CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

 

CLT UPDATE
Tuesday, February 11, 2003

"Where would you cut?" is the wrong question


When lawmakers voted in 2000 to double the pay they receive for commuting to the Statehouse, they said they needed the extra money to help adjust to the new Clean Elections law.

Now that the campaign finance law is all but defunct, few Beacon Hill lawmakers are talking about giving up the extra travel pay, known as a "per diem."

"(Clean Elections) was the excuse for raising the per diem," said Pam Wilmot, executive director of Common Cause Massachusetts. "Since they have no intention of funding or implementing the Clean Elections law, they should go back to the old formula." ...

In 2000, the state's total spending on per diems was about $364,000. That jumped to nearly $750,000 in 2001, the first year lawmakers could collect under the new rate....

When lawmakers boosted their per diem pay, they also doubled their office expense account from $3,600 a year to $7,200 a year again citing the Clean Elections law.

Associated Press
Feb. 11, 2003
Critics: Lawmakers should give up extra pay for Clean Elections


Massachusetts taxpayers have a choice to make this year: Declare goods purchased out of state and pay a tax, or lie on their tax return.

A new line on the state income tax return requires Massachusetts residents to estimate their total purchases in tax-haven states such as New Hampshire and pay a "use tax." ...

Michael Widmer, president of the Massachusetts Taxpayers Foundation, predicts that tax filers are going to be "very surprised" to see the line for the use tax....

"In a way it introduces a sort of voluntary notion to a tax system that is not supposed to be voluntary," Widmer said. "It's a little bit troubling in that way," he added.

The Eagle-Tribune
Feb. 10, 2003
Tax form dilemma: Pay or perjure


Either we're not paying attention or we're just a bunch of saps.

Here we are, as we all know, in the biggest supposed budget crisis since The Great Depression. But it's like "A Tale of Two Cities" around here....

On the other hand, you find out the city is giving NSTAR - fresh from its let-them-eat-cake efforts to shut down the New England Shelter for Homeless Vets - a $500,000 tax break, every year....

On the other hand, you find out the city is giving Jeremy Jacob's' FleetCenter a $3.5 million annual tax break. Plus, the city's assessed the Fleet at $25 million when experts say it's worth $125 million.... That's basically the deal given Genzyme's Allston plant. Their tax savings: $2.5 million a year....

When everyone else must cut to the bone, why do owners of One Beacon Street - $26 million in tax breaks and counting - need not even a close shave? It never ends....

And the rest of us just keep on paying.

The Boston Herald
Feb. 11, 2003
Bigwigs' breaks leave rest of us out in the cold
by Margery Eagan


An abundance of construction projects and a controversial 33-year-old program that pays bonus money to police officers who earn college degrees made 2002 a lucrative year to be an officer in Lawrence.

Twenty of the 25 highest paid city employees last year were police officers, each earning at least $98,000 in regular salary, overtime and traffic detail work....

Several entry-level patrolman were able to double their roughly $50,000-a-year salaries into the $100,000 neighborhood....

The highest paid Lawrence police officer last year was Lt. Roy Vasque at $125,438. Vasque, along with 15 other superior officers in the "top 25," had his salary substantially bolstered by the Quinn Bill, which pays officers for attaining degrees in criminal justice....

For the fiscal year ending July 30, police officers from cities and towns throughout Massachusetts will make $84 million in extra pay through the Quinn Bill...

The Eagle-Tribune
Feb. 10, 2003
2002 a lucrative year for city's police officers


Rethinking the Quinn Bill that gives financial incentives to state and municipal police officers is long overdue....

The state and cities and towns are paying $100 million or so a year to support the Quinn Bill incentives. All levels of government are in a situation that demands cost-cutting wherever possible. Nothing is sacrosanct, especially a program that was devised to meet conditions that existed 35 years ago.

A Patriot Ledger editorial
Feb. 10, 2003
Overhaul Quinn Bill


Repealing the Pacheco Law would help the state cut costs and still retain essential services....

In 1992, as the economy showed signs of rebounding, Sen. Marc R. Pacheo, D-Taunton, began chipping away at the privatization movement. His mission was to restore public sector jobs and protect unions from further losses....

In 1993, the Legislature enacted the Pacheco Law just as the first budget surpluses reappeared....

