Managing by the Rahm Rule
© by Barbara Anderson

The Salem News
Thursday, February 26, 2015


“Never let a good crisis go to waste ... it’s an opportunity to do things you think you could not do before.”
— Rahm Emanuel, when President Obama’s chief of staff.

What is now called the Rahm Rule has been ongoing government policy for a long time: It explains many bad laws and regulations, and most notably the national debt.

Sometimes “opportunity” is used to create a crisis when there isn’t one, so politicians can pass legislation to begin destroying a decent private health care system, and then move on to try wrecking entire economies with carbon taxes to fight “global warming.”

Rather than just dismiss the Rahm Rule as a tool of liberal government, maybe citizens should adopt it themselves, using “good crises” to argue for serious reform. Take the recent snowstorms that the Massachusetts Bay Transportation Authority couldn’t handle, creating a crisis in public transportation.

We have been here before. In December 1980, a few weeks after the voters passed Proposition 2½, the new law was changed after a one-day T shutdown due to lack of funds. There was a surge of reporting on the outrageous work rules of the T’s Carmen’s Union (e.g., crews waiting for the one union member who could change a lightbulb.) So the Legislature approved a change in work rules and a major change in the governing structure of the MBTA, in return for more funding.

This funding required a change in Prop 2½, which, as passed by voters, limited assessments by public authorities on the cities and towns to no more than 4 percent over the previous year’s assessment. The new plan assessed payments based on communities’ proportionate share of the T’s deficit. The cities and towns were given an advisory board to oversee their “contributions.”

Later in the ‘80s, I was at a Statehouse news conference that was selling the Big Dig. Concerned local officials wanted to know if that project would take money away from local road and bridge projects; they were assured that it would not. Seemed an obvious lie, along with the low estimated cost of the Boston project (roughly $3 billion, which hit $16 billion before the Dig was dug), but this couldn’t be proven until it was too late.

Later, it seemed insane to put Big Dig debt onto the MBTA by including demands for expansion of public transportation. So the T continued to expand instead of doing maintenance (because cutting ribbons on new stuff is more fun than keeping existing stuff fixed).

Most recently, the T was given a penny of the state sales tax in return for giving up some of the most egregious pension abuses, but this only worked going forward — it would (may) take bankruptcy to address some of the outrageous pension benefits that were negotiated decades ago (e.g., a 45-year-old has retired with a lifetime pension of $59,525).

Worse, despite the guaranteed funding, our governor and elected representatives still have no control over the operation of the MBTA, which is an independent authority.

I found a 1985 report released by Senate Ways & Means Chairman Patricia McGovern, D-Lawrence, warning about the accelerating number of independent authorities (506 at that time), including the “massive MBTA … These authorities represent a fourth branch of government over which the electorate has little control… (placing) the state in a precarious situation in which many of its most critical functions are performed by autonomous, non-elected governmental units.”

The reason some state government agencies became independent authorities is that legislators didn’t want aggravation from their constituents when services weren’t efficiently provided. After a rough beginning, this strategy worked with the Mass Water Resources Authority and its competent director Fred Laskey. It’s not working with the T, which has abused its mission and the taxpayers until finally, with incompetent director Beverly Scott, it reached the inevitable collapse this month.

Now the Pioneer Institute recommends that the T Board be eliminated and a receiver appointed to fix the fiscal/operational problems the board hasn’t addressed. Receivership worked for Chelsea and more recently, seems to be helping Lawrence: it’s worth a try with the T.

The last thing that should be tried is giving an unreformed, unaccountable MBTA more revenue. It already gets 49 percent of the gas tax, one penny of the 6.25 percent sales tax, and fares (from now stranded customers). Some liberal legislators have actually filed a bill to create local option sales or payroll taxes — even property tax increases — with revenues dedicated to transportation, however that is defined after the system takes care of itself with extraordinary pay, benefits and expense accounts.

There are examples of privatized transportation systems around the country, but I doubt this will be considered here. The MBTA’s own website notes on that “During the mid to late 1800’s some 20 different horsecar companies offered service to Boston and surrounding communities. Lax supervision led to over-duplication of existing services, fares were not regulated, and competition for passengers was fierce.” So, the General Court of Massachusetts, rather than stepping up the supervision, decided it couldn’t tolerate competition for passengers or fares not being regulated, so it began the creation of a public street railway system, and that evolved to today’s crisis.

In 1974, voters passed a constitutional amendment allowing taxes collected for the state highway fund to be used for public transportation. The argument was that a viable public transportation system would take pressure off the highways and make driving a nicer experience; we voters fell for it by 58.4%.

I think most taxpayers consider transportation a legitimate function of government, from the interstate highway system to trains. But we are paying more than enough for the Massachusetts version. Any sane taxpayer asked to “contribute” more to this ongoing boondoggle would say no.

No point in wasting this crisis: let’s try receivership, and if that doesn’t work, there may be an “opportunity” to discuss bankruptcy or even privatization.

Barbara Anderson of Marblehead is president of Citizens for Limited Taxation and a Salem News columnist.

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.

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