Governor can use crisis to create real change
by Barbara Anderson

The Salem News
Wednesday, January 26, 2011

With Governor Patrick releasing his FY 2012 state budget today, I guess I need to write about the state of the commonwealth, which I'd been trying since November not to even think about.

I've been a Massachusetts taxpayer activist since the mid-1970s. It seemed to me that if taxes were limited, and tax hikes resisted, the politicians would have no choice but to stop the expensively outrageous practices that made our commonwealth uniquely dysfunctional, even within the normal government paradigm that doesn't work real well anywhere.

There were battles won and battles lost, but in the end, here we are, swimming in scandal and mismanagement, facing yet another fiscal crisis.

But let's look at the bright side of potential disaster. President Obama's chief of staff Rahm Emanuel was criticized for saying, "You never want a serious crisis to go to waste; and what I mean by that is an opportunity to do things you think you could not do before."

He was referring to national concerns like health care, energy, and fiscal, tax and regulatory problems. It's probably better not to dwell on the Obama administration's first two years, during which it tried to do things that really shouldn't be done at all; but Emanuel's point is still well-taken and applicable here in Massachusetts.

Government by its very nature big and unwieldy, with incentives having little to do with effective management isn't inclined to reform or improve itself unless there's a crisis; and I've lived through two such crises here that didn't go to waste.

The first was the crisis after fed-up voters passed Prop. 2 in 1980, dramatically cutting and/or limiting property taxes for the next fiscal year. While some public employee unions asked the courts to stop implementation, Citizens for Limited Taxation, which had created the initiative petition, joined forces with the Massachusetts Municipal Association to lobby for more local aid from the state to cover half the required cuts.

Feisty legislative Republicans soon collected almost enough Democrat votes in the Massachusetts House to cut the state budget and share freed-up state revenues with their cities and towns. Then Senate Ways & Means Committee chairman Chester Atkins took on the challenge and found the money to "make Prop. 2 work" until the communities themselves had time to get their acts together.

New local aid became an annual tradition until the next fiscal crisis, created when then-Gov. Michael Dukakis ran for president in 1988 on "the Massachusetts Miracle" which was partly created by the improved economic climate after property taxes were cut, and partly fabricated by the Dukakis administration exaggerating state revenues and hiding state bills. By the time Dukakis returned from the campaign trail, the commonwealth was "the Massachusetts Mess" and once again there was opportunity in crisis.

Unfortunately, the governor and Legislature took the opportunity to panic and pass the biggest tax increase in state history (until then). This of course only delayed necessary reforms until a new governor was inaugurated: Bill Weld's "no new taxes" pledge prevented further tax increases and demanded a restructuring of state government instead. This was when badly needed welfare reform was enacted with bipartisan legislative support.

My experience states that, when push comes to shove, and the taxpayers refuse to be pushovers, someone in government steps forward to lead. In 1980, it was certain House members and the Senate leadership; in 1990, it was the House leadership working with Gov. Weld. This year, it might have been new-Gov. Charlie Baker, but let's not dwell on that.

Pardon my habitual optimism, but without having yet seen Gov. Patrick's initial budget, experience tells me to expect some serious reform by the beginning of the new fiscal year in July. Once again the Massachusetts Municipal Association is lobbying hard; but since the current crisis is actually cutting, not increasing, local aid, this time mayors and selectmen are looking for the legislated tools to manage their communities past union intransigence.

Voters last November at least added some feisty new Republicans to the legislative mix. And both the governor and the legislative leadership seem to recognize that new taxes in this economy would be a bad idea, leaving only reform as a viable option.

Across the country, public employee pension and health insurance benefits have become unaffordable; there is even discussion of allowing states to declare bankruptcy in order to nullify union contracts. In this crisis environment, a strong leader can get things done.

The Massachusetts legislative leadership is as clueless as I've ever seen it, leaving great opportunity for Gov. Patrick to lead the way. Coming from the private sector, he hasn't seemed to fear the public employee unions as many Democratic politicians do; with backup from municipal officials, taxpayers, media and business leaders, and conservative think tanks, he may yet get a grip on the problem.

Putting off fully funding liabilities until 2040 isn't leadership, of course; but the governor's proposed pension reforms, and giving municipal officials the ability to control their health insurance costs, are a beginning.

Our job as citizens is to keep saying "no new taxes" until that beginning can turn a satisfactory start into genuine, ongoing change.

The comments made and opinions expressed in her columns are those of Barbara Anderson
and do not necessarily reflect those of Citizens for Limited Taxation.

Barbara Anderson is executive director of Citizens for Limited Taxation. Her column appears weekly in the Salem News and other Eagle Tribune newspapers; bi-weekly in the Tinytown Gazette.

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