The opportunities to shrink government at a cost savings have basically dried up. The budget bulge, meanwhile, has kept getting bigger. Since 1993, the state's budget has grown from $15.5 billion to $23 billion an average annual growth rate of 6.11 percent.

A Lowell Sun editorial
Feb. 10, 2003
Pacheco Law primer


"Any time you see the kind of inefficiency and waste that's been associated with the Big Dig and the failure to receive funds that may be due to the Commonwealth, you have to react with a sense of outrage," Romney said at a press briefing.

Romney made the comments in response to a series of reports in the Globe that detailed the errors of managers Bechtel/Parsons Brinckerhoff and the state's failure to make a good faith effort to investigate more than $1.6 billion in construction cost overruns.

The Boston Globe
Feb. 11, 2003
Romney vows to recover Big Dig funds


The Romney Administration is learning how hard it is to cut the state budget while leaving intact what the new governor calls "core essential services."...

Instead, some mayors seem to define as "core essential services" anything in their budget. When Romney announced a tiny cut in local aid, some mayors rushed to the microphones to declare the first thing they would do was lay off police, firefighters and teachers....

State aid to cities and towns has gone up an average of 7.5 percent a year for the last 10 years....

City officials must take the revenue medicine dealt them and come up with their own definition of core essential services.

A MetroWest Daily News editorial
Feb. 11, 2003
Defining 'essential core services'


Chip Ford's CLT Commentary

A week or two ago, Barbara was a guest on business talk radio 1060 (WBIX) with hosts (and Boston Globe business columnists) Charlie Stein and Steve Bailey. They wanted to know where she would cut the state budget -- a trick question big spenders always toss our way.

We've developed the perfect answer. Give them one thing -- just one -- to cut, then tell them after that's cut, come back for a second thing to cut. They'll never be back for seconds because the first suggestion will, of course, go ignored.

"Where would you cut?" The obvious answers abound. The only thing that's lacking is the political courage to cut, anywhere.

Where to start cutting without hurting "the most vulnerable among us" is obvious. Annually save hundreds of millions simply by deep-sixing the Quinn bill, Massachusetts-unique police details, and the Pacheco law.

Cut them, and then we'll gladly offer a few more recommendations and see what happens. We can keep going as long as any suggestions are taken seriously ... and the obvious recommendations have been out there for years, ignored and instead often expanded.

Margery Eagan, Boston Herald columnist, almost got her finger on it in her column today, she just didn't connect the dots, take it the next step.

In an e-mail to her today, I pointed out "You call them 'bigwigs' -- we call them the Fat Cat members of the so-called Mass. Taxpayers Foundation," and provided her with links to our website so she can, hopefully, connect the dots.

While on the subject of MTF, its president, Mickey W., is shaking in his boots that taxpayers may start believing that taxes are "voluntary" as the Department of Revenue now begins chasing taxpayers for sales taxes on items they might have bought out-of-state. Oh oh, civilization as we know it could well end if we don't fill out another form and pay more taxes for that couch we bought in New Hampshire or that carton of cigarettes!

At least the so-called Mass. Taxpayers Foundation has ended the myth that taxes somehow are voluntary.

Chip Ford


Associated Press
Tuesday, February 11, 2003

Critics: Lawmakers should give up extra pay for Clean Elections 
By Steve Leblanc

When lawmakers voted in 2000 to double the pay they receive for commuting to the Statehouse, they said they needed the extra money to help adjust to the new Clean Elections law.

Now that the campaign finance law is all but defunct, few Beacon Hill lawmakers are talking about giving up the extra travel pay, known as a "per diem."

"(Clean Elections) was the excuse for raising the per diem," said Pam Wilmot, executive director of Common Cause Massachusetts. "Since they have no intention of funding or implementing the Clean Elections law, they should go back to the old formula."

Lawmakers in the Massachusetts House and Senate each took home an average of $3,093 last year under the taxpayer-funded program, according to a review by The Associated Press. The extra pay is based on the distance between a lawmaker's home and the Statehouse.

Last year's average is less than the $4,216 lawmakers took home in 2001. The drop is due in large part to the Legislature's 19-month formal session, which began in January of 2001 and ended midway through 2002.

