House Speaker Thomas M. Finneran's budget chief yesterday opened the door
to another tax hike, a key sign that Beacon Hill may back down from its vow to
address the state's fiscal crisis by service cuts and government reform alone.
Last November, Finneran said flatly, "I think taxes
are off the table," and insisted the House is "not contemplating taxes in any way, shape or form."
But House Ways and Means Chairman John H. Rogers said yesterday that
taxes may be back on the front burner once citizens begin feeling the pain of
massive budget cuts this year and next....
"Forty six percent of the voters want to repeal the
income tax. Rogers is saying that a majority of the House doesn't want a tax increase. What part of no
does he not understand?" said Barbara Anderson of Citizens for Limited
Taxation.
Anti-tax advocates speculated that, while Finneran
was silent, Rogers would not make such a pronouncement without the powerful speaker's
approval.
"Finneran speaks through a lot of people," Anderson
said. "I've heard him say publicly that taxes are off the table, so which side of his mouth is he
talking out of now?"
The Boston Herald
Jan. 23, 2003
House budget leader won't rule out tax hike
As a 2½-hour public hearing on state revenues
drew to a close yesterday, a Republican state senator asked whether the state should eliminate
lucrative tax breaks it handed out to big companies during the 1990s. A Democratic
state senator said bluntly that tax hikes must be part of the plan to close an
estimated $3 billion gap in fiscal 2004.
And the chairman of the House Ways and Means Committee said that the
Legislature's reluctance to consider new taxes could easily change after
Governor Mitt Romney hands down the deep budget cuts he's planning for next week.
"It will force a dialogue among the people of Massachusetts, and therefore that
will have a domino effect, I think, on their representatives and senators," said
state Representative John H. Rogers, a Norwood Democrat who chairs the budget-writing
panel. "There's two ways to get us out of this mess: either new, permanent revenues or new, permanent
cuts. And some would say the best way to do it - perhaps the most prudent amongst us would say -
should be a mix." ...
"The reality is that the hole that we're in, we're
not going to get out of this just by cutting. It's got to be a combination of cutting and revenues,"
[said state Senator Dianne Wilkerson, a Roxbury Democrat].
The Boston Globe
Jan. 23, 2003
Cautiously,
legislators begin talk of raising taxes
Dozens of state lawmakers who are declining a $3,258
raise due to the fiscal crisis are using a maneuver to protect the pay hike in their pensions.
House Speaker Thomas M. Finneran and others, including Ways and Means
Chairman John H. Rogers (D-Norwood), Majority Leader Salvatore F. DiMasi
(D-East Boston) and Republican leader Bradley H. Jones, Jr., have opted to
"furlough" the raise rather than outright decline it.
The step preserves the added pay in their base salary
- an amount used to calculate their pensions....
Lawmakers who chose to furlough the raise included
Rep. David L. Flynn (D-Bridgewater), Sen. Stanley C. Rosenberg (D-Northampton), Sen. John A.
Hart (D-South Boston), Sen. Dianne Wilkerson (D-Boston) and Sen. Robert A.
Havern III (D-Arlington).
The Boston Herald
Jan. 23, 2003
Pols declined pay raise but preserved pensions
Our state's Medicaid plan, called "MassHealth,"
costs $6 billion -- about one-quarter of the entire state budget -- and serves one in six residents. It
is, as [state Rep. Harriett] Stanley notes, the "BMW of Medicaid systems" as it
offers one of the more generous package of benefits among similar programs
nationwide.
In fact, state Rep. Brad Hill, R-Ipswich, told a group of business people
Tuesday, "It is the most generous program in the entire nation." And it is
presently immune from the cuts being considered to help close the state's
yawning budget gap.
But with a $600 million or better deficit looming this fiscal year and another $2
billion or better shortfall expected in the fiscal year that begins next July 1,
Massachusetts can no longer afford a BMW. We may have to settle for a Ford
or Chevrolet.
A Salem News editorial
Jan. 22, 2003
Some clear thinking on Medicaid
Warm up the Finneran Express bus for another "fiscal crisis"
tour across the state; the "blended approach" trial balloon has been released.
