Chip Ford's CLT Commentary
What's with these revenue "estimates" vs. revenue
facts?
On the one hand, the All-Democrats-All-the-Time state
government on Monday predicted a revenue increase of only "3 percent
next fiscal year."
But just two days later, the Department of Revenue
reported state revenues were "up in January, totaling just over $2
billion, an increase of $130 million or 6.7 percent compared with
January 2006 . . . an increase or $431 million or 4.2 percent over the
same period last fiscal year. Revenues so far this year are also $95
million higher than expectations." And "expectations," keep in
mind, are "revised" from time to time over a given year.
Is the state taking in more of our money, or less?
Inquiring minds want to know.
Is this how a Democrat governor and legislative
majority play it to lower rank-and-file expectations -- when they've
refused to take the "No New Taxes" pledge?
Despite "budget constraints," there still seems to be
room to maneuver for legislative pay hikes. There somehow always
seems to be available money for those.
Foolish voters thought in 1998 that they'd end this
controversy by granting legislators a constitutionally-mandated pay hike
every two years, the only such constitutional provision in the world.
We warned them to forget about that dream -- that when it came to
feathering their nests, legislators were far too creative to be limited.
And here we are again.
So -- though they agreed with Kerry Healey,
Republican candidate for governor, on the issues -- they nonetheless
elected a Democrat governor and reelected a massive Democrat majority to
the Legislature. Gov. Deval Patrick campaigned on property tax
relief instead of the voters' 2000 tax rollback which he opposed.
But almost immediately
upon being elected, he suddenly discovered a new "fiscal crisis" looming
just over the horizon, that his promised property tax relief would need to wait and
be prepared for -- with maybe additional new "local option" taxes.
Sort of like how he campaigned on being able to find
and cut $750 million in state government wasteful spending -- until mere days after
taking office. Now, finding and cutting that waste too will have
to wait. He hasn't yet found that specific waste he declared was there to
cut -- except for $5 million to the nonprofit Tourism Massachusetts.
Romney vetoed this, Patrick restored it, but now has abolished the
funding. Only $745 million more to go, but it's a start.
Voters get the government they deserve. I'm
just tired of suffering the consequences of dumb decisions made by a
clueless majority.
So now we have municipal politicians in growing
numbers looking to change Proposition 2˝ to Proposition 3, or 3˝.
Why not Proposition 5, or even 10 -- if more than 2˝ is better? (I
know, don't give them ideas!) Apparently they've forgotten the
reason for the 1980 property tax revolt -- when there was no limit and
property taxes just kept climbing through the stratosphere year after
year. At least now, voters have the power to decide how much they
want to tax themselves and their neighbors -- instead of the town's
politicians deciding unilaterally.
But as the old adage goes, "It's better to apologize
than ask permission"!
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Chip Ford |
The Boston Herald
Thursday, February 1, 2007
Tax-fighting guru takes on Patrick
By Virginia Buckingham
With the mighty watchdogs in the Legislature focused on such pressing
initiatives as the welfare of elephants (Sen. Robert Hedlund,
R-Weymouth) and $10,000 giveaways to college grads (Sen. Brian Joyce,
D-Milton), it’s a good thing that other self-appointed guardians of
taxpayer dollars have had some 16 years to rest up for the big game. The
election of Gov. Deval Patrick has put Citizens for Limited Taxation
back on the field.
Its quarterback, Barbara Anderson, has lost none of her edge
either, if the latest missives to land in reporters’ e-mail inboxes are
any guide. This week, Anderson took aim at the Patrick administration’s
secrecy in refusing to release budget cut recommendations developed by
his cabinet (a gubernatorial request, the State House News Service
points out, that was initially trumpeted to the press).
“The deadline for submitting the recommendations to the governor was
last week. But when asked by a reporter, the Patrick administration said
it wouldn’t share; not sharing with the media means not sharing with the
taxpayers -- whose money is under discussion here. How ‘can we,
together,’ if, together, we don’t have all the information?” Anderson
asked, as she filed a freedom of information request to force the gov to
“share.”
A couple of weeks back, Anderson filed a complaint with the Board of Bar
Overseers against Patrick and 34 “lawyer-legislators” for violating
their oaths of office during the Constitutional Convention.