Not surprisingly, lawmakers from western Massachusetts received the most in per diem pay. Rep. Daniel Bosley, D-North Adams, topped the list with $12,780, followed by Rep. Peter Larkin, D-Pittsfield, with $12,420, and Sen. Michael Knapik, R-Westfield, with $10,560.

Thirty lawmakers did not ask for the extra travel pay.

The lawmaker who claimed the most number of trips to the Statehouse was Rep. John Fresolo, D-Worcester, who said he drove to the Statehouse 246 days in 2002. An aide to Fresolo, who sits on the Redistricting and Insurance committees but does not hold a leadership position, would not comment.

Critics say per diems are just another way for lawmakers to pad their paychecks. Most ordinary workers are not paid extra money for commuting, opponents say.

In 2000, the state's total spending on per diems was about $364,000. That jumped to nearly $750,000 in 2001, the first year lawmakers could collect under the new rate. Last year, the total spent on per diems was about $620,000.

When lawmakers boosted their per diem pay, they also doubled their office expense account from $3,600 a year to $7,200 a year again citing the Clean Elections law.

Former House Ways and Means Committee Chairman Paul Haley, D-Weymouth, said the extra pay both per diems and office expenses would help legislators adjust to the Clean Elections law. Lawmakers had complained the law would make it harder to use their campaign funds to maintain district offices.

"It's a matter of fairness," Haley said at the time.

Since then, lawmakers have worked to kill the voter-approved Clean Elections law. Last year, the Legislature initially refused to fund the law. The state's highest court allowed supporters of the law to sell state property to pay candidates who qualified for funding.

The Legislature finally agreed to fund the law for one year, but also put a nonbinding question back on the ballot asking voters if they still supported the law. Voters overwhelmingly supported the question, seemingly rejecting the law.

Clean Elections supporters said the wording of the Legislature's ballot question was skewed.

House leaders are already pushing a bill to kill the Clean Elections law.

Charles Rasmussen, a spokesman for House Speaker Thomas Finneran, the most vocal opponent of the Clean Elections law, said Finneran, D-Boston, would not to comment on any per diem rollback plan.

Senate Ways and Means Chairwoman Therese Murray, D-Plymouth, said there are no plans in the Senate to rollback the pay. She said the extra money has helped senators pay for things like mailings and newspaper subscriptions expenses that have been cut from other Senate accounts.

"If you were in a community with 10 papers a week, in order to keep abreast of constituent issues, you need to get all those newspapers," she said.

Return to top


The Lawrence Eagle-Tribune
Monday, February 10, 2003

Tax form dilemma: Pay or perjure
By Andy Murray 
Staff Writer

Massachusetts taxpayers have a choice to make this year: Declare goods purchased out of state and pay a tax, or lie on their tax return.

A new line on the state income tax return requires Massachusetts residents to estimate their total purchases in tax-haven states such as New Hampshire and pay a "use tax."

The use tax has been part of the state tax code for more than 30 years but has never been part of the standard personal income tax form, which must be signed "under penalties of perjury."

Residents who knew about the tax and were willing to pay it had to obtain a separate form, the ST-11, and attach it to their income tax return. Few did.

"We are just giving them a better way" to pay the tax, explained Tim Connolly, spokesman for the Massachusetts Department of Revenue.

Michael Widmer, president of the Massachusetts Taxpayers Foundation, predicts that tax filers are going to be "very surprised" to see the line for the use tax.

"I think almost no one knows this has been on the books for 35 years," he said.

The use tax requires taxpayers to pay a tax on out-of-state purchases intended for use in Massachusetts. The tax is equivalent to the difference between Massachusetts' 5 percent sales tax and the sales tax in the other state.

A Massachusetts resident who buys a $2,500 sofa for his home in sales-tax-free New Hampshire owes Massachusetts 5 percent, or $125.

Thirteen other states include a use tax line item on their personal income tax form, with mixed results. The amounts collected by the state ranged from almost $3.5 million in North Carolina to less than $60,000 in Rhode Island.

Early returns suggest that the inclusion of the use tax on the standard form won't mean a huge windfall for Massachusetts.

Of the 254,000 residents who had filed their 2002 tax return as of Feb. 3, only 183 had paid a use tax, less than a tenth of a percent. The average use tax paid was $94, and the state collected a total of $17,260, according to the DOR.

