CLT
UPDATE
Monday, December 15, 2003
Revenue climbing, residents bailing
out, Big Dig party spiked
The recovering economy will pump hundreds of millions of extra tax dollars into the state's coffers, significantly shrinking a projected 2005 budget shortfall that was pegged at $2 billion just two months ago, according to officials and economists who testified at a Beacon Hill hearing yesterday....
"The state is lagging, but ... we're looking at real economic growth for the first time since 2000," said Kriss, who also cautioned that "we're still looking at significant cuts in some areas." ...
Other witnesses at yesterday's hearing offered even rosier predictions. The Massachusetts Taxpayers Foundation said it expects the state to collect about $620 million more than projections ...
"I'd say it's the first good news in a long time," said Michael J.
Widmer, who heads the Taxpayers Foundation, a business-funded nonprofit that studies taxes and government spending....
"We think, quite frankly, that the state could be a little looser with the purse strings, based on this news," said Stephen E. Collins, executive director of the Massachusetts Human Services Coalition....
The Boston Globe
Tuesday, December 9, 2003
Easing of state budget shortfall seen
New tax revenue might avert cuts
The latest economic forecast from the Massachusetts Taxpayers Foundation predicts significant revenue growth in the next 18 months, but it is unlikely to spread seasonal joy among the advocates of stepped-up spending.
The foundation presented its forecast at the Statehouse yesterday to the legislative Ways and Means panels and the Romney administration financial team.
A Telegram & Gazette editorial
Tuesday, December 9, 2003
Murky outlook:
Spending commitments outpace revenue growth
What a difference a year makes. Last December, the state government faced an almost incomprehensibly large deficit of $2 billion. By January 2003, it had grown, unbelievably, to $3 billion.
And now? No one's shouting it from the rooftops, but at legislative hearings this week administration officials and outside economists allowed that, perhaps, things just might be getting a bit better. To be sure, they were subdued about it. The next year would see some "modest revenue growth," said Michael
Widmer, who heads up the Massachusetts Taxpayers Foundation. State budget chief Eric Kriss, while acknowledging an improvement, stressed, that "the state still is lagging."
...
They understate the case. If the recent stunning rise in economic indicators holds true, Massachusetts may be headed for one of the fastest turnarounds it has ever seen. A year or two from now, we very well may be awash in cash.
Pop the champagne corks! Break out the truffles! It's time to gorge again!
The Boston Herald
Wednesday, December 10, 2003
Economy rebounding but hold the party
By Thomas Keane, Jr.
If the middle class is the foundation of strong communities, the Bay State is in a heck of a lot of trouble, according to a new study showing that an increasing number of well-educated, native-born people are fleeing Massachusetts for other New England states that offer a more affordable living....
Robert Nakosteen, professor at UMass-Amherst, said findings contained in the report he co-authored "illustrate a challenging economic reality: jobs are not enough to attract and keep workers in Massachusetts. Clearly, families are considering a range of factors - including those impacting quality of life - when deciding where to make their home.
Making the entire Bay State an attractive and affordable place to work and live is in the best interests of all.
A Springfield Republican editorial
Monday, December 8, 2003
Mass. exodus signals need for policy shift
After a week's worth of mental gymnastics trying to find a way to pay for Friday's planned celebration of the Interstate 93 southbound tunnel opening, Big Dig officials canceled the event yesterday....
Citizens Bank had contributed $250,000 toward it, but Big Dig officials later revealed safety and security expenses could bring the actual cost to $450,000, which the bank balked at paying.
Officials from Romney to a majority of the project's board members decried any use of public money to make up the difference, including House Speaker Thomas Finneran ...
Gerard Cassidy, a bank analyst at RBC Capital Markets, called the decision "a fitting end to a costly project" and said the fiasco did little to raise Citizens' goodwill....
Of the ill-fated party for the budget-busting project, he said, "Why should it have surprised anyone that the party would in itself turn out to cost too much money? ... It would have been shocking if the party came in under budget."
The Boston Herald
Saturday, December 13, 2003
Party's over: Big Dig bigwig caves in on $450G shindig
Chip Ford's CLT
Commentary
There goes the so-called Massachusetts Taxpayers
Foundation again, circulating a defective study to affect state fiscal
policy -- but this time it's news.
This time the MTF admitted up front that its
projections are flawed, that they are "more unlikely than
likely."
In his column last Wednesday ("Economy rebounding but hold the party"),
Boston Herald columnist Thomas Keene, Jr. noted:
Take for example, the MTF's estimate. It based projections upon predictions about national and state economic growth. The numbers, prepared in October before the most recent spate of good economic news, were decidedly pessimistic. For example, they assumed that the current national unemployment rate was 6.3 percent and would rise slightly next year to 6.4 percent. Yet the unemployment rate today is actually a much lower 5.9 percent and is dropping steadily.
In other words, the MTF - and pretty much everyone else - is relying on excessively grim economic data. The MTF admits as much. Given the third quarter results, its projections are now "more unlikely than likely," says the foundation's Cam Huff.
MTF's unemployment figure already is off half a
percentage point (out of about six percent) in the wrong direction --
about a 16 percent differential -- in an apparent attempt to distract
from the economic recovery. It's more difficult for MTF to advance its
tax hike agenda if anticipated state revenue is surpassed by actual
collections.
