The Boston Globe
Thursday, February 20, 2003
Romney defends proposal to merge MDC, state agency
Asserts plan won't reduce park services
By Stephanie Ebbert, Globe Staff
Governor Mitt Romney acknowledged yesterday that his plans
for merging the Metropolitan District Commission with the state's parks agency would save
only $5 million, but he asserted that the government restructuring plan he will
unveil next week will save "hundreds of millions" more.
During the campaign, the governor said he could save $1
billion by restructuring government and eliminating waste, fraud, and mismanagement.
The governor's press secretary, Shawn Feddeman, said he will meet that
pledge in the budget and reorganization plan for fiscal 2004 that he plans to
introduce next week.
"The governor has taken steps to bring this year's budget
into balance and next year he's going to present a budget that solves the $3 billion budget deficit
without raising new taxes," she said.
Standing by the Hatch Shell on Boston's Esplanade, Romney
argued for his plans to merge the MDC and the Department of Environmental Management,
with an estimated annual savings of $5 million.
By creating an agency - the Division of Conservation and
Recreation - Romney said he was not backing off his plans to eliminate the MDC, a quasi-public
agency that has been criticized for its lavish spending and its politically
connected hires. The division would include a separate unit, called the Metro
Parks Bureau, to oversee urban parks and parkways.
Senate President Robert E. Travaglini had complained last
week that the state should protect recreation opportunities for city residents, and park advocates
had been urging the administration to keep the management of parks and
parkways together.
"This is the same proposal we have had from the very
beginning," Romney said. "Let's bring together the agencies that are doing duplicate functions, put
them in one place with one overhead structure, so we can do a better job for
our citizens for less money."
Under Romney's plan, which requires approval from the
Legislature, the Metro Parks Bureau would oversee all the urban parks, pools, skating rinks, and
beaches now managed by the MDC. The parkways would be maintained by a new bureau within
the Transportation Department's Division of Public Works. Romney wants the bureau to work with city planners on the Rose
Kennedy Greenway, the Surface Artery that will result from the Big Dig.
Romney suggested he would not further trim park services,
which he had cut by more than $2.5 million in last month's round of budget reductions,
shortening the season for some MDC golf courses, swimming pools, beaches and
skating rinks. The current appropriation for the MDC was $46.5 million. The
DEM received $33 million.
"Our specific concern is to make sure that we do not
eliminate a single rink, a single park, a single pool, or a single public beach," the governor said. "All of the
MDC services that people rely upon and together form such a vital part of our
parks system will remain intact and hopefully even stronger. What we will
eliminate is a pervasive reputation of cronyism and malfeasance."
Romney said the new Division of Conservation and Recreation
would be able to limit patronage because he and Secretary of Environmental Affairs Ellen Roy
Herzfelder would be accountable for its management.
Barbara Anderson, executive director of Citizens for Limited
Taxation, said that even smaller savings are worthwhile, if put to more useful causes.
"Ultimately, it isn't about saving money but making
government work more effectively," she said. "It's easier to do that in the reorganization debate than it
is to do when everybody is feeling fat and happy."
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The Boston Globe
Tuesday, February 18, 2003
Report hits tax cuts for fiscal crunch
By Rick Klein, Globe Staff
Despite widespread assertions that overspending has led to
the state's worst fiscal crisis since the Great Depression, state spending during the past 12 years
has failed to keep pace with growth in personal income, according to a report
being released today by a liberal advocacy group.
The report by the Massachusetts Budget and Policy Center
[aka, TEAM: Tax Everything And More] suggests that tax cuts are
more responsible for the $3 billion budget gap the state is facing in fiscal 2004 than any new investments in
state programs. Tax changes enacted during that period are draining $3.7
billion from the state treasury every year, even after last year's $1.2 billion tax
increase.
"When you look at the data, it indicates that spending was
extremely restrained during the 1990s," said Noah Berger, executive director of the
budget and policy center, which was formerly known as the Tax Equity Alliance
of Massachusetts. "The problem was caused by excessive tax cuts. It can't be
solved without restoring some of the revenue that was lost."
Business groups are expressing skepticism at the report's
findings, noting the liberal leanings of the budget and policy center. State leaders showered money
on health care expansions and education reform efforts through the 1990s,
with little regard for the fact that booms are inevitably temporary, said
Christopher Anderson, president of the Massachusetts High Technology Council.
"The reason you have tax reductions or tax incentives is
that your tax base is too high in the first place," Anderson said. "It's clearly not a tax-cut problem,
but a fundamental flaw in spending."
Anderson added that much of the economic growth in Massachusetts during
the 1990s was the result of the tax cuts pushed through by Republican governors. Reversing those cuts
now would stifle an economic recovery, he said.
But the report, coming just a week before Governor Mitt
Romney is due to release his budget plan for fiscal 2004, takes aim at one of the central
underpinnings of Romney's approach to state spending. Romney has suggested
that irresponsible spending by the Democratic-controlled Legislature was the
root cause of the current budget crunch, and he has repeatedly vowed to hold
the line on new taxes and instead slash state spending as part of his government restructuring proposals.
Romney said Friday that he views his election as a statement
by voters that they oppose higher taxes.
"One option is to substantially increase our taxes so that
we don't have to cut anything," he said. "That was an option that the voters had a choice on in
November, and they made that choice. ... That debate has already been had."
Most members of the House and Senate have been hesitant to
publicly discuss another tax increase this year, with many citing the surprising 45 percent vote
on last fall's ballot initiative to eliminate the income tax as a sign of voter
outrage over taxes. Still, Senate President Robert E. Travaglini and House
Ways and Means Chairman John H. Rogers have both said in recent weeks that
the appetite for taxes may change when citizens and lawmakers confront
devastating budget cuts.
