CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

 

CLT UPDATE
Saturday, January 4, 2003

Hold legislators' salaries harmless for now


Barbara Anderson, executive director of Citizens for Limited Taxation and Government, said every legislator who ever voted for a tax increase should reject the pay raise. "The pay raises are in the state constitution and the governor has to offer it but the Legislature doesn't have to take it or keep it," she said.

The Boston Herald
Jan. 4, 2003
Legislators due for instant pay hike


The problem is, many voters probably had no idea what they were voting for in 1998. The question was worded in such a way that it left the impression voters were taking away lawmakers' rights to give themselves pay raises. Just four years before, lawmakers had voted themselves 55 percent raises, spurring public outrage. So in an effort to take the pay raise out of the political arena, they placed it in the constitution.

What wasn't quite so clear to voters was the fact this ballot question gave lawmakers something that no one should have -- an almost guaranteed raise every two years.

Ironically, when voters also passed the Clean Elections law in 1998 -- a move intended to give candidates a better chance against incumbents -- lawmakers headed by House Speaker Thomas Finneran said voters didn't understand what they were voting on, and he worked hard to get rid of Clean Elections. Despite arguments that the automatic pay raise was similarly misleading, you certainly aren't seeing Finneran working hard to change it.

A Salem News editorial
Jan. 2, 2003
Automatic raises for legislators sends wrong message


Refusing to accept the pay raise or donating it back to the state or to some charity are two options, though they are not without cost. Legislators are still liable for any federal or state taxes on their established salaries even if they don't accept the raise or if they give it away. (Although there could be a modest charitable deduction on their federal tax returns -- but not on their state taxes since legislators suspended the state charitable deduction law during this period of budget deficits.)

Personally, I like the idea of checking the option on our 2002 state income tax form to pay my taxes at the higher rate of 5.8 percent on my entire salary, rather than the minimum rate of 5.3 percent that most state taxpayers will pay.

The Telegram & Gazette
Jan. 2, 2003
State legislators should refuse pay raise during tough times
By State Sen. Richard T. Moore


Massachusetts for most of the past two years was in a recession, and gross state product declined for seven consecutive quarters, through the third quarter of 2002. The sharp downturn was in proportion to the magnitude of the late 1990s boom caused by a high-technology spending spree.

The Boston Globe
Jan. 4, 2003
New England recovery lagging
3% or more US gain seen, less for region


Facing a high-stakes and delicate decision over legislators' pay, Governor Mitt Romney yesterday refused to detail what salary he is recommending for lawmakers.

The Boston Globe
Jan. 4, 2003
Romney quiet on salary issue
Is preparing to set legislative pay level


Backing off his inaugural speech's criticism of lawmakers for overspending, Governor Mitt Romney yesterday said he would try to develop a consensus with legislative leaders on how to address fiscal problems, noting that he will need their cooperation to quickly bring the budget into balance....

Romney's comments on the budget yesterday, delivered at his first news conference as governor, marked a change in tone from his inaugural address on Thursday. In that speech, he suggested that the Democrat-controlled Legislature spent irresponsibly during the boom of the 1990s, setting up the current crisis of a $500 million deficit this year and a separate budget gap of up to $3 billion in the fiscal year that begins July 1.

"State government spent the windfall, and borrowed even more," Romney said Thursday. "We've used up virtually all our cash, borrowed all the banks will lend us, and we are still spending much more than we're earning." ...

Yesterday, perhaps realizing that he will need the cooperation of Finneran and Travaglini, Romney clarified his remarks, saying he did not mean to assign blame for the state's fiscal mess.

The Boston Globe
Jan. 4, 2003
Romney reaches out on budget
Vows to work with lawmakers on fiscal crisis


Massachusetts' besieged initiative petition process is coming under renewed attack in 2003 from a familiar source: the state Legislature.

Emboldened after defying with impunity the will of the people and the Supreme Judicial Court on clean elections last year, the Legislature now is contemplating a frontal assault....

The lawmakers claim their intent is to counterbalance the increasing influence of large, often out-of-state financial interests in initiative campaigns ... That is political flapdoodle at its most insulting....

