd”) that non-profits avoid promoting any legislation that might increase taxes, because it might have the (very indirect) effect of reducing their revenue (which is not the only measure of a non-profit’s potential performance since they often involve volunteer labor). I suggest that a non-profit that believes some legislation will forward their stated non-profit mission has a responsibility (or at least a good reason) to support that legislation. And I also think that even people with less disposable income might nevertheless donate to a non-profit that was pursuing a mission that they think is important, and choose to cut back in some other way.
For what it’s worth, I don’t necessarily support the higher sales tax rate. I just think you’re being a little flippant regarding non-profits.
David: Your volunteerism angle is an interesting one. Economists have shown that people will tend to work fewer hours per week as the marginal income tax rate rises. A population that has been taxed into working, say, just 35 hours/week, would have more time available to volunteer. If getting folks to volunteer is the goal, though, it wouldn’t make sense to fight a lower sales tax because the lower sales tax combined with existing union agreements and pension obligations, would likely lead to the higher income tax rate that would encourage folks to leave work early and volunteer.
As to whether the Audubon Society would be concerned about maximizing revenue… http://www.audubon.org/sites/default/files/documents/2008-990-taxform.pdf shows that they pay a lot of employees between $200,000 and $350,000 per year. If I had to meet a payroll like that, I would be very motivated to collect revenue!
I wouldn’t have been surprised to see the Audubon Society supporting a bill to increase fundings for parks, for example, but I still can’t see how the organization’s goals are advanced by a higher sales tax.
First off Mass Audubon (www.massaudubon.org) is indepenedent of and not in any way affilite with the National Audubon Society, so the above salary figures are far from accurate.
Thank you for all of the messages regarding Question 3. While we may not agree on how to vote on the ballot measure, your membership and communications remain very important to us. The environmental budget is just .64 percent of the commonwealth’s $28 billion budget. Mass Audubon’s campaign, One Percent for Nature! has a goal to restore the environmental budget to at least 1 percent. If Question 3 passes, it will result in an across-the-board cut of 30 percent to the state’s overall budget with devastating effects on environmental agencies’ abilities to protect and manage our forests, parks, beaches, open space, and endangered species. Further, their ability to protect the public’s health through the enforcement of air and water standards will be compromised. That is why we oppose Question 3.
The 30 percent reduction figure comes from the Massachusetts Taxpayers Foundation. They are a nationally recognized, nonprofit research organization whose purpose is to promote the most effective use of tax dollars, improve the operations of state and local governments, and foster positive economic policies. Their credibility is based upon independent, objective and accurate analysis of state and local spending, taxes and the economy. Over the past decade the Foundation has won fourteen national awards for their work on transportation reform, business costs, capital spending, state finances, MBTA restructuring, state government reform, and health care. The report on Question 3 can be found at: http://www.masstaxpayers.org/sites/masstaxpayers.org/files/MTF%20Question%203%20Report.pdf
Jack: Thanks for the clarification. I think it is laudable that you have your Form 990 available from your site (http://www.massaudubon.org/about/finances_governance.php ) rather than making folks dig for it from Guidestar, et al. Mass Audubon does seem to be rather miserly compared to the national society, paying executives no more than $194,000 per year.
I still don’t understand the organization’s support for a higher sales tax. If the environmental budget is 0.64 percent of the total state budget, I infer that when a poor citizen pays an additional $100 in sales tax only 64 cents of that goes to funding environmental agencies. That seems like an awfully cruel and inefficient way to fund environmental goals.
http://www.massbudget.org/documentsearch/findDocument?doc_id=661 has a chart showing how the burden of the old 5 percent sales tax fell differentially on Massachusetts families (presumably the chart would look worse with Deval Patrick’s 6.25 percent rate).
As a person with a higher-than-average household income and the owner of property in Massachusetts, I personally would be better off if we raised the sales tax to 20 percent and eliminated state income and property taxes (presumably Mass Audubon employees earning $194,000/year would also benefit from a shift from income/property to sales tax). But I’m not going to argue that we need the 20 percent sales tax rate in order to save the environment. I can simply argue that I prefer that other people be taxed rather than me.
“Were the sales tax to be cut, it is not credible that government spending in Massachusetts would be cut (most of our spending is determined by public employee union contracts and pensions).
I think this is the key point of confusion! If the sales tax is cut, the state government will need to cut that part of its spending which is *not* fixed. Hence the across-the-board 30% cut that the Massachusetts Taxpayers Foundation is predicting. From the MTF report:
Note that the proposed sales tax cut only accounts for $2.5 billion of the shortfall.
To me, it’s very strange that state governments in the US can’t run deficits, so when there’s a downturn and tax revenues collapse, they need to make drastic spending cuts, aggravating the downturn. In Canada, it’s generally accepted that governments (federal and provincial) need to balance their budgets over the course of the economic cycle, running surpluses when the economy is doing well and running deficits when the economy is doing badly. (To a large extent this is automatic, because tax revenues go up when the economy is doing well and go down when the economy is doing badly.)
Russil: Why don’t U.S. states indulge in deficit-spending? They have, to the tune of $4 trillion in unfunded pension commitments to public employee unions (see http://philip.greenspun.com/blog/2009/09/18/pensions-how-states-and-local-governments-indulge-in-deficit-spending/ ). Why wouldn’t you want state and local politicians to be able to do additional deficit spending? For one thing, these folks have tended to be overly optimistic about their local corners of paradise. Most Michigan politicians, for example, over the past few decades, continued to push for investments in Detroit even as businesses, jobs, and people have fled. It is much harder to leave the U.S. than it is to move from Michigan to North Carolina.
The idea that reducing the sales tax must necessarily lead to spending cuts does not make sense to me. This is a one-party state with the majority of candidates for public office running unopposed. The Democrats in the legislature could meet after the election and, in a matter of days, increase other tax rates to whatever extent they desired.