CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

 

CLT UPDATE
Monday, June 16, 2003

Is Romney about to surrender his veto power?


Tax season is almost over, and here are the latest numbers from the state Department of Revenue on how many good liberals have taken advantage of the opportunity to pay their income taxes at the old 5.85 percent rate rather than the new 5.3 percent rate.

Of the 2,265,000 returns now processed, 1,132 filers have wanted to pay more than their fair share. That continues to work out to one in every 2,000 filers - one-twentieth of 1 percent.

Odd, because when the income-tax reduction was on the ballot in 2000, 41 percent of the electorate voted not to cut their taxes. Guess all but 1,132 of them have had a change of heart.

The 1,132 have contributed an extra $130,732 to the coffers.

The Boston Herald
Sunday, June 15, 2003
The Buzz: Principles too taxing


Critics lambasted Gov. Mitt Romney yesterday as a flip-flopper for signaling renewed support for a legislative pay hike package that would hand pols unfettered power to dole out bonus pay to loyalists....

The plan, first pushed by House Speaker Thomas M. Finneran, would allow Finneran and Senate President Robert E. Travaglini the ability to appoint committee leaders and dole out bonus pay....

Despite suggestions that the bill is a one-time bonus that could be reviewed in the future, the bill appears to give leaders' broad power in future years.

Lawmakers conceded that a Senate tweak of the plan approved Thursday is meaningless and that the measure would still tie the hands of future governors by shutting them out of the process....

"This is a permanent change and I don't know if the governor understands that," Rushing said. "This repeals a law and it won't just go back into effect in 18 months. It's rescinded." ...

If approved, the bill will immediately mean $7,500 bonuses for two state senators and pay raises of $7,500 to $15,000 for an undetermined number of House members.

Because of an emergency preamble tacked onto the bill, the pay raises will be immediate and retroactive to Jan. 1.

The Boston Herald
Saturday, June 14, 2003
Foes slam Mitt's 'flop': Gov wavers on pay hikes


House Speaker Thomas M. Finneran is seeking the change as a way to restructure legislative committees and award new chairmen and vice chairmen with a pay raise on top of their $53,381 annual base salary. Finneran wants the additional pay handled through House and Senate internal rules, which are proposed by legislative leaders and typically rubber-stamped by rank-and-file members, without review by the governor.

Finneran critics argue that the speaker will use this new expanded power to reward loyalists, so he can tighten his grip on the legislative process. State Representative Byron Rushing said yesterday that he and other House members will continue to fight against even the temporary measure, because the salaries that are increased will carry forward into future years and the Legislature could seek expanded powers again in 2005 and beyond.

The Boston Globe
Saturday, June 14, 2003
Romney says he would probably sign limited pay raise bill


Democratic leaders at the Statehouse still don't get it. By voting to roll back the income tax in 2000 and coming perilously close to ordering its abolition last year, and by electing Mitt Romney governor in 2002, Massachusetts voters made clear their feeling that taxes are too high. They want relief for themselves, not the cities and towns.

Voters don't want one tax substituted for another, and they don't want taxes replaced by fees, surcharges and the like. They do, on the other hand, want every bit of waste squeezed from the system before they're willing to consider new ways of increasing revenues.

An Eagle Tribune editorial
Saturday, June 14, 2003
Voters want less spending, not new fees


What do smoking, Pike signs and Clean Elections have to do with the state budget, you ask?

Not much -- and therein lies the problem, according to the Massachusetts Taxpayers Foundation.

In a report issued June 6, the non-partisan foundation chided House and Senate lawmakers for "loading up" their budgets with more than 600 budget riders, or "outside sections."

Many of the outside sections make sweeping policy changes without the benefit of a public hearing or the careful review of a legislative committee. And many simply have nothing to do with the state's finances.

"Although some of these proposals may have merit, it is hard to see how any of them belong in the state budget," the foundation's report says.

An abundance of budget riders is hardly a new phenomenon, but the foundation says the decades-old practice has become "increasingly problematic." ...

To clamp down on the abuse of budget riders, Widmer's foundation has drafted a proposed amendment to the state Constitution that would limit the use of outside sections to matters with a direct link to the state budget.

The MetroWest Daily News
Sunday, June 15, 2003
Legislators beat the system with budget riders


Life's two certainties - death and taxes - are on a collision course in Lancaster, where officials are making plans to all but shutter the town if voters turn down a tax increase today....