In recent years, increasingly autocratic legislative leaders have succeeded, by hook or by crook, in evading or nullifying the people's will on term limits, legislative salaries, the income tax rollback, deductions for charitable donations and more....

This proposal to undermine the people's right to participate directly in the lawmaking process must not stand.

A Telegram & Gazette editorial
Jan. 2, 2003
A grave betrayal


Chip Ford's CLT Commentary

Into the new year we go, and the issues go on as well. Legislators are still looking forward to their guaranteed automatic pay raise, but leading economists have reported that the state's economy is barely holding its own and will only recover after the national economy rebounds, perhaps later this year, perhaps not.

Can you imagine, with the Boston Federal Reserve Bank president's observing "Massachusetts for most of the past two years was in a recession, and gross state product declined for seven consecutive quarters," the state median household income actually grew?

On Dec. 31, Massachusetts Benchmarks reported "The Massachusetts Current Economic Index for November was 127.7, up 0.9 percent from October (at annual rates) and down 0.1 percent from November of last year."

Can you believe state median household income grew?

Gov. Romney's secretary of administration and finance, Eric Kriss, has termed the looming fiscal crisis the worst state government has faced since the 1930s, during the Great Depression. Is it even conceivable that legislators deserve an automatic pay raise?

The U.S. Census conclusion on median household income won't be out until this coming fall, so Gov. Romney must "estimate" its rise or fall. If the decision was left to you -- especially considering the fiscal mess the Beacon Hill pols have again created -- could you even remotely consider proposing another pay raise for legislators?

Gov. Mitt Romney's smartest way out would be to point to the only economic indicators available, and deny any pay raise. If he wants to "play ball," as it seems he's already beginning to learn how to do, he can just hold salaries harmless: No increase, no decrease, until the Census figures are released.

But already, he's learning that he has to deal with the professional pols and has backed off on the accurate appraisal he boldly asserted in his inauguration address: "In state government, our slow and bureaucratic ways have led to leviathan budget deficits and tax hikes ... State government spent the windfall, and borrowed even more ... We've used up virtually all our cash, borrowed all the banks will lend us, and we are still spending much more than we're earning."

His assessment was right on target and everybody knows it, especially those acting most offended, his most vociferous critics, Finneran and Travaglini. But in speaking truth to power he offended power, and so yesterday he back-tracked. This is not an auspicious beginning, but maybe he knows what he's doing? For now, I'll give him the benefit of the doubt ... and keep my fingers crossed.

Chip Ford


The Boston Herald
Saturday, January 4, 2003

Legislators due for instant pay hike
by Elizabeth W. Crowley

Days after laying into legislators for their free-spending ways, Gov. Mitt Romney is likely to hand them pay raises on Monday.

Aides to the governor said yesterday that he has an estimate of what legislative pay will be in the new year but that "as a courtesy" to House Speaker Thomas M. Finneran and Senate President Robert E. Travaglini he would not release it until after telling them first.

Aides to the new governor stressed yesterday that their boss is not to blame for the pay hikes. Massachusetts voters themselves approved a change in the state constitution in 1998 that ties legislative pay raises to the average household income in the state.

Since the income figure almost always increases, the pay raises are practically automatic. The state's 200 lawmakers received 7 percent raises last year.

It's unclear how much more money they'll get this year amid what many are saying is the worst budget crisis the state has seen in decades.

Romney only has an estimate in hand - the official figure for household income from the U.S. Census Bureau won't be out until the fall. Aides took pains to explain that Romney can't say no to the pay raises and that his only job is to pass along the numbers.

"It's a mechanical action and he has no discretion in this matter," spokeswoman Shawn Feddeman said. The issue proved too hot to handle for former acting Gov. Jane M. Swift, who left office Thursday, a day after the pay raises were supposed to kick in.

Barbara Anderson, executive director of Citizens for Limited Taxation and Government, said every legislator who ever voted for a tax increase should reject the pay raise. "The pay raises are in the state constitution and the governor has to offer it but the Legislature doesn't have to take it or keep it," she said....

