Governor Mitt Romney's State of the State Address
Tuesday, February 25, 2003
Suffolk University
Boston, Massachusetts
President Travaglini, Speaker Finneran, Senator Lees,
Representative Jones, members of the Legislature, honored guests and fellow citizens. Tonight, we
know we face challenging times, but the good news is we do so together.
I believe we also share the same priorities.
They are first, education. The total education of children
is the measure of a generation's success or failure. We need to make sure our education system
takes our kids from kindergarten all the way to being qualified for a good
paying job. We must insist that all our children are taught and are fluent in
English. We must hold firm against any attempt to roll back the progress we
have made in education.
Another priority: we must build our economy to create more
good jobs. Our state government spends tens of billions of dollars each year; properly
channeled, these dollars can be a powerful economic engine. Let's rev up that
economic engine to create more jobs.
Of course, we also must address our state's financial
problems. You know that old saying: Be careful what you ask for, you might just get it. Well, I have this
habit of asking to lead turnaround situations, like this one. They have some
features in common. First, they're almost always in worse shape than they
seemed from the outside. That's sure true for Massachusetts. I thought our
budget problem was $1.5 billion. Instead, it's $3 billion. And second, the only
permanent way to fix a turnaround is to start doing things in a new way. The
road that got you into trouble is never the way out of trouble.
Tonight, we stand at a crossroads. On the one hand, we can
take the same way we've tried before, raising taxes to keep up with our spending. Frankly, I don't
like what I see at the end of that road. Raising taxes again hits working families
hard. It scares off employers, both new and old. It's time to declare that the
road to Taxachusetts is a dead end street.
I want to take a different road, the road to prosperity.
It's not an easy road, particularly with a $3 billion pothole. But this road takes Massachusetts to a
better future.
Tomorrow, I will send the Legislature a new budget for a new
direction. There have been three principles that have guided this budget. First, eliminate every
speck of waste and inefficiency we can find.
Second, focus on delivering the core missions of government.
And third, ask our cities and towns to do the same thing. Let's talk about each of these.
First, waste and inefficiency. When I ran for office, I said
I'd find $1 billion. I was wrong. I'm proud to report that our team has found $2 billion.
We call our program "Common Sense for the Commonwealth."
Common Sense combines agencies to eliminate duplication. Several years ago, Beacon Hill
noticed that there were 12 different state agencies managing workforce-training programs.
Do you know what government's answer was to that kind of duplication? It was to create a 13th agency to coordinate the
12. My answer is to combine and eliminate, both for savings and for simplicity.
In the Executive Office of Health and Human Services, the
problem with duplication goes beyond wasting money. With a current maze of 15 different
agencies, a family looking for help could spend days driving between offices
trying to find the right people to help them. I'll bring our agencies together
into four groups: one for needy children and families, one for seniors, one for
healthcare and one for long term care. The agencies won't go away, they'll just
be a lot easier to find. And by combining their administrative functions, we'll
save money.
Our court system has some of the country's finest judges.
But we need to do a better job administering the courthouses themselves. For historic reasons, the
state has created two trial court divisions, one for Boston and one for the rest of
the state. Boston's court division has 11 judges, the other has 170 judges. Can
you believe that despite that huge disparity, they both have roughly the same
administration cost? I'll combine the Boston courts in with the rest of the state
and save millions of dollars. Of course, we'll also be saying goodbye to a lot of
patronage jobs.
There's need for Common Sense organization in higher
education as well. We have 29 higher education campuses in Massachusetts. I found it remarkable
that each has its own independent purchasing department, Web site, information
technology department, and so forth. They even have different accounting systems. By grouping campuses by region and
providing for shared services between them, Massachusetts can save millions of dollars. And, for the
first time, prospective students will be able to file one application for
admissions to any of our state campuses.
My Common Sense plan for reforming state government can only
work if we adopt Common Sense employment practices as well. Two changes are essential.
We have to end "bumping rights." That's the practice of protecting the job of
any state worker who has seniority, regardless of their expertise, experience or
performance. Recently, an employee with seniority as a tax processor avoided
being laid off by taking the job of someone who worked in child support, an area
where this employee had no experience whatsoever. Multiply this a thousand
times and you'd have workers doing jobs for which they are totally unqualified.
Government's work would grind to a standstill.