Her letter closed with this little shot across the bow: “Our premise is
that no one, including governors and legislators, is above the law and
the Constitution, and if they think themselves so, they should be set
straight by the Board of Bar Overseers, so that in the future, the
Constitution and SJC [Supreme Judicial Court] rulings will be
respected.”
“She’s like a new person,” CLT’s longtime grassroots organizer Chip
Faulkner said of Anderson’s resurrection as governor-baiter in chief.
It’s a role she honed when the last Democratic governor, Mike Dukakis,
made it his business to run the state’s finances into the ground and
taxpayers’ bills up to the ceiling. But she was happy to hold GOP govs’
feet to the fire, too, though, she joked, “Weld and Cellucci wanted to
sign ‘no new taxes’ pledges every three or four days.
“I did everything I could to get Kerry Healey elected,” Anderson said
yesterday in an interview in her Marblehead home, where she was
simultaneously listening to WTKK-FM’s Eagan and Braude show, fielding
media calls and monitoring e-mail. “But this is fun.
“You just wake up in the morning laughing. I never saw an administration
make such bonehead moves,” Anderson said. Of Patrick’s latest move to
strike a deal for a legislative leadership pay raise in exchange for
some government reform, she says, tongue in cheek: “If you’re going to
bribe legislators, then at least do it one at a time when they vote with
you.”
The chief defender of Proposition 2˝ is under no illusion that she’ll be
able to change the course of events at the State House.
“I try to help my members see the funny side of it. There is nothing we
can do except cause trouble, until the day comes when a few legislators
are thrown out of office.”
Anderson reserves most of her contempt for the voters who refuse to do
just that.
“I’m in a different place,” she said. “You can’t be a populist when you
keep electing the same people.” It galled her, she said, when polls
showed voters agreeing with Healey on the issues, but supporting Patrick
anyway. “You get what you deserve,” she said.
In the meantime, CLT will be engaged in “guerrilla warfare to make sure
the public stays informed.”
Yes, it is fun. It is also necessary.
State House News Service
Tuesday, January 30. 2007
Budget writers assuming
3 percent revenue growth next year
By Jim O'Sullivan
Budget chiefs from the Patrick administration and Legislature agree the
state will see revenue growth of approximately 3 percent next fiscal
year, arriving at a consensus revenue estimate of $19.879 billion.
The maximum amount of tax dollars available for the Fiscal 2008 budget,
three versions of which will emerge from Gov. Deval Patrick's office,
the House, and the Senate, will be $17.089 billion, Administration and
Finance Secretary Leslie Kirwan, House Ways and Means Chair Rep. Robert
DeLeo, and Senate Ways and Means Chair Sen. Therese Murray said in a
joint statement.
The budget chiefs concurred on off-budget obligations: $756 million for
the MBTA; $634.7 million for School Building Assistance; and $1.399
billion for public employee pensions. The pension transfer is a $64
million increase above the current fiscal year's, but does not
reformulate the funding plan.
Assuming 3 percent growth hamstrings budget writers as they work to
forge a spending plan on the heels of this year's budget, which hiked
spending 7.5 percent. Lottery revenues, a key source of local aid, have
also shown a drop-off, and capital gains receipts, which the House
budget panel says comprise nearly 10 percent of the tax base, are
expected to tumble $300 million over the next two years.
In a joint statement provided to the News Service by the House budget
panel, Kirwan, Murray, and DeLeo said, "[T]he secretary and budget
committee chairs worked together to produce a reasonable and informed
forecast for next year's fiscal revenues."
Patrick has projected a funding gap of $1 billion next fiscal year,
which starts July 1, but said Monday the current fiscal year's revenues
would likely suffice for its budget. DeLeo forecasts the structural
deficit at nearly $800 million in the next fiscal year.
The branches disagree about which method to pursue for closing the gap.
Patrick, who has promised expansions of local aid, education spending,
and police forces, as well as property tax relief, has been toning down
his public pronouncements lately, but says he will battle a reluctant
Legislature for his proposal to allow municipalities to impose taxes on
meals and lodging.
Senate President Robert Travaglini has called taxes "off the table," and
House Speaker Salvatore DiMasi said his chamber wouldn't cross the
Senate on the issue of tax hikes.
Associated Press
Thursday, February 1, 2007
State revenues up in January
State revenues were up in January, totaling just over $2 billion, an
increase of $130 million or 6.7 percent compared with January 2006.