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The Salem News 
Thursday, January 02, 2003

Editorial
Automatic raises for legislators
sends wrong message

Imagine being the boss at a time when you are firing employees, thinking about hacking into money for educating children, and considering cutting benefits for the poor and infirm.

And then imagine that you think you are entitled to a pay raise.

What is the message you are sending?

That feeling of entitlement is in full swing right now at the Statehouse, where lawmakers are constitutionally entitled to pay raises at a time when the state faces what its new budget guru, Eric Kriss, calls the worst financial crisis since the Great Depression. Some lawmakers want to take the raise, others think its the wrong thing to do.

We agree wholeheartedly with the latter.

How could this pay raise conundrum happen? Some lawmakers will argue that it was the voters of this state who mandated that they should get the pay raise. They will argue that it was an effort by voters to stop lawmakers from voting themselves pay raises. You remember making that decision, right?

Probably not. In a move that critics considered to be stealth politics at its best, in 1998 lawmakers placed a measure on the ballot that grants them automatic pay raises every two years, and they made it almost repeal-proof because it is an amendment to the state constitution. Changes to the constitution require votes of two sitting Legislatures, followed by the approval of all voters in the state.

The problem is, many voters probably had no idea what they were voting for in 1998. The question was worded in such a way that it left the impression voters were taking away lawmakers' rights to give themselves pay raises. Just four years before, lawmakers had voted themselves 55 percent raises, spurring public outrage. So in an effort to take the pay raise out of the political arena, they placed it in the constitution.

What wasn't quite so clear to voters was the fact this ballot question gave lawmakers something that no one should have -- an almost guaranteed raise every two years.

Ironically, when voters also passed the Clean Elections law in 1998 -- a move intended to give candidates a better chance against incumbents -- lawmakers headed by House Speaker Thomas Finneran said voters didn't understand what they were voting on, and he worked hard to get rid of Clean Elections. Despite arguments that the automatic pay raise was similarly misleading, you certainly aren't seeing Finneran working hard to change it.

The mechanism for determining the pay raise is a tricky thing. The law says it is tied to the change in household median income -- "as ascertained by the governor."

While some lawmakers might argue that median income could go up or down, in reality, over the past couple of decades it has gone up. For example, from 1989 to 1999, it has increased 37 percent, according to federal Census statistics. The buzz on Beacon Hill is that it could go up 8 to 13 percent. That's about $4,000 to $6,500 in raises for lawmakers.

No lawmaker in good conscience should take a raise this year. And it's time we revisit giving anyone constitutionally-guaranteed raises.

Should lawmakers be paid more than the $50,123 base pay they get? Probably. But first, they should be proving to us that they are keeping a promise they made to the voters when they gave themselves 55 percent raises -- they promised to be "full-time legislators." Many of them are not; they are working part time in the Legislature and part time in private practices, usually as lawyers.

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The Worcester Telegram & Gazette
Thursday, January 2, 2003

State legislators should refuse pay raise
during tough times

By State Sen. Richard T. Moore

There is a provision in the Massachusetts Constitution that sets the pay for state legislators at the median income of the families that they represent. The purpose of the provision was to put an end to potentially exorbitant "Halloween Pay Raises" in which legislators would vote to increase their own pay. The amendment took the issue out of legislators' hands permanently.

When the voters of Massachusetts approved the concept in 1998, the state was awash in burgeoning revenues and some voters were concerned that legislators might take "their share" of the state's wealth by voting themselves another big pay raise. Voters agreed that it was fair to link legislators' salaries to that of average families across the state and that legislators could receive a pay cut if the average income dropped, just as they receive a pay increase if average income increased -- essentially keeping pace with inflation.

No one complained two years ago with state revenues still strong, when Gov. Paul Cellucci determined that the median income had increased by 8 percent and, therefore, legislative pay should increase by that amount, from $46,410 to the current $50,123. It should be noted that this was the first increase in legislative pay since 1994.

Now that the state is facing staggering budget deficits resulting from the current national recession, the constitutionally mandated automatic pay raise has become a political issue. It seems inconsistent to some that legislators should receive a raise while budget realities are forcing state employee layoffs and program cuts.

