CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

 

CLT UPDATE
Thursday, January 15, 2004

Dems and their dependents running scared


Facing another year of budget challenges, Governor Mitt Romney tonight is expected to use his second State of the State address to outline a new and ambitious agenda for major government reforms to close a gaping deficit, returning to a theme that elected him to the office but that is stirring increasing antipathy from Beacon Hill Democrats.

Romney's 20-minute speech will reiterate his pledge to veto new taxes to resolve next year's $1 billion-plus projected budget deficit and instead will expand his proposals for streamlining and changing state government to create savings to help deal with the state's budget problems, top administration aides confirmed....

Yesterday, Senate President Robert E. Travaglini, in an unusual attempt to upstage a governor a day before the State of the State address, called on Romney to offer "realistic solutions to the fiscal crisis, not unrealistic symbolic attacks disguised as reforms." ...

The call for reform appears to have a welcome audience among voters. A new University of Massachusetts poll shows that a huge majority -- 86 percent -- think it is important that state government is reformed. But despite Romney's popularity and good marks for the job he has done, voters are more inclined to think that the changes should be made by legislators....

"The battle for next year's budget is going to center on Democratic and Republican concepts of reform," said Lou DiNatale, the director of UMass polls. "Romney has the initiative and actually advantage as governor but Democrats seem to have significant support for their own agenda." ...

On another issue, the UMass polling indicates voters are feeling property tax increases, and a 32 percent plurality blames the local officials who run their cities and towns....

As he addresses the House chamber tonight, Romney will look out at a chamber filled with Democratic legislators, many of them seething over his major political initiative to field Republican challengers. For years, most Democratic incumbents have faced little or no opposition from GOP candidates.

The Boston Globe
Thursday, January 15, 2004
Romney to focus on reform plan
Address to offer ideas on closing budget gap


Senate President Robert E. Travaglini wants Gov. Mitt Romney to forego proposing in tonight's State of the State speech "unrealistic, symbolic" reforms that Democratic lawmakers will have to reject....

Travaglini's comments - referring to Romney's successful campaign last year to oust former UMass President William M. Bulger - foreshadowed election-year politics in which Beacon Hill will grapple with another formidable budget deficit and Republicans will try to break a Democratic headlock on the Legislature....

Health advocates claimed they had an advance copy of Romney's budget, indicating cuts in community health centers, teen pregnancy prevention, tobacco control and school nurses, but administration officials said details have not been finalized.

The Boston Herald
Thursday, January 15, 2004
Senate prez to Mitt: Skip 'symbolic' reforms


The state's largest teachers union has launched a radio advertising blitz urging Gov. Mitt Romney to "stop the nonsense" of cutting state spending on education, kindergarten and class-size reduction.

The Massachusetts Teachers Association, which represents 97,000 public school employees, plunked down $50,000 for the ads.

Romney aides protested the governor's budget last year proposed to fully fund the Chapter 70 education aid formula.

The Boston Herald
Tuesday, January 13, 2004
Teacher union ads rip Romney cuts
By Herald staff/Local briefs


Gov. Mitt Romney will be schmoozing at a fund-raiser for his campaign donors immediately after he delivers tomorrow's State of the State address - a move Democrats decried as an unseemly mixing of government and political business.

The governor's campaign committee is hosting the $250-a-head "speech watching party" at the Omni Parker House in downtown Boston....

Democrats howled in outrage, with Democratic Party spokeswoman Jane Lane calling it "classless and hypocritical" for Romney to cash in his State of the State bully pulpit for gobs of campaign cash....

News of the State of the State fund-raiser shocked advocates for the poor and downtrodden - who threatened to protest outside the event.

The Boston Herald
Wednesday, January 14, 2004
Dems blast gov's post-speech donor bash


"I'll propose a balanced budget. I will not propose raising taxes. I will propose no broad-based fee increases," [Gov. Romney] said.

The governor said that while higher fees brought in hundreds of millions in much-needed revenue last year, they were targeted at services provided for specific purposes.

"The fees (increases) last year were generally narrow and there was a specific service being provided to the public and we were trying to match the fee with the cost of the service," he said. "But we didn't go after things like driver's licenses and auto inspections, because they are very broad-based and, even through they are different from a tax, it sure feels like a tax. We stayed away from those and we will continue to stay from those and we will not raise taxes," Mr. Romney said.

