CLT
UPDATE
Wednesday, July 2, 2003
Finneran Power-Grab teetering at the
precipice
Governor Mitt Romney is threatening lawmakers with litigation if they override his veto of a bill affecting legislative pay. Though championed by House Speaker Thomas M. Finneran, the pay-raise bill is already controversial in a time of budget cuts and the threat of a lawsuit could doom it, the bill's opponents say....
If there is a legal challenge to the pay-raise bill, it's unclear who would bring it - the administration, a rank-and-file lawmaker, or a private citizen....
But the possibility of such a challenge, combined with existing policy differences, could make it harder for Finneran to rally the votes needed to override Romney's veto....
The Boston Globe
Wednesday, July 2, 2003
Governor to fight pay-raise proposal
House Speaker Thomas M. Finneran's controversial pay raise bill is headed for a court battle if the House boss succeeds in pushing it past Gov. Mitt Romney's veto, opponents said yesterday....
If the speaker musters a two-thirds vote to override the veto, Citizens for Limited Taxation said it's ready with a lawsuit. "The constitution is a sacred document," said CLT chief
Barbara Anderson. "This definitely has to be stopped."
The Boston Herald
Wednesday, July 2, 2003
Foes of speaker's pay-raise bill promise lawsuit
Legislative leaders yesterday criticized Governor Mitt Romney's $201 million in budget vetoes, vowing to override most of them to preserve important state services.
"Not only did it go to the bone, it goes through the bone," Senate President Robert E. Travaglini said, pointing to the extra $57.1 million the governor slashed Monday from aid to cities and towns. "I'm very disturbed. But we'll remedy that very shortly." ...
Romney aides defended the governor's vetoes, saying he was simply fulfilling his obligation to maintain a balanced budget. They cited a Massachusetts Taxpayers Foundation report that found the Legislature's budget underfunded accounts by at least $230 million.
The Boston Globe
Wednesday, July 2, 2003
Governor's vetoes to be overridden, legislators say
[Boston Mayor Tom Menino] has been able to have it both ways this budget season - preparing a worst-case budget based on a possible $100 million cut in local aid, and then doling out goodies when the Legislature ultimately ended up cutting $36 million....
In his January State of the City Address, Menino was much more understanding of Romney's challenge, saying "The national recession is prolonged and painful, so we are reducing the size of municipal government ... We need to do more with less."
Nothing's changed since then but Menino's political posture.
A Boston Herald editorial
Wednesday, July 2, 2003
Gloom and doom in Boston
Politicians have a credibility problem.
And in this year of massive budget cuts, that's deeply frustrating to many in and outside of government. The Massachusetts Municipal Association warns of "dramatic service reductions." Human services advocates fear a "bloodbath." The solution, they all argue, is to raise taxes.
Yet, voters don't believe it.
The electorate nearly abolished the state income tax last November in an anti-tax and anti-government paroxysm that continues unabated today. Even at the local level, for instance, where government spending is more transparent and easier to understand, overrides of the Proposition 2½ property tax limit are difficult to manage.
The latest was in Milton, where voters 10 days ago rejected a proposed override. The arguments were familiar. Supporters of the tax increase warned of layoffs and the destruction of a decent public school system. Opponents in effect called them liars. "We've been listening to that story for too long," Milton Selectman James Mullen told a Herald reporter....
And it provides two important and depressing lessons.
One is that it is only under the most severe budget pressure that politicians will genuinely consider reform. If that pressure is lessened, as happened when the projected state aid cuts were reduced, they will quickly abandon those efforts.
The second is that even in the tightest of budgets, politicians still too readily trade off the broad public good for their own political interests.
The skeptics, it appears, are right.
The Boston Herald
Wednesday, July 2, 2003
Tax foes justified in being skeptical
by Tom Keane
This week, the 56-year-old layabout tried to pull an unarmed robbery at the State House. With the assistance of Sen. Robert Havern (D-Arlington), he managed to insert into the state budget an outside section, Sect. 655, which would have jacked up a single state pension - his. With another budget rider, Mike Ralph came
this close to more than doubling his monthly kiss in the mail....