Despite the fact that the pay raise only equals the median income of the people that legislators serve, the perception of receiving a raise in a time of scarce resources has created an embarrassing situation -- even if the sum of raises for all of the legislators amounts to only about $1 million. That amount will do little to address a $2 billion to $3 billion deficit, but its symbolism should not be underestimated.

To be fair, it should be noted that the majority of legislators have not ignored the plight of state employees. The Legislature has supported efforts to help state employees by approving an early retirement package to avoid layoffs, appropriating funding for contractually approved salary increases (even though the governor reneged on her agreement to fund the contracts), and has resisted attempts to decrease the amount that the state provides for state employee health insurance. Cuts in state health programs and other services -- many of which were made unilaterally by the governor to balance the budget -- have also not been popular among members of the Legislature.

The budget deficit should not change the principle that the constitution, rather than legislators themselves, should set the rate of any legislative pay increase or decrease. The existence of a budget deficit also increases the workload of legislators and their responsibility to make difficult, unpopular choices. Therefore, a good case can be made in support of a modest pay raise after two years at the same salary.

However, legislators need to consider what former Gov. William Weld used to call "the smell test" when deciding whether to accept what, this year, will be a raise. There are several options to defuse the controversy that legislators might want to consider.

Refusing to accept the pay raise or donating it back to the state or to some charity are two options, though they are not without cost. Legislators are still liable for any federal or state taxes on their established salaries even if they don't accept the raise or if they give it away. (Although there could be a modest charitable deduction on their federal tax returns -- but not on their state taxes since legislators suspended the state charitable deduction law during this period of budget deficits.)

Personally, I like the idea of checking the option on our 2002 state income tax form to pay my taxes at the higher rate of 5.8 percent on my entire salary, rather than the minimum rate of 5.3 percent that most state taxpayers will pay.

I think there is also merit in donating some or all of any pay raise to some nonprofit agency that has had its state funding cut. If that option were to be chosen, my choice would be to donate to an organization such as Tri-Valley Elder Services, which helps so many senior citizens throughout my senatorial district.

Public employees, including those who are elected, perform responsible functions and provide important services to the people of our state. They and their families should not be expected to sacrifice any more than anyone else in our efforts to resolve the budget crisis brought on by the downturn in the national economy.

However, the leadership position of legislators, the governor and other constitutional officers and the judiciary means that, for now, we all should work within our current salaries in an effort to address the problem and help our state get back on track.

State Sen. Richard T. Moore, D-Uxbridge, represents the Worcester & Norfolk District.

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The Boston Globe
Saturday, January 4, 2003

New England recovery lagging
3% or more US gain seen, less for region

By Kimberly Blanton
Globe Staff

The president of the Federal Reserve Bank of Boston predicted yesterday that the US economy would grow "moderately but steadily" this year, but she cautioned that New England's growth would be slower....

The nation, after experiencing a 2001 recession, swung last year between strong and weak growth but ended weakly. Wall Street economists estimate the US economy grew at an annual pace of just 1 percent in the final quarter of last year. But, like Minehan, private economists expect the pace to accelerate as the year advances.

Minehan was far more guarded in her New England outlook, which she called "uncertain."

Massachusetts for most of the past two years was in a recession, and gross state product declined for seven consecutive quarters, through the third quarter of 2002. The sharp downturn was in proportion to the magnitude of the late 1990s boom caused by a high-technology spending spree.

The New England Economic Project, a group of forecasters in the region, estimated in October that Massachusetts' payrolls would shrink by 1.8 percent in 2002, far greater than the 0.8 percent decline for the nation as a whole and for all of New England.

Minehan said a full recovery in New England hinges on when the US economy begins to revive. Moreover, she said, due to the region's heavy concentration of high-tech manufacturing, software, and technology services, "The current nationwide weakness in telecom, computers and technology services suggests New England may lag the nation's recovery."

Alan Clayton-Matthews, a professor of public policy and economics at the University of Massachusetts, Boston, said his analysis shows that Massachusetts, in the final weeks of last year, began to grow at a very slow 1.7 percent annualized rate. This growth should continue through May, he forecast.