Likewise, I'll insist that the state government supervisors
must be categorized as management, not union workers. These are our front line managers. If we're
going to manage government for the citizens of our state, they have to work for
the people.
Common Sense for the Commonwealth doesn't stop with
streamlining and reorganization. We must also reset fees that are out of line. We'll plug corporate
tax loopholes so companies will pay their fair share. And we will reform
government employee benefit programs. I will ask the Legislature to raise the
employee share of health insurance to 25 percent from the current 15 percent.
Why should a teller at Fleet Bank, who pays 30 percent of her own health
insurance, pay more taxes so that a state employee only has to pay 15 percent?
All totaled, my Common Sense for the Commonwealth program
will save $2 billion. That's money saved in waste, inefficiency and mismanagement that can
now go to healthcare, public safety and schools.
I told you that there were three parts to my plan to fill
our $3 billion budget gap.
The first is Common Sense for the Commonwealth that I have
just described. The second brings spending programs to levels we can afford. When it comes to
caring for the poor, the disabled and the elderly, Massachusetts is one of the
most generous states in the nation. And despite facing the worst fiscal crisis in a
generation, we will stay one of the most generous. Even more remarkably in
light of the record budget gap, our total state spending for Health and Human
Services will GROW next year under my budget. Let me say that again:
Health and Human Services will actually GROW next year.
We will also be able to fully preserve all our veterans'
benefits, welfare payments to the poor, all our childcare funding, and all our funding for
homeless shelters. I'm proud that my budget will fulfill our mission to care for
those who cannot care for themselves.
There will be some programs, however, that will see changes.
I believe that they are necessary, fair and right. Let me give you an example. In
Massachusetts, for every three taxpayers, there is one person receiving free
healthcare. Simply put, if you're a taxpayer, you're not just paying for yourself,
you're paying one third of the cost of another person's healthcare bills as well.
And in Massachusetts today, this other person doesn't pay even one dollar for
their healthcare. My plan calls for almost everyone to have to pay something,
even if it's just a token amount. I just don't think it's fair or right for
people to get something for nothing at the taxpayer's expense.
Another example: we're the only state in the nation that
doesn't require a parent on welfare with pre-school children to work. While the rest of the
country fully implemented workfare, Massachusetts did not. I'm putting
money into childcare programs so that every able-bodied person can have the
dignity of working for their benefits.
And finally the third part of my plan. I will call on our
cities and towns to join us in finding savings at the local level. State aid to municipalities has almost
doubled in the last 10 years. Now that our state revenues are declining, we're
asking cities and towns to share as well. I'll propose reducing local aid by $232
million or about 5 percent. To protect foundation education spending in our less
affluent municipalities, many of our more financially strong cities and
towns will see a decline about twice that large. For no municipality, however, will the
reduction be larger than 2¼ percent of their annual budget. And, because of
growing real estate revenues, virtually no municipality will experience a
year-to-year decline in their total municipal budget. I know this won't be easy,
that's why I've worked very hard to make this reduction as small as possible. I
have great confidence in our state's mayors, selectmen, and other local leaders.
I want to reach out to them so that together we can find a way to govern well
and wisely during these tough times.
My new budget recognizes that we can no longer continue to
pass off our financial difficulties on the hardworking people of Massachusetts. I get
hundreds of letters, emails and phone calls from working people who are fed up
with the high cost of government. Not long ago, I received a letter from Mary
Coughlin, who says she has trouble making ends meet with phone bills, medicine and heating costs. Mary says, "When I go over
my budget, I can't go to my neighbors and ask for their money to pay my bills, but the government
thinks nothing of raising taxes all the time."
Mary, my 2004 budget is balanced. It does not raise taxes.
It fulfills the core missions of government to help those who cannot care for themselves. It slims
down state government and reforms spending programs that have been growing
uncontrollably. And perhaps most important, it takes us on a road to a
better future. We'll be able to retain and attract good jobs with stable taxes.
We'll invest in education, holding harmless our school spending.
Let there be no mistake. For this budget to win, politics as
usual has to lose.
There will be an enormous effort to continue with the old
ways, with year after year of tax increases as programs and bureaucracies grow on and on. The
arguments will be frightening and loud. The resistance to change will be
daunting. I need you to join me and make your voice heard. For Common Sense
in the Commonwealth to succeed, you will need to let your voice be heard just
as loudly as your votes were heard last fall.