Had Gov. Mitt Romney not vetoed the two outside sections, Ralph's grab would have gone up to $72,220 a year.
Budget crisis? What budget crisis? ...
Anyway, this stink-bomb sailed through the entire legislative process until the budget reached the governor's desk. Since 655 only affected the
MWRA, Romney's people placed a call to the agency, where it was quickly determined it was, in fact, a payoff to one guy - Mike Ralph.
The Boston Herald
Wednesday, July 2, 2003
Mitt whacks hack caught siphoning an MWRA pension
by Howie Carr
The state treasurer's office collected a record level of abandoned assets in the past 12 months, drawing more than $230 million in cash for the fiscally strapped state.
The banner fiscal year, which ended Monday, stemmed largely from a change in state law in March that sped up the way that demutualized insurance firms hand over the value of unclaimed shares to the state.
The Boston Herald
Wednesday, July 2, 2003
State claims abandoned assets:
New law leads to record $234M infusion
Chip Ford's CLT
Commentary
The Finneran Pay-Raise Power-Grab is finally getting
the attention it deserves and, as they say, "light is the best
disinfectant." More are coming to recognize that this is not merely
about money, but more importantly it is about power; absolute power.
This part of Finneran's coup was never supposed to be recognized until
it was too late. Word is that he's furious and pulling out the stops to
have his way as usual.
Though we are considering various options if it is
adopted over the governor's veto, CLT has not yet decided to take the
power-grab to court. Another option is a repeal referendum petition
drive. We are conferring with other members of the Coalition for
Legislative Reform, specifically Common Cause and CPPAX. Before CLT
makes any decision, our members of course will be polled.
Governor Romney is being attacked for his vetoes of
the Legislature's budget, as would be expected. I thought the
administration had the perfect response today, the same response I noted
in yesterday's Update: "Romney aides ... cited a Massachusetts Taxpayers Foundation report that found the Legislature's budget underfunded accounts by at least $230 million."
Also in yesterday's Update, I reminded readers of
last year's response by state Rep. Daniel Bosley (D-North Adams) to a
"budget rider" fiasco, in which he claimed "many
lawmakers didn't fully understand what they were approving." I
asked, "Do you suppose they had any better comprehension of what
they were approving in another "budget rider" this year?"
Thanks to Howie Carr, today we have the answer:
"With the assistance of Sen. Robert Havern (D-Arlington), he managed to insert into the state budget an outside section, Sect. 655, which would have jacked up a single state pension -
his. With another budget rider, Mike Ralph came this close to more than doubling his monthly kiss in the mail...."
With some 600-700 outside sections, so-called
"budget riders," it would be impossible for every member of
the Legislature to be aware of what they're voting on when they vote
simply up-or-down on the conference committee budget; anything can be
and usually is snuck in; this year a big pension boost for one lone hack
would have become law were it not for the governor's veto.
This is why using the budget as a legislative
catch-all for all sorts of extraneous legislation is such an atrocious
way to make public policy, and why legislative leadership continues
using the tactic.
No doubt "many lawmakers didn't fully understand
what they were approving" again this year, the usual lame excuse
when they are caught in their perennial embarrassment of ignorance.
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Chip
Ford |
Your rep and senator need to know you
oppose the Finneran pay-raise power-grab and will not forget how they vote.
This is a critical turning point in
Massachusetts history, a point that will define our very form of government.
Don't let it pass by without voicing
your opinion. Find
your rep and senator now, and let him or her know where you stand: for
democracy or for a "Finneran Rules" autocracy.
When you call, just tell whoever
answers the phone that you're a constituent and would like the representative or
senator to sustain the governor's veto on the Finneran Power-Grab. If there's a
question, refer them to the CLT
memo that was delivered to their offices on June 25.
