CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

CLT UPDATE
Thursday, October 6, 2005

The Fat Cats can't decide . . . but we can!


Leaders in the State House and Senate said they were cautiously optimistic about the revenue figures, but rejected Romney's argument that Massachusetts is hale enough financially to pass a tax cut that would drain $600 million a year in revenue. They cited the fiscal uncertainty of rising oil and natural gas prices and healthcare costs and the threat of steep cuts in federal Medicaid money.

"Before those variables take on a value, I'm not willing to make any determination on a tax rollback, and it would be unwise to do so," said Senate President Robert E. Travaglini, an East Boston Democrat.

House Speaker Salvatore F. DiMasi, a North End Democrat, said the public has faith in the Legislature to put any surplus revenue to good use in coming months. On the agenda, he said, is a $296 million "economic stimulus" package to help spur job growth, an $80 million energy plan to mitigate the impact of higher heating costs, and a yet-to-be-priced effort to reduce the number of residents living without health insurance....

But other areas of the economy show signs of continued weakness, said Michael Widmer, who heads the business-backed Massachusetts Taxpayers Foundation....

"If the leadership is considering a tax cut, it should be directed to provide property tax relief through increased aid to cities and towns," Widmer said.

The Boston Globe
Tuesday, October 4, 2005
State revenues up $317 million; Romney calls for tax rollback


According to the bureau's report set for release today, the cost of collective bargaining, pensions and health insurance for employees and retirees in the city of Boston is gobbling up what little revenue growth the city takes in a whopping 86 percent of it this year....

At some point, lawmakers, local officials and the unions have to realize some simple math: No one can afford to spend twice what they take in on personnel costs. They must take action soon.

A Boston Herald editorial
Wednesday, October 5, 2005
Busting local budgets


"Over my dead body," said Boston Police Patrolmen's Association president Thomas J. Nee, whose union settled a contract on the eve of the [DNC] convention that gave members 14.5 percent in raises over four years. Tyler "wants to make us all indentured servants," Nee said.

Jim Durkin -- spokesman for the American Federation of State, County, and Municipal Employees -- said his union would also fight any move to change state labor laws. "AFSCME would strenuously oppose any effort to infringe on our collective bargaining rights and would aggressively fight any effort to weaken collective bargaining laws." ...

Menino said he is instead pushing bills to increase the city's revenue ...

The report also said that city health insurance costs are soaring, to $211.5 million this fiscal year, an 11.2 percent jump from last year....

But such a change would also meet resistance from the city's unions, which have fought more modest changes, such as the city's elimination of one HMO plan last year. Three unions filed grievances, which are pending.

Pension costs are making up an increasing portion of the city budget, the report said. That's in part because city officials have provided extra benefits that count toward employee pensions....

According to the report, the average pension for a teacher who retired in 2003 was $50,337. For a police officer, the average was $53,142 and for a firefighter, $49,164.

The Boston Globe
Wednesday, October 5, 2005
Report blasts city union pay raises
Calls for changes in bargaining law


Every 10 years, states are required to redraw legislative and congressional district lines to reflect new population data. In most states like Massachusetts, lawmakers are the ones drawing the maps. Convenient, no?

But all you have to do is take a look at a map of U.S. Rep. Barney Frank's district to realize that lawmakers aren't exactly relying on natural boundaries when they come up with these plans.

Former Chelmsford rep Carol Cleven was forced to retire when her House district was eliminated by the Democrat-dominated Legislature in 2001. Guess which party she represented....

Voters' rights groups have drawn up a plan that would give the power to redraw legislative maps to an independent commission. The seven-member panel would include legal and government experts but no elected officials, and meetings would be open to the public instead of conducted in secrecy at the State House. Imagine that.

A Boston Herald editorial
Wednesday, October 5, 2005
Mapping the way to a better system


Chip Ford's CLT Commentary

Each morning I arise before dawn (which is getting easier by the day with the the summer gone and the progression of autumn) and scour newspapers around the state looking for news that's relevant to us taxpayers and which needs to be collected and passed on to increase our collective wisdom and understanding. My next step in writing these commentaries is an effort to find the common link throughout them:  there is usually a cause-and-effect thread in everything political. This generally becomes my theme, and today is no different.