I look forward to working with the Legislature on this
budget. I'll be flexible and open to improvements I may have missed. But I will fight for bold change.
I will stick to my principles.
I must admit I am invigorated by the challenges and the
opportunities. We are a great state, a great place to live. We have remarkable people. And just as
important, our future is bright.
Thank you.
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The Boston Globe
Wednesday, February 26, 2003
Governor eyes 5% cut in local aid
By Rick Klein, Globe Staff
Governor Mitt Romney said yesterday his budget proposal for
the next fiscal year would slash aid to cities and towns by 5 percent, with wealthier
communities receiving the deepest reductions, and he promised that his
government reorganization plans would save taxpayers $2 billion.
Romney will call for a $232 million cut in aid to cities and
towns next year, on top of $114 million that he slashed unilaterally from municipal aid accounts last
month. He would not detail his cuts to other programs.
In last night's speech previewing his spending plan, which
he delivered in front of legislative leaders and a statewide television audience, Romney warned that
the budget reductions are needed to avoid higher taxes. He called on state
leaders to "start doing things in a new way."
"The road to 'Taxachusetts' is a dead-end street," Romney
said during the 15-minute address. "I want to take a different road - the road to prosperity.
It's not an easy road, particularly with a $3 billion pothole. But this road takes
Massachusetts to a better future."
Today, in perhaps the most eagerly anticipated move of his
term, Romney will file his budget proposal for fiscal 2004, which begins July 1. The administration
has declined to say how much Romney is seeking to spend next year, but the
proposal is expected to be several hundred million dollars less than this
year's $22.9 billion in spending.
"There will be an enormous effort to continue the old ways,
with year-after-year tax increases," Romney said. "But I will fight for bold change."
On local aid, Romney warned that more affluent communities
could see local aid cuts of as much as 10 percent, since the state is required to provide a legally
mandated minimum level of funding for poorer school districts. When the
governor cut local aid unilaterally last month, he spread the burden as an
equal percentage across cities and towns, an approach that hit poorer communities
more than wealthier ones because poorer cities and towns tend to receive more
state aid.
It was difficult for those who attended the speech to
evaluate Romney's budget blueprint last night, because he declined to release most of the details until
today. Legislative leaders say they are expecting the proposal to be extremely
hard to analyze, since Romney is trying to restructure government at the same
time that he cuts spending, making year-to-year comparisons for agency
appropriations difficult.
"It's going to take a long time to figure out where those
savings come from, and how you get there," said Senate Ways and Means chairwoman Therese
Murray, a Plymouth Democrat.
While the budget gap has been described as a $3 billion
problem, that number represents the difference between expected revenue next fiscal year and the
amount state agencies say they'd have to spend next year to maintain current
levels of services, after inflation and mandated cost increases are factored in.
Romney would close $1.9 billion through efficiencies and
reorganizations, and raise about $250 million in non-tax revenues. He would also generate $350
million in savings from local aid and $273 million from other state spending.
But since the actual cut in local aid from this fiscal year
to next is $232 million, Romney's claimed savings of $350 million represents an example of using the
so-called maintenance levels of funding, which result in a larger savings
than the actual year-to-year comparison.
In his fast-paced speech, Romney outlined his budget
proposals with a broad brush, briefly touching on major shake-ups of the state's higher education
system, welfare programs, and Medicaid, in addition to mentioning a raft of
proposals he has already rolled out.
Romney's prominent reference to generating new revenues next
year without raising non-tax revenues convinced some analysts that he is planning to
propose an expansion of gambling. His aides declined comment, but some
lawmakers believe Romney's budget plan will call for slot machines to be
installed at the state's four racetracks.
But it's not clear if such a move would reflect a genuine
desire to expand gambling, or an effort to spur negotiations with out-of-state casino operators,
who Romney has suggested should pay Massachusetts to ban slot machines
and casinos.
The governor also stressed that his plan will preserve the
"core missions" of government.
He said he would maintain current levels of K-12 education
funding and pointed out that spending on health and human services would actually increase in his
plan, though he acknowledged some services would be scaled back.
"I'm proud that my budget will fulfill our mission to care
for those who cannot care for themselves," Romney said.