"If this does come to fruition it represents a slow expansion," Clayton-Matthews said....

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The Boston Globe
Saturday, January 4, 2003

Romney quiet on salary issue
Is preparing to set legislative pay level

By Stephanie Ebbert
Globe Staff

Facing a high-stakes and delicate decision over legislators' pay, Governor Mitt Romney yesterday refused to detail what salary he is recommending for lawmakers.

The legislative pay adjustment was mandated in a 1998 constitutional amendment, in which voters approved automatic, biennial pay hikes for their legislators in order to end the practice of lawmakers voting themselves pay increases. The amendment called for the governor to determine adjustments in their pay based on the rise - or fall - in median household income over the prior two calendar years.

The rate is to be set by the first Wednesday in January every two years, but the deadline was extended because of the New Year's Day holiday and the Romney team's inability to determine the number on Thursday, the day of the inauguration, said Romney press secretary Shawn Feddeman.

Though the Office of Administration and Finance calculated the adjustment yesterday, Feddeman said, Romney declined to make it public until he could meet with legislative leaders Monday.

"As a courtesy, Governor Romney would like to notify the House and Senate leadership before releasing it publicly," Feddeman said.

Legislators' pay is a tricky issue, especially given the economic downturn and likelihood of layoffs later this year because of the fiscal crisis. Acting Governor Jane Swift, who could have addressed the salary adjustment herself, left the task to Romney.

The constitutional amendment provides little guidance to the governor about which economic indicators should be consulted to determine the median household income, making the "automatic" increase somewhat subjective. The US Census does not issue its survey of median income until the fall.

Complicating the picture, Romney, who is a multimillionaire, announced this week that he would work for four years without taking his $135,000 annual salary. Aides would not say whether he would urge legislators to also do more with less. Legislators currently make a base salary of about $50,000, with members who hold committee chairmanships or other leadership posts receiving additional pay.

Individually, some legislators have been talking about declining the pay raise because of the difficult economic times. At least 5,800 state workers have lost their jobs over the past 18 months and more layoffs are expected in the new year.

In his inaugural address this week, Romney called for immediate changes to stem a fiscal emergency.

Senate President Robert E. Travaglini and House Speaker Thomas M. Finneran could not immediately be reached for comment.

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The Boston Globe
Saturday, January 4, 2003

Romney reaches out on budget
Vows to work with lawmakers on fiscal crisis

By Rick Klein
Globe Staff

Backing off his inaugural speech's criticism of lawmakers for overspending, Governor Mitt Romney yesterday said he would try to develop a consensus with legislative leaders on how to address fiscal problems, noting that he will need their cooperation to quickly bring the budget into balance.

Romney said he will meet frequently with House and Senate leaders in coming weeks to devise a plan to close a budget gap that could reach $500 million this fiscal year. A top aide said Romney could begin to address the problems through cuts and proposals to the Legislature by the end of next week.

"The emergency needs that we have financially are ones that I will address not only through the executive branch but also with the leadership of both houses of the Legislature," Romney said. "Those emergency needs are not steps that I will take on my own, but I'll take in consultation with others. It may indeed require legislation to help take certain action, and if there is legislative action that's required, we'll bring that forward immediately to the Legislature."

A Romney spokesman said it would be premature to speculate on what specific actions will be pursued, but Romney said he may ask the Legislature to grant him expanded authority to rein in spending. The governor's emergency powers to reduce spending, as laid out by the state constitution, cover only about 63 percent of the state's $23 billion budget, mostly in the areas of health and human services.

The biggest area of spending off-limits to the governor is aid to cities and towns, which accounts for $5.5 billion of annual state spending. On Tuesday, Jane Swift, then acting governor, recommended that Romney ask the Legislature for the authority to reduce local aid, along with other possible solutions.

Such a request could put Romney in a political minefield, because local officials and many House and Senate members are fiercely protective of state aid for their hometowns. Included in the $5.5 billion is the nearly $4 billion the state spends every year on aid to local elementary, middle, and high schools.

