CITIZENS   FOR  LIMITED  TAXATION  &  GOVERNMENT

 

CLT Update
Saturday, November 17, 2001

CLT Truth Squad nabs new Gimme Lobby
point-man in another deception


The budget agreed upon Thursday by Senate President Thomas F. Birmingham and House Speaker Thomas M. Finneran actually increases spending by about 2 percent over last year -- less than in years past, but an increase nonetheless.

That means that even as the state is taking in less money this year -- due to plunging revenues -- it is spending more....

But some suggest their difficulty stems from the fact that state government has been growing at a rate of 6 percent a year for five years. Bureaucrats and other constituents have become accustomed to generous expansions....

"They always put off the tough decisions, and they particularly don't like to make them in an election year," said Barbara Anderson, executive director of Citizens for Limited Taxation.

The Boston Globe
Nov. 17, 2001
Analysts see harsher budget cuts looming
Some say state just delays the inevitable


In Wednesday, Nov. 14's CLT Update I wrote: "[A] new poll just released indicates that Ď51 percent opted for delay [of the rollback], while 36 percent wanted to press forward with the tax cuts.í There is no mention of who commissioned this Opinion Dynamics poll, but count on its results being touted by the Gimme Lobby and other rollback opponents in the days ahead."

Just two days later, in jumped the new lead whiners organization, the Mass. Human Services Council, led by Jimmy St. Georgeís apparent rival for the title of Number One Sore Loser, Steve Collins.

Isnít it satisfying how easily weíre able to get under Steveís skin! (Remember his Oct. 12 response to my letter to the editor of the Boston Globe?) We havenít been entertained by such angry rants for a very long time! [His long-winded harangue to the Legislature in reaction to our memo is below.]

The Sore Losers will never get over our effective use of the "Keep the Promise" slogan during our Tax Rollback campaign -- itís like fingernails on a chalkboard to them! They cry "promise" every chance they get now, still fighting the last war.

As usual, the Gimme Lobby plays fast and loose with the facts, or it outright lies in attempts to achieve its ends. For example, in Steve Collinsí rant he deceptively stated:

"How does providing a family of four with annual income of $70,000 with an additional $175 in 2002 -- less than 48 cents a day -- provide anything that could be called an economic stimulus? Just look at the stimulating effect that all those $300 to $600 checks distributed by the Internal Revenue Service have provided. Our recession has only grown worse...."

The CLT Truth Squad again arrives on the scene! Hereís an excerpt from the Nov. 15 Boston Globeís business section ("Retail sales surge 7.1% in Oct ...", by Stephanie Stoughton). The report ran the day before the Human Services Coalitionís memo was released:

American consumers pulled out their wallets and sent October retail sales surging 7.1 percent, the largest month-to-month gain ever recorded, the Commerce Department reported yesterday. Sales jumped to a seasonally adjusted $306.8 billion last month after falling 2.2 percent in September, when consumers were reeling from the terrorist attacks, according to the government's preliminary data....

"What we have witnessed is a sharp rebound from the devastating numbers in September," said Frederick Breimyer, chief economist with State Street Corp. in Boston." ...

According to the Commerce Department, the only retail sectors with decreasing sales last month were gasoline stations, as well as home furnishings and furniture stores....

Much of the retail spending increase was attributed to "car and light truck sales, which soared 26.4 percent last month from September as auto manufacturers offered huge incentives to entice consumers," but the Sore Losers canít legitimately claim that "the recession has only grown worse" when consumer spending is "surging."

Furthermore, the state Department of Revenue reported earlier this month that October "Sales and use tax collections totaled $345 million, up $10 million or 3.1 percent" from October 2000, and $76 million more than collected in the previous month (September).

Despite their cheap tactic of deceptions, Steve and the Gimme Lobby lose again.

Chip Ford


The Boston Globe
Saturday, November 17, 2001

Analysts see harsher budget cuts looming
Some say state just delays the inevitable

By Rick Klein
Globe Staff

Legislative leaders call their budget pact grim, harsh, but prudent -- a plan that will close the state's $1.4 billion deficit but inflict pain across state government.

But some analysts fear that the spending plan actually delays action on tough financial problems that confront the state, and fails to make the deeper cuts needed to prepare for the lean times ahead.

The budget agreed upon Thursday by Senate President Thomas F. Birmingham and House Speaker Thomas M. Finneran actually increases spending by about 2 percent over last year -- less than in years past, but an increase nonetheless.