Oh sure, Finneran's donned his "fiscal responsibility" crown
and still says he wants to first give Gov. Mitt Romney a chance to balance the budget without new taxes ... but his
majordomo, Rep. John Rogers, wouldn't still be chairman of Finneran's Ways
and Means Committee this morning if he wasn't speaking with permission, encouragement, setting the
stage for the next "The Sky Is Falling!" express bus tour.
"It's got to be a combination of cutting and revenues," Sen.
Dianne Wilkerson (D-Roxbury) said, dredging up the "blended approach" mantra they thought they got away with last
year ... before 46 percent of the voters almost repealed the entire state income tax and
scared the bejesus out of Beacon Hill. I don't think it'll work again this year, especially
coming from a convicted tax-evader.
Sen. Dianne Wilkerson advocates "a combination of cutting
and revenues," then we learn that she's one of the Beacon Hill Gang who're gaming the pension system by "furloughing"
her pay raise. Of course after all her problems with paying her own taxes, I'm hardly
surprised she's among the me-first crowd.
The cutting and restructuring hasn't even begun -- in fact
none of the serious structural problems have been addressed since they were evaded last year. But already, "tax hikes
are on the table." We've still got the nation's most generous, gold-plated, unsustainable
Medicaid program yet the only "fix" they've come up with are the new taxes on
prescription drugs and nursing homes for those paying their own freight. Can we
expect better from "The Best Legislature Money Can Buy"?
The more things change, the more they remain the same ... or
get worse.
|
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Chip Ford |
The Boston Herald
Thursday, January 23, 2003
House budget leader won't rule out tax hike
by Elizabeth W. Crowley
House Speaker Thomas M. Finneran's budget chief yesterday
opened the door to another tax hike, a key sign that Beacon Hill may back down from its vow to
address the state's fiscal crisis by service cuts and government reform alone.
Last November, Finneran said flatly, "I think taxes are off
the table," and insisted the House is "not contemplating taxes in any way, shape or form."
But House Ways and Means Chairman John H. Rogers said
yesterday that taxes may be back on the front burner once citizens begin feeling the pain of
massive budget cuts this year and next.
"What I'm hearing from the House members is that they do not
want to entertain new taxes. My personal position is different ... I think they should be
on the table," said Rogers, a Norwood Democrat. "The cuts will force a
dialogue."
"There are new permanent revenues or new permanent cuts.
Perhaps among the most prudent among us should say it should be a combination of the two,"
Rogers said.
On the heels of a $1.2 billion tax hike last year - the
single largest tax increase in Massachusetts history - outraged voters nearly abolished the state income
tax in a statewide referendum.
"Forty six percent of the voters want to repeal the income
tax. Rogers is saying that a majority of the House doesn't want a tax increase. What part of no does
he not understand?" said Barbara Anderson of Citizens for Limited
Taxation.
Anti-tax advocates speculated that, while Finneran was
silent, Rogers would not make such a pronouncement without the powerful speaker's approval.
"Finneran speaks through a lot of people," Anderson said.
"I've heard him say publicly that taxes are off the table, so which side of his mouth is he talking out
of now?"
The new mention of taxes sets the stage for a confrontation
between lawmakers and Gov. Mitt Romney, who has pledged not to sign any new tax
legislation.
Rogers' sudden tax-hike salvo caught the administration
off-guard - prompting the governor's aides to protest that Romney's government restructuring plan
hasn't even been filed yet.
"The governor does not support raising taxes. He supports an
approach of restructuring state government in order to achieve cost savings and
efficiencies," said Romney spokeswoman Shawn Feddeman.
Lawmakers have scoffed at Romney's claim of hundreds of
millions of dollars in savings through consolidation - but Feddeman said there will be a swift veto of
any broad-based tax hikes.
In the state Senate, leaders also said a tax hike now is a
non-starter. "I think the door is closed," said Senate Ways and Means Chairman Therese Murray
(D-Plymouth.) "When you look at the results of the last election, I think the
voters sent us a clear message on taxes."
Rogers' comments yesterday came on the heels of a grim
session with economists trying to figure out how large the state's budget hole will be in the
fiscal year that begins July 1 and when the state's economy might begin to limp
out of the recession.