"If this doesn't pass, there won't be anyone to dig the graves," said Town Administrator Alan Agnelli....

"We'll turn off the water, shut off the lights, and board up the windows," Agnelli said....

"If there was a tax to bring Jesus off the cross, they wouldn't pay it - even if they were Christian," Agnelli said....

Tony Pirro, a former selectman, said he will vote against the override to register his disgust. 

"If you give them their money this time, they are just going to come back for more," he said. "You have to send the message that they can't just keep taking money from average Joes and pouring more money into the schools, which got us in all this trouble."

The Boston Globe
Monday, June 16, 2003
In Lancaster, budget is overriding issue


Chip Ford's CLT Commentary

If Governor Romney buys into the Finneran pay raise power grab, it'll be the biggest mistake he'll make in his fledgling administration and it will come back to haunt him again and again: it'll be the end of any hope he has to ever sustain any veto he makes.

"Leadership" of Finneran's Flock now makes up nearly half of the House and votes in lockstep to the wishes of the speaker-for-life. All the Massachusetts Machiavelli (ironically today in Venice -- close to "The Prince's" roots -- speaking to a group of international legislators) needs is a two-thirds vote in the House to override a governor's veto. "Leadership" will always vote Finneran's way to keep their bonus, and those who aspire to their own "leadership" position will toe the Finneran line in expectation.

Governor Romney must realize this will hand the Massachusetts Machiavelli unilateral power to use taxpayer money to raise an invincible army of Flock Leadership beholding to "The Prince" for its mercenary rewards.

*               *               *

Talk about "the sky is falling" hysterics, Lancaster town administrator Alan Agnelli has set a new benchmark that'll be hard to top! If a Proposition 2½ override doesn't pass today in Lancaster, "there won't be anyone to dig the graves"!

Here in Marblehead, we're going to lose our trash pick-up -- and there's no back-up plan to do anything whatsoever but let it pile up unless we pass a $1.38 million override. Proponents neglected to mention in the flyer that arrived on everyone's doorstep over the weekend that more than half of the tax hike will go just to pay raises for teachers. The vote is today; Barbara and I are off to vote "no."

Chip Ford


The Boston Herald
Saturday, June 14, 2003

Foes slam Mitt's 'flop': Gov wavers on pay hikes
by Elizabeth W. Crowley


Critics lambasted Gov. Mitt Romney yesterday as a flip-flopper for signaling renewed support for a legislative pay hike package that would hand pols unfettered power to dole out bonus pay to loyalists.

Opponents of the plan say Romney appears more horse-trader than reformer by not standing by previous threats to veto the bill.

"The bloom may come off the rose somewhat on this one for him," said state Sen. Brian A. Joyce (D-Milton), who voted against the plan.

Added state Rep. Byron Rushing (D-South End): "If (Romney) goes along with this, he's going to have to explain just how it does not do what he said he would not support or he has to explain the deal he's cut."

The plan, first pushed by House Speaker Thomas M. Finneran, would allow Finneran and Senate President Robert E. Travaglini the ability to appoint committee leaders and dole out bonus pay.

Currently, the governor has veto power over both issues.

Romney yesterday continued to walk a verbal tight-rope on the thorny issue.

The governor said he's "comfortable" letting current lawmakers decide which committees to create and which legislators to reward.

"I've indicated that for myself, with regards to this (legislative) term, I'm comfortable with us each being able to manage the structure of our respective branches," Romney said.

But, he added, he would not support any "permanent" change that would strip his successors in the Corner Office of the ability to review legislative pay.

The comments marked a sea change for Romney, who only a week ago promised to veto the bill after lawmakers killed his broad government reform plans - and bid to oust UMass President William M. Bulger. At the time, a top Romney aide did little to dispute the notion that it would be payback, criticizing lawmakers for "back-sliding" while Romney was offering reform.

Despite suggestions that the bill is a one-time bonus that could be reviewed in the future, the bill appears to give leaders' broad power in future years.

Lawmakers conceded that a Senate tweak of the plan approved Thursday is meaningless and that the measure would still tie the hands of future governors by shutting them out of the process.

The Senate change to the controversial plan requires the House and Senate to vote on it while debating their formal rules at the start of every two-year session.

That puts the power in the Rules Committees led by loyalists to Finneran and Travaglini.