So far this year, the state has taken in $10.81 billion, an increase or
$431 million or 4.2 percent over the same period last fiscal year.
Revenues so far this year are also $95 million higher than expectations.
"January is our third or fourth largest month for tax collections
because of withholding for year-end bonuses, income tax estimated
payments and sales tax payments on holiday season purchases," said
Revenue Commissioner Alan LeBovidge.
While withholding and estimated payments were below target, LeBovidge
said, strong corporate collections, including a one-time $37 million
corporate settlement, let the state meet its expected monthly revenue
goal.
The Boston Herald
Saturday, February 3, 2007
A Boston Herald editorial
Beacon Hill pols already get ‘paid’
Maybe legislative leaders have been spending too much time watching
football - it’s Super Bowl weekend after all - and listening to people
like Patriots cornerback Asante Samuel.
You know, he of the famous “Get Paid” tattoo.
After all, there’s lots of talk on Beacon Hill right now about extra pay
for state lawmakers and news of a possible deal with Gov. Deval Patrick
to increase the stipends paid to legislative leaders.
According to the State House News Service, DiMasi this week compared
lawmakers’ earnings to those of higher-paid Boston city councilors --
but noted the Legislature is responsible for the state budget and major
policy decisions. “All of that should be factored in on what these
people should be getting paid,” he said.
Meanwhile, on the same topic, Travaglini noted that some of the stipends
paid to members of legislative leadership haven’t gone up in 20-plus
years. “It’s now 2007, and the price hasn’t changed,” he said on
Thursday.
Folks, we pay our state lawmakers a base salary of about $56,000. Every
Democratic senator (35 out of 40) is a member of leadership, earning at
least $7,500 and up to $15,000 extra. House committee chairs earn the
same extra cash for extra work. Many lawmakers have lucrative side
careers. And don’t even get us started on the per diems!
In other words, they’re “getting paid.”
True, some stipends have remained flat -- but we see no compelling
reason why that should change. Remember, Bob Kraft isn’t paying the
bills here -- you are.
The Boston Herald
Saturday, February 3, 2007
Tourism boondoggle KO’d:
Gov axes free-spending agency
By Jay Fitzgerald
Gov. Deval Patrick is pulling the plug on the taxpayer-funded Tourism
Massachusetts, which had become a political embarrassment due to its
lavish spending, cozy contracts with Democratic operatives and a
controversial globe-trotting president.
Patrick, who last month restored $5 million for Tourism Massachusetts
that former Gov. Mitt Romney had previously cut, reversed himself
yesterday by refusing to sign a contract with the nonprofit outfit
tasked with promoting international tourism.
A Patrick spokeswoman would only say officials believe the two-year-old
Tourism Massachusetts wasn’t working.
But sources say the organization, backed in the past by key Democratic
legislators, was “too hot” after a series of articles by the Herald
found lax oversight of the group’s spending and infighting among board
directors.
Among other things, one Democratic-tied firm netted hundreds of
thousands of dollars from Tourism Massachusetts to produce a video for a
Web site starring a former British boyband singer and aspiring “American
Idol” contestant.
The agency also raised eyebrows by dishing out tens of thousands of
dollars to local groups such as the Boston Lobsters and the Jimmy Fund’s
“Cow Parade,” featuring a “Moosachusetts” cow statue Tourism
Massachusetts sponsored for $7,500.
After two disgruntled directors quit the group’s board - whose powers
were never clearly spelled out - president William MacDougall was
instrumental in getting on board Sheila Martines Pina, a former
Providence TV personality who was fired from her previous tourism job
for skipping work and who has been arrested numerous times for drunken
driving.
MacDougall -- who was fired in 2001 from a state tourism job over his
involvement in a travel-expense controversy -- issued a statement
yesterday saying it’s “great” the Patrick administration remains
committed to foreign tourism. MacDougall, who has jetted to Europe,
South America and elsewhere as president of Tourism Massachusetts, said
the group would work “on a transition.”
Lawmakers will be consulted about rebuilding a government-run
international tourism program, perhaps within the Massachusetts Office
of Travel and Tourism, Patrick’s office said.
Ironically, it was Democratic legislative leaders who stripped MOTT of
its international tourism funds in 2005 and gave them to Tourism
Massachusetts.