"What we heard was very gloomy economic forecasts. The fact
is, there is no recovery for Massachusetts in sight yet," Murray said.
Rogers predicts Massachusetts will be $900 million in the
red by June if cuts aren't made. Romney's figure on the deficit is between $450 million and $600
million. The governor has pegged next year's deficit at as high as $3 billion.
Romney is set to announce next week where he wants to cut.
He has said - and the House has mandated - that only as much as one-third of those cuts will
come from local aid to cities and towns.
Health and human services will also get hit hard, again. In
the past two years, hundreds of millions of dollars have been sliced out of human services, including
50,000 people being thrown off the state's Medicaid rolls on April 1.
Meanwhile, Romney yesterday said he will not ask cities and
towns to absorb a bigger local aid cut even if they have substantial "rainy day" funds as reported
in the Herald.
"I'm not going to change that percentage on the basis of
reserves," Romney said. "In some cases, they'll have reserves to cover that. In other cases, they
won't."
Elisabeth J. Beardsley contributed to this report.
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The Boston Globe
Thursday, January 23, 2003
Cautiously, legislators begin talk of raising taxes
By Rick Klein and Cynthia Roy
Globe Staff
After hearing waves of economists testify that next year's
budget could be even more dismal than this year's, Beacon Hill lawmakers began publicly discussing a
subject that has been widely considered to be off the table: taxes.
As a 2½-hour public hearing on state revenues drew to a
close yesterday, a Republican state senator asked whether the state should eliminate lucrative
tax breaks it handed out to big companies during the 1990s. A Democratic
state senator said bluntly that tax hikes must be part of the plan to close an
estimated $3 billion gap in fiscal 2004.
And the chairman of the House Ways and Means Committee said
that the Legislature's reluctance to consider new taxes could easily change after
Governor Mitt Romney hands down the deep budget cuts he's planning for
next week.
"It will force a dialogue among the people of Massachusetts,
and therefore that will have a domino effect, I think, on their representatives and senators," said
state Representative John H. Rogers, a Norwood Democrat who chairs the
budget-writing panel. "There's two ways to get us out of this mess: either
new, permanent revenues or new, permanent cuts. And some would say the best
way to do it - perhaps the most prudent amongst us would say - should be a
mix."
The discussion of tax increases comes after a period in
which the subject seemed almost taboo at the State House. In the 11 weeks since Romney was
elected, legislative leaders have publicly agreed with the governor that further
tax increases should not be considered in helping close the deficit.
But the state's fiscal outlook has worsened even since the
November election. Romney is warning that this year's budget - which as recently as late
December was estimated to be in balance - could leave the state spending as
much as $600 million more than it takes in. The current fiscal year ends
June 30.
With freshly granted powers to slash aid to cities and towns
to close the gap for this year, Romney is expected to make heavy cuts next week that will affect
school spending, public safety, health care, and social services. As much as
$200 million could be cut in local aid, and Romney has asked for a list of $300
million in possible cuts to health and human service programs, to give him
options to choose from.
This year's gap aside, Romney has warned that in the next
fiscal year, state revenues could fall $3 billion below what would be necessary to maintain the
current level of state services.
"We can't get it [a balanced budget] on the backs of our
seniors, we can't get it by raiding education and dismantling the progress that we've made," said state
Senator Dianne Wilkerson, a Roxbury Democrat. "The reality is that the hole
that we're in, we're not going to get out of this just by cutting. It's got to be a
combination of cutting and revenues."
But Romney pledged during the campaign that he would balance
the budget without tax hikes, and has also committed to rolling back last year's $1.2 billion
tax package by the end of his four-year term as governor. Romney is considering raising state
fees and has not ruled out granting municipalities the right to raise taxes on meals and other services, but he still plans to
veto any state tax increase approved by the Legislature, an aide said yesterday. The
Legislature would need the approval of two-thirds of House and Senate members to override a veto.
"His approach is going to be to fundamentally restructure
government, and more efficiently deliver services," said Shawn Feddeman, Romney's press
secretary.