That means that even as the state is taking in less money this year -- due to plunging revenues -- it is spending more.

Birmingham and Finneran have spoken at length about how challenging it has been for them to find areas to cut. They and their aides are meeting on Beacon Hill through the weekend to finalize their list of $650 million in cuts.

But some suggest their difficulty stems from the fact that state government has been growing at a rate of 6 percent a year for five years. Bureaucrats and other constituents have become accustomed to generous expansions.

The legislative plan, for example, does not affect some politically untouchable programs: Aid for local education is likely to increase by $220 million over last year, a boost of 7 percent.

Outside of a few hard-hit areas -- including higher education, human services, and the judiciary -- this year's spending will be about the same or only slightly lower than last year's in most programs.

Michael J. Widmer, president of the nonpartisan Massachusetts Taxpayers Foundation, said the Legislature should slash spending more aggressively. His group called for $850 million in cuts this year and said lawmakers are putting off making tough decisions on where to scale back state services.

Widmer said state leaders may have to slash another $650 million in state spending next year. And next year's cuts will probably be more painful because the easiest reductions -- administrative cuts, salary freezes -- will not be available to them.

"The first cuts may not be easy, but they're always easier than subsequent cuts," Widmer said. "The second round, which is almost inevitable, will be tougher still. It will require at least as many cuts, and more sacrifices."

The legislative leaders are also relying on $700 million from the state's cash reserves, plus $50 million from the settlement with tobacco companies to make up the rest of the deficit. They plan to tap the reserve accounts for another $1 billion over the next two years, leaving $600 million for future use.

At a press conference yesterday, Finneran defended the plan, but he acknowledged the state could easily be facing another difficult budget cycle next year. "There's always that fear, that you have not come to grips with the dimensions of the problem early enough," Finneran said. "Next year could involve more cuts."

Finneran and Birmingham believe the sudden plunge in state revenues is an aberration, resulting in part from the Sept. 11 terrorist attacks, and justifies the use of $700 million from the rainy day accounts.

"We were quite frankly horrified with what we saw because it was far worse than anything that even we had considered," Finneran said.

The legislative leaders are hoping to close the books on their 4 1/2-month budget deadlock by Wednesday. Massachusetts is the only state still operating without a final spending plan.

Senate Ways and Means Chairman Mark C. Montigny said if next year's budget has to be tighter, the Legislature will have six months to prepare. By that time, it could become obvious how long the slowdown will last.

But costs beyond the state's control are likely to continue to rise. Medicaid costs are rising beyond anyone's comprehension.

Shortfalls are all but certain at independent agencies that are especially reliant on economic activity, like the Massachusetts Port Authority and the Massachusetts Turnpike Authority. The state could also be forced to pitch in more to pay for the Big Dig.

This puts more pressure on the rest of the budget, because the money for those priorities will have to come from current programs. And both Birmingham and Acting Governor Jane Swift will be running for governor next year and neither wants to be associated with harmful budget cuts.

"They always put off the tough decisions, and they particularly don't like to make them in an election year," said Barbara Anderson, executive director of Citizens for Limited Taxation.

Rank-and-file lawmakers have yet to receive copies of the budget plan and their leaders have not provided details of the revisions. Lawmakers expect to get copies of the plan in time to vote on it Tuesday or Wednesday.

Both the House and Senate approved initial budgets for this year in the spring, when times were flush and state government was expected to expand by 5 percent.

Material from the Associated Press was used in this report.


Letter from the Mass. Human Services Coalition
on Freezing the Tax Rollback

The Massachusetts Human Services Coalition
November 16, 2001

To all members of the Great and General Court,

In a recent condescending message to you all, Barbara Anderson of Citizens for Limited Taxation said that any move you might make to freeze the implementation of the Question 4 income tax rate rollback would be "a slap to the face" of Massachusetts voters who would then toss you all out of office. Are Ms. Anderson's anti-tax, anti-government rose-colored glasses so thick that she does not see the daunting challenge you face in fulfilling your fiscal duties to protect the well being of Massachusetts residents while producing a balanced budget? Can Ms. Anderson not see the drastically different world in which we all now must live? We believe it is Ms. Anderson who insults the intelligence of the voters. A poll conducted by Opinion Dynamics between October 19 and October 22 shows 51% of respondents supporting a freeze while only 38% supported moving forward with the tax cut. Massachusetts voters know that the state's fiscal health and the economy are much different from November of 2000. All voters heard then were promises from the Cellucci/Swift administration that we could pass Q. 4 and still increase FY02 spending by 5% and have a FY01 surplus of a billion dollars. (We came up $440 million short on that one.) Why isn't Ms. Anderson demanding that that political promise be kept? You and your colleagues have kept your promise that an income tax rate of 6.25% was indeed "temporary" with the rate already now reduced to 5.6%.