The budget and policy center's study found that while
personal income rose at a 2.6 percent annual average clip above inflation between 1991 and 2002, the
budget rose just 2.3 percent above inflation on average. More than 90 percent
of the state's additional spending since 1991 has come in just two areas: K-12
education and health care for the poor, Berger said.
"Each year, the state was taking a smaller portion of the
personal income of Massachusetts residents," he said.
The budget and policy center's report could correct the
misconception that the current fiscal crisis is solely the result of irresponsible spending, said Alan
Clayton-Matthews, an economics professor at the University of Massachusetts
at Boston who was given an advance copy of the study to review. Lawmakers
should refocus their discussions around the budget crunch to think realistically
about the causes of the crisis and the proper levels of taxes and spending, he
said.
"The budget crisis is not just because of high spending and
lower revenues because of the economic slowdown, since there were quite a few tax cuts
passed as well," Clayton-Matthews said. "What you should do is focus on what
services the state should be providing, and then figure out what the tax burden
should be to support that."
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The MetroWest Daily News
Tuesday, February 18, 2003
Report blames state's fiscal crisis on tax cuts
By Michael Kunzelman
A decade's worth of tax cuts, not lavish state spending, was
the driving force behind the state's current fiscal crisis, according to a report a liberal think tank
plans to unveil today.
The report, drafted by the Massachusetts Budget and Policy
Center [aka, TEAM: Tax Everything And More], says state spending grew at a slower rate
than personal income during the 1990s.
Meanwhile, during the same time period, the state enacted
$3.7 billion in tax cuts that created a structural deficit in the state's budget, the center found.
"Based on this analysis, then, it is extremely difficult to
assert that spending has been the major contributor to the state's fiscal crisis," the report states.
On the contrary, the report argues that state spending rose
more slowly than might be expected, given the healthy economic climate of the 1990s and the
rise in personal income.
The center's report concludes that, to compensate for the
"overly ambitious tax cuts" of the 1990s, tax hikes must be part of any solution to the state's budget
crisis.
"To propose that the budget should be balanced by cutting
programs -- without reconsidering what in retrospect are the clearly unaffordable tax cuts
of the 1990s, ignores the reality of budget decisions and priorities of the last
decade," the report says.
Gov. Mitt Romney has steadfastly refused to consider tax
hikes as a way to help close the state's estimated $3 billion revenue gap in fiscal year 2004,
which starts July 1.
Senate President Robert Travaglini, on the other hand, has
said that tax increases must be weighed to stave off deeper budget cuts.
"I think there's a growing realization that you can't solve
the problem without revisiting some of those tax cuts of the 1990s," said Noah Berger, the center's
executive director.
Berger, who worked for former Senate President Thomas
Birmingham until the Chelsea Democrat left office last year, said report contradicts the "popular
perception" that taxes have been steadily rising over the last decade.
"We had three consecutive governors who made tax-cutting a
priority of the state," he added.
While taxes were cut 42 times between 1991 and 2002, state
spending fell from 9.4 percent of personal income in 1991 to 9.2 percent of personal income
in 2002, according to the report.
During the 1980s, however, spending grew faster than
personal income. Excessive state spending played a key role in the budget crisis of the early
1990s, the center asserts.
"Contrary to the role spending played in the last fiscal
crisis, spending growth in Massachusetts has been quite modest," the report adds.
The report also found that: "Only five states spend less
than Massachusetts on state and local services as a share of its total personal income.
"Moreover, the share of state resources dedicated to public
services has fallen more here over the last two decades than in any state in the nation," the report
states.
Only three states spend a smaller share of personal income
on public employees than Massachusetts.
Massachusetts also has fewer public employees than nearly
any state in the nation.
Massachusetts ranks 49th in the country in terms of how much
it spends on K-12 education as a percentage of personal income. The state ranked seventh
in 1979, but since then education spending in Massachusetts has fallen from 19
percent above the national average to 16 percent below the national average.
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The Worcester Telegram & Gazette
Wednesday, February 19, 2003
Editorial
Some 'restraint'
The Tax Equity Alliance of Massachusetts, for years the
indefatigable champion of just about every big-government "revenue enhancement" scheme
to hit Beacon Hill, has been redubbed the Massachusetts Budget and Policy
Center. The name may be new, but the TEAM agenda is intact: lobbying single-mindedly for more state spending on behalf of the public
employees and advocates who pay its bills.
In the group's latest report, Executive Director Noah Berger
tries to make a case that the state's current revenue crunch is a result not of unsustainable
growth in spending but of too-low taxes. "When you look at the data, it
indicates that spending was extremely restrained during the 1990s."
Oh, really? In the 12-year span cited by Mr. Berger, state
spending ballooned from $13.4 billion to $22.2 billion -- a 66 percent increase in the bottom line.
By what rational measure is that "extremely restrained"?
(Moreover, the report's comparison of state spending growth
to marginally higher personal income growth is disingenuous, to say the least. The base year
of 1991, at the end of a deep recession, was a low-point in household income;
the endpoint in 2002 was at the peak of Massachusetts' high-flying technology
boom.)
In the last year or two, the state has managed to offset the
slowdown in revenue growth with billions of dollars in reserves and $1.2 billion in new taxes
and fees. By the end of the current fiscal year, four months from now, most of
the reserves will be gone; growth in personal income will be modest at best
and recovery of capital-gains revenue is nowhere in sight.
No one doubts that the revenue crunch is real. But the
notion that Massachusetts can tax its way out of budget trouble -- while ignoring its
structural deficits and patently unsustainable growth in spending -- is
dangerously misguided.