Yesterday, Romney's administration and finance secretary,
Eric Kriss, joined representatives of the House and Senate Ways and Means committees for an
annual hearing on the state's revenue outlook. Economists told budget-writers
to expect anemic growth in fiscal 2004, which begins July 1. State revenues
have been soft for the first six months of fiscal 2003, remaining essentially flat
over the previous year.
"2002 was a disappointing year," said Yolanda
Kodrzycki, assistant vice president and economist at the Federal Reserve
Bank of Boston. "The data is not encouraging for 2003. The Massachusetts economy remains quite soft."
State Senator Michael R. Knapik, a Westfield Republican on
the Senate Ways and Means Committee, asked the economists for their opinion on whether tax
breaks won by Raytheon Corp. and Fidelity Investments in the mid-1990s
should be continued.
Several responded that the incentives are crucial to the
state's economic competitiveness, but after the hearing, Knapik said the issue is worth
exploring.
"I think it's prudent for us to ask the corporations that
got tax cuts to come to us and justify why they still need it," Knapik said. "We can't afford to go
without one penny right now." ...
Stephanie Ebbert of the Globe Staff contributed to this report.
Return to top
The Boston Herald
Thursday, January 23, 2003
Pols declined pay raise but preserved pensions
by Joe Battenfeld
Dozens of state lawmakers who are declining a $3,258 raise
due to the fiscal crisis are using a maneuver to protect the pay hike in their pensions.
House Speaker Thomas M. Finneran and others, including Ways
and Means Chairman John H. Rogers (D-Norwood), Majority Leader Salvatore F. DiMasi
(D-East Boston) and Republican leader Bradley H. Jones, Jr., have opted to
"furlough" the raise rather than outright decline it.
The step preserves the added pay in their base salary - an
amount used to calculate their pensions.
More than a dozen state senators, including Majority Leader
Frederick E. Berry (D-Peabody), Marc R. Pacheco (D-Taunton), Brian A. Joyce (D-Milton)
and Cheryl A. Jacques (D-Needham), are also exercising the "furlough" option,
according to Treasury records.
Senate President Robert E. Travaglini notified the Treasury
he is declining the raise outright, records show.
Lawmakers must notify the Treasury today whether they will
accept the 6.5 percent raise, which is based on a rise in median income in the state. Voters
approved the mechanism to raise legislators' pay as part of a 1998 referendum
question.
A Finneran aide confirmed last night that the speaker would
notify the Treasury today that he will "furlough" the raise. Finneran's leadership team
also will take the furlough option, the aide confirmed.
Many other House members are still struggling with the
politically sensitive issue.
All but one of the 40 state senators have decided to turn
down the pay hike, saying it would send a bad message in a time of economic hardship. Only Sen.
Guy Glodis (D-Auburn) decided to accept the raise.
Treasury officials say lawmakers who choose to "furlough"
the pay hike will have the amount deducted from their salary during the rest of the year.
But the deferred money will still be reflected in their base
pay, officials said. Pensions are calculated based on lawmakers' top three earning years.
"It's a way in which they can decline (the raise) and
protect their retirement," said Karen Sharma, spokeswoman for Treasurer Tim Cahill. "For the people
that decline, that money's not going to go toward their pension."
But lawmakers who chose the furlough option downplayed the
significance of the move, saying it was unlikely to have a major impact on their pensions.
Several noted that lawmakers are likely to get a raise next
year anyway, if the economy improves.
Jones, who took the furlough, noted that he and other
lawmakers voluntarily submitted to furloughs last year, saying he's personally foregone $5,000 in pay
over the last year. He argued it would be "silly" for his pension to be penalized
"forever."
Bristling that the pension criticism is "unfair" to
lawmakers, Jones insisted every penny counts and pointed to the $200,000 saved by last year's House
furloughs.
"I'm not expecting to be deified," Jones (R-North Reading)
said. "But once in a while when we do something right or laudatory, we ought to get just a little bit
of credit."
Jones contended that the only lawmakers who would benefit
from the furlough are the few who are close to retirement or in danger of being kicked out by the
voters.
"The fact of the matter is, it's probably not going to mean
much, if anything, to the vast majority of members," Jones said.