The Boston Globe
Wednesday, July 2, 2003
Governor to fight pay-raise proposal
By Rick Klein and Raphael Lewis, Globe Staff & Correspondent
Governor Mitt Romney is threatening lawmakers with litigation if they override his veto of a bill affecting legislative pay. Though championed by House Speaker Thomas M. Finneran, the pay-raise bill is already controversial in a time of budget cuts and the threat of a lawsuit could doom it, the bill's opponents say.
In a message accompanying the veto he delivered Friday, Romney said the bill may violate the state constitution, based on a 1996 Supreme Judicial Court opinion related to legislative pay. The justices found that legislative compensation must be set via bills passed by the House and Senate, not through internal legislative rules. The measure being pushed by Finneran would give legislative leaders near-complete power to set the pay of top lieutenants and committee chairs. But the opinion suggests that the pay must be set through laws passed by the Legislature and reviewed by the governor, according to Romney's legal analysts.
If there is a legal challenge to the pay-raise bill, it's unclear who would bring it - the administration, a rank-and-file lawmaker, or a private citizen. The governor's aides declined to comment yesterday.
But the possibility of such a challenge, combined with existing policy differences, could make it harder for Finneran to rally the votes needed to override Romney's veto. While the speaker and members of his leadership team are aggressively lobbying rank-and-file members for their support, they could have a difficult time cobbling together the two-thirds majority they need to push the bill through. The original vote in the House was 100 to 50 - a tally that would have overridden the veto by the barest of margins. But some of that support appears to be slipping.
Though 13 Republicans originally voted for the bill, many of them - including House minority leader Bradley H. Jones Jr. and his top lieutenants - are promising to switch their votes to demonstrate support for Romney. Jones said the legal issues Romney has raised constitute another obstacle for the bill's supporters to get around.
"There is at least a question that needs to be thought about," said Jones, of North Reading. "Someone might say, 'Let's pass it and the governor can challenge it if he likes,' and someone might say, 'We should think about that and make adjustments if necessary.' That's not my decision to make."
But state Representative Lida E. Harkins, Finneran's third-ranking deputy, predicted that any legal challenge to the law would be quickly rejected. The governor already has no say about the size of stipends handed out to the chairmen of the Legislature's 24 joint committees, meaning it's clearly legal for the Legislature to set leadership pay, she said.
"I don't think it would be unconstitutional or abused," said Harkins, a Needham Democrat who serves as House majority whip. "Much as the governor can create new jobs in the administrative branch without coming before us, we don't have to come before him ... There's never been a move to take that away from us because it's never been abused."
Romney's veto message cites a 1996 SJC opinion, which was delivered in response to questions regarding a proposed ballot initiative that would cut the pay of all lawmakers. The justices wrote in a unanimous opinion that the state constitution requires all legislative pay matters to be set through laws - not by internal House and Senate rules, which is the change Finneran is seeking.
State Representative Byron Rushing, a frequent Finneran critic who is helping to marshal opposition to the bill, said the possibility of a legal threat will make it harder for Finneran to get the votes he needs.
Globe correspondent Brendan McCarthy contributed to this report.
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The Boston Herald
Wednesday, July 2, 2003
Foes of speaker's pay-raise bill promise lawsuit
by Elisabeth J. Beardsley
House Speaker Thomas M. Finneran's controversial pay raise bill is headed for a court battle if the House boss succeeds in pushing it past Gov. Mitt Romney's veto, opponents said yesterday.
In vetoing the bill, Romney last week cited a 1996 Supreme Judicial Court case barring lawmakers from hiking leadership pay through their own internal rules, rather than by statute.
The rules route, which would deny the governor the ability to review legislative pay hikes, is exactly what Finneran has sought.
If the speaker musters a two-thirds vote to override the veto, Citizens for Limited Taxation said it's ready with a lawsuit. "The constitution is a sacred document," said CLT chief
Barbara Anderson. "This definitely has to be stopped."
House Majority Whip Lida E. Harkins countered that some joint committee pay stipends are handled through the rules. "What makes this any different?" Harkins (D-Needham) said.