[Massachusetts Taxpayers Foundation President Michael] Widmer said his group has pegged the gap between revenues and spending in the fiscal '05 budget at about $1 billion as well, and he said going into the start of the budget preparations it is clear that, "everybody recognizes that broad-based taxes are off the table." ...

The Massachusetts Teachers Association began running radio ads yesterday seeking to restore money cut last year from school programs, particularly education reform funding for local communities, and Mr. Widmer said he expects state colleges and universities will try to make up ground lost to deep budget cuts last year and pressure will also mount to restore social services money trimmed dramatically last year.

MTA President Catherine A. Boudreau said the education cuts imposed last year have to be "reversed" to maintain progress on education reform.

Meanwhile, the Massachusetts Human Services Coalition is preparing to release its 2004 version of its "People's Budget"; it details the impact of $300 million in social service cuts on the lives of needy people this year.

"My advice is to be cautious of declaring victory too soon," Mr. Widmer said.

The Worcester Telegram & Gazette
Tuesday, January 13, 2004
No hike in taxes, Romney pledges
Broad-based fees in same category


Gov. Mitt Romney is putting the final touches on his first official State of the State address and the pre-speech spin is rife with that old buzzword "optimism." ...

Romney even used the dreaded "I" word in pre-speech interviews. The improving fiscal picture will allow him to "invest in our schools, to invest in more housing, to invest in our environment," the governor said [emphasis ours].

Yikes. In the bad old days, "invest" was just another Democratic code word for increasing taxes and spending.

A Boston Herald editorial
Tuesday, January 13, 2004
Memo to Romney: It's not morning yet


After a week of sparring over the true state of the Commonwealth's finances, Governor Mitt Romney and lawmakers quieted the controversy yesterday by settling on revenue estimates for the rest of this year and next....

After nearly a month of discussions, Kriss, Rogers, and Senate Ways and Means chairwoman Therese Murray, Democrat of Plymouth, agreed that by the end of this fiscal year in June, the state will have an estimated $422 million in unanticipated tax revenue it can carry into fiscal 2005.

They expect the Commonwealth to take in $15.8 billion next year -- about $1 billion more than this year's predicted total but $1 billion less than what it collected in fiscal 2001, before the economic downturn....

Independent budget analysts predicted [an unanticipated tax revenue] windfall of as much as $730 million.

The Boston Globe
Thursday, January 15, 2004
Democrats, Romney aide agree on revenue sum


No one likes to pay taxes. But if it sometimes seems like the boastful politicians in Washington and Boston seem to have noticed the tax cuts they gave you more than you have, it may be because your local property tax bill has gone up faster than the others have come down.

That perception is borne out in a Boston Herald analysis of property tax rates. It found that the average property tax bill has shot up 30 percent or more over the last four fiscal years in 70 of the 158 cities and towns of eastern and central Massachusetts that had set their tax rates for fiscal 2004 as of last week....

Several factors lie behind these figures ...

A MetroWest Daily News editorial
Tuesday, January 13, 2004
Behind the property tax increases


Chip Ford's CLT Commentary

First we had Speaker for Life Finneran upstage Governor Romney with his own "Speaker's State of the State" speech last Monday -- a "tradition" His Royal Eminence inaugurated only in 1997. Now we have Senate President Travaglini telling the governor what he can and can't say tonight during his "Governor's State of the State" speech.

The greedy state teachers union, the Massachusetts Teachers Association,  is investing $50,000 more of its members' dues running ads attacking the governor for not spending enough on "education" -- for the children, of course -- while the Human Services Industrial Complex is about release to its annual "People's Budget," this year already decrying "$300 million in social service cuts on the lives of needy people" that hasn't yet even been proposed. They've threatened to protest Romney's speech tonight, but can they rally enough of their Gimme Lobby "clients" to brave the cold?

Ah ... but there's an explanation for this unprecedented preemptive assault, if you read closely between the lines:

The call for reform appears to have a welcome audience among voters. A new University of Massachusetts poll shows that a huge majority -- 86 percent -- think it is important that state government is reformed....

Romney will look out at a chamber filled with Democratic legislators, many of them seething over his major political initiative to field Republican challengers. For years, most Democratic incumbents have faced little or no opposition from GOP candidates.

The Democrats and their dependents are all running scared!

