CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

 

CLT UPDATE
Monday, February 2, 2004

Is government reform possible in Taxachusetts?


Citizens for Limited Taxation has always divided state spending into three, not two, categories: the money used to provide services to those who really need them, the money returned to taxpayers in direct services, and the money misused by some politicians and bureaucrats. We file numerous news items into this third category, which we call WIMPAC (waste, inefficiency, mismanagement, patronage, abuse of power, and corruption). 

It always seemed to us that genuine liberals -- as opposed to the professional system-suckers -- and taxpayers should work together to fight the third category. Sometimes we have, as with welfare reform, opposition to corporate welfare, and legislative reform coalitions....

Gov. Romney's State of the State address and 2005 budget begin in the right places, with construction and pension reforms. A discussion on these specifics is long overdue, but it really had to wait until someone stepped forward to present the overall budget math. For his willingness to take the heat for stating the obvious, Eric Kriss deserves our gratitude and admiration.

CommonWealth Online Forum
Winter 2004
Budget Imbalance: Responses to Eric Kriss
An overweight, overtaxed Commonwealth has plenty of room to cut
By Barbara Anderson


Kriss conveniently glosses over the fiscal history of the last decade. During the '90s, Massachusetts tax revenue from capital gains and stock options exploded. In response, we cut taxes, particularly on personal income. This wasn't good long-term fiscal policy. Capital gains and stock options were powered by a stock market growing at 25 percent per year, something which could not go on indefinitely. When the stock market came back to earth, the logic of Kriss's "evolution" was that we should have restored the long-term relationship between the economy and taxes by restoring taxes to their prior level. But, like so much of the Republican party, Kriss views this through an ideological lens in which falling taxes are OK and rising taxes are not. If taxes go down in good times and don't go up in bad times, how is this consistent with his idea of stasis?

CommonWealth Online Forum
Winter 2004
Budget Imbalance: Responses to Eric Kriss
Response by Edward Moscovitch


Between 1995 and 2000, during the stock market bubble, state spending ballooned from $16.3 billion to $21.8 billion. If the budget had grown by inflation and population growth it would have stood at just $18.9 billion. Instead, as the money poured in, Beacon Hill added an extra $2.8 billion in annual spending. That additional spending came from deliberate decisions to grow government.

One of the biggest was the decision to expand Medicaid. Lost in much of the hullabaloo about rising health care costs is the simple fact that most of the state's rising Medicaid budget comes for expanding eligibility. By 2000, Medicaid enrollment had grown by 50 percent over 1996 levels.

According to analyses produced by the Massachusetts Taxpayers Foundation, nearly 60 percent of the cost increases in Medicaid between 1997 and 2002 were driven by expanding eligibility, not underlying costs of health care. Today one in six Massachusetts citizens receive Medicaid support. However laudable this goal, it is not sustainable within current revenues.

The Boston Herald
Monday, March 3, 2003
Romney's budget lays out priorities
By Stephen J. Adams


For the second year in a row, Gov. Mitt Romney has proposed a budget that bridges some of the gaps between revenue and expenditures by assuming the reform of agencies that have long resisted reform. Last year, aside from eliminating the patronage-plagued Metropolitan District Commission, the Legislature ignored Romney's best ideas.

The difference this year, Romney says, is the election Nov. 2, when voters will have a chance to weigh in on the budget choices made by the Legislature and the opportunities left unrealized.

A MetroWest Daily News editorial
Sunday, February 1, 2004
Romney's call to reform


But Administration and Finance Secretary Eric Kriss shed some light on why the Turnpike report found a cost, not a savings, from the plan.

Arguing in favor of the administration's plan to merge the Turnpike Authority with the state highway department, Kriss said $20 million annually could be saved in back-office administrative costs and employing fewer tolltakers.

Kriss said that as the automated Fast Lane system accommodated a higher percentage of Turnpike users, tolltaker employment levels stayed the same instead of being reduced....

Ah, now we get it! Of course, Turnpike officials wouldn't want to take down the toll plazas if that meant having to lay off a few toll takers....

The need for more common sense at the Turnpike is yet another argument in favor of the governor's merger plan.

A Boston Herald editorial
Monday, February 2, 2004
Pike officials motto: 'Just say no' to ideas


House Ways and Means Chairman John Rogers (D-Norwood) is already huffing and puffing that Gov. Mitt Romney's budget is out of balance by some $400 million to $500 million because of its use of one-time sources of revenue. We hope Rogers' indignation is a sign he won't fall back on the well-worn budget trick - this year avoided by Romney - to underfund the snow and ice removal account.