During its short reign, Tourism Massachusetts burned through $6 million
in taxpayer funds - and taxpayers may have to fork over more than $1
million extra to pay off the organization’s debts.
The administration will consult with lawmakers on how to pay off the
bills to overseas workers, vendors and others who haven’t been paid by
the group, said Patrick spokeswoman Cyndi Roy.
“The Patrick administration remains deeply committed to international
travel and we will work with the Legislature to move the agenda
forward,” she said.
The Daily News Transcript
Thursday, February 1, 2007
Stirrings of a tax override
By Brian Falla
NORWOOD - Some School Committee members say now is the time to at least
talk about asking voters for the town's first-ever operational tax
override.
The board Wednesday discussed the idea of asking selectmen to put a
placeholder on the April town election ballot, in the event officials
want to ask for an override that would allow the town to increase the
tax levy by more than the 2.5 percent allowed by law.
Chairwoman Toni Eosco said yesterday she will put the item on the agenda
for the committee's Feb. 7 meeting for further discussion.
Norwood has only passed one override in its history and that was a debt
exclusion override for $6 million to design a proposed new high school.
An operational override is a permanent tax hike, as opposed to a debt
exclusion, which eventually disappears off the tax rolls.
Board member Chris Morrison said yesterday he believes the deadline for
placing a question on the April 2 ballot is Feb. 20. Since the town's
revenue picture likely will not be clear until after Feb. 20, Morrison
said it's prudent to have a question on the ballot in case it is
necessary.
"This is a tool we have available to us," Morrison said yesterday. "I
think it has to at least be part of the conversation."
Morrison said due to increases in staff salaries and inflation, the
schools will need a 6 percent increase in spending next year just to
keep the current level of services, and Morrison feels that is unlikely.
"I think it's unrealistic to think that we'll get a 6 percent increase
based on the revenue picture," said Morrison. "There's no doubt in my
mind that we are looking at a reduction or reorganization in staff,
whether it's by not filling positions of retirees or some other method."
"I understand where this is coming from - this is not new news," said
Eosco. "I'm on (The Education Collaborative) board and talk to people in
the other 15 towns and almost all of them have gone for operational
overrides."
Member Mitch Pentowski believes it may be premature.
"My feeling is that we should give the process a chance," said Pentowski.
"We don't even know the (revenue) figures yet. We should get that number
first and work backward."
Pentowski does say an operational override may lie in the town's future.
"It certainly seems like this is the way the trend is going and it's
happening in communities all around us," said Pentowski. "But I think
it's presumptuous right now."
Committee member Paul Samargedlis also said he would like to see the
town's overall budget picture, but he does agree that Proposition 2˝ may
be outdated.
"I think it was a good thing and trimmed a lot of fat in budgets in the
'80s, but now the pendulum may have swung back too far the other way,"
said Samargedlis.
The School Committee is scheduled to meet Feb. 7 at 7:30 p.m. in the
James Savage Education Center.
The Sharon Advocate
Friday, February 2, 2007
Why town finance is broken?
By Sam Liao
Why is it that the Sharon School Department budgets seem to require
Proposition 2˝ overrides every other year or so? Why are the taxes from
homeowners alone unable to support all the costs of delivering police,
fire, and other town services, and also provide for the educational
needs of our children?
After years of being in the midst of the town of Sharon’s budgeting
process as a member of the School Committee, I have arrived at the
opinion that the common answer to the above questions is that the
mechanism for town finance is broken. But first let me be clear that
when I refer to town finance, I am referring to everything inclusive of
the School Department and the departments controlled by the Board of
Selectman and the Finance Committee. I maintain that one of the major
reasons town finance is broken, despite the best efforts of our elected
town officials and committees, is because of a natural economic law
derived from simple mathematics.
The increase in cost of goods and services as represented by the rate of
inflation, or more formally the consumer price index, has been between
2.5 percent to 3.5 percent over the past few years, and much higher in
previous decades. In the meantime, the increase in property tax
revenues, which is allowed to be collected by the town, is restricted to
be 2.5 percent (plus a small allowance for new growth) by the
Massachusetts Proposition 2˝ law.
It does not take a great deal of analysis to realize that even 3 percent
minus 2.5 percent equals a 0.5 percent increase in costs that will not
be covered by the property tax revenues collected by the town, which is
not a sustainable situation in the long term.