How scared?

The governor's campaign committee is hosting the $250-a-head "speech watching party" at the Omni Parker House in downtown Boston....

Democrats howled in outrage, with Democratic Party spokeswoman Jane Lane calling it "classless and hypocritical" for Romney to cash in his State of the State bully pulpit for gobs of campaign cash....

As if Democrat powerbrokers don't hold endless "times" to raise piles of cash to keep themselves and their buddies in power and money!

Anyone looking for a scandalous fundraiser need only recall what we termed "The Fleeing Felon Fundraiser" back in the mid-90s. The Anthony's Pier Four "time" benefited convicted tax-evader and outgoing House Speaker "Good Time Charlie" Flaherty. It was so honestly "classless and hypocritical" that CLT organized a demonstration and a crowd of members picketed outside the Boston harborside restaurant.

But now, only Democrats-running-scared should be allowed to raise money -- or today it's an "outrage."

How scared are the Democrats and their dependent constituency?

Very, very ... and desperate too.

Chip Ford

PS.   Remember when you hear about a $1 billion "deficit," a $1.5 billion "budget gap," or a $2 billion "hole in the budget," they're talking about the increase they want but can't have.  The budget next year will increase -- just as it did this year -- only not by as much as those feeding at the public trough would like.


The Boston Globe
Thursday, January 15, 2004

Romney to focus on reform plan
Address to offer ideas on closing budget gap
By Frank Phillips, Globe Staff


Facing another year of budget challenges, Governor Mitt Romney tonight is expected to use his second State of the State address to outline a new and ambitious agenda for major government reforms to close a gaping deficit, returning to a theme that elected him to the office but that is stirring increasing antipathy from Beacon Hill Democrats.

Romney's 20-minute speech will reiterate his pledge to veto new taxes to resolve next year's $1 billion-plus projected budget deficit and instead will expand his proposals for streamlining and changing state government to create savings to help deal with the state's budget problems, top administration aides confirmed.

Romney and his aides declined to offer any specifics yesterday, but his communications director, Eric Fehrnstrom, confirmed that reforming state government will be one of the keynotes of his address.

"The governor will set the stage of the next year and talk about the need for more reform," Fehrnstrom said. "When we eliminate waste and duplication in government, we can do more for people."

His address, which will be carried on most of Boston's major television stations, comes as Romney, while popular with voters, continues to have strained relations with the Democrats on Beacon Hill. Lawmakers complain Romney is underestimating the size of the budget shortfall and overstating the savings he will get from changing the way the government does business.

Yesterday, Senate President Robert E. Travaglini, in an unusual attempt to upstage a governor a day before the State of the State address, called on Romney to offer "realistic solutions to the fiscal crisis, not unrealistic symbolic attacks disguised as reforms."

Travaglini said the Senate would cooperate with Romney, but sharply criticized the governor for implying in the past that overhauling government would provide enough savings to deal with the deficit.

"This type of approach of overstating reforms is a mere distraction from the real and difficult choice of having to implement drastic budget cuts and increase fees to truly manage the state's budget gap," Travaglini said at a news conference.

The Senate leader urged Romney to avoid a "political agenda or personal attacks." He cited the governor's attempt to abolish the University of Massachusetts president's office, then attempting to beef it up after forcing William M. Bulger to resign from the post.

One big dispute this year: how to close what the administration says is a $1 billion deficit for fiscal 2005, but which House leaders say may reach $1.5 billion. Romney's aides say they are confident their numbers are correct and he will make clear how savings can be achieved.

"People in this building tend to think that there is some trick or magic involved in saving money in government. There is not. It simply requires commitment to change," Fehrnstrom said.

As a candidate, Romney portrayed himself as an outsider ready to take on the Beacon Hill establishment, and since coming to office last year he has often used the word "reform" to describe the changes he wants to bring to state government. So far, he has pushed Bulger from office, taken on state employee unions on a number of fronts, and persuaded lawmakers to abolish the Metropolitan District Commission.

The call for reform appears to have a welcome audience among voters. A new University of Massachusetts poll shows that a huge majority -- 86 percent -- think it is important that state government is reformed. But despite Romney's popularity and good marks for the job he has done, voters are more inclined to think that the changes should be made by legislators.