Here in the human services community, we are told that there are no alternatives to making $650 to $700 million or more in cuts to the FY02 budget. This simply is not true....

Acting Governor Swift tells us we cannot freeze the further implementation of Question 4 because it is providing the economic stimulus that will pull us out of what is now clearly a recession. How does providing a family of four with annual income of $70,000 with an additional $175 in 2002 -- less than 48 cents a day -- provide anything that could be called an economic stimulus? Just look at the stimulating effect that all those $300 to $600 checks distributed by the Internal Revenue Service have provided. Our recession has only grown worse....

Despite the mindless hue and cry (and threats) raised by Citizens for Limited Taxation, they are now in a minority. The simple fact remains that a ballot initiative when passed becomes a law like any other. And you have a fiscal and moral responsibility to re-examine any law in times of drastically changing circumstances. (For example, the circumstances supporting the 67% voter approval of Question 2 in 1998 have not changed. The circumstances supporting the 59% approval of Question 4 in 2000 have clearly changed.)

We urge you to fulfill your social, moral and fiscal responsibilities to all the residents of the Commonwealth by supporting a freeze in the implementation schedule of the Question 4 tax rollback. We implore that you convey as quickly as possible to your leadership your support for the freeze. We will stand with you when you show your courage and resolve in taking this important step....

Sincerely,
Stephen E. Collins,
Executive Director
MHSC, Inc.


The Boston Herald
Saturday, November 17, 2001

Top pols may take pay cut to help ease budget pains
by David R. Guarino and Steve Marantz

At least four of the state's top pols might take the budget ax to their own wallets in symbolic givebacks meant to blunt the pain of $700 million cuts set to be rolled out in the coming days.

House Speaker Thomas M. Finneran suggested yesterday that he might volunteer a chunk of his beefy $85,000 salary, joining acting Gov. Jane M. Swift's call for personal austerity in the budget crunch. State Treasurer Shannon O'Brien agreed as others opened the door to a pay cut.

Finneran said the personal cuts and those to internal legislative accounts, detailed in a Swift proposal in Thursday's Herald, are akin to a patriotic duty following Sept. 11.

"The nation has come together very, very nicely to the challenge of Sept. 11," Finneran told reporters. "We are certainly not in uniform, engaged in war, but in our own limited way we can demonstrate similar sacrifice and leadership."

Sources said closed-door budget negotiating this weekend might also include cuts to sacred district office accounts and travel expenses.

Months of dickering over the spending plan came to a head at week's end as leaders announced an outline of a budget deal with deep spending cuts. But the smoke cleared on no real details yesterday, leaving Swift spinning.

From her Williamstown home, the acting governor held a rare telephone press conference to harangue the Legislature.

"After 139 days of delay, a page-and-a-half outline is not an adequate response," Swift said. The governor intends to file her own version of specific proposed cuts on Monday morning.

"Even as a former legislator, the governor is thunderstruck by the lack of responsibility of this," said Stephen Crosby, Swift's secretary of administration and finance.

Swift has vowed to make a 3 percent cut on her own $6 million office account, cutting paid interns, newspapers, and possibly her own $135,000 salary.

Finneran agreed deep internal cuts would be made. "We prefer to lead by example and I think you'll see when the budget comes out that we are not going to pretend that the Legislature is somehow or other immunized from this exercise," Finneran said.

The pay of rank-and-file lawmakers, now tied to median household income, rose to just under $50,000 this year. Leadership earns up to $20,000 more and many, like Finneran, have lucrative law practices.

O'Brien, who with other statewide officers saw her pay jump from $75,000 to $120,000 last year, seized the symbolic call. "In tough economic times, state government must cut its costs and Treasurer O'Brien would be happy to join her fellow constitutional officers in sacrificing a portion of her salary to save taxpayers money," said Treasury spokesman Dwight Robson.

Secretary of State William Galvin said he's "open" to the 3 percent reduction and Auditor Joe DeNucci said he'd take the cut if it includes judges and college presidents, but called it pure politics. A spokesman for Attorney General Thomas Reilly wouldn't comment.


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