Top House lieutenants have been canvassing lawmakers, trying to overcome a new 26-vote deficit after 13 House Republicans who originally voted with Finneran opted to stand with Romney. Rep. Carol A. Donovan, who was absent for the first vote, said she received three calls from Finneran's team - but said no, despite favoring bill elements that merely create new committees. "If it was a pure bill ... I could do it," Donovan (D-Woburn) said. "But (Finneran) had to sneak through this whole rules change."
But other reps who voted against the bill are wavering. "I think it's been so blatantly manipulated by the governor," said Rep. Elizabeth A. Malia (D-Cambridge). "That makes me really angry."
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The Boston Globe
Wednesday, July 2, 2003
Governor's vetoes to be overridden, legislators say
By Rick Klein, Globe Staff
Legislative leaders yesterday criticized Governor Mitt Romney's $201 million in budget vetoes, vowing to override most of them to preserve important state services.
"Not only did it go to the bone, it goes through the bone," Senate President Robert E. Travaglini said, pointing to the extra $57.1 million the governor slashed Monday from aid to cities and towns. "I'm very disturbed. But we'll remedy that very shortly."
A top member of the House Ways and Means Committee, which initiates all veto overrides, said he also expects the Legislature to overturn the majority of the governor's spending reductions.
State Representative Peter J. Larkin, the committee's assistant vice chairman, called the vetoes "stunning" and said the committee would "respond accordingly."
The two made their comments as advocates descended on the State House lobbying for overrides. Veto overrides require two-thirds votes in the House and Senate, margins that are fairly easy to get in the heavily Democratic bodies.
Romney aides defended the governor's vetoes, saying he was simply fulfilling his obligation to maintain a balanced budget. They cited a Massachusetts Taxpayers Foundation report that found the Legislature's budget underfunded accounts by at least $230 million.
Shawn Feddeman, the governor's press secretary, repeated Romney's charge that the Legislature's adoption of more of his proposed reforms would have reduced the need for such cuts.
"The governor takes his constitutional responsibility to balance the budget very seriously," Feddeman said. "The easiest and the best way for the Legislature to avoid these cuts would be to fully embrace the governor's reform agenda."
But legislative leaders pointed out that they went beyond the governor's revisions in some areas and that their $23.14 billion budget would spend $100 million less than Romney's proposed budget.
Senate Ways and Means Committee chairwoman Therese Murray said Romney's budget cuts appear to be politically driven, with him positioning himself as the voice of fiscal conservatism to help the Republicans' cause.
"I would say it's all run through his political polling operation," said Murray, a Plymouth Democrat. "This is not fiscal responsibility. This harms the economy. This harms people. And it's morally reprehensible."
About 100 advocates for the mentally disabled rallied at the State House yesterday and held meetings with individual lawmakers, calling for Romney's vetoes to be overturned. On Monday, the governor trimmed $4.9 million from the Department of Mental Retardation, which was already slated to be cut by nearly $9 million in the Legislature's budget.
"It's way beyond what's fair and reasonable, and what we can absorb," said Mary Lou Maloney, legislative liaison for Arc Massachusetts, an advocacy group for mentally retarded residents.
The Massachusetts Bar Association decried cuts to legal aid to the poor, saying they would "cripple the availability of legal services to our neediest citizens." William J. Leahy, chief counsel of the Committee for Public Counsel Services, said Romney's vetoes of $15 million for such legal representation would deny many citizens their constitutional right to be represented by a lawyer in court.
"Unless they are promptly overridden by the Legislature, they will forever mark the day when the Commonwealth turned its back on the enforcement of the right to counsel," Leahy said in a prepared statement.
The cuts seemed inexplicable to many advocates in light of the generally encouraging fiscal news flowing from the state Department of Revenue. Romney said Monday that the state was finishing fiscal 2003 with a small surplus, though he added that weeks of tax return processing must take place before the precise number is determined.
"The governor overreached with his veto pen," said Stephen E. Collins, executive director of the Massachusetts Human Services Coalition. The coalition is trying to persuade the Legislature to reverse about $100 million in cuts to health and human services and programs for the elderly.