Asked whether the Republican administration or the Democrat-controlled Legislature is more likely to bring about the reforms that each respondent wanted, the voters were nearly evenly split: 43 percent chose the legislators and 37 percent the executive branch. The poll of 401 registered voters has a margin of error of plus or minus 5 percent.

"The battle for next year's budget is going to center on Democratic and Republican concepts of reform," said Lou DiNatale, the director of UMass polls. "Romney has the initiative and actually advantage as governor but Democrats seem to have significant support for their own agenda."

Respondents were split in the dispute between the governor and the Democratic leadership over whether Romney can avoid cuts in local aid and other services with his overhaul. Some 42 percent agreed with the governor and 46 percent agreed with the Legislature's skeptism.

Still, some 62 percent rate Romney's job performance excellent or good, while 37 percent rate it not so good or poor.

On another issue, the UMass polling indicates voters are feeling property tax increases, and a 32 percent plurality blames the local officials who run their cities and towns. Lawmakers are considering legislation to cushion homeowners from large property tax increases by raising taxes on businesses beyond the current state limit.

DiNatale said the survey shows Romney has yet to develop a definitive public profile, leaving the Democrats a chance to challenge him. He noted that 41 percent of those polled could not identify what they most like about the Romney adminisration. Some 15 percent -- the largest response -- cited his personality and style.

As he addresses the House chamber tonight, Romney will look out at a chamber filled with Democratic legislators, many of them seething over his major political initiative to field Republican challengers. For years, most Democratic incumbents have faced little or no opposition from GOP candidates. Romney, saying he wants to reestablish a competitive two-party system, is recruiting candidates for the House and Senate and raising a large campaign war chest for the state party.

Some 60 percent of those polled said they think it is important for Romney to get more Republicans in the state Senate. The poll found that 49 percent say it is important to them that Romney endorses their state representative or senator, while 48 percent said it is not important.

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The Boston Herald
Thursday, January 15, 2004

Senate prez to Mitt: Skip 'symbolic' reforms
By Steve Marantz
Thursday, January 15, 2004


Senate President Robert E. Travaglini wants Gov. Mitt Romney to forego proposing in tonight's State of the State speech "unrealistic, symbolic" reforms that Democratic lawmakers will have to reject.

"We would expect that any recommendation of reform that comes from this administration be substantive, and not be driven by any political agenda, nor any personal attack, but rather the best interest of the citizenry," Travaglini said.

Travaglini's comments - referring to Romney's successful campaign last year to oust former UMass President William M. Bulger - foreshadowed election-year politics in which Beacon Hill will grapple with another formidable budget deficit and Republicans will try to break a Democratic headlock on the Legislature.

"Gov. Romney will set the stage for the next year and talk about the need for more reforms and he will make the point that when we eliminate waste and duplication from state government we can do more for the people of Massachusetts," said Shawn Feddeman, Romney spokeswoman.

Said Travaglini: "We do not want to mislead the public that reforms are a magic solution - overstating reforms is a mere distraction from the difficult choice of having to implement drastic budget cuts and increase fees to truly manage the state's budget gap."

Travaglini's comments came as Senate and House budget writers reached agreement with the administration on a consensus revenue figure for the next fiscal year.

The consensus figure, $15.8 billion, represents a tentative political accommodation between lawmakers and Romney, providing a common ground on which to construct the next budget.

The consensus revenue figure prompted the House to lower its projected deficit, from $1.7 billion to $1.5 billion - closer to the $1 billion deficit projected by Romney.

Travaglini said new taxes are not on the Senate agenda, but he did not guarantee that local aid would not sustain additional cuts, as Romney has promised.

Health advocates claimed they had an advance copy of Romney's budget, indicating cuts in community health centers, teen pregnancy prevention, tobacco control and school nurses, but administration officials said details have not been finalized.

Meanwhile, the House yesterday passed a tax reclassification measure granting property tax relief to homeowners for the next four years.

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The Boston Herald
Wednesday, January 14, 2004

Dems blast gov's post-speech donor bash
By Elisabeth J. Beardsley
Wednesday, January 14, 2004


Gov. Mitt Romney will be schmoozing at a fund-raiser for his campaign donors immediately after he delivers tomorrow's State of the State address - a move Democrats decried as an unseemly mixing of government and political business.

The governor's campaign committee is hosting the $250-a-head "speech watching party" at the Omni Parker House in downtown Boston.