DOR spokesman Connolly said Massachusetts has no special plans to step up enforcement of the use tax.

"We leave it up to taxpayers to be honest. We have the same enforcement that we have on any tax," Connolly said.

Widmer doubts the DOR has the manpower to enforce payment -- "It would take a veritable army to enforce it," he said -- and expects most taxpayers to skip the line item.

"If they know they have bought something (in another state), it will make them uncomfortable to know they are lying, so I suspect there will be some voluntary disclosure. But I think it will be a minority. I think most people will still ignore it," Widmer said.

New Hampshire retailers, especially those who market expensive big-ticket items like televisions, appliances and furniture, are naturally opposed to the use tax.

"We are not thrilled at being targeted," said Dave Souter, operations manager for Baron's Major Brands TV & Appliances, a New Hampshire appliance chain. He estimates at least 30 percent, and likely more, of customers at Baron's Salem and Plaistow stores are from Massachusetts.

On the other side of the border, Walter M. Kimball, store manager for Ethan Allen Home Interiors in North Andover, recognizes that his business would benefit if Massachusetts got serious about the use tax. But he's not holding his breath.

"I'd love to think it's going to work. We -- certainly all the retailers on this side of the border -- lose a lot of business to Salem," he said.

"Let's be realistic. How many people are going to do it?" Kimball asked.

Such doubts make Widmer think Massachusetts may actually have bitten off more than it can chew -- and the unintentional consequence may be to encourage more lying on tax returns.

"In a way it introduces a sort of voluntary notion to a tax system that is not supposed to be voluntary," Widmer said. "It's a little bit troubling in that way," he added.

Return to top


The Boston Herald
Tuesday, February 11, 2003

Bigwigs' breaks leave rest of us out in the cold
by Margery Eagan

Either we're not paying attention or we're just a bunch of saps.

Here we are, as we all know, in the biggest supposed budget crisis since The Great Depression. But it's like "A Tale of Two Cities" around here.

On one hand, you have parents and pupils from Boston's Timilty School at City Hall protesting a $620,000 budget cut and the loss of an after-school program.

On the other hand, you find out the city is giving NSTAR - fresh from its let-them-eat-cake efforts to shut down the New England Shelter for Homeless Vets - a $500,000 tax break, every year.

On one hand, you have city grants for early childhood programs totally wiped out, all $658,000 of them.

On the other hand, you find out the city is giving Jeremy Jacob's' FleetCenter a $3.5 million annual tax break. Plus, the city's assessed the Fleet at $25 million when experts say it's worth $125 million. Imagine how ecstatic you'd be if your $100,000 home were assessed - and therefore taxed - as if it were worth $2,600. That's basically the deal given Genzyme's Allston plant. Their tax savings: $2.5 million a year.

That's enough for lots of afterschool teachers, cops, firefighters, old ladies' prescriptions - the stuff that's always whacked first. Second, it's middle class, two- and three-job homeowners with soaring tax bills yet mediocre schools and so-so city services that'll only get worse here in the biggest supposed budget crisis since the Great Depression.

Yet Boston can somehow subsidize Fidelity's Ned Johnson, one of the richest men in the world.

I know. Nobody likes class warfare. But don't fret. The war's over. As the Herald has detailed in a three-part series, developers with close ties to Tom Menino's City Hall have already won. And maybe you could stand it in the flush '90s, or justify it when Boston was a development hard sell.

But no more. When everyone else must cut to the bone, why do owners of One Beacon Street - $26 million in tax breaks and counting - need not even a close shave? It never ends. Another day, another boondoggle. So now, besides the usual corruption, payroll padding and the multibillion-dollar Big Dig scam, we've got tax breaks for Millennium Partners, who just built ... The Ritz!

Today the Herald details how the Post Office Square garage and the park above it were supposed to make big money for the city: $200 million over 40 years, since the city supplied the land.

Played like fools, again.

If you haven't yet visited the garage and park right across from Le Meridien, get over there. Never have you seen such a jewel in the crown, such a marriage of engineering and architecture and mad dog maintenance. Sparkling. Shimmering. Eat off the exit ramps. Tiles cleaner than the new terra-cotta ones in the Logan tunnel. And right next to the cashier ($3.50 for a half-hour, $17 for an hour, $31 for 2 hours) there are underground bathrooms as silvery sweet as anything on the Eastern seaboard.