"We certainly don't blame anyone in the State House for being cautious, but the most recent numbers have been good," Collins added.
In Somerville, Mayor Dorothy Kelly Gay predicted that 20 city employees would lose their jobs if the $1 million veto in aid to her city is allowed to stand.
"The campaign is over and it's time to govern," she said. "To govern, you need to keep a government in place."
Feddeman dismissed the mayor's criticism as "ridiculous." She said excessive pay raises for police officers and firefighters, as well as overly generous health care benefits, are the true culprits for Somerville's budget woes.
"With good management, the city should be able to live within their budget," Feddeman said.
Still, the breadth and depth of the cuts Romney called for stoked anger among top lawmakers. Many said Romney had indicated his budget vetoes would be relatively minor.
"He spread the pain to every corner of the Commonwealth with these cuts, and I just think they're unnecessary," said Larkin, a Pittsfield Democrat.
Also yesterday, the 18 protesters who were arrested outside the House chamber Monday for refusing to leave appeared in Boston Municipal Court. Four pleaded no contest and agreed to perform 20 hours each of community service, and the other 14, including Boston City Councilor Chuck Turner, pleaded not guilty to criminal trespassing charges.
"We would encourage people to express their dissatisfaction with the Legislature throughout this year," Turner said.
Globe correspondents Brendan McCarthy and Benjamin Gedan and Raphael Lewis of the Globe Staff contributed to this report.
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The Boston Herald
Wednesday, July 2, 2003
A Boston Herald editorial
Gloom and doom in Boston
Boston Mayor Tom Menino likes playing budget Santa Claus a whole lot better than budget
grinch, which would explain his rather churlish reaction to the budget vetoes issued Monday by Gov. Mitt Romney.
"I guess campaign promises, after you're elected, you don't have to keep them. All the programs that affect people, this administration has cut," growled Menino. Well,
harumph!
The mayor has been able to have it both ways this budget season - preparing a worst-case budget based on a possible $100 million cut in local aid, and then doling out goodies when the Legislature ultimately ended up cutting $36 million.
Menino's recent "restoration" budget was full of good news: 60 new police hires here, 40 firefighters spared from layoffs there.
Now Romney, faced with a budget some $200 million out of balance, has had to cut some more - in Boston $10 million more - in local aid to cities and towns.
But even with the additional funding cut, Boston's total reduction is well under the drastic scenario Menino was prepared to deal with.
Of course, even under that scenario, a Boston Municipal Research Bureau report found that the mayor was able to protect core classroom instruction, all those gloom and doom predictions to the contrary.
In his January State of the City Address, Menino was much more understanding of Romney's challenge, saying "The national recession is prolonged and painful, so we are reducing the size of municipal government ... We need to do more with less."
Nothing's changed since then but Menino's political posture.
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The Boston Herald
Wednesday, July 2, 2003
Tax foes justified in being skeptical
by Tom Keane
Politicians have a credibility problem.
And in this year of massive budget cuts, that's deeply frustrating to many in and outside of government. The Massachusetts Municipal Association warns of "dramatic service reductions." Human services advocates fear a "bloodbath." The solution, they all argue, is to raise taxes.
Yet, voters don't believe it.
The electorate nearly abolished the state income tax last November in an anti-tax and anti-government paroxysm that continues unabated today. Even at the local level, for instance, where government spending is more transparent and easier to understand, overrides of the Proposition
2½ property tax limit are difficult to manage.
The latest was in Milton, where voters 10 days ago rejected a proposed override. The arguments were familiar. Supporters of the tax increase warned of layoffs and the destruction of a decent public school system. Opponents in effect called them liars. "We've been listening to that story for too long," Milton Selectman James Mullen told a Herald reporter.
And, unfortunately, politicians continue to provide the skeptics with plenty of ammunition. Here is but a small example, drawn from this year's budget negotiations for the city of Boston.