As revenue again piles up in state coffers we're hearing the old refrain we heard  during the Roaring '90s, when the Democrat-controlled Legislature insisted it take a wait-and-see stance against rolling back the "temporary" income tax hike while it spent additional billions and doubled the budget. And again, legislators are lining up the spending programs that will create more unsustainable growth when the next cyclical economic downturn inevitably rears its head. Their excuse then for not finally rolling back the income tax increase will again become -- "we can't afford it during this 'fiscal crisis'."  Been there, done that -- and we're now watching it happen all over again.

Leading the charge to trample average taxpayers is Michael Widmer, president of the so-called Massachusetts Taxpayers Foundation:  "If the leadership is considering a tax cut, it should be directed to provide property tax relief through increased aid to cities and towns."

Meanwhile, another "business-backed" group, the Boston Municipal Research Bureau, issued a report yesterday, "the latest proof that personnel costs are croaking municipal budgets," according to The Boston Herald editorial.

"'Collective bargaining is broken,' the report said. As labor costs soar, along with healthcare and pension costs, the city will be unable to deliver anything but the most basic services, such as police and fire protection, according to the report."

The Boston Globe report added:

"City officials should resist any efforts to modify collective bargaining contracts that would expand benefits that would add to employee compensation and be considered pension eligible," said the report. The city's pension benefit is "very generous . . . in this economy, and there is no need to enrich it further at taxpayers' expense," the report said.

I wonder if the same businessmen are backing these two conflicting "business-backed" conclusions, or if they ever talk to each other?

I hope they didn't pay too much to fund these "studies," because there's certainly been plenty of information available at no cost, some right here.

In the CLT Update of Apr. 24 ("The secret ticking time bomb: "public service" pensions, health insurance giveaways"), I wrote:

As if the impending crash of Social Security and Medicare isn't overwhelming enough for taxpayers, now comes news of perhaps an even bigger threat to our financial survival -- and especially that of younger workers and taxpayers and those not yet born. The "public service" gravy train is soon to utterly bury us, especially the younger generations coming up who'll have to pay the staggering bill for government first and foremost taking care of itself as usual.

This begins to explain why one of the largest line items in the state budget has recently been taken "off-budget" where it's less visible. This "whistling-past-the-graveyard" tactic makes it no less a bill payable down the road, and we know who's going to do the paying -- and who'll be doing the getting.

A month earlier on Mar. 8 ("Taxpayers' employees, a class of their own"), I wrote:

Only government employment is immune from the vicissitudes of economic cycles, and now we learn that it is exempt from forced participation in the doomed Social Security system as well. It's good enough for us taxpayers, but they've got a better deal: their own private pension plans!

And earlier yet, on Jan. 25 ("Property taxes skyrocket while Public Employees swim in salaries") I wrote:

Property tax increases have been growing in leaps and bounds, driving some lifelong residents out of their homes. The most specific cause for these double-digit tax increases increases is becoming all too clear. Public employee unions such as the teachers unions are reaping the benefits at everyone else's expense and misery. Charles Chieppo's column in yesterday's Boston Herald reveals the extent of this problem, just how out-of-touch Massachusetts payroll patriots are with the rest of the nation and with the economy in general:

"About 90 percent of Massachusetts state employees are unionized, compared to 35 percent of state employees across the country. Approximately one of 10 private sector employees in the commonwealth belongs to a union. Of the 20 political action committees that gave the most to candidates for Massachusetts state and county offices during the 2002 election cycle, 16 were unions or other labor organizations.

"From 2000, the last year before the most recent recession, to 2003, total private sector wages in Massachusetts actually decreased. But state and local government employees had a very different experience. The Bureau of Labor Statistics reports that their wages grew by nearly 12 percent, and a 2003 BLS report found that public employee wages in eastern Massachusetts were also 12 percent higher than those of private employees doing comparable jobs...."