"This is a permanent change and I don't know if the governor understands that," Rushing said. "This repeals a law and it won't just go back into effect in 18 months. It's rescinded."

Lida E. Harkins, the House assistant majority whip, confirmed that the Senate amendment - touted by sponsors as offering a means of redress for members who don't like the new system - doesn't change the bill.

"That protection was there all along," she said.

The Needham Democrat said the Legislature should have the same ability as the administration to organize itself and make salary decisions.

If approved, the bill will immediately mean $7,500 bonuses for two state senators and pay raises of $7,500 to $15,000 for an undetermined number of House members.

Because of an emergency preamble tacked onto the bill, the pay raises will be immediate and retroactive to Jan. 1.

Romney aides said the governor's legal office is performing a complete review of the legislation, which must now be approved by the House before it is sent to Romney.

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The Boston Globe
Saturday, June 14, 2003

Romney says he would probably sign limited pay raise bill
By Rick Klein, Globe Staff


In a move that would defuse a confrontation with the Legislature, Governor Mitt Romney indicated yesterday that he is likely to sign a measure allowing legislative leaders to increase the pay of their lieutenants through the end of next year.

Romney had threatened to veto a similar bill that did not include an expiration date. But the measure approved by the Senate late Thursday appears to answer his objections, because it would grant legislative leaders the new powers only temporarily.

"I've indicated very clearly to the leadership that this is not something that's going to go on on a permanent basis, but for this session, fine," Romney said. "I have no problem with them managing their own houses. I don't want to get involved in which committee is doing what, and what stipend goes with a committee chairmanship position. ... I, however, don't want to see [pay changes] continue beyond this session."

Shawn Feddeman, the governor's spokeswoman, cautioned that the language of the Senate-passed bill must be thoroughly reviewed before Romney supports it. The House is expected to approve the Senate version of the measure next week and deliver it to Romney for his signature.

House Speaker Thomas M. Finneran is seeking the change as a way to restructure legislative committees and award new chairmen and vice chairmen with a pay raise on top of their $53,381 annual base salary. Finneran wants the additional pay handled through House and Senate internal rules, which are proposed by legislative leaders and typically rubber-stamped by rank-and-file members, without review by the governor.

Finneran critics argue that the speaker will use this new expanded power to reward loyalists, so he can tighten his grip on the legislative process. State Representative Byron Rushing said yesterday that he and other House members will continue to fight against even the temporary measure, because the salaries that are increased will carry forward into future years and the Legislature could seek expanded powers again in 2005 and beyond.

Rushing speculated that Romney yielded to Finneran in return for favorable treatment of one of the governor's priorities, a charge Romney aides deny.

"If Romney signs this, he cut a deal around something," Rushing said. "We just need to find out what."

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The Lawrence Eagle Tribune
Saturday, June 14, 2003

Editorial
Voters want less spending, not new fees


Because of the efforts of Senate Majority Leader Fred Berry, the "municipal relief package" passed by the Senate includes the original language of the $1-per-ticket Topsfield Fair surcharge that state Rep. Ted Speliotis managed to insert in the House version of that package.

As the representatives for the town of Topsfield, Berry and Speliotis may feel an obligation to carry out the wishes of the voters at Town Meeting who came up with this scheme as a way of forcing those who don't live in Topsfield to contribute -- to the tune of an estimated $200,000 a year -- to the cost of maintaining town services. Unfortunately, this sets a dangerous precedent. What if other communities wish to seek, for instance, a similar surcharge on every ticket sold at movie complexes? Like the fair, those businesses generate a significant amount of traffic; and unlike the fair, they operate 365 days a year.

Democratic leaders at the Statehouse still don't get it. By voting to roll back the income tax in 2000 and coming perilously close to ordering its abolition last year, and by electing Mitt Romney governor in 2002, Massachusetts voters made clear their feeling that taxes are too high. They want relief for themselves, not the cities and towns.

Voters don't want one tax substituted for another, and they don't want taxes replaced by fees, surcharges and the like. They do, on the other hand, want every bit of waste squeezed from the system before they're willing to consider new ways of increasing revenues.

That's the new reality, and legislators, municipal officials, and the public employee unions ignore it at their peril.