Invitations were sent to hundreds of people who have given money to Romney's campaign, and between 30 and 50 donors have rendezvoused for the cozy fete, Romney campaign officials confirmed.

Immediately after Romney finishes giving the speech in the House chamber at the State House, he'll stroll down Beacon Hill to put in a personal appearance at the donor party, aides said.

Democrats howled in outrage, with Democratic Party spokeswoman Jane Lane calling it "classless and hypocritical" for Romney to cash in his State of the State bully pulpit for gobs of campaign cash.

"How hypocritical for Gov. Romney to put a for-sale sign on the State House, when in fact he has railed against that practice," Lane said. "It makes a mockery of the governor's office and good government."

Romney political operatives defended the event, which could raise more than $10,000 for the governor's efforts to launch Republican challengers against incumbent Democratic lawmakers this fall.

"Every politician, including the governor, has fund-raisers every week," said Romney political director Alex Dunn. "For us to fight against the real special interests up there and the real power brokers - which is the Democratic Party - it requires lots of resources."

Dunn refused to release a list of the invited donors, but denied speculation that special access was being given to high-powered business leaders who are among Romney's strongest allies - or that such access would affect the governor's positions.

"Mitt Romney owes no favors," Dunn said.

News of the State of the State fund-raiser shocked advocates for the poor and downtrodden - who threatened to protest outside the event.

The governor has "completely abandoned" his pledge to protect core services from painful budget cuts, said Massachusetts Human Services Coalition Executive Director Stephen Collins.

"We find it reprehensible that the governor's setting up a toll booth with a $250 charge as part of his so-called State of the State," Collins said. "It certainly shows just who in the state is No. 1 on the governor's list - and it ain't poor folks."

While campaign donors enjoy a private reception, Republican activists who are planning a pro-Romney rally before the State of the State will get their own separate party at the Parker House.

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The Worcester Telegram & Gazette
Tuesday, January 13, 2004 

No hike in taxes, Romney pledges
Broad-based fees in same category
By John J. Monahan, T&G Staff


Making the challenge of solving a $1 billion deficit in next year's budget sound easy compared to dealing with last year's $3 billion shortfall, Gov. Mitt Romney said Friday he will not propose raising taxes or any "broad-based fees" when he unveils his state spending plan later this month.

While close observers expect to see little relief for cities and towns suffering from cuts in local aid last year, the governor is not likely to make further cuts in local aid when he lays out his budget proposals, said Michael J. Widmer of the Massachusetts Taxpayers Foundation.

Gone is the crisis atmosphere that surrounded Mr. Romney's first budget last year.

The fiscal gloom and doom of a year ago has been replaced with cautious optimism in light of federal aid increases and rising state revenues.

"This is a lot less hectic than last year for a lot of reasons," Mr. Romney told the Telegram & Gazette.

"We still have a very severe budget challenge ahead of us. I think the early estimates were as much as $2 billion in deficit. I don't think it will be that bad. I think our economy is coming back," the governor said. "I am far more optimistic than that, but we will still have a deficit. Maybe it's closer to $1 billion."

The governor, who is preparing to deliver a "state of the state" address on Thursday, said he will again freeze taxes and general fees, relying on reforms, budget cuts and consolidations to balance the budget.

"We have been having to look for every possible reform that can generate additional cash, any cuts in programs where we think the program is not as effective as it might be," Mr. Romney said.

"I'll propose a balanced budget. I will not propose raising taxes. I will propose no broad-based fee increases," he said.

The governor said that while higher fees brought in hundreds of millions in much-needed revenue last year, they were targeted at services provided for specific purposes.

"The fees (increases) last year were generally narrow and there was a specific service being provided to the public and we were trying to match the fee with the cost of the service," he said. "But we didn't go after things like driver's licenses and auto inspections, because they are very broad-based and, even through they are different from a tax, it sure feels like a tax. We stayed away from those and we will continue to stay from those and we will not raise taxes," Mr. Romney said.

Mr. Widmer said his group has pegged the gap between revenues and spending in the fiscal '05 budget at about $1 billion as well, and he said going into the start of the budget preparations it is clear that, "everybody recognizes that broad-based taxes are off the table."

Mr. Widmer said he expects about half of the $1 billion gap will be filled by one-time revenues, such as an increase in federal aid to the state and reserve cash. He warned, however, that the $1 billion deficit projections rely on improving revenue through June 2006, while health care and Medicaid costs continue to rise rapidly.

