While Boston burned through cash in the go-go '90s,
neighboring Cambridge kept a tight rein on spending, state records show.
From fiscal 1994 to fiscal 2002 Cambridge's budget grew just
2.8 percent from $347 million to $356 million, state Department of Revenue figures show.
"We know that the economy is cyclical," said Cambridge City
Manager Robert W. Healy. "We tried to keep expenditures down. We tried to build reserves."
Cambridge currently has about $50 million in a rainy day
fund that could be used to stave off layoffs as the state threatens budget cuts.
Healy's philosophy is "don't spend it all because you have
it." Conservative budgeting meant Healy didn't have to make drastic cuts in the 1990s recession.
And he doesn't expect to see "blood in the streets" of Cambridge now - despite
Gov. Mitt Romney's threat to cut $200 million from local aid before July
1.
"I'm prepared to develop a plan to deal with it," said
Healy, facing a possible $4.3 million local aid cut. Cambridge's meager budget growth in part comes
from its 1996 decision to sell its hospital, a move that Healy estimates
saves Cambridge $100 million a year. But Boston, which saved some $200,000
annually by privatizing Boston City Hospital, managed to spend the difference -
and more, state records and an analysis by the Boston Municipal Research
Bureau show.
The Herald reported yesterday that Boston's budget grew $600
million from 1994 to 2002 - a hefty 50 percent driven by adding 1,900 employees to the
payroll.
Cambridge is one of the few Greater Boston municipalities
that kept spending under control during the 1990s, records show.
From Arlington to Watertown, budgets ballooned as the state,
following the education reform mandate, poured money into schools.
Chelsea, a community targeted by Ed Reform, saw its budget
grow 85 percent - some $51 million - from 1994 to 2002. Boston's wealthy suburbs of Brookline
and Newton hiked spending 57 percent and 40 percent, respectively.
"There was some pent-up demand for municipal services," said
Rick Kingsley, bureau chief of DOR's division of local services, noting that budget cuts in the
late 1980s and early 1990s had forced communities to cut police, firefighters
and school teachers.
The flush 1990s were a great time to be a mayor, said
Michael Widmer, president of the Massachusetts Taxpayers Foundation. Local aid hikes and
property tax limits gave city leaders ability to spend without raising taxes, he
said.
Widmer expects layoffs in most municipalities and cuts to
basic services but doubts the situation is as dire as Mayor Thomas M. Menino and others say.
"The mayors have had the best of all worlds," Widmer said. "Suddenly, the rug
gets pulled out. That's why there's such an hysterical reaction."
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The Boston Herald
Saturday, January 18, 2003
Class war: Mitt's plan for cuts
pits rich suburbs vs. poor cities
by Elisabeth J. Beardsley
The state's fiscal stage is set for a class warfare
showdown, after Gov. Mitt Romney's 11th-hour decision to abandon a Senate directive to protect poor
urban areas while embracing House suburbanites' demands for across-the-board
local aid cuts.
Romney signed the legislation expanding his emergency
budget-cutting powers into law yesterday afternoon - but came under fire from urban state senators
for opting to ignore Senate-backed provisions offering the discretion to protect
needy communities.
House lawmakers had successfully argued to Romney that the
only fair way to handle $200 million in local aid cuts is to apply equal percent reductions to
every city and town in the state - hitting poor cities such as Lynn with the
same percentage cut as tony suburbs such as Lincoln.
"It isn't supposed to be what's simply fair," said Sen. Mark
C. Montigny, a New Bedford Democrat. "It's supposed to be what's right - to help communities
where they can't help themselves."
Large urban areas and poor outlying communities rely more
heavily on state aid to support municipal budgets than affluent suburbs.
Applying the local aid cuts in equal percentages "sounds
fair at first blush," but would take a bigger bite out of the state aid-reliant communities than those
with their own resources, said Sen. Steven C. Panagiotakos, a Lowell Democrat.
Panagiotakos said he's "disappointed" since the Senate gave
Romney the ability to scrutinize individual communities' ability to pay, and the option to spare cuts
to cities and towns that could be pushed into financial ruin.
"Under his across-the-board plan, it's disparate, it's
unequal," Panagiotakos said. "The result is unfair to communities like Lowell and other urban areas."
Romney signed onto the across-the-board plan after huddling
late Thursday with five House lawmakers from mostly well-to-do suburbs - areas that
overwhelmingly supported Romney in the election, catapulting him to victory
over opposition from the heavily Democratic cities.
Montigny said he found Romney's sudden support of the House
suburbanites "troubling" after the governor said publicly as recently as Wednesday that he
wanted "to favor the less wealthy cities" when he imposes painful, mid-year
local aid cuts over the next few weeks.
"I'm hoping that he will provide clarity because it does
seem to be a potential contradiction here and I'm not sure how to report that to my communities,"
Montigny said.
Romney spokeswoman Shawn Feddeman declined comment on the
criticism, instead offering careful praise of the Legislature's rapid action to cede
unprecedented budgetary powers to Romney, to help him address an estimated $600 million current-year
deficit.
Feddeman reiterated Romney's intent to cut local aid in a
"proportionate" manner, and insisted Romney's cuts will be "fair."
But with mayors and other local leaders in an uproar over
the looming cuts, Lt. Gov. Kerry Healey is hammering together a package of legislative proposals
aimed at freeing municipalities from costly and time-consuming state mandates,
Feddeman said.