And now one part of the "business community" is surprised -- and the other part wants to give cities and towns even more to squander the same way. How do they ever manage to keep their businesses afloat?

But so long as the Legislature calls the shots and with impunity gets away with thumbing its collective nose at its constituents, the voters and taxpayers, more of our money will continue passing from the state government's greedy hands down to the greedy hands of municipal government officials, then to the greedy unions which control both in the end. Those are the political machines that keep getting our "representatives" on the state level re-elected, and when that money trickles down to the local level, what keeps selectmen and councilors dumb, fat, happy, and re-elected as well.

Then, once each decade, the Legislature gets to carve out their preferred districts, just to be sure they have every edge and advantage going for themselves to secure their positions. That's why the Common Cause petition that's now being circulated for signatures is so important: to help break up this incestuous cycle of arrogance.  If you want to help gather signatures to insure it reaches the 2006 ballot or just want to sign one yourself, see the CLT Update for Sep. 12 ("It's petition season again") or the contact information below.

Fair Districts Initiative Campaign
www.massfairdistricts.org


Common Cause Massachusetts
59 Temple Place, Suite 600
Boston, MA 02111
Phone: 617-426-9600
Fax: 617-426-6855
E-mail: ccma@commoncause.org
www.commoncause.org/ma

Chip Ford


The Boston Globe
Tuesday, October 4, 2005

State revenues up $317 million; Romney calls for tax rollback
By Raphael Lewis, Globe Staff


State revenues shot up $317 million in the first quarter of fiscal 2006 compared with the same period last year, prompting Governor Mitt Romney yesterday to call on legislative Democrats to cut the personal income tax rate to 5 percent as voters demanded five years ago.

"It's pretty clear that Massachusetts is back and firing on all cylinders," Romney said at a State House press conference. "The numbers we're looking at from a revenue standpoint are just mind-numbing.... It's time to return to the taxpayers the tax rate they asked for and voted for."

Leaders in the State House and Senate said they were cautiously optimistic about the revenue figures, but rejected Romney's argument that Massachusetts is hale enough financially to pass a tax cut that would drain $600 million a year in revenue. They cited the fiscal uncertainty of rising oil and natural gas prices and healthcare costs and the threat of steep cuts in federal Medicaid money.

"Before those variables take on a value, I'm not willing to make any determination on a tax rollback, and it would be unwise to do so," said Senate President Robert E. Travaglini, an East Boston Democrat.

House Speaker Salvatore F. DiMasi, a North End Democrat, said the public has faith in the Legislature to put any surplus revenue to good use in coming months. On the agenda, he said, is a $296 million "economic stimulus" package to help spur job growth, an $80 million energy plan to mitigate the impact of higher heating costs, and a yet-to-be-priced effort to reduce the number of residents living without health insurance.

"I think people have confidence in what we're doing -- balancing our budget and putting our revenues where we think they can be beneficial," DiMasi said.

The higher revenue collections were largely fueled by a record September, the state Department of Revenue announced yesterday. All told, September tax revenues reached about $1.94 billion, an increase of 14.3 percent over last September.

It was the second-highest monthly revenue haul in state history, after the $2.02 billion reaped in April, DOR said.

Tax collections appear stronger across the board. Income tax collections are up 7 percent over last year at this time, withholding taxes are up 5.1 percent, and corporate and business tax collection are up an eye-popping 34.3 percent, or roughly $128 million.

But other areas of the economy show signs of continued weakness, said Michael Widmer, who heads the business-backed Massachusetts Taxpayers Foundation. Of the roughly 205,000 jobs shed by Massachusetts in the three-year period beginning in 2001, the state has recaptured only 45,000, he said.

Those cuts have forced cities and towns to either override Proposition 2 and hike property taxes or slash services.

"If the leadership is considering a tax cut, it should be directed to provide property tax relief through increased aid to cities and towns," Widmer said.

Geoffrey Beckwith, executive director of the Massachusetts Municipal Association, agreed, saying cities and towns are now relying on property taxes more heavily than they have in the past quarter-century. The average municipality, he said, now needs property tax money to fund 53 percent of spending, up from less than 50 percent in 2000.