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The MetroWest Daily News
Sunday, June 15, 2003

Legislators beat the system with budget riders
By Michael Kunzelman, Staff Writer

A statewide smoking ban in the workplace. A limit on the size of signs on the Massachusetts Turnpike. A repeal of the Clean Elections law.

With little fanfare and scant debate, the Senate quietly approved all three measures during the waning hours of its budget debate last month.

What do smoking, Pike signs and Clean Elections have to do with the state budget, you ask?

Not much -- and therein lies the problem, according to the Massachusetts Taxpayers Foundation.

In a report issued June 6, the non-partisan foundation chided House and Senate lawmakers for "loading up" their budgets with more than 600 budget riders, or "outside sections."

Many of the outside sections make sweeping policy changes without the benefit of a public hearing or the careful review of a legislative committee. And many simply have nothing to do with the state's finances.

"Although some of these proposals may have merit, it is hard to see how any of them belong in the state budget," the foundation's report says.

An abundance of budget riders is hardly a new phenomenon, but the foundation says the decades-old practice has become "increasingly problematic."

"It's one thing to have a handful of outside sections. It's another thing to have a free-for-all," said foundation president Michael Widmer. "This year was pretty close to a free-for-all."

An MCAS-related budget rider in the House was a "particularly egregious" example of the abuse of outside sections, Widmer said.

The House approved a budget amendment, sponsored by Rep. Alice Peisch, D-Wellesley, that would allow school districts to award diplomas to special-needs students who haven't passed MCAS but have met all other graduation requirements.

"This undercuts 10 years of education reform efforts," Widmer said. "I think it's a very important issue, worthy of consideration, but it's particularly egregious to do it as an outside section."

Peisch said she couldn't wait for the proposal to wend its way through the normal legislative channels, given that members of the Class of 2003 were due to graduate shortly after the House's budget debate.

"This was a very time-sensitive issue," she said. "It became clear to me that this was not going to make it through the normal committee process in a timely fashion. It was a question of fairness that needed to be dealt with quickly."

Rep. David Linsky, D-Natick, said budget riders can stifle public debate and run the risk of passing "sloppily drafted legislation."

But that doesn't mean Linsky is immune from the practice. Earlier this month, he sponsored an amendment to the House's "municipal relief" bill that gave an unrelated tax deduction to any resident who pays a fee for school transportation.

"I felt that the opportunity to get this bill onto the governor's desk warranted me taking that chance," he explained.

To clamp down on the abuse of budget riders, Widmer's foundation has drafted a proposed amendment to the state Constitution that would limit the use of outside sections to matters with a direct link to the state budget.

The amendment must be approved by two consecutive sessions of the Legislature before it can be placed on the ballot and ratified by voters. Lawmakers are expected to consider the proposal for the first time this fall.

Widmer is realistic about the chances that legislators will vote in favor of limiting the use of outside sections.

"It cuts heavily against the grain," he said of the proposed amendment. "I guess I would say it's an uphill battle."

The abuse of outside sections isn't limited to the leaders of the House and Senate.

Ironically, some progressive reformers in the House are fond of using outside sections to advance their legislative agenda because their bills rarely make it out of a committee and reach the House floor.

"Sometimes, it's the only way they can get their ideas before their colleagues," said Pamela Wilmot, executive director of Common Cause of Massachusetts.

"Clamping down on outside sections is an important reform," Wilmot added. "However, an even more important reform is having true democracy in the Legislature and allowing bills to come to the floor for debate."

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The Boston Globe
Monday, June 16, 2003

In Lancaster, budget is overriding issue
Officials say dire straits threaten town's future
By Peter Schworm, Globe Staff


LANCASTER - Life's two certainties - death and taxes - are on a collision course in Lancaster, where officials are making plans to all but shutter the town if voters turn down a tax increase today.

Town Hall and the town library would close for the foreseeable future while Lancaster officials worked under what they're calling a "meltdown budget." The town beach wouldn't open this summer. Even the town's five cemeteries would go untended.

"If this doesn't pass, there won't be anyone to dig the graves," said Town Administrator Alan Agnelli. 

The plan would halve the number of firefighters on call and shut down the highway department and health board. The town would probably lease a small office for the remaining employees and offer limited public access, after locking up the other town buildings.

"We'll turn off the water, shut off the lights, and board up the windows," Agnelli said.

And in three months, officials said, the town could run out of money altogether. 