"We hope to be responsive to them, to help them manage their
finances," Feddeman said.
Romney aides also pointed out that the governor has pledged
to protect Chapter 70 education reform aid, which disproportionately benefits poor
communities.
While urban leaders were up in arms, suburban officials
expressed relief over Romney's shift to an equal percentage approach to cuts.
Medford Mayor Michael McGlynn, president of the Massachusetts Municipal
Association, said he had feared that giving Romney the power to "cherry-pick"
would lead to cities and towns being punished or rewarded on the basis of
political affiliations.
"Giving someone the unilateral power to pick and choose
between communities and pit cities and towns against one another is very frustrating," McGlynn said.
Despite the kudos to Romney, McGlynn noted that all
communities are bracing for cuts - and he's still walking through Medford City Hall, trying to decide
which workers to lay off.
"For me, the anxiety level is still extremely high," McGlynn
said. "The fact of the matter is the bottom line will not change."
While the local aid battle has consumed most of the
political attention this week, Romney still faces the prospect of drumming up $400 million in cuts
from human service programs, if the entire $600 million deficit materializes.
Human service advocates have called on Romney to avoid
further cuts by dipping into the state's last $300 million in reserves or by "borrowing" from
the state's $500 million in tobacco settlement funds.
But those options are politically unpopular and, in the
absence of such relief, advocates said they expect Romney to zero in on huge agencies like the
Departments of Mental Retardation and Mental Health, which largely escaped
past cuts through vocal lobbying blitzes.
"The bigger agencies are like wounded bears and the smaller
agencies are like stomped-on chipmunks," one advocate said.
While local aid cuts loom, Romney announced he will soften
regulations former acting Gov. Jane M. Swift had proposed to kick 168 homeless families out of
their shelter beds, sacrificing $2 million in budget savings. He called aid to the
homeless an "essential service."
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The Brockton Enterprise
Saturday, January 18, 2003
"Are we afraid to debate that an emergency tax resolution of
exact, enforceable, limited duration with precise economic triggers may be a better
economic stimulus than the wholesale devastation of our most important
natural resources, our education system and public safety?" Brockton Mayor
John T. Yunits Jr. asked in his [State of the City] speech.
The answer is yes. Members of the Legislature are afraid of
anything that might threaten their job security. The Beacon Hill gang may not understand
the state's finances, but they sure know how to read a poll, and 45 percent of
the electorate voted in November to abolish the state income tax. The Legislature is unlikely to increase any tax, much less one that
would prop up local aid. The political equation in the Statehouse is simple: Romney is going to
take the heat for cutting local aid and there's no mileage in helping the local
officials who will have to make the tough choices on what programs and jobs to
eliminate. Yunits asked for courage, but he should have known that the
uniform of the day in the House features a wide yellow stripe running down the
back.
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The Salem News
Friday, January 17, 2003
Editorial
Pharmacies aren't public charities
It's difficult to believe the level of arrogance in the
Massachusetts Statehouse, where legislators have reportedly been shocked to find pharmacies passing a
tax on prescription drugs on to customers.
The $1.30-per-prescription tax -- or "assessment" as the
Legislature prefers to call it -- has prompted outrage among the public judging from calls and
letters to our newspapers.
The idea that the state wants to soak citizens on the drugs
they take -- and sometimes need to survive -- strikes a nerve. The tax especially hits those
elderly who are poor, but not poor enough for Medicaid.
The surcharge, which took effect Jan. 1, was intended to
raise an additional $36 million for Medicaid, the state health insurance plan for the poor. Federal
matching funds would increase the total raised to $72 million.
Pharmacies must pay the state $1.30 for every non-Medicaid
or Medicare prescription filled. The first bill comes due May 1.
The legislators who instituted this plan apparently believed
the pharmacies would simply pay this tax out of profits; this despite the fact the Swift
administration lowered the profit pharmacies make on filling Medicaid prescriptions to 2 percent.
But even in filling prescriptions for private health insurance providers, most pharmacies don't make enough profit to absorb
such a tax.
"It's almost impossible to think that anyone could do that,"
Carmelo Cinqueonce, executive vice president of the Massachusetts Pharmacists
Association told the Associated Press. "To expect them to spend $1.30 on
every prescription they dispense is, quite literally, ludicrous."
Nevertheless, lawmakers like House Ways and Means chairman
John Rogers, D-Norwood, are now demanding that pharmacies cease passing this extra cost
on to customers, or else. Among the punishments available to Rogers is
repealing the "assessment" while simultaneously ending the dispensing fee the
state pays to pharmacies for filling Medicaid prescriptions.
That Rogers and Attorney General Tom Reilly insist on
casting pharmacies as "evil corporations," shows an appalling lack of knowledge as to how businesses
work.
Businesses including pharmacies, large or small, are not
charitable organizations. They exist to make profits. If they fail, they close.
Every cost imposed on a business is ultimately passed on to
customers and that includes this tax or "assessment."
The Legislature wants to maintain its luxurious Medicaid program
that costs $6 billion a year -- one-quarter of the state budget -- and provides one in six
state residents with a health plan better than that held by much of the working
population which pays for it.
Legislators, knowing that the public has no appetite for higher
taxes, wants to make pharmacies pay for its charity. That's wrong and citizens know it.
