Saturday, November 24, 2001
Politics, attacks and souring economy
feed endless budget battles
By Steve Leblanc
BOSTON (AP) This year's budget battle was mired in politics and a souring economy long before two airliners hijacked from Logan International Airport crashed into the World Trade Center.
But as the shock and horror of the Sept. 11 attacks rippled through the economy, budget negotiations took a dramatic turn.
Legislative leaders, mostly Democrats, accustomed to years of ever-increasing tax revenues, suddenly found themselves struggling to close a budget shortfall that soared to $1.35 billion.
The Legislature's inability to produce a budget by July 1 and the second year of a voter-approved tax cut set to drain another $200 million in state revenues, made the job even tougher.
If that wasn't enough, two of the three most powerful players in the budget battle acting Gov. Jane Swift and Senate President Thomas Birmingham are planning to run for governor, injecting election year politics into the showdown.
Swift, a Republican, took advantage of the impasse by accusing legislative leaders of acting like "3-year-old children."
Birmingham called cutting hundreds of millions from mental health programs and the courts a "grim" task.
Finally, on Wednesday at about 10 p.m., just two hours before the end of the session, the Legislature approved a $22.25 billion budget for the 2002 fiscal year.
The debate dragged on so late that House members opted to go home for the Thanksgiving holiday before a final roll call. That last procedural move was taken by voice vote, after most members had left the Statehouse.
The battle isn't over.
Swift, who has called the budget "a mess," has 10 days to make vetoes. On Wednesday, both the House and Senate voted to return on Dec. 5 to consider veto overrides.
If state revenues decline further during the next six months, the Legislature and Swift might have to make more cuts.
And even as this year's belated budget is being wrapped up in time for Christmas, Swift's top aides are already putting together a spending plan for next year.
That plan, which must be submitted in January, will likely be leaner than the budget unveiled by her predecessor, former Republican Gov. Paul Cellucci, last January.
Back then, lawmakers were just beginning to hint that the roaring economy of the 1990s was starting to turn.
In fact, legislators spent much of last year wrestling with what to do with the state's growing surplus.
Cellucci pointed to the surplus as one argument for his three-year $1.4 billion income tax cut, which he said was needed to keep the Legislature from spending too freely.
Within months of the tax cut winning approval from voters, the state's economy began to turn. By January, some legislative leaders warned that dwindling revenues could force a tighter budget, though none predicted a $1.35 billion shortfall.
Despite the economic downturn, Swift continues to support the tax cut, and will likely point to it during her campaign for governor next year.
Democrats, on the other hand, will likely blame the tax rollback for even more dire cuts next year, particularly if the economy fails to turn around.
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The Patriot Ledger
Friday, November 23, 2001
The shameful budget saga
The way the Legislature produced a 2002 budget is a story of intrigue and treachery worthy of a Russian novel, and of a Russian-style government.
Nothing about the process was fair or democratic, and the results are abysmal. If ever there was a time for Massachusetts taxpayers to rear up and say, Enough!, it is now.
No other state came close to dithering over a budget to the point that it is nearly five months late. No other legislature would show such contempt for the public as this one has, by dumping a budget document on rank-and-file members at midnight and giving them just hours to vote up or down. No discussion, no amendments. Only the Democratic politburo that hashed out the budget in the back room knew what was in it.
This chicanery comes at a time when the state is facing a serious financial crisis.
Cuts have been made, in ways both mysterious and self-serving. Local aid and school funding have been spared, because if those accounts were cut cities and towns would holler loudly and soon. That doesn't mean, however, that municipalities won't be hit in other, less obvious ways. By eliminating some support for children in state custody, for example, local special education costs will continue to increase.
Because the budget has barely become public, we don't yet know all the dastardly deeds it contains. But a few are obvious. There is not a dollar for clean elections, although the voters approved the law in a referendum and money had been set aside, amounting to $22 million.
