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Baker Proposes Real Estate Tax To Pay For Local Climate Change Resiliency Projects

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Gov. Charlie Baker speaks Friday at the Massachusetts Municipal Association's annual meeting to unveil plans to invest in climate change initiatives and bring more local aid funds to the state's towns and cities. (Courtesy Gov. Baker's office)
Gov. Charlie Baker speaks Friday at the Massachusetts Municipal Association's annual meeting to unveil plans to invest in climate change initiatives and bring more local aid funds to the state's towns and cities. (Courtesy Gov. Baker's office)

As the region braced for the first major snowstorm of this winter, the Baker administration said it will unveil a plan to raise funds to help cities and towns protect property from damage wrought by climate change. The governor called his proposal a "modest" increase to a real estate transfer tax. But realtors have already begun questioning the plan.

Republican Gov. Charlie Baker took the wraps off his plan at the annual convention of city and town officials Friday at the Hynes Convention Center.

First, Lt. Gov. Karyn Polito warmed up the crowd by telling them the administration plans to boost unrestricted local aid to cities and towns by $30 million this year. Baker then took to the stage to say he hopes to raise a $1 billion over the next 10 years to help Massachusetts communities fund climate change mitigation projects.

"We would then use it as a loan program, a grant program, and other kinds of assistance to communities for climate smart investments, which could involve storm water upgrades and dam and flood controls, drainage and culvert improvements," Baker told the crowd. "This is such sexy stuff. I just love talking about it."

Baker has, for the most part, resisted increasing taxes. But now he wants a .2 percent increase to the deeds excise tax. That's the tax paid at the time a piece of property changes hands. Baker said in the long run, it will protect property.

"It's pretty clear that climate change is starting to have a very significant impact on our communities, on their infrastructure," Baker told reporters after his speech. "This is a way for us to build a program that can generate about a $1 billion over 10 years to invest in communities, to invest in resiliency, to invest in infrastructure, to protect people's property, to protect community property from what is going to be storm surges increasing ... Storms generally, frequency, intensity and all the rest," Baker added.

Some in the real estate industry pushed back, however, saying raising the deeds excise tax is not the way to go. Justin Davidson of the Massachusetts Association of Realtors said the group will oppose the governor's proposal.

"We're in a position now where we have historically low numbers of homes for sale on the market, and we are now surpassing all-time highs for housing prices, and this is only going to drive up the cost of housing," said Davidson.

He added that realtors support the need for climate sustainability but don't believe it should be paid for only by homeowners.

The governor will formally present the proposal to the Legislature as part of his budget recommendation Wednesday.

This segment aired on January 18, 2019.

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Steve Brown is a veteran broadcast journalist who serves as WBUR's senior State House reporter.

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