"The local aid cuts that they have suffered make it far too premature to talk about cutting income taxes," Beckwith said.

But Romney sees things differently. Massachusetts now boasts a $1.71 billion "rainy day" reserve fund balance, which is almost a record high. "We can't keep on walking around the building with long faces," Romney said.

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The Boston Herald
Wednesday, October 5, 2005

A Boston Herald editorial
Busting local budgets


From the Boston Municipal Research Bureau comes the latest proof that personnel costs are croaking municipal budgets.

According to the bureau's report set for release today, the cost of collective bargaining, pensions and health insurance for employees and retirees in the city of Boston is gobbling up what little revenue growth the city takes in a whopping 86 percent of it this year. With the rest going to schools, police, fire and public works, there sure isn't much left to keep those city parks fixed up.

Meanwhile, the chickens are coming home to roost after city contracts were negotiated in the pressure-packed days before the Democratic National Convention, the report notes. The cost to keep union members quiet last July will amount to a total of $200 million by 2006, with nothing to guarantee improved service delivery.

With the exception of the "DNC factor," these problems aren't unique to Boston. Before he left, Gov. Mitt Romney's former budget aide said excessive contracts and soaring health care costs have put cities and towns in their worst fiscal shape ever. And the Mass. Taxpayers Foundation has said cities and towns desperately need more flexibility to administer health benefits.

So what to do? Among other recommendations, the report wisely suggests overhauling the state's collective bargaining laws to give management more authority over such areas as staffing levels and overtime, and to ensure more timely decision-making. As it is, management is sometimes forced to wait years to bargain important changes.

And the report echoes the findings of the governor and MTF that health benefits should be removed from collective bargaining. The governor's plan is to create municipal group insurance commissions to negotiate for multiple unions, while Senate President Robert Travaglini would make premium and co-payment levels subject to Town Meeting or city council approval. A combination of the two would lead to savings, the report says, though a more comprehensive solution is needed.

At some point, lawmakers, local officials and the unions have to realize some simple math: No one can afford to spend twice what they take in on personnel costs. They must take action soon.

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The Boston Globe
Wednesday, October 5, 2005

Report blasts city union pay raises
Calls for changes in bargaining law
By Andrea Estes, Globe Staff


The generous pay raises and benefits handed out to labor unions in recent years could jeopardize the city's ability to deliver services to its residents, a new report warned yesterday.

The report, from the business-backed Boston Municipal Research Bureau, called for changes that would allow Boston to settle contracts more quickly and make key management changes without negotiating them with city unions.

"Collective bargaining is broken," the report said. As labor costs soar, along with healthcare and pension costs, the city will be unable to deliver anything but the most basic services, such as police and fire protection, according to the report.

"You'll have fewer dollars for services like libraries and parks," said bureau president Samuel R. Tyler. "You have outdated laws and practices that need to be changed."

In a scramble to settle union contracts before last year's Democratic National Convention, the Menino administration agreed to $200 million in raises over four years, but gained little in return, Tyler said.

He proposed that the state law controlling public employee bargaining be changed so that municipalities can unilaterally assign and promote workers, subcontract, offer overtime, and hire part-timers, all steps that are now subject to negotiation.

In addition, Tyler wants legislation to encourage unions to settle contracts faster, by limiting retroactive pay raises to one year and forcing police and fire unions that delay bargaining with the city into binding arbitration sooner.

Leaders of city employee unions reacted swiftly to the report's recommendations, saying they would oppose any effort to undermine their bargaining power.

"Over my dead body," said Boston Police Patrolmen's Association president Thomas J. Nee, whose union settled a contract on the eve of the convention that gave members 14.5 percent in raises over four years. Tyler "wants to make us all indentured servants," Nee said.

Jim Durkin -- spokesman for the American Federation of State, County, and Municipal Employees -- said his union would also fight any move to change state labor laws. "AFSCME would strenuously oppose any effort to infringe on our collective bargaining rights and would aggressively fight any effort to weaken collective bargaining laws."