The park itself? Marble-like pillars and wrought-iron benches and trellises and glass gazebos like something on Rodeo Drive. One gazebo houses the oh-so-precious Milk Street Cafe‚ for Guacamole Passion Wrap or Portabello Fantasy, your choice, $5.75. In the summer, this place is so overrun with investment bankers, fern and fauna, brides pose for pictures here.

The problem: Should investors Fleet and State Street and Verizon, et al, get away with exotic orchids and a staff of thousands, but leave Mayor Tom Menino with nary a dime?

Housing advocate Lew Finfer said yesterday that here in the biggest supposed budget crisis since the Great Depression, voluntary payments from these zillionaires might be in order.

A more jaded Stephen Collins of the Massachusetts Human Services Coalition was not surprised by these shenanigans. He's seen so many. "There's a reason it's called the establishment," he said. "And you know the golden rule. Those who got the gold make the rules."

And the rest of us just keep on paying.

Return to top


The Lawrence Eagle-Tribune
Monday, February 10, 2003

2002 a lucrative year for city's police officers
By Shawn Regan 
Staff Writer

An abundance of construction projects and a controversial 33-year-old program that pays bonus money to police officers who earn college degrees made 2002 a lucrative year to be an officer in Lawrence.

Twenty of the 25 highest paid city employees last year were police officers, each earning at least $98,000 in regular salary, overtime and traffic detail work.

Police Chief John J. Romero, the 12th-highest paid city employee at $108,130, said his officers benefited from the ongoing Broadway and Water and Marston streets construction projects to the tune of about $1 million. State and local laws require construction and utility companies to hire local cops to direct traffic around work areas. The city coffers also get a cut of 10 percent, or about $100,000 an average year, the chief said.

Several entry-level patrolman were able to double their roughly $50,000-a-year salaries into the $100,000 neighborhood.

For example, patrolman Donald Beverage made $58,280 in detail pay, boosting his $50,755 salary to $109,035. Patrolman John Fornisi made $54,360 in detail pay and $104,897 overall. Patrolman Thadeus Czarnecki added $32,898 to his regular salary to earn $98,870, making him the 20th highest paid officer and 24th highest paid city employee.

"Police officers who work a lot of detail work are basically giving up their private lives for the money," Romero said. "It's pretty well accepted that the public is safer by having police officers directing traffic at busy construction sites, so it's a good deal for everyone."

The highest paid Lawrence police officer last year was Lt. Roy Vasque at $125,438. Vasque, along with 15 other superior officers in the "top 25," had his salary substantially bolstered by the Quinn Bill, which pays officers for attaining degrees in criminal justice. A two-year associate's degree is worth a 10 percent pay raise, a four-year bachelor's degree is worth a 20 percent hike, and a six-year master's degree is worth a 25 percent increase.

For the fiscal year ending July 30, police officers from cities and towns throughout Massachusetts will make $84 million in extra pay through the Quinn Bill, created in 1970 following a report that concluded Massachusetts police officers were relatively uneducated compared to those in other states. Of all Essex County communities, Lawrence spent the most on the program -- $370,442 paid by taxpayers and the same amount paid by the state, for total of $740,884.

As the state prepares for a 2004 fiscal deficit that could top $3 billion, Gov. Mitt Romney and other state leaders have said they intend to reform both the Quinn Bill and the expensive police detail system. The governor has said he will detail his plan for reforming both programs when he presents his 2004 budget Feb. 26.

The best paid police officers in Lawrence, however, earned nowhere near the city's top wage earner, School Superintendent Wilfredo T. Laboy. The self-styled lion of the School Department was paid $159,202 in 2002.

Mayor Michael J. Sullivan, by contrast, earned $69,000, about $90,000 less than the superintendent. Even "team" McGravey -- consisting of senior City Attorney Carol H. McGravey ($71,024) and her husband City Clerk James McGravey (52,846) -- trailed the superintendent in earned wages by approximately $36,000. Laboy was also recently awarded a 5 percent pay raise by the School Committee for this year.