Another cut is an item that would have increased the pathetically low wages of human service workers. To better understand legislators' priorities, let's remember that a week before the budget was finalized, the Legislature saw fit to toss $5 million to state racetracks. Horse betting before people.
Sad to say, the commonwealth is bound to be in bigger fiscal trouble next year than it is now, because neither acting Gov. Jane Swift nor legislative leaders are facing up to the magnitude of cuts that are needed. And there are accounts that can be cut without shortchanging foster children.
The only good news in the financial picture is that the state has a rainy-day fund, a sound move made by state leaders when the coffers were overflowing. On top of that, there's the tobacco settlement money that other states have been using to make up for revenue shortfalls. Now Massachusetts joins the pack.
The state had been banking 30 percent of the $300 million annual tobacco settlement, but now will spend half of that amount as general revenue. The tobacco fairy is nice to have around, but helps avoid the harsh realities. And while that money is being used to balance the budget, it's not available to increase Medicaid reimbursements to hospitals -- thus perpetuating a critical problem for an important sector of the economy.
The Massachusetts Taxpayers Foundation -- whose special interest is fiscal stability -- points out in its most recent budget analysis that the $1.4 billion shortfall anticipated in the budget is just for this year, and is likely to worsen next year. Therefore, plugging the hole is not much of a solution.
The Legislature didn't bother to look at sensible -- though unpopular -- moves like increasing state employee contributions to their health insurance from 15 to 25 percent, which is more in line with private sector workers. That would save $60 to $70 million each year.
Don't believe the hard work has been done, or that the conniving is over.
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State House News Service
Weekly Roundup - Week of Nov. 19, 2001
(Recap and analysis of the week in state government)
By Craig Sandler
STATE HOUSE, BOSTON, NOV. 21, 2001 ... Usually government budgets are said to be "unveiled." But the discussion about the House-Senate leadership compromise on this year's model was more befitting an exhumation: a midnight press conference in the gloom of the hallway outside the House Clerk's office on the first floor of the State House.
It seemed as if the chairmen of the Ways and Means Committees wanted as little attention paid as possible to the fact that, 142 days, 23 hours and 58 minutes after the deadline, they'd finally filed a compromise budget.
And appearances aren't always deceiving. The public was angry it took five months longer than necessary to decide how to spend its money; there was a great deal of complaining from lawmakers themselves that the budget would be passed without the opportunity for careful study by the rank-and-file; and lobbyists for human services, higher education and court services were doing all they could to further diminish the already-crumpled public standing of the legislative leadership.
So it was not astonishing that House chairman John Rogers and Senate chairman Mark Montigny thought after midnight on the Wednesday before Thanksgiving was the appropriate time to publicly air the details of the plan they'd left with the clerks, after a final round of talks between their bosses, House Speaker Thomas Finneran and Senate President Thomas Birmingham, who make the important budget choices.
At no point did the process become graceful and intelligent looking. The ordinary members of the House and Senate spent most of the next legislative day behind the closed doors of caucuses, or debating rules so they can return in December for a special session to attend to matters they failed to finish on time.
With so little for them to do -- a straight up or down vote was mandated on the compromise budget -- they turned their attention to whether, once the acting governor makes her vetoes, they should be allowed to try to block the tax cut citizens voted themselves last November.
Ultimately, the House decided not to consider tax cuts or increases on Dec. 5, but to include Congressional redistricting to what will likely be a full plate of veto overrides. Acting Gov. Jane Swift said the long-awaited budget accord is "a mess."...
Judging from the mood in the building, it seemed to be getting more difficult not just for the public to keep faith in state government, but for many of their representatives as well.
Even with all the abuse the leadership took, and the public's disgruntlement, after an action-packed three days of activity on the budget it was clear all that had been accomplished was the first step. Lawmakers said they didn't like the budget much, but felt it was necessary to move on. The House vote to approve it was 115-41; the Senate okayed it at 29-8.