Mr. Romney is expected to again seek the merger of the state Highway Department with the independent and self-financed Turnpike Authority, a controversial proposal rejected by the Legislature last year.

The administration has maintained that the merger would free up about $190 million in cash reserves from turnpike toll revenues for use in the budget by allowing the state to assume the turnpike debt and cover it with state bonds.

With turnpike officials and most legislators opposing the merger, Mr. Widmer said, the proposal will likely be controversial again this year.

"We would be concerned about using this money. For one, it has been raised for transportation purposes, and secondly it would mean using a one-time revenue to fill the operating budget," he said. That would leave a similar size hole to fill in the budget in future years, he said.

"This is just grabbing $190 million, but I expect it will be part of the budget proposal this year," he said.

Mr. Romney could also revive proposals to consolidate court systems and realign state college campuses, both proposed last year and blocked by the Legislature. Lawmakers, meanwhile, may look again at expanded slot machine and casino gambling operations, which have been rejected in the past.

The Massachusetts Teachers Association began running radio ads yesterday seeking to restore money cut last year from school programs, particularly education reform funding for local communities, and Mr. Widmer said he expects state colleges and universities will try to make up ground lost to deep budget cuts last year and pressure will also mount to restore social services money trimmed dramatically last year.

MTA President Catherine A. Boudreau said the education cuts imposed last year have to be "reversed" to maintain progress on education reform.

Meanwhile, the Massachusetts Human Services Coalition is preparing to release its 2004 version of its "People's Budget"; it details the impact of $300 million in social service cuts on the lives of needy people this year.

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The Boston Herald
Tuesday, January 13, 2004

A Boston Herald editorial
Memo to Romney: It's not morning yet

Gov. Mitt Romney is putting the final touches on his first official State of the State address and the pre-speech spin is rife with that old buzzword "optimism."

These annual speeches are supposed to be forward-looking and Romney seems to be taking a page out of President George W. Bush's book on that score. Bush's campaign strategists are reportedly already crafting new "Morning in America" ads a la Ronald Reagan to contrast Bush with his chief and utterly pessimistic rival, former Vermont Gov. Howard Dean.

And while Romney changed time zones when he flew back from Utah after penning a first draft of the speech, we have news for him. It's not morning in Massachusetts.

It's not midnight either. Economic prospects aren't quite that gloomy anymore. But if we had to ascribe a time of day to the current state of affairs, it would be those pre-dawn hours when the mist is just lifting, and it's not quite clear whether the umbrella should be left behind.

Which makes it even more puzzling why Romney is the one preaching sunnier skies while legislative leaders paint gloomy scenarios. Of course, while sounding the alarm about the still troubling fiscal picture, those same lawmakers this week are going to add $40 million to $80 million to state spending by overriding Romney's vetoes of economic development programs.

But just as troubling as legislators' actions are Romney's words, at least as previewed in the "table-setting" pre-speech news stories put out by Romney's aides. Romney himself is emphasizing the expansion of some state programs, including education, housing and the environment.

Romney even used the dreaded "I" word in pre-speech interviews. The improving fiscal picture will allow him to "invest in our schools, to invest in more housing, to invest in our environment," the governor said [emphasis ours].

Yikes. In the bad old days, "invest" was just another Democratic code word for increasing taxes and spending.

As his professional wordsmiths try to imbue Romney's own prose, with a few memorable, or at least, quotable, lines, we hope they settle on a theme more befitting the times, like caution. And guys, try to keep the "golly gosh's" to a minimum. There's only so much optimism folks can take.

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The Boston Globe
Thursday, January 15, 2004

Democrats, Romney aide agree on revenue sum
By Scott S. Greenberger, Globe Staff


After a week of sparring over the true state of the Commonwealth's finances, Governor Mitt Romney and lawmakers quieted the controversy yesterday by settling on revenue estimates for the rest of this year and next.

Administration budget chief Eric Kriss and the House and Senate cochairs of the joint Ways and Means committee also agreed to make technical changes to next year's pension fund payment that will allow the state to count an additional $200 million in fiscal 2005.