Other than being a police officer or the school superintendent, the next best paid job in the city is that of a school principal. Several finished just out of the top 25. South Lawrence East Principal Mary Toomey made $94,110, Tarbox Principal Donna Chevaire made $92,966, and Leahy Principal Patricia M. Mariano made $92,144.

Return to top


The Patriot Ledger
Monday, February 10, 2003

Editorial
Overhaul Quinn Bill

Rethinking the Quinn Bill that gives financial incentives to state and municipal police officers is long overdue.

An audit released recently by the state Board of Higher Education pointed to abuse of the education program, citing a widespread practice of giving college credit to police officers for "life experiences." Training that they'd already received, such as CPR, was being counted as education.

The Board of Education plans to tighten the rules that colleges participating in the Quinn program must follow. But the structure of the program also deserves a thorough review by the Legislature.

The Quinn Bill grew out of a 1967 report that showed Massachusetts police officers had less education than their counterparts around the country. Incentives were created to encourage officers to pursue higher education. The benefits are a 10 percent salary increase for an associate's degree, 20 percent for a bachelor's and 25 percent for a master's. Of the state's 351 cities and towns, 250 have adopted the Quinn bill.

At the time, that made sense. But that was 35 years ago, when the percentage of people earning associate's and bachelor's degrees was far smaller than it is today. George DiBlasi of the Massachusetts Chiefs of Police Association endorses the Quinn Bill and says just because "everybody uses that incentive, you cannot now say 'make it go away.'"

Not true. Lawmakers can, and they should. The education level of the labor pool in general has changed. The way the incentive is structured can be changed. Cohasset, for example, is one community that has a flat-rate incentive for officers with more education: $2,000 for an associate's degree, $3,000 for a bachelor's and $4,000 for a master's. That's fair.

The state and cities and towns are paying $100 million or so a year to support the Quinn Bill incentives. All levels of government are in a situation that demands cost-cutting wherever possible. Nothing is sacrosanct, especially a program that was devised to meet conditions that existed 35 years ago.

Return to top


The Lowell Sun
Monday, February 10, 2003

Editorial 
Pacheco Law primer

Today, Gov.-elect Mitt Romney and the Legislature are anticipating a $3 billion budget gap in fiscal year 2004. Both Republicans and Democrats are talking about fundamental changes in how the state conducts its business and what programs it can and can't afford.

Repealing the Pacheco Law would help the state cut costs and still retain essential services.

First, here's how the Pacheco Law came to be.

In 1990, Republican Gov. William Weld faced a $1.8 billion deficit in a $13-billion state budget. An economic recession and 16 years of increasing the public payroll were the major factors behind the state's fiscal plight.

Weld's response was to bring competition to government services through privatization. He believed that if a private company could perform a government service at a cheaper cost, while improving the quality of that service, why not allow the company to bid on the contract?

Weld's initiative met resistance from public employee unions, but won a trial due to the fiscal gloom.

Over a three-year period, the Weld administration awarded 36 privatization contracts at a cost savings of $237 million to taxpayers.

Cost-efficient government didn't last long, however.

In 1992, as the economy showed signs of rebounding, Sen. Marc R. Pacheo, D-Taunton, began chipping away at the privatization movement. His mission was to restore public sector jobs and protect unions from further losses.

In 1993, the Legislature enacted the Pacheco Law just as the first budget surpluses reappeared.

The law erected a minefield of obstacles for private companies to overcome before they could be awarded government contracts. It forced private contractors to undergo job performance and cost analysis evaluations at their own expense while exempting public employee unions from the same standards. The competitive factor, for all intents and purposes, was written out of the law.

Lastly, it gave the state auditor the power to review all proposals and reject any deemed not to be "in the public interest." His rulings can not be appealed.

Needless to say, the Pacheco Law has shut down "entrepreneurial government" as Weld had envisioned it.

In nine years under the Pacheco Law, only eight private proposals have been submitted to the auditor and six have been contracted out, according to a study by the Pioneer Institute, a nonpartisan think-tank.

The opportunities to shrink government at a cost savings have basically dried up. The budget bulge, meanwhile, has kept getting bigger. Since 1993, the state's budget has grown from $15.5 billion to $23 billion an average annual growth rate of 6.11 percent.