By week's end there were five major objections, widespread, to this budget:
BUDGET IN A PARAGRAPH
Rogers and Montigny said they were pleased with the plan in that it spared most local aid and the senior pharmacy program, though it cut $650 million in other areas. Pensions, higher education, human services and the courts took the biggest hits, but the reductions came in hundreds of areas like AIDS services and adult education. The other part of the budget balancing equation was the use of more than $800 million from reserve funds. Time will tell if the state is drawing too quickly from its $2.3 billion reserve pile.
SWIFT PROMISES PLENTY OF VETOES
But the plan was nowhere near good enough for Acting Gov. Jane Swift. She pronounced it a "mess," and lambasted the process. The acting governor, who formally submitted her own alternative "recovery" budget this week, said she'll take the full 10 days allowed her to study it, and make plenty of changes. Swift said the document filed Tuesday was so flawed it contained no money for plowing this winter.
TAX HOLIDAY REJECTED
Sen. Brian Lees lost his bid to fast-track consideration of an idea being pushed by Swift this week -suspending the sales tax in Massachusetts for the first two days of December. Swift says her idea will help the economy, but some retailers say its stalling and maybe killing sales. It's understood at the State House that the tax break won't happen this year. But consumers don't necessarily know that, and retailers worry that people will withhold purchases waiting for the tax holiday, and then never make the purchase.
State House News Service
Advances - Week of Nov. 26, 2001
STATE HOUSE, BOSTON ... Beacon Hill becomes spin city this week as everyone tries to pick the winners and losers in this year's protracted budget battles.
The budget stalemate may have ended last week but the memory will linger, along with the apparent ill will that grew between the branches and their two leaders as negotiations sputtered through the summer and fall.
Most attention this week shifts to Acting Gov. Jane Swift as she mulls the numbers and contemplates vetoes in the $22.26 billion spending proposal. She has until Saturday to make her decisions.
The bottom line has shrunk since the budget was first conceived back in January by former Gov. Paul Cellucci and then refined last spring by the House and then the Senate. All three of those early versions spent at a far greater clip than does the bill now on Swift's desk.
Plummeting revenues in recent months forced House and Senate conferees to make $650 million in cuts and to tap existing reserves in order to produce what they say is a balanced budget. The final legislative bill surfaced at the last possible moment Tuesday night, thereby qualifying for a vote in each branch on Thanksgiving Eve.
Passage of the budget, delayed since last July, bumped up against the Nov. 21 end of formal House and Senate sessions, leaving no time to override any vetoes Swift may issue after reviewing the bill on her desk. For that reason, the two branches have agreed to come back to Beacon Hill on Dec. 5 to override any Swift moves for which there is the will and the two-thirds vote needed to override.
Some lawmakers and advocates for those dependent on state services worry that the economy may continue to weaken and that even more cuts may on the horizon. They are lobbying to freeze the next phase of an income tax cut placed on the books by voters.
Others worry about voter perceptions of the prolonged budget tug of war that took place over many months behind closed doors. Voters in 2000 were not fazed by a similar budget impasse that had occurred in 1999 but the economy was robust then and few worried about their wallets. The same voters in 2002 could have a different agenda when they go to the polls.
This week represents a respite for lawmakers who will not be back for their special override session until Dec. 5. Two years ago when there was a one-day override marathon, the House and Senate overturned 74 of the 348 vetoes Gov. Cellucci had issued.
SWIFT'S OPTIONS: Acting Gov. Swift is about to sign her first budget. She has 10 days from the moment it reaches her desk to peruse it before acting. Last week, she said it was "a mess."
Swift will likely follow tradition and spend this week asking agency heads and top aides to advise her on the pros and cons of line items and policy changes affecting them. When she does sign the document, the acting governor will at the same time return to the House a list of items she has vetoed or reduced -- the governor is prohibited from increasing any account or adding language.
Swift filed her own proposed cuts last week before conferees produced theirs. That "recovery budget" may offer clues as to what she could reduce further this week -- or what she is anticipating in the new fiscal 2003 budget proposal she has to file in January.