This is not a problem that is unique to Sharon. Every municipality in
Massachusetts has to deal with it. Thus the most comprehensive solution
to this dilemma would be to modify the Proposition 2˝ law to be
Proposition 3˝ or minimally Proposition 3, to at least give every city
and town in Massachusetts a fighting chance to responsibly balance its
budget without having to constantly resort to overrides.
But a logical question is how is it that we have been able to sustain
town finances since the Proposition 2˝ law was passed in 1980, even when
there have been periods of inflation well over 2.5 percent? The answer
is that, other than cuts in services, increases in fees, and overrides,
we have been subsidized by the state by distributions of local aid to
cities and towns through Chapter 70 funding, lottery funds, and other
mechanisms.
In essence, someone else has been helping us pay the town’s bills over
the years. But if you think clearly about it, the money for all that
local aid ultimately comes from us. It’s just that the state collects it
through the income tax, sales tax, gasoline tax, and other forms of fees
that often seem less painful than paying property taxes.
Let’s not kid ourselves and get fooled by this shell game. It is
ultimately we who have to pay for the services we need or want. There is
no free lunch. And occasionally, when state local aid is unable to
adequately supplement the town’s revenues, this is often when overrides
happen.
Then there is the dark side to balancing the budget, and that is by
decreases through cuts in personnel and services. In the past few years,
there have been significant cuts borne by the School Department. This
year, compared to last year, there are a net of 19 fewer teachers and
staff employed by the schools. The point here is to dispel a
misconception that the school costs are out of control and increasing
exorbitantly more than other costs in town.
There is more complexity than what is portrayed above. Much more can be
said and debated about town finances and costs, but to get to the bottom
line, there are four things I am asking you to consider regarding how we
can extract ourselves from this dilemma.
The purpose is to try to lessen the trauma, contentiousness, and
acrimony among all of us whenever we need to have an override on the
election ballot. No one likes to pay higher taxes, but we all have to
make choices about what we really want to pay for, and what we can
afford.
First, let’s accept that overrides are an inevitable part of the
equation, absent a change in the Proposition 2˝ law, and that every two
to four years, we need to have an override vote, and that this should
not be an unusual and heart-rending event.
Second, let’s consider voting on the basis of what is described by the
Massachusetts Department of Revenue as a “Pyramid Override.” This is
actually a way to give the voters more choice. In a Pyramid Override,
voters can decide among, for example, an override increase of $1
million, $2 million, or $3 million. Each of those amounts would be
associated with services or programs that would be funded, or conversely
be cut, if those amounts were approved or not approved.
The most common objection I have heard to this voting process is that it
would be too complicated for the voters to understand. But I have more
faith in the voters, and especially in the citizens of Sharon, where
according to Town Clerk Marlene Chused, we have between 80 to 89 percent
voter turnout in national presidential elections compared to 63 percent
statewide and nationwide.
Third, alternatively let us consider a two-year (or longer) budget
cycle, at least in terms of overrides. Suppose that it is projected that
we need an additional $1 million for the budget next year, but we might
anticipate an additional budget increase of $1 million for each of the
following two years as well.
Then the logical thing to do is to have a comprehensive total $3 million
override that will last us for three budget years. If approved, the tax
rates would rise predictably according to the override amounts voted
corresponding to each of the years. In this way, we won’t have to
subject ourselves to override votes three years in a row.
Fourth, among all this consideration of overrides and increasing taxes,
we should recognize that not everyone in town can afford to constantly
pay more taxes. An increase in taxes may mean to most of us that maybe
we need forgo a family vacation to an exotic locale, eat out at less
expensive restaurants, or not go for that latte drink at Starbucks.
But there are those of us in Sharon for which a tax increase might
actually affect the ability to afford milk or medical care. For those
citizens, whether the need is due to a recent loss of a job, illness, or
the realities of fixed incomes, there is a need to freeze the level of
property taxes either temporarily or for the long term.
So those are the considerations to ponder. As a disclaimer, these are my
own thoughts and do not necessarily reflect the consensus of the School
Committee. But I hope there will be some debate that comes out of this
to try to “think outside of the box” to improve the broken state of
Sharon’s town finances. You will have a chance to provide your opinions
and feedback on the above ideas and other issues at the School
Committee’s Public Forum on the budget on Thursday, Feb. 15.
Sam Liao is a member of the Sharon School Committee.
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