The governor said he would seek to regionalize the higher
education system, grouping campuses by region so they can share administrative services, and
would allow high school seniors to file one application to all state colleges and
universities.
Romney will also seek to force more welfare recipients to
work by providing better child care services, and said more poor residents who receive health care
through Medicaid should be required to pay modest co-payments for the health services
they receive.
"I just don't think it's fair or right for people to get
something for nothing, at the taxpayers' expense," Romney said.
Romney asked the Legislature to approve union-related
reforms, including proposals that would make it easier for the state to lay off agency supervisors
by classifying them as management, not union members. He also said he will
again ask the House and Senate to force state workers to contribute more
to their own health care; the Legislature shot down a similar proposal by Romney
last month.
Romney has already laid out plans to streamline management
of the state's judiciary; to eliminate the Metropolitan District Commission, to save $5 million;
and to drastically restructure health and human service agencies. He also
wants to merge the state Turnpike Authority and the Highway Department,
and to begin phasing out the six sprawling residential campuses that the state
runs for the mentally disabled.
Romney has said he would work with legislative leaders to
ensure that his proposal is acceptable.
"I'll be flexible and open to improvements I may have
missed," Romney said. "But I'll fight for bold change, and I'll stick to my principles."
The House and Senate, which are both dominated by Democrats,
will prepare their own spending plans for next year, and the competing proposals will be
reconciled and voted on, likely in late spring. In recent years, Republican
governors have had little say over the budget, but Romney is trying to build
public support for his plan.
Joanna Weiss of the Globe Staff contributed to this report.
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The Boston Globe
Wednesday, February 26, 2003
Romney critics see much to fault
By Joanna Weiss and Cyndi Roy
Governor Mitt Romney filled his speech last night with
references to the support he needs from the public to change the longstanding practices of state
government. And it quickly became clear after the address that Romney will
face determined opponents as he tries to turn the wish list he outlined last
night into legislative reality.
Union leaders complained that Romney's suggestion to change
seniority rules for state employees was unrealistic, and would defeat the purpose of
government overhaul by leaving some jobs more vulnerable to politics.
"I don't know who made him king," said Robert V. Haynes,
president of the Massachusetts AFL-CIO. "You can't just unilaterally decide to kick managers
out of the union and do away with seniority."
And advocates of some of the programs in jeopardy were quick
to criticize Romney for avoiding specifics. Ron Hollander, president of the Massachusetts
Hospital Association, said he wasn't satisfied with Romney's announcement that
the Health and Human Services budget would increase next year, saying the
remarks would have been more credible if the governor had talked about
individual programs. His association is especially concerned with the rising
costs of caring for the poor.
"These are major issues we did not hear addressed, major
issues that will affect everyone," Hollander said.
And Alan MacDonald, executive director for the Massachusetts
Business Roundtable, said Romney's reference to closing corporate tax loopholes could
bring the state much-needed revenue, but questioned the governor's definition
of a loophole.
Some state Democratic leaders also questioned whether
Romney's promises to maintain core services would hold up. Philip W. Johnston, chairman of the
Massachusetts Democratic Party, called the speech "rhetorical nonsense," and
said Romney was uncaring to suggest that the poor should contribute token
amounts to their health care costs.
"Mitt Romney has revealed himself as the right-wing
ideologue that he has been all along," Johnston said.
But while Johnston was outspoken, many lawmakers, who will
spend the coming weeks slogging through the budget, and deciding its fate, were more
circumspect - if they spoke at all. Most left the building as the speech ended.
House Speaker Thomas M. Finneran ducked from reporters like a rock star
evading paparazzi, shouting, "I'm going to stick with my statement!"
Later, Finneran's aides handed out a paragraph of prepared
words: "Governor Romney has set a high standard of balancing the budget without cutting
essential services, raising taxes or utilizing one-time revenues."
Senate President Robert Travaglini, a Democrat, also
insisted that he was reserving judgment. But he questioned the few hard numbers Romney uttered
in his speech.
"I respect the governor's viewpoints and his recommendations
for change and efficiency in government," Travaglini said. "I am still not convinced that the
arithmetic is accurate."
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The Boston Globe
Wednesday, February 26, 2003
For new administration, few allies in an uphill battle
By Frank Phillips, Globe Staff
Despite his talk of the critical "crossroads" the state
faces, Governor Mitt Romney will have few natural allies to join him in the battle against the
powerful special interests that will seek to defeat many of his plans to
drastically reshape an entrenched state bureaucracy.
