The Boston Herald
Monday, February 24, 2003
Report: Cuts, reforms can't solve state fiscal crisis
by Elisabeth J. Beardsley
The snowballing fiscal crisis has become so "gigantic" that
further painful spending cuts and Gov. Mitt Romney's bureaucratic reforms may not be
enough to avoid another raid on the taxpayers' wallet, a fiscal watchdog report
says.
The Massachusetts Taxpayers Foundation's 42-page analysis of
state spending trends points to a dwindling array of options for cash-strapped policymakers
who are facing a deficit that MTF pegs at $2.4 billion and Romney places at
$3.2 billion.
While carefully sidestepping direct mention of tax hikes,
the report notes that Romney's proposed reforms won't raise a lot of cash, and state leaders are
running out of places to slash spending.
"In the end, the tradeoff is program cuts vs. additional
revenues," said MTF President Michael Widmer. "How deeply are we as a commonwealth willing to
go in terms of cutting into education, health care, public safety?"
The warning comes as Romney prepares to unveil his first
budget proposal Wednesday - relying heavily on government reorganization savings, but also
steep cuts to programs, including local aid.
With tax talk percolating, the Romney administration has in
recent days ramped up a message of "yearly tax increases" if lawmakers don't go along with
Romney's plans.
Romney will hammer that message tomorrow night in a "state
of the state" address, pitching his restructuring plans to the public as a way of avoiding a
repeat of last year's $1.2 billion tax hike.
"Raising taxes would hurt the working families of our state
and further slow down our state economy, costing people jobs and our state to lose tax revenue,"
said Romney spokeswoman Shawn Feddeman.
While applauding Romney's reform proposals, the MTF report
throws cold water on his claims that he can save $1 billion or more with plans like today's
rollout of a health and human services consolidation.
Total savings are more likely to be on the order of "tens of
millions," and that money won't materialize fast enough to help with the coming year's deficit, the
MTF report said.
"The restructuring will help over the long term cut costs,
but it won't begin to address the fiscal '04 problem," Widmer explained.
Feddeman stood by the $1 billion savings estimate and added
that further program cuts are expected - including steep cuts to local aid to cities and towns,
which will have to "share the sacrifice."
"Gov. Romney will close the entire $3 billion budget gap
without raising taxes," Feddeman said.
Titled "The Perfect Storm Unleashed," the MTF report found
that the continuing implosion in state tax collections - coupled with skyrocketing growth
in health care costs - is driving the ledgers ever further out of balance, even as
"rainy day" accounts run dry.
With state leaders feeling averse to both tax hikes and
program cuts, Widmer "reluctantly" proposed that the state borrow as much as $500 million a year
over the next five or six years - the equivalent of using a credit card to pay the
mortgage and utilities.
MTF also called on House, Senate and administration leaders
to develop a multiyear fiscal recovery plan.
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The Boston Globe
Monday, February 24, 2003
Romney readies new local aid cuts
Part of plan to close estimated $3.2b gap
By John McElhenny, Globe Correspondent
Governor Mitt Romney isn't likely to make any more friends
among the state's mayors this week when he presents a new state budget with further cuts in
local aid.
Romney also plans to maintain the controversial Quinn Bill,
a salary bonus system for police with college and advance degrees, which a 2001 Board of
Education report called an ineffective "cash cow."
"I believe we get our money's worth and that we need law
enforcement officers with higher education and training," Romney told the Associated Press.
In the budget proposal to be presented on Wednesday, Romney
will set out ways to plug a budget deficit estimated at $3.2 billion for the coming fiscal year.
The fresh cuts to local aid come on the heels of a $114 million reduction last
month in the current budget. Those trims sparked layoffs in some communities
and forced towns to consider auctioning property.
One mayor even challenged Romney to debate the cuts at
center court in the Basketball Hall of Fame in Springfield.
Romney said the previous reductions were necessary to close
a $650 million deficit in the budget year ending June 30. The economic slump has badly hurt
state revenues, and Romney said communities have to bear some of the financial pain.
Cities and towns are due to receive $5 billion in local aid
from the state this year, a figure that has risen steadily over the past decade. Romney plans to
reverse that trend in the budget proposal for the next fiscal year, his press
secretary said yesterday. She declined to be more specific.
The local aid cuts are part of a wider effort to shrink and
reorganize state government, said Shawn Feddeman.
"The state is at a crossroads," Feddeman said. "We can
either seize this opportunity to fundamentally restructure state government, or we'll have to
accept yearly tax increases."
Springfield Mayor Michael Albano, whose city budget depends
on state aid for three-quarters of its funding, said last month's cuts forced him to lay off 330
city workers and close three library branches. Albano, whose center-court
debate challenge was rejected by Romney, said the governor's refusal to
consider raising the income or sales tax, which Albano supports, will force
communities to raise property taxes.
"We understand sharing the pain - all the mayors understand
sharing the pain - but what we don't understand is the philosophical straitjacket on the revenue
side," Albano said. "You can't cut your way out of this fiscal crisis without
hurting programs and hurting people." ...