For most people in this two-blinking-traffic-light town of 7,380, 50 miles west of Boston, the decision boils down to a financial tug-of-war. In a hard-luck economy, can homeowners absorb another tax increase to spare town services from drastic cutbacks, while still keeping their own finances in the black? 

Just a few days removed from the town's 350th anniversary parade, a celebration of New England charm and small-town spirit, many see the vote as a referendum on Lancaster itself. 

"This has really been promoted as a vote to save the whole community, about what kind of a place we want our town to be," said Selectwoman Alexandra Turner. 

In stark terms, Lancaster's predicament shows how a prolonged economic slump, rising education costs, and reduced state aid can place enormous pressure on a small town's finances. At the same time, in a town with little commerce and industry, an escalating tax burden makes it increasingly tough for homeowners to weather difficult economic times.

"I've heard people say they will move if it doesn't pass, and I've heard people say they will move if it does," said Linda Ledoux, a part-time town employee who supports the measure.

Voters will decide today whether to approve an override of Proposition 21/2, the state law capping annual property tax increases at 2.5 percent, to raise an additional $2.3 million for the budget. Without the money, the town would have enough cash to scrape by on minimal services for about three months, starting July 1.

The town would turn off its 70 street lights to shave expenses, and leave 78 miles of road unrepaired. The police force, now 17 strong, would shrink to two, and those officers would work banker's hours - 8 a.m. to 4 p.m weekdays. With a staff that size, police will not respond to routine calls or many more serious incidents, Chief Kevin Lamb warned.

But approving the override would permanently increase annual property taxes on a $250,000 home by more than $1,000. Many in town say voters' traditional aversion to tax increases suggests that a $2.3 million tax increase will be a tough sell. (Lancaster has never passed an override greater than $189,000.) 

"If there was a tax to bring Jesus off the cross, they wouldn't pay it - even if they were Christian," Agnelli said.

The crisis has town leaders and residents openly discussing the possibility of state intervention, either through a bailout loan, a financial advisory board, or even receivership, a municipal bankruptcy. But town officials say the state will not intervene unless the town defaults on payments.

"They've made it quite clear that they don't have that kind of money and that we have to solve our own problems," Turner said.

Joan Grourke, a spokeswoman for the state Department of Revenue's Division of Local Services, said it was premature to discuss state involvement and declined to comment on what scenario would trigger some kind of action. 

"We're just going to have to wait and see which way the vote goes," she said. "We're aware of problems there."

If the tax increase is rejected today, town officials said, they will go back to the voters with another one this summer.

For residents, the prospect of the town facing bankruptcy is difficult to grasp.

"Then what happens? We'll become, I don't know, Chelsea?" asked Jeanne Rich, who serves on three local boards. "I don't know what happens when a town stops being a town."

Chelsea was in state receivership from 1991 to 1995, the only Massachusetts community that has gone that route.

Last summer, accountants at the Nashoba Regional School District, which draws students from Lancaster, Stow, and Bolton, discovered a massive budget deficit created by years of overspending and mismanagement. The district required a $3.8 million state bailout loan to remain afloat.

Many voters blame that scandal, combined with dramatic increases in school spending, for the bulk of Lancaster's troubles. Tony Pirro, a former selectman, said he will vote against the override to register his disgust. 

"If you give them their money this time, they are just going to come back for more," he said. "You have to send the message that they can't just keep taking money from average Joes and pouring more money into the schools, which got us in all this trouble."

But taking out that anger on the town, most locals say, is misdirected, because money from the tax increase would mostly pay for non-school municipal services. 

Several factors have combined to leave Lancaster in its predicament, officials say, chiefly the town's narrow tax base, the cost of several capital projects, state aid cuts, and several years of closing shortfalls with past savings.

Last year, officials nearly exhausted the town's savings to avoid a tax increase, warning residents that the move would only buy time. Still, some residents said the town has cried wolf before.

"We've absolutely lost our credibility," said Shawn Winsor, the health board chairman and a lifelong resident. 

Lancaster's median household income is about $60,000, but almost a quarter of residents make less than $35,000, according to the last federal census. That economic diversity creates deep divisions over the vote to increase taxes. Paula Castner, who is spearheading drive to support the tax increase, describes the situation as "plaid" rather than black or white.

"But you have the reality that the town will shut down one week after celebrating 350 years," she said. "For me, the alternative isn't an alternative."

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