In April, looking at projected cuts of $100 million in state aid, Mayor Thomas Menino unveiled a budget that made some radical changes in spending. One of those was a proposal to save $2.1 million by contracting out custodial services at approximately 60 local schools.
It was hardly a novel idea. Other city buildings, including City Hall and 1010 Massachusetts Ave., use private custodial services. The Boston Municipal Research Bureau, a budget watchdog, had long argued for the reform. Moreover, in its 1999 contract with the custodians union, the administration had fought for (and made expensive concessions for) the right to contract out services, as long as the jobs of existing custodians were protected.
Saving money without reducing services - you would have thought this would have been an easy one.
To the contrary. The fate of the custodians became the most contentious budget item of the year.
Shortly after Menino released his budget, machinations at the State House caused an important change. The House came up with new numbers: Instead of the $100 million cut Menino had feared, state aid would be cut by only $26 million.
Administration officials were delighted, figuring this would allow them to add back some important items such as a police class and additional funding for teachers. City Council members agreed to those add-backs but, with close union ties, they had a different agenda. With the prospect of more money than anticipated coming out of the state, the council's Ways and Means Committee saw an opportunity to stop the privatization the unions dreaded. It rejected the school department's plan for reforming custodial services.
At one point, in fact, the council toyed with the incredible requirement that it would force the school department to add another 20 custodians. Meanwhile, however, the Senate, in its review of the state budget, had come up with more pessimistic numbers than the House: a cut of $39 million vs. $26 million. (The final number was $36 million, although this week's vetoes by Gov. Romney could make it $46 million or more.)
Given this, even the most ardent union proponents on the City Council knew that adding to the number of custodians wouldn't fly. Together with the union, they devised their own proposal: contracting out would be prohibited altogether, but the school department could hire 125 part-time custodians. The savings theoretically would be $1.2 million (because the school department would have to supervise those custodians, however, the actual savings probably would be less).
The difference? At least $900,000. To school officials, facing the prospect of cutting 419 teaching positions, that missing money could better have been used in the classroom.
So why did the City Council end up siding with the custodians over the school department, in effect choosing the union over the kids?
Reforms like contracting out are an anathema to public employee unions. Throughout the spring, union leaders made it clear to councilors that it was a key litmus test. Those who refused to follow labor's line would be denied its support, something that would prove particularly embarrassing at this year's Labor Day breakfast.
The City Council's decision, as Sam Tyler of the Research Bureau puts it, "was a good political move, but not a good educational move."
And it provides two important and depressing lessons.
One is that it is only under the most severe budget pressure that politicians will genuinely consider reform. If that pressure is lessened, as happened when the projected state aid cuts were reduced, they will quickly abandon those efforts.
The second is that even in the tightest of budgets, politicians still too readily trade off the broad public good for their own political interests.
The skeptics, it appears, are right.
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The Boston Herald
Wednesday, July 2, 2003
Mitt whacks hack caught siphoning an MWRA pension
by Howie Carr
The hack du jour is Mike Ralph of the Mass. Water Resources Authority (MWRA). Ralph, a former coat-holder for Tip O'Neill, has at least two things in common with Rep. Patches Kennedy.
No. 1, he's never worked a bleepin' day in his life.
No. 2, he has been known to take a drink under extreme social pressure.
This week, the 56-year-old layabout tried to pull an unarmed robbery at the State House. With the assistance of Sen. Robert Havern (D-Arlington), he managed to insert into the state budget an outside section, Sect. 655, which would have jacked up a single state pension - his. With another budget rider, Mike Ralph came
this close to more than doubling his monthly kiss in the mail.
Right now, Mike Ralph could cash out with $34,550 a year.
Had Gov. Mitt Romney not vetoed the two outside sections, Ralph's grab would have gone up to $72,220 a year.
Budget crisis? What budget crisis?
Calls to the two stick-up artists - Ralph and Sen. Havern - went unreturned yesterday.
A bit of background on this Ralph. He is an old North Cambridge boy, a hack's hack, and once Tip announced he was all done in '86, the MWRA picked Ralph up on waivers.