During last year's governor's race, Romney was endorsed by
the Massachusetts State Police Association and the Massachusetts Chiefs of Police
Association, but Feddeman said the governor supports the Quinn Bill because
he believes it improves public safety.
"He believes we need to encourage higher education for our
law enforcement personnel, particularly during this time of heightened vigilance against
terrorism," Feddeman said.
The program costs taxpayers about $100 million per year,
split about equally between the state and local communities. The state Board of Higher Education
is considering regulations that would require institutions that grant degrees to
officers to show that two-thirds of their criminal justice faculty hold
doctoral degrees.
The board is also considering eliminating an aspect of the
program that gives officers credit for "life experience." A vote could come as early as this week.
Romney supports steps to toughen the program's educational standards, Feddeman said
yesterday.
The budget announcement Wednesday will be the third
high-profile event for the Republican governor in as many days. Today, he plans to announce details
for reorganizing the state Health and Human Services Department, which
includes 16 agencies and has a $10 billion annual budget.
Tomorrow, in a break with tradition, Romney plans to deliver
a State of the State address. Most newly elected governors give an inaugural address instead
of a State of the State address, but Romney plans to do both.
But it's his budget proposal - and its local aid provisions
- that have raised concerns among local officials around the state.
Feddeman said state aid to local communities has risen an
average of 7.5 percent each year for the past decade. While state revenues have plummeted,
revenues from locally assessed property taxes have risen, so the cities and
towns are better prepared for a cut in aid from the state, Feddeman said.
Somerville Mayor Dorothy Kelly Gay said last month's local
aid cuts forced her to lay off 27 city workers and eliminate a bus shuttle for senior citizens.
Thirty-eight percent of Somerville's budget comes from the state, and Kelly
Gay said she understands that the economic slump means some cuts are required.
But she said Romney should do a better job communicating
with mayors who are left to deal with the cuts that he makes. "The message that we're getting
from Beacon Hill is that we're a bunch of whiners and criers. I don't think that's
true," she said. "It's the manner in which we've been treated."
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The Lawrence Eagle-Tribune
Sunday, February 23, 2003
Legislators have already forgotten taxpayers' message
By Taylor Armderding
News and Views
So much for raising taxes only as a "last resort." They're coming. And they will
be far from the last resort.
Well, the lure of fiscal slumber is apparently much more
compelling. A couple of months later, following a speech by Gov. Mitt Romney (who was elected on a
no-new-taxes pledge), the leadership was already wavering. The new Senate
president, Robert Travaglini, declared that taxes wouldn't rise this year,
and if they were raised next year, it would only be as a "last resort."
Now, just weeks after that, Travaglini is practically
guaranteeing he will move to raise taxes next year, and is being hailed as a hero for extraordinary political
courage. Tax Team Travaglini is growing. State Rep. Ruth Balser, D-Newton,
has filed a bill to hike the income tax to 5.6 percent, which will supposedly add
$450 million to state revenues -- a majority of what they were all complaining
would have to be cut.
Balser is apparently clairvoyant. She knows what voters
meant to do, rather than what they did. In her world, those who voted to eliminate the income tax
entirely weren't even declaring that they didn't want a tax increase. "People, I
believe, don't want programs dismantled," she said. "That's a basic social
contract."
Can anybody say "short attention span?"
Of course, the problem goes well beyond a short attention
span, at a number of levels:
* The claims of Balser, Travaglini and others are wildly
overstated. Romney attempted to point that out, when he noted that the cuts he was proposing
were "pennies on the dollar." Did anybody notice? Not likely. One description of
Romney's cuts of $343 million was that he had "cut a swath" through state
government. So perhaps it is worth pointing out again. Pull out the pocket
calculator. Romney's cuts were 1.5 percent from a $23 billion budget. A $500
million cut is 2.2 percent.
More like a nick than a swath.
* The bureaucratic response to the "pennies" argument is
that the cuts are actually much more severe than they look, because so much of state spending
is "non-discretionary." The state's Medicaid program, with annual double-digit
increases, is trotted out as the prime example.
Well, state Rep. Harriett Stanley, D-W. Newbury, was going
to do something about it, before she was dumped from the Health Care Committee. She wasn't
planning to eliminate it, just make it more of a basic health-care program
(remember "basic social contract"?) than the current gold-plated version.
The reality is, or should be, that nothing is non-discretionary.
* A tax increase will not solve the problem. It will only
postpone it. The state has a "structural" deficit. Since 1996, state spending has increased an average
of 5.6 percent a year. That is unsustainable, without regular, continuing tax
hikes.
* Finally, the Legislature has shown no will to cut spending
programs that have nothing to do with "the most vulnerable" among us. They won't cut the
infamous $100 million Quinn Bill, a giveaway to police unions for dubious
educational achievement. They won't demand that state workers pay even
closer to the percentage the rest of us pay for health insurance. Things like that
are, you know, just not "politically feasible."
At the local level, a Peabody School Committee member, in
response to a call from the mayor for teachers to share -- just share -- in overcoming the deficit,
declared he would "not balance the budget on their backs."
Of course not. And you know what that means. It will be
balanced on your back.