The first of a two-part look at the Pacheco Law and how it hinders affordable government.

Return to top


The Boston Globe
Tuesday, February 11, 2003

Romney vows to recover Big Dig funds
By Sean P. Murphy and Raphael Lewis
Globe Staff

Governor Mitt Romney, saying he was outraged that the Big Dig's private-sector managers have never been held accountable for costly mistakes, pledged yesterday to hire an independent engineering firm to get money back for state taxpayers.

"Any time you see the kind of inefficiency and waste that's been associated with the Big Dig and the failure to receive funds that may be due to the Commonwealth, you have to react with a sense of outrage," Romney said at a press briefing.

Romney made the comments in response to a series of reports in the Globe that detailed the errors of managers Bechtel/Parsons Brinckerhoff and the state's failure to make a good faith effort to investigate more than $1.6 billion in construction cost overruns.

Meanwhile, two other state leaders promised to hold public hearings on Bechtel's performance and the state's lax oversight of the company. Secretary of State William F. Galvin said he would investigate the Big Dig's record-keeping for any missing documentation of cost overruns. And Senator Mark C. Montigny, cochairman of the Senate Committee on Longterm Debt, said he would hold hearings into how much money Bechtel owes the state and why officials haven't pursued the company more aggressively.

Romney, the fifth governor to occupy the corner office since Bechtel was hired in 1985, also reiterated his desire to dissolve the Massachusetts Turnpike Authority, which oversees the Big Dig. Not only would getting rid of the agency save money, he said, but it would also allow the executive branch to take direct control of the project.

Romney said the Turnpike's decision last month to hire a retired probate court judge to head up the agency's cost-recovery efforts fell well short of what was necessary for the task. The Globe series reported that as much as two-thirds of the $1.6 billion in overruns might be off limits to the state, because the statute of limitations has expired. In addition, mistakes leading to more recent overruns have been poorly documented, hampering any recovery.

Romney said an outside firm should review all potential claims that are still viable.

"We ought to get a professional firm to come in and look at all the billings to make sure everything we're entitled to comes back to the state," Romney said. "Nothing else makes any sense to me."

Andrew Paven, the company's spokesman, said yesterday that Bechtel was not fazed by Romney's call for an independent engineering firm to scrutinize overruns for potential reimbursement from Bechtel.

"Bechtel/Parsons has never shied away from cost recovery or their contractual obligations," Paven said, declining to comment further.

Montigny, a Democrat of New Bedford, said the Legislature will call Bechtel and state officials to a hearing shortly to probe why the Big Dig's cost-recovery process has provided just $35,707 since construction began in 1991, which he called "deeply troubling."

"There is no question a hearing needs to be held," Montigny said. "These cost overruns affected every single community in Massachusetts, every single taxpayer.... The state was clearly outsmarted and outgunned by Bechtel."

Galvin said he had summoned the Turnpike Authority to appear before the state Records Conservation Board, after reading in the Globe series that the Big Dig had failed to retain crucial documents pertaining to Bechtel's performance. The hearing, Galvin said, was made necessary after Alan Cote, the state's supervisor of public records, did not "receive a satisfactory response" from Turnpike Authority general counsel Michael Powers as to the missing documents. Powers could not be reached for comment.

"I don't know the extent of what omissions or deficits there are in the records, but for the largest project in America, there shouldn't be any deficit," Galvin said. "Record keeping was not a high priority over there, apparently." Galvin said he believed that the Legislature should pass a bill that would waive the statute of limitations on pursuing Big Dig cost overruns. Current laws forbid the state from recovering costs on overruns that took place more than three or six years afterward, depending on whether the claim is for negligence or breach of contract.

Attorney General Thomas F. Reilly said his office would stand on the sideline while Romney and others fight over a possible refund for taxpayers. "We're an enforcement agency," Reilly said. "What's needed is a good, long, independent review of Bechtel, especially concerning cost recovery. It's clear there's been a lack of candor and a lack of accountability."

The Globe investigation, which lasted a year and included scrutiny of more than 20,000 pages of state and federal records, found that Bechtel's management of the project led to more than $1 billion in construction overruns, while the company profited from delays caused by its own mistakes.

Bechtel officials have said that the company's management saved the public more than $1 billion by shortening the project's timeline. They insist that the company has done its job well and to the standards outlined in their contracts.