I hadn't thought about Ralph since 1998, when he ingested a bad ice cube and slammed his car into a private house in Medford one morning at 3:30 a.m. At the time of his OUI arrest, Ralph was making $90,744. He is now up to $109,393. You can't keep a good hack down, not at the MWRA anyway.
As the MWRA's "director of public affairs," he's responsible for supervising the agency's State House lobbying efforts. Mostly, it appears, Ralph's been lobbying for himself, free-lancing.
He got Havern, the patron saint of MWRA hacks, to sneak a paragraph into the Senate budget that would allow Ralph to move over his years on the U.S. House payroll to the MWRA retirement system.
Mike Ralph would, of course, pay a pittance to "buy" those years back. In return, he would have reaped an extra $450,000 over the course of his "retirement" - as if he hasn't already been retired his whole career.
Anyway, this stink-bomb sailed through the entire legislative process until the budget reached the governor's desk. Since 655 only affected the
MWRA, Romney's people placed a call to the agency, where it was quickly determined it was, in fact, a payoff to one guy - Mike Ralph. Said Fred
Laskey, MWRA executive director: "Neither the board nor the senior staff had any part in this legislation."
Will there be any disciplinary action against Ralph?
"It's premature. We're still trying to sort out what happened."
I'll tell you what happened, Fred. This vermin had nothing to do except scheme, and being a hack, all he ever thought about was his pension. He saw his opportunity, and he took it.
Alas for Ralph, Gov. Romney vetoed Sect. 655, as well as 616, which would have authorized a new early retirement program. Of course, had 655 and 616 sailed through, Ralph's ripoff would have still needed a sign-off from the MWRA retirement board, whose executive director is Brian Leahy, a onetime Dorchester ward boss for Kevin White. He was sponsored at the MWRA by someone named
Bulger. The Bulgerite Leahy now makes $88,786.
Oh well, it was a nice try. For close to a half-million bucks, it was worth a shot. Tip would surely have approved. And one last thought: Do you think Gov. Shannon O'Brien would have vetoed Sect. 655?
Howie Carr's radio show can be heard every weekday afternoon on WRKO AM 680, WHYN AM 560, WGAN AM 560, WEIM AM 1280, and WXTK 95.1 FM.
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The Boston Herald
Wednesday, July 2, 2003
State claims abandoned assets:
New law leads to record $234M infusion
by Jon Chesto
The state treasurer's office collected a record level of abandoned assets in the past 12 months, drawing more than $230 million in cash for the fiscally strapped state.
The banner fiscal year, which ended Monday, stemmed largely from a change in state law in March that sped up the way that demutualized insurance firms hand over the value of unclaimed shares to the state.
The 2003 fiscal year's total of $234 million passed the state's next best year in 1993, when $168 million in abandoned assets arrived after another law change.
Mark Cavanagh, deputy treasurer under Treasurer Tim Cahill, said the demutualizations of Prudential, MetLife and John Hancock combined drew more than $70 million in cash in the past year.
The windfall went to the state's "rainy day" fund, said Sen. Therese Murray (D-Plymouth), head of the Senate's budget committee.
The money came from the stake that former policy-holders had in the firms before they became publicly traded. When insurers go public, they offer their policy-holders cash or stock for the firm's value. But if the insurers can't find the policy-holders after a three-year period once they go public, the firms hand the "abandoned property" to the state.
The new law requires insurers to give those assets to the state three years after their last contact with the policy-holder, or three years after demutualization, whichever comes first. Without the law change, the three insurers' assets would have arrived in 2004 and 2005, Cavanagh said.
The record year spanned two treasurers' tenures, as former Treasurer Shannon O'Brien ran the office until mid-January. O'Brien's team also helped last year's figures by selling $37 million worth of stock that had been held as abandoned property, Cavanagh said.
Despite the fact that Cahill's office has moved nearly all the abandoned cash to the state's budget coffers, owners of abandoned property or their heirs have no time limit on when they can be reimbursed for their "lost" assets.
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