Mayor Thomas M. Menino said he supports the proposed labor law changes but believes that the Legislature is unlikely to approve them, given the political strength of unions on Beacon Hill.

"Is it a possibility? No. It is not realistic," Menino said. "You're telling me we'll get legislation to reform labor laws? It's not going to happen."

Menino said he is instead pushing bills to increase the city's revenue, such as closing loopholes for telecommunications companies, a change that would put an extra $45 million in the city's coffers each year. He is also pushing for a city tax on restaurant meals.

The report also said that city health insurance costs are soaring, to $211.5 million this fiscal year, an 11.2 percent jump from last year.

Tyler recommended that the city push for legislation to set up a group insurance commission, similar to the one used by the state to contain healthcare costs. While the city's medical costs have increased 73 percent over five years, the state's have risen only 57 percent, Tyler said.

A group insurance commission would have the power to negotiate with insurance companies, design plans, and determine coverage, copayments, and deductibles unilaterally, without union input. "If you can't control health plan design, you can't control health insurance costs," Tyler said. "It's an unsustainable situation in terms of double-digit increases in health insurance costs."

But such a change would also meet resistance from the city's unions, which have fought more modest changes, such as the city's elimination of one HMO plan last year. Three unions filed grievances, which are pending.

Pension costs are making up an increasing portion of the city budget, the report said. That's in part because city officials have provided extra benefits that count toward employee pensions.

The Quinn bill, which pays thousands of dollars extra to police officers who earn college degrees, has swelled the city's pension liability, as have recent labor contracts allowing employees to buy back vacation time and count the extra time toward their pension, the report said.

In addition, weak investment performance, an early retirement incentive offered in 2002, and the benefit structure combined to require a payment of $186.3 million this fiscal year, a 27.1 percent increase over last year, Tyler said.

According to the report, the average pension for a teacher who retired in 2003 was $50,337. For a police officer, the average was $53,142 and for a firefighter, $49,164.

"City officials should resist any efforts to modify collective bargaining contracts that would expand benefits that would add to employee compensation and be considered pension eligible," said the report. The city's pension benefit is "very generous . . . in this economy, and there is no need to enrich it further at taxpayers' expense," the report said.

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The Boston Herald
Wednesday, October 5, 2005

A Boston Herald editorial
Mapping the way to a better system


Gerrymandering has long been a political fact of life. Massachusetts politicians may not have invented the practice of rigging district maps to protect incumbents, but it got its name here.

And if you think there is too little competition in the Bay State, look just about anywhere else. According to the Center for Voting & Democracy, the last two elections were the least competitive in U.S. history. In 2004, the average margin of victory in the House was a whopping 40 percent.

Several states, including Florida, Ohio and California, are pushing hard to reform the redistricting process that allows incumbents to keep a vise-like grip on their seats. It's an idea worth exploring in Massachusetts, too.

Every 10 years, states are required to redraw legislative and congressional district lines to reflect new population data. In most states like Massachusetts, lawmakers are the ones drawing the maps. Convenient, no?

But all you have to do is take a look at a map of U.S. Rep. Barney Frank's district to realize that lawmakers aren't exactly relying on natural boundaries when they come up with these plans.

Former Chelmsford rep Carol Cleven was forced to retire when her House district was eliminated by the Democrat-dominated Legislature in 2001. Guess which party she represented.

And remember folks, at the heart of the lawsuit that tripped up former House Speaker Thomas Finneran was a claim that the Legislature used its redistricting power to protect incumbents. A court said that's exactly what happened.

Voters' rights groups have drawn up a plan that would give the power to redraw legislative maps to an independent commission. The seven-member panel would include legal and government experts but no elected officials, and meetings would be open to the public instead of conducted in secrecy at the State House. Imagine that.

The push is on to qualify for the 2008 ballot, and talk about your strange bedfellows. The state GOP has signed on along with liberal groups like MassVote and Common Cause. Seems the only ones not on board are legislative leaders. Imagine that.

Naturally, the out-of-power GOP is hoping to spark competition in at least a few races. But as long as the Democrats have exclusive access to the redistricting software, that's impossible. It's time to consider a change.

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