Each vetoed or reduced item remains disapproved unless and until there is a two-thirds vote in each branch to override it.
Because vetoes can only be overturned by roll call votes, the House and Senate must meet in formal sessions to consider them. That is why they have agreed to hold one additional formal session this year -- on Dec. 5.
Swift and her advisors have a political and policy opportunity that is also fraught with peril. The big cuts are available only in popular programs. She does have the opportunity to veto items such as the higher travel reimbursements House and Senate members retained for themselves, a holdover from the Clean Elections law, the rest of which was scrapped by the Legislature when zero funding was provided.
She needs to clean up the "mess" in a way the public finds believable, while making budget-balancing cuts it finds acceptable. The Mass. Taxpayers Foundation last week said the budget passed by the Legislature Wednesday was $200 million [out of balance], but that Swift did even worse when she submitted a "recovery" budget Monday. MTF said Swift's rewritten budget was $270 million out of whack.
VETO OVERRIDE SESSION: The House and Senate have adopted orders to suspend the Joint Rules preventing them from conducting controversial business or roll calls after the third Wednesday in November, and they have agreed to hold a formal session Dec. 5.
The order limits business on that day to veto overrides and action on a congressional redistricting plan that has also been hung up between the branches.
It is the House, and Speaker Finneran, that will control the schedule that day since no veto can reach the Senate until it has been overridden in the House.
If Swift comes out very aggressively against the Legislature's management style, both Finneran and Senate President Birmingham are likely to find ways to make their counterpoints, in the chamber and in the hallways with reporters.
Lawmakers will be trying to salvage some of their reputation, tarnished by press depiction of midnight budget filing and the outrage of the rank and file. The actual number-crunching likely will be affected by word of revenue performance in November, which ends Friday. Word of November revenues can be expected to leak out at week's end.
Proponents of a delay in last year's tax cut may yet try at least a symbolic attempt to make their case; the session is not supposed to deal with that topic, but it's still hot.
While thousands of bills that were dormant this year will be carried automatically into 2002, the second year of this biennial session, budgets and budget vetoes don't enjoy extended life and will die with the end of the 2001 legislative year at midnight on Jan. 1.
REDUCTION BACKLASH: After four days of line-item scrutiny by advocacy groups, expect to hear much more from them this week. Clean Elections advocates, lobbyists for higher education, and proponents of programs such as adult ed know the budget was passed and cuts more at a nadir of public attention. With the state back to business starting Monday, advocates will try as hard as possible to get citizens focused on what the Legislature is doing.
Fiscal conservatives will be pointing out that there's some evidence that the budget still isn't balanced. Good-government groups may continue objecting to the abuses of democracy many complained about last week. And liberals will likely have more to say about the wisdom of pursuing the tax cut right now.
TAX HOLDIAY: With no hearing of the Taxation Committee scheduled, Acting Gov. Swift's tax holiday proposal can be considered dead. Even if the committee were to hold a hearing and the bill hit the floor, any member could object to its consideration during informal sessions.
INFORMAL SESSIONS: With the exception of the special Dec. 5 override session, the remaining five weeks of this legislative year will feature twice weekly "informal" sessions.
During those meetings, the House and Senate conduct routine business and occasionally more significant legislation if there is unanimous agreement to do so. That means that just one member in either branch can object and block a bill from advancing. If any lawmaker wants a favorite bill to move before full sessions resume, it's up to him or her to convince colleagues in both branches of its value. The preoccupation over the budget drew attention away from hundreds of other bills but the real deadline for most is July 31, 2002 when formal sessions are set to end for the 2002/2002 legislative sitting.
Meanwhile routine sessions, usually occurring on Mondays and Thursdays, will continue through Jan. 2 when the new legislative year begins and "full formal' sessions can be called.
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The Springfield Union-News
Friday, November 23, 2001