A Boston Herald editorial
Monday, February 2, 2004
No snow job in budget


Chip Ford's CLT Commentary

In its Winter issue of Commonwealth, MassInc presented "Budget Imbalance: Rising medical costs could throw off the ecology of government," written by Administration & Finance Secretary Eric Kriss. The publishers also invited eight others to critique Kriss's commentary. All but for Barbara and Pioneer Institute's Stephen Adams, each took their best shot at discrediting Kriss.

"During the economic boom of the 1990s, the imbalance caused by a smaller and smaller portion of income being paid in taxes was hidden by rapidly escalating incomes. When the boom ended, however, it became clear that a decade of deep tax cuts had caused a structural gap in our state budget," wrote Noah Berger, executive director of the Massachusetts Budget and Policy Center (formerly TEAM, "Tax Everything and More," before its abrupt make-over).

*               *               *

"[W]hile he has abandoned his now-infamous references to 'givers' and 'takers,' Kriss's mindset and philosophy remain the same. It's the 'haves' versus the 'have-nots,' and the 'needy' are just proving to be too much of a burden on the rest of us righteous taxpayers," added Stephen Collins, executive director of The Massachusetts Human Services Coalition.

*               *               *

"In arguing that balance should be preserved, Secretary Kriss raises two issues of stability or sustainability:

the roughly 50-50 division between state spending for the needy and for services shared by all;

the approximate 10 percent share of Massachusetts income taken by state and local taxes....

"Regarding taxes, it is certainly worthwhile to consider the share of total personal income going to state and local taxes. But, again, what is sacrosanct about 10 percent? Why not 8 percent, or 12 percent? ...

"Were we to increase the income tax rate to 5.6 percent, for example, total taxes would constitute slightly more than 10 percent of personal income, the level that we experienced during the long period of economic growth in the 1990s," piped in Michael Widmer, president of the so-called Massachusetts Taxpayers Foundation.

*               *               *

And so it went.

This is highly-recommended reading for all pro-taxpayer activists; a good insight into what we're up against and what's ahead as the FY'05 budget wars heat up. After you've read Eric Kriss's original column and the eight responses, Commonwealth invites your thoughtful and measured comments to be sent in and posted to the MassInc site.

CommonWealth Online Forum
Budget Imbalance:
Responses to Eric Kriss

*                    *                    *

Is government reform possible in Massachusetts? The entrenched centers of power and the raw power of single-minded, selfish special interests make the potential a real challenge, even amidst this "fiscal crisis" they decry.

If something as simple as merging the Mass. Pike with the Highway Department runs into such resistance -- simply to keep well-connected and wired political patrons on the payroll even at the expense of "the most vulnerable among us" -- is so resistant to basic commonsense reform, where is this state heading, and where are they taking us taxpayers?

Right now Barbara is in Boston, a participant in Gov. Romney's news conference at the state Transportation Building as he doggedly pushes his turnpike/highway department merger. If toll-collectors' jobs are more important than providing for the mentally ill and handicapped, the halt and the lame, the elderly and "the children," if savings can't be found -- or won't be surrendered --  in a clearly-bloated agency which exists primarily to provide full employment to a select few high-powered hangers-on, can reform of any substantive value be achieved?

Or will spending just continue spiraling out of control until there is "no other option" but another massive tax increase to "bail us out"?

This is the year in which that decision will be determined.

This is the year to pay very close attention.

Long-overdue reform: If not now, when?

If not now, never.

Chip Ford


The MetroWest Daily News
Sunday, February 1, 2004

A MetroWest Daily News editorial
Romney's call to reform


For the second year in a row, Gov. Mitt Romney has proposed a budget that bridges some of the gaps between revenue and expenditures by assuming the reform of agencies that have long resisted reform. Last year, aside from eliminating the patronage-plagued Metropolitan District Commission, the Legislature ignored Romney's best ideas.

The difference this year, Romney says, is the election Nov. 2, when voters will have a chance to weigh in on the budget choices made by the Legislature and the opportunities left unrealized.

Among Romney's proposals:

  • Merging the Mass. Turnpike Authority with the state Highway Department: Romney says this would free up $190 million in reserve funds and save $20 million a year by eliminating administrative overlap. Like last year, some Democrats are resisting. "I don't see where the savings are going to be," Sen. Richard Moore, D-Uxbridge, told a Daily News reporter. Doesn't sound to us like he has looked too hard.