The governor, who was elected in good part because voters
responded to his call to "clean up the mess" at the State House and bring state government into
the 21st century, cannot turn to an organized army of reformers to push his
agenda and create the political pressures to force the Legislature to accept his
plans.
The constituencies that once pushed for changes to the
status quo are no longer significant forces. Speaker Thomas M. Finneran has all but co-opted the small
and ineffective band of Republican lawmakers in the House. The GOP delegation in the
40-member Senate has dwindled to six, down from the override-proof 16 members that then-governor William F. Weld
briefly enjoyed in the early 1990s.
Much of the business community, which has sought and gained
tax breaks and other favors, is nervous about challenging the Democratic legislative leadership.
And there is no compelling event, such as the scandal in the late 1970s over
state building contracts, to stir public passion for what is essentially a dry
subject -- government restructuring.
Most analysts agree that Romney's reforms resonate with a
majority of the voters, particularly the independents who gave him the edge to win the
governor's race last November. His political advisers believe Romney, drawing
on the state's fiscal crisis, has a mandate to act and that he can't squander
the opportunity.
But, as history has proven, reform forces in state politics
are often ephemeral and disorganized.
Pam Wilmot, the executive director of the government
watchdog group Common Cause, said the desire for reform is widespread and the impulses run
deep among the electorate, often influencing elections like the recent governor's
race. But, because they are disparate and scattered, they are often hard to rally
into a political pressure group.
"There is not necessarily a constituency for reform," Wilmot
said. "It is on everyone's list. They vote for it, but they don't show up at the State House with
placards. The people who show up at the State House usually have a specific
financial interest."
Indeed, Romney's job of selling his changes will be
daunting. His restructuring plans threaten the existence of longstanding state agencies that have strong
constituencies on and off Beacon Hill. They would eliminate or diminish the
positions of politically connected managers and career bureaucrats. A host of
special interest groups, including state employee labor unions and some of the
human services advocacy organizations, will use their considerable influence
within the Democrat-dominated Legislature to protect their interests.
Romney and his aides are still confident the governor, using
his bully pulpit, can create pressure on lawmakers by stirring public interest in his reorganization
plans. Late yesterday, he gave a speech on his budget vision that Boston
television stations carried live.
Romney, Lieutenant Governor Kerry Healey, and top administration officials
are also expected to fan out across the state over the coming months, meeting
with local officials, holding high-profile media events, and visiting media outlets
to promote the administration's plans.
To be sure, Romney will face serious questions, most
fundamentally whether the reforms will truly change government for the better or even come close to
the $2 billion that he says will be saved. But Senate minority leader Brian Lees
is convinced Romney will gain a lot of what he is seeking. "It is not just labor
unions and state employees who control things on Beacon Hill like they did for
years," he said. "There's a strong electorate out there."
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The Boston Globe
Wednesday, February 26, 2003
Romney's pitch for change
By Scot Lehigh
Say this for Governor Romney: He meant exactly what he said
when he declared that he was going to change the way things are done on Beacon Hill.
The new governor is prepared to meet the (maintenance) budget gap of $3.2
billion with a sweeping reform package that he claims could save $2.1 billion
but that is sure to touch off a roar of protest from public employee unions.
In the close-to-level-funded spending plan he will unveil
today, Romney will propose a near-complete elimination of civil service protections for state and
municipal employees and call for revamping the Pacheco Law, the union-backed measure that
has effectively ended efforts to economize by privatizing or "outsourcing" state services.
He will also call for a package of public-sector management
reforms, including the removal of all state lawyers and some 14,500 supervisors from union
membership and the elimination of bumping rights, which allow employees
with seniority to claim the jobs of more junior employees when their own
positions are eliminated.
Romney will also suggest an overhaul of the state pension
system, the point of which will be to begin to move from a traditional pension to a defined
contribution arrangement like a 401(k).
And the governor will once again ask the Legislature to
consider requiring state employees to pay 25 percent, rather than 15 percent, of their health care costs.
In an interview yesterday in his office, Romney said he realized his plans will
be greeted with vehement opposition on some fronts but insisted that Massachusetts is at a crossroads.