Sen. Michael W. Morrissey (D-Quincy) said his pension was
not a consideration in taking a furlough, and added that he took it because it "shows if we are going
to ask people to take a furlough, we're willing to take a furlough."
Several lawmakers interviewed last night, however, said the
furlough option was clearly discussed as a way of preserving pension amounts.
"I thought it was a little cute," said one lawmaker who
declined the money. "Either you take the money or don't take the money."
As of late yesterday, more than 30 House members had
notified the Treasury they were declining or furloughing the raise.
Lawmakers who chose to furlough the raise included Rep.
David L. Flynn (D-Bridgewater), Sen. Stanley C. Rosenberg (D-Northampton), Sen. John A.
Hart (D-South Boston), Sen. Dianne Wilkerson (D-Boston) and Sen. Robert A.
Havern III (D-Arlington).
Not all lawmakers who declined the pay raise apparently were
aware of the furlough option.
Freshman Sen. Jarrett T. Barrios (D-Cambridge) said he
didn't know he could take a furlough and isn't concerned about his retirement. "I'm only 34," Barrios
said.
David R. Guarino and Elisabeth J. Beardsley contributed to
this report.
Return to top
The Salem News
Wednesday, January 22, 2003
Editorial
Some clear thinking on Medicaid
You have to credit state Rep. Harriett L. Stanley with
courage. The West Newbury Democrat, who co-chairs the Legislature's Joint Committee on Health
Care, thinks our state-funded Medicaid system could be a bit less lavish and is
willing to say so publicly.
Such blasphemy is normally enough to spur activists into a
pitchforks-and-torches march on the Statehouse.
Stanley, of course, is absolutely correct.
Our state's Medicaid plan, called "MassHealth," costs $6
billion -- about one-quarter of the entire state budget -- and serves one in six residents. It is,
as Stanley notes, the "BMW of Medicaid systems" as it offers one of the more
generous package of benefits among similar programs nationwide.
In fact, state Rep. Brad Hill, R-Ipswich, told a group of
business people Tuesday, "It is the most generous program in the entire nation." And it is
presently immune from the cuts being considered to help close the state's
yawning budget gap.
But with a $600 million or better deficit looming this
fiscal year and another $2 billion or better shortfall expected in the fiscal year that begins next July 1,
Massachusetts can no longer afford a BMW. We may have to settle for a Ford
or Chevrolet.
Stanley believes the Medicaid program will not escape
current efforts to deal with the state's fiscal crisis. She expects the budget for Medicaid will grow, but
more slowly than in past years. And with health care costs rising at a rate
greater than inflation, cuts in some parts of the program are likely.
Hill, speaking before the North Shore Chamber of Commerce's
legislative affairs committee in Ipswich, was critical of what he describes as the
"phenomenal" abuse of the system, as well as the Democratic leadership's
efforts to fund it via a tax on nursing home beds and prescription drugs.
Stanley doesn't want to cut people out of the Medicaid
program. In fact, she'd like to expand it to include some 400,000 people who have no coverage at all.
But doing that requires eliminating waste and scaling back some of MassHealth's generosity.
A less opulent plan could cover more people for the same
money. "If we drove a Ford as opposed to a BMW, we could probably afford to cover all those people
and offer a very good, but not a fabulous, Medicaid benefits package," she said.
And isn't that the point of a "safety-net" health plan? To
provide all in need with the basics, rather than some with the best?
In addition, Stanley would like to see Medicaid recipients
pay something, however small an amount, for their coverage -- perhaps a co-payment for
doctor visits or a modest monthly premium -- you know, the kind of contribution the rest of us
make to our health plans.
"I want people to think of Medicaid as more of an insurance
program than an entitlement program," she said. "And there's a huge difference there -- you
don't value what you don't pay for."
This is clear and sensible thinking on what will surely be
the most contentious and emotional part of the upcoming budget debate. Hopefully those ideas will
be incorporated into a study Gov. Mitt Romney has commissioned from an
expert in the Medicaid field.
Hopefully, too, lawmakers will then have the courage to
implement the changes necessary to make the program beneficial and affordable to both recipients and
taxpayers.