  • Construction reforms: Romney says the state could save 10 percent on everything from schools to courthouses by streamlining the rules governing public bidding and construction. Those who have seen property taxes soar to pay for pricey new schools would love to see the effort made.

  • Workforce reforms: Romney wants to do away with most Civil Service requirements, which offer protections already locked into union contracts, and he'd like state employees to pay 25 percent of health insurance premiums. Health insurance is a budget-buster at the local level too.

  • Pension reforms: Recent scandals, from Billy Bulger's attempt to fatten his pension by counting his housing allowance as income to the single day Sen. Cheryl Jacques worked in 2004 that added a full year to her pension eligibility, are just a sample of the loopholes that allow the politically connected to pad their retirements with undeserved perks. Romney wants to institute clear rules to protect taxpayers as well as state employees.

Romney is a Republican and most of the legislators asked to enact these reforms are Democrats, but this isn't about ideology. There's no liberal or conservative way to build a school, plow a highway or fashion pension rules. The divide here is between those who profit from wasteful government and those who pay for it.

In Massachusetts, the no-show jobs and pension sweeteners have mostly been enjoyed by Democrats and protected by their Democratic friends in the Legislature. On issues, the Democrats are more often right than wrong; the problem is the things they do to perpetuate their power and reward their cronies.

With a newly-recruited crop of Republican legislative candidates, Romney intends to hold Democrats accountable for their resistance to reform. Smart Democrats should find some reforms of their own to embrace.

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The Boston Herald
Monday, February 2, 2004

A Boston Herald editorial
Pike officials motto: 'Just say no' to ideas


It's easy to find a reason not to do something. So we weren't surprised the Turnpike's own study of doubling the tolls inbound at the Allston/Brighton toll plaza so that the westbound tolls could be removed underscored the reasons for not doing it.

It would cost some $8 million a year in lost toll revenue from drivers circumventing the inbound toll by using local streets and then taking their freebie on the way home, Turnpike officials said. And the neighbors sure wouldn't be happy with all that extra local traffic, either.

Those findings contrast markedly with a study commissioned by board member Christy Mihos which found the Turnpike could save up to $4.5 million a year by removing the toll plazas westbound at both Allston/Brighton and in Weston. The savings are derived from reduced transaction fees paid to the company which administers the Fast Lane system and a reduced need for tolltakers. Mihos doesn't even quantify the savings in time and convenience for Turnpike drivers or from the reduced accidents now caused by lane switching at the toll plazas.

But Administration and Finance Secretary Eric Kriss shed some light on why the Turnpike report found a cost, not a savings, from the plan.

Arguing in favor of the administration's plan to merge the Turnpike Authority with the state highway department, Kriss said $20 million annually could be saved in back-office administrative costs and employing fewer tolltakers.

Kriss said that as the automated Fast Lane system accommodated a higher percentage of Turnpike users, tolltaker employment levels stayed the same instead of being reduced.

In fact, when the authority removed exact-change booths last year, it replaced them with manned booths instead of adding Fast Lane capacity.

Ah, now we get it! Of course, Turnpike officials wouldn't want to take down the toll plazas if that meant having to lay off a few toll takers.

Common sense tells us that most people won't add time and aggravation to their commute to avoid paying the inbound toll. The need for more common sense at the Turnpike is yet another argument in favor of the governor's merger plan.

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The Boston Herald
Monday, February 2, 2004

A Boston Herald editorial
No snow job in budget


House Ways and Means Chairman John Rogers (D-Norwood) is already huffing and puffing that Gov. Mitt Romney's budget is out of balance by some $400 million to $500 million because of its use of one-time sources of revenue. We hope Rogers' indignation is a sign he won't fall back on the well-worn budget trick - this year avoided by Romney - to underfund the snow and ice removal account.

Romney made quite a point at his budget news conference that he was setting aside some $45 million for the job, a reasonable estimate of the average spent to keep the roads clear over the past few years.

The Legislature has routinely appropriated far less, knowing roads will be plowed anyway and contractors eventually paid.

This budgetary snow job certainly won't break the bank in the context of a $23 billion budget. But it's the kind of fiscal wink and nod which makes taxpayers justifiably cynical about the Legislature's stewardship of their hard-earned money.

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