"For the taxpayers to win, politics as usual has to lose,"
Romney said. "This is the time to make the choice. Do we want to have sweetheart deals for state
employees and continuing growth of government and rising taxes every year,
or do we want to opt for streamlined, scaled-back government and a flat tax
burden and, by the way, therefore, more employers finding this a great place to
come?"
Romney compared the reforms he is proposing to the crucial
management-rights package the Legislature passed in 1980 to bring exploding
MBTA expenses back into line.
"What we would hope to do is accomplish the same things for
the taxpayers of Massachusetts that we accomplished for the riders of the MBTA," Romney
said. Although Romney said many mayors have privately voiced support for
some of the measures he will propose, he realizes he may well have to ride into
the fray alone.
"I don't imagine you will have a single mayor who says
hurrah," Romney said. "This will not be a profiles in courage setting. This will be, `Please, please, help
us, but I can't say it.' " Asked if his plans weren't tantamount to a declaration of
war on the public employee unions, Romney said he was "simply trying to have
the same rules of engagement in Massachusetts that exist in other states."
Under Romney's plan to nix civil service, work relations
would be governed by collective bargaining contracts. However, doing away with bumping rights
would reduce the job security that seniority imparts -- and at a time when the
governor estimates that layoffs "in excess of 1,000 people" are coming.
Overall, Romney, reflecting his roots in business, insisted
that state employment should more closely resemble private sector work.
"I think it is unfair for state employees to feel that we
should get a better deal on pensions, on health care, and on work rules than exist in the surrounding
marketplace," he said. Secretary of Administration and Finance Eric Kriss
added that moving to a portable pension plan would make state government
more attractive to younger workers, who would like to serve for five or six
years but don't want to make a career of state government.
Romney's new proposals -- coming on the heels of plans to
restructure the Department of Health and Human Services, wrest control of the judiciary from
the line-item micromanagement of the Legislature, and do away with the
patronage-choked MDC - demonstrate just how committed he is to changing
business as usual on Beacon Hill.
That's not to say any of them will face easy passage. Quite
the contrary: Look for bitter battles ahead.
But give this governor credit for his willingness to begin
an important debate.
He is asking the right questions about beneath-the-radar
arrangements too long ignored. And he's demonstrating the sort of reform determination that has
been missing for far too long on Beacon Hill.
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The Boston Herald
Wednesday, February 26, 2003
A Boston Herald editorial
Romney proposes a turnaround
Gov. Mitt Romney summed up the budgetary year ahead
accurately and succinctly:
"For this budget to win, politics as usual has to lose."
That is the essence of the dilemma that will face the
Legislature. And judging from their performance thus far, it's not one they are fully prepared to grapple
with.
After all, even in the midst of the current fiscal crisis
legislators simply refused to make state workers pick up more than the current 15 percent share of their
health insurance premiums.
Yet once again the governor says he will ask them to
increase the figure to 25 percent.
That's hardly the only management reform Romney called for
in last night's State of the State address, but it's indicative of the difficult road ahead.
Yes, the new governor is brimming with new, bright ideas -
different ways to do things that could not only cut the cost of government, he insists, by $2
billion, but could make it work better for the people it serves. To do that,
however, requires a sea change in legislative thinking. And that won't happen
without an energized electorate. Presumably that is what the governor is
counting on.
Because in many ways last night Romney touched just about
every third rail in Massachusetts politics:
Local aid would be cut by $232 million (about 5 percent).
Every welfare recipient, including those with preschool
children, would be required to work.
State employees would not only have to pay more for their
health care, but employee unions would be required to give up "bumping rights" and certain
management positions.
The entire state college and university system would be
reorganized by region, have administrative positions cut and - imagine this - there would be one
uniform application for the entire system.
Romney called his package Common Sense for the Commonwealth,
and it is that. But make no mistake about it, it's also nothing short of a revolution. This
is no incremental tinkering around the edges.
But then this is no time for tinkering.
"We can take the same way we've tried before, raising taxes
to keep spending more money on programs," the governor said. "Frankly, I don't like what I see
at the end of that road. Raising taxes - again - hits working families hard. It
scares off employers, both new and old.
"The road to Taxachusetts is a dead-end street," he added.
And that's pretty much the situation the Legislature will
find itself in. It is out of options and it has never been big on ideas.
Romney has offered lawmakers a way out. They ought to take
it.