Last month, the Turnpike Authority's chairman, Matthew Amorello, hired retired probate court judge Edward M. Ginsburg to lead the agency's cost-recovery efforts. Ginsburg, who retired after 25 years on the bench, was to hire other lawyers to plow through thousands of pages of documents.

Romney said Ginsburg can remain, in part because he has already signed a contract with the Turnpike Authority.

Sean O'Neill, the Turnpike Authority's spokesman, said the agency is ready to assist lawmakers and policymakers as they hold hearings into the Big Dig.

O'Neill also defended the Turnpike's record-keeping, saying the agency has "an extensive collection" of documents in warehouses and file rooms at project headquarters that should offer adequate documentary evidence for the state's cost recovery efforts.

As for hiring Ginsburg, O'Neill said: "This was a strong and good faith effort. Chairman Amorello needed to go forward with a reasonable and fair process for assessing and acting on cost recovery."

Shawn Feddeman, a Romney spokeswoman, said the governor has already begun the process of looking for an engineering and construction management firm that would take over the cost-recovery process. She said no company has been chosen yet.

The company selected will work on a contingency basis, taking a small percentage of any money returned to the state by Bechtel, Feddeman said.

Rick Klein of the Globe staff contributed to this report.

For the full three-part Boston Globe expose "Easy Pass" go to:

Return to top


The MetroWest Daily News
Tuesday, February 11, 2003

Editorial
Defining 'essential core services'

The Romney Administration is learning how hard it is to cut the state budget while leaving intact what the new governor calls "core essential services."

The state budget has already been through two rounds of cuts since lawmakers enacted it late last summer. Depending on how you define the terms, some of those cuts have already sliced deeply into the core.

Acknowledging as much, the administration last week rescinded one of its cuts, restoring day treatment mental health services of critical importance to nearly 5,000 clients. In backing off, administration officials showed remarkable and commendable candor.

"We have pretty much decided this was a mistake. This was a core service," Ron Preston, Romney's Secretary of Health and Human Services, said Friday. "I'm not embarrassed about whether mistakes happen along the line. The question is, are you going to reconsider what you've done."

Preston reconsidered, and is finding other, less harmful, ways to save enough to restore the day treatment. That's the kind of honesty, humility and flexibility these trying times require of all public officials.

Unfortunately, it's not what we're getting from some local officials, particularly the state's mayors. Instead, some mayors seem to define as "core essential services" anything in their budget. When Romney announced a tiny cut in local aid, some mayors rushed to the microphones to declare the first thing they would do was lay off police, firefighters and teachers. See, they said with righteous indignation, the governor is cutting into core essential services.

That's passing the buck upstairs, and we hope most voters will see through it.

State aid to cities and towns has gone up an average of 7.5 percent a year for the last 10 years. Lots of raises have been given out to deserving public employees, lots of new programs have been added and initiatives launched, lots of new positions added, especially in schools and public safety departments.

But to define every position that has been added to municipal payrolls in the last decade years as a core essential service implies government wasn't fulfilling its essential functions way back in the dark days of 1993. Not every function is critical. Not every teacher, firefighter or police officer is, by definition, essential.

Romney's daunting task is to cope with a huge shortfall in state revenue by separating programs that are valuable from those that are essential. Because municipal revenues aren't as dependant on the health of the general economy, shortfalls at the local level aren't nearly as severe, but their challenge is the same as Romney's. Setting priorities is what management is all about.

City officials must take the revenue medicine dealt them and come up with their own definition of core essential services. Mistakes will be made, and, we hope, recognized and reversed. Even the right decisions will be difficult for those making them and painful for those they directly affect.

But this modest downsizing of government has been forced on us by economic activity and decisions made by the people and their elected representatives. Now it's up to mayors and town administrators to do the hard work of applying available dollars to prioritized needs. They should stop blaming the governor and start doing their jobs, bringing to their decisions the same decisiveness, compassion and candor Romney has shown.

Return to top


NOTE: In accordance with Title 17 U.S.C. section 107, this material is distributed without profit or payment to those who have expressed a prior interest in receiving this information for non-profit research and educational purposes only. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml


Return to CLT Updates page

Return to CLT home page