By agreeing on revenue, the three key leaders paved the way for the main event: settling on a spending plan for fiscal 2005, which begins July 1. Romney is expected to talk about his budget proposal in his State of the State speech tonight and will officially launch the budget debate when he submits his plan Jan. 28.

"We know what we have to budget to, and we look forward to reaching that target," Kriss said.

The administration and lawmakers still differ, however, on how large a budget gap the state will face in fiscal 2005, mostly because they disagree on how much it will cost to maintain current programs and services. Kriss said the state will have a $1 billion gap, while Representative John H. Rogers, a Norwood Democrat who is House chairman of Ways and Means, predicts a gap of $1.5 billion, once the pension savings are factored in.

After nearly a month of discussions, Kriss, Rogers, and Senate Ways and Means chairwoman Therese Murray, Democrat of Plymouth, agreed that by the end of this fiscal year in June, the state will have an estimated $422 million in unanticipated tax revenue it can carry into fiscal 2005.

They expect the Commonwealth to take in $15.8 billion next year -- about $1 billion more than this year's predicted total but $1 billion less than what it collected in fiscal 2001, before the economic downturn.

The Department of Revenue announced last week that the state was $356 million ahead of its projections in the first half of the fiscal year, fueling the administration's optimism. Last month, Kriss predicted the state would carry nearly $500 million in extra money into next year. Independent budget analysts predicted a windfall of as much as $730 million.

Romney has suggested that the new revenue, combined with savings from the consolidation of certain state agencies, will allow the state to increase some spending after three years of budget cuts.

But Rogers and Murray have been skeptical. They warned that the latest revenue report continued a troubling trend: While the state collected more in capital gains and corporate taxes in December 2003 than it did in December 2002, it received less in income withholding and sales taxes, which make up most of the state's revenue and are viewed as barometers of the state's fiscal health.

Rogers also pointed out that the state's revenue projections for the first half of the fiscal year were so low it was easy to exceed them. The target numbers are much higher in the second half of the year, and Rogers suggested the state might miss them if its recovery remains sluggish.

Rogers said the three branches settled on the $422 million figure to smooth the budget process.

"The governor, to his credit, came down," Rogers said. "We had to come up."

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The MetroWest Daily News
Tuesday, January 13, 2004

A MetroWest Daily News editorial
Behind the property tax increases


It's hard to complain about tax cuts at the federal level or recent efforts at the state level to avoid tax increases despite record deficits.

No one likes to pay taxes. But if it sometimes seems like the boastful politicians in Washington and Boston seem to have noticed the tax cuts they gave you more than you have, it may be because your local property tax bill has gone up faster than the others have come down.

That perception is borne out in a Boston Herald analysis of property tax rates. It found that the average property tax bill has shot up 30 percent or more over the last four fiscal years in 70 of the 158 cities and towns of eastern and central Massachusetts that had set their tax rates for fiscal 2004 as of last week.

Leading the list are two area communities, Upton and Northborough, which saw their average tax bills increase by 61 percent over the last four years.

Several factors lie behind these figures:

  • Responding to growing enrollment and aging buildings, communities have embarked in the largest school building boom since the 1960s.

  • Fast-growing communities that are largely residential -- Upton and Northborough among them -- benefited little from the commercial and office-industrial boom of the '90s, while new subdivisions boosted school costs more than the revenue they brought in.

  • Some communities, especially up and down Rte. 495, had low property tax rates frozen in by Proposition 2 back in 1980. Some are still catching up. Despite its rapid increase, Upton's average property tax bill, just over $4,000, is well below some of its neighboring communities.

The sharpest increases, the analysis notes, came over the last four years, as the state slowed the growth of local aid, then froze it, then cut it sharply. Cities and towns cut spending as well, but not enough to avoid having to raise property tax rates.

These explanations don't make it any easier for anyone to handle an increase in property tax bills in the hundreds or thousands of dollars. But they should remind us that while taxes are mailed to different addresses, they all come from the same wallets. When the state Legislature cuts local aid or school building assistance, Beacon Hill politicians are, in effect, forcing local property taxes higher. When the Congress cuts grants while saddling communities with unfunded mandates, Washington politicians are helping raise property taxes.

Property taxes are among the least progressive, least fair and least efficient means of raising revenue for government services. While it is incumbent on local government leaders to do what they can to keep property tax rates reasonable, they need more help than they've been getting in recent years from Beacon Hill and Washington, D.C.

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