Ordinarily, a newly elected governor does not make formal budget recommendations until late February, when the state constitution requires the filing of a proposed spending plan for the next fiscal year. But this year, with the state's fiscal climate continuing to worsen, lawmakers have expressed a willingness to come back into session to work with the governor on the current fiscal year's budget.

Romney's comments on the budget yesterday, delivered at his first news conference as governor, marked a change in tone from his inaugural address on Thursday. In that speech, he suggested that the Democrat-controlled Legislature spent irresponsibly during the boom of the 1990s, setting up the current crisis of a $500 million deficit this year and a separate budget gap of up to $3 billion in the fiscal year that begins July 1.

"State government spent the windfall, and borrowed even more," Romney said Thursday. "We've used up virtually all our cash, borrowed all the banks will lend us, and we are still spending much more than we're earning."

That part of his address brought sharp rebukes from House Speaker Thomas M. Finneran and Senate President Robert E. Travaglini, who both said that the newly installed governor ignored the fact that the Legislature built up a $2.3 billion rainy day fund during the boom years. Other legislators noted that the state also enacted 42 tax cuts over the past 12 years, peeling away $4 billion a year from state coffers.

Yesterday, perhaps realizing that he will need the cooperation of Finneran and Travaglini, Romney clarified his remarks, saying he did not mean to assign blame for the state's fiscal mess. He said that only with hindsight is it clear that the state was overspending through the late 1990s, and added that he recognizes that virtually every other state did the same.

"I must admit, in a 15-minute speech, I glossed over a lot," Romney said. "I'm not suggesting Massachusetts is alone or that somehow we are particularly to blame in Massachusetts government. I'm saying instead that we have - as a nation, as a group of states, and as a state here - spent more than we would have spent had we known what was coming."

Most State House watchers believe the state's fiscal woes are the result of many factors, including the economic slowdown, the collapse of the high-tech stock market, deep tax cuts enacted during the boom years, and vast additional investments in health care and education.

House Ways and Means Chairman John H. Rogers called it "heartening" that Romney sought to clarify his statements. He also applauded the governor's willingness to negotiate with lawmakers before presenting his ideas, saying it suggests that Romney is more interested in accomplishments than grandstanding.

"Many times governors will roll out bills and build up public relations behind them, but won't work with the most critical people involved in the process: the legislators themselves," said Rogers, a Norwood Democrat. "Philosophical battles can be avoided when you work together beforehand. It's not only smart politics, it's smart policy-making." ...

Globe correspondent Benjamin Gedan contributed to this report.

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The Worcester Telegram & Gazette
Thursday, January 2, 2003

Editorial
A grave betrayal

Massachusetts' besieged initiative petition process is coming under renewed attack in 2003 from a familiar source: the state Legislature.

Emboldened after defying with impunity the will of the people and the Supreme Judicial Court on clean elections last year, the Legislature now is contemplating a frontal assault.

A bill sponsored by Democrats Sen. Stanley C. Rosenberg of Northampton and Rep. Robert P. Spellane of Worcester would raise the minimum number of certified signatures on initiative petitions from the current 72,000 to 100,000. The requirement would make it significantly more difficult for grass-roots movements to place proposals on the ballot.

The lawmakers claim their intent is to counterbalance the increasing influence of large, often out-of-state financial interests in initiative campaigns -- a reference to the successful English immersion initiative bankrolled by billionaire Ron Unz last fall.

That is political flapdoodle at its most insulting.

In fact, the requirement would be a negligible obstacle to the Ron Unzes of the world, who can deploy armies of signature-collectors. But it would create a huge additional burden for true grass-roots movements that depend largely on volunteers.

This is just the latest in a string of assaults on the people's right of initiative petition, guaranteed by the state constitution. In recent years, increasingly autocratic legislative leaders have succeeded, by hook or by crook, in evading or nullifying the people's will on term limits, legislative salaries, the income tax rollback, deductions for charitable donations and more.

The right of initiative petition, established in 1917, was not intended to usurp Legislative prerogatives and certainly not to establish an ad hoc People's Legislature. It was intended to give the electorate the ability to make laws when elected representatives refuse to act.

This proposal to undermine the people's right to participate directly in the lawmaking process must not stand.

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