MTF missed its best opportunity to impose a higher
tax burden on average taxpayers. Had MTF gotten its way last year, state
government would now be taking more from us as we watched more of our
earnings pour into the state's coffers. Any hope of state fiscal reform
would have been smothered in the cradle, crushed once again thanks to
MTF's historic interference.
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Results from the MassInc report, MASS.migration,
"illustrate a challenging economic reality: jobs are not enough to attract and keep workers in Massachusetts. Clearly, families are considering a range of factors - including those impacting quality of life - when deciding where to make their
home," said Robert Nakosteen, a professor at UMass-Amherst and
report co-author.
"Making the entire Bay State an attractive and affordable place to work and live is in the best interests of
all," concluded a Springfield Republican editorial ("Mass. exodus signals need for policy shift")
on December 8.
Can this mean that the Springfield Republican --
which has never seen a tax or tax hike it hasn't endorsed -- has finally
recognized the results of its tax-and-spend advocacy? I doubt it, as it
made no reference to one of the report's quiet but critical
observations:
"If we consider the net migration year-by-year
over the last twelve years, however, we find that in every single year,
Massachusetts lost more people than it attracted -- including those
years of extraordinary economic expansion...."
"The majority of that loss is to New Hampshire,
to which 78,201 former Massachusetts residents, on net, fled between
1990 and 2002. The fact that Massachusetts is losing people to New
Hampshire is not new, although the size of the loss has been increasing
over the last five years...."
"In fact, the number one reason for wanting to
move was 'to go somewhere with a lower cost of living or lower
taxes.'"
I read the report in its entirety ... and
carefully. Can I truly be the only one who caught the number
one reason for state residents' wanting to bail out of
Massachusetts?
Of course, I expected that if the MassINC report was
legitimate (as their reports usually are), our high tax burden had
to be included somewhere as a consideration for emigration. Granted, it
did take a bit of reading to find it, but there it was, "the
number one reason for wanting to move"!
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I followed the latest Big Dig fiasco last week but
didn't expect Big Dig czar and MassPike chairman Matt Amorello's
toll-and-taxpayer-funded party would happen in the end: not with
the immediate and near-universal barrage of disgust and outrage. Not
even in Taxachusetts.
On Wednesday Boston Herald columnist Howie Carr wrote
("Underground party tosses more money down a hole"):
You'd think Fat Matt Amorello would just be satisfied with his $223,000-a-year sinecure at the public mammary, and his Web site, and his office with all the photos of himself. But no. He has to have a party every few months. So what if all the top pols in the state now treat him like he was Jim Kerasiotes or something. Yesterday he was bragging about how many people were going to show up at his "time" next week.
"We already have 800 RSV's," he said, although surely he meant to say RSVP's. How many of his RSV's do you suppose are employees of either the Big Dig payroll or Citizens Bank?
Here's the final paragraph of a letter he's sent out to at least one top state official about the party:
"The Boston Pops! A tour de force to conclude the most impressive public works project since the Pyramids!" - The Pyramids! You can't make this stuff up. From now on, Fat Matt is known as The Pharoah.
Two days later "The Pharoah" tossed in the
towel and cancelled his bash, as expected. Nobody, not even the
imperious Big Dig czar, could stand up to that kind of white heat. Talk
about utterly out of touch, Amorello is the term's definition in action.
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Chip
Ford |
The Boston Globe
Tuesday, December 9, 2003
Easing of state budget shortfall seen
New tax revenue might avert cuts
By Scott S. Greenberger, Globe Staff
The recovering economy will pump hundreds of millions of extra tax dollars into the state's coffers, significantly shrinking a projected 2005 budget shortfall that was pegged at $2 billion just two months ago, according to officials and economists who testified at a Beacon Hill hearing yesterday.
The increased revenue would relieve at least some of the fiscal pressure on Governor Mitt Romney and lawmakers, who were anticipating another round of painful cuts in programs and services in the upcoming fiscal year. Romney, who will begin the budget debate when he presents his own blueprint next month, has vowed to veto any broad-based tax increase. Eric Kriss, Romney's top budget aide, described yesterday's testimony as "the first positive looking economic news most of us have heard in three years."
As recently as last month, Kriss described the state's revenue numbers as disappointing, and a year ago he declared that the Commonwealth was facing its worst fiscal crisis since the Great Depression.
But a spate of positive national economic news has convinced the budget chief, the administration's outside economic advisers, and independent analysts that Massachusetts is poised for a turnaround.
"The state is lagging, but ... we're looking at real economic growth for the first time since 2000," said Kriss, who also cautioned that "we're still looking at significant cuts in some areas."
The state has slashed about $3 billion in spending on health, education, and other programs in the past three years.
Shortly after the hearing, Romney said that "all signs point to a recovery in our economy, both in Massachusetts and the nation as a whole."
"That obviously will be very helpful to us in meeting our needs this year and in preparing for next year's budget," he said.
The administration, which bases its revenue projections on the work of three different groups of economists, now expects to collect as much as 3.6 percent more than it took in last year, far exceeding the 0.5 percent growth on which the fiscal 2004 budget is based, Kriss said. That translates to as much as $489 million extra for 2005.
Other witnesses at yesterday's hearing offered even rosier predictions. The Massachusetts Taxpayers Foundation said it expects the state to collect about $620 million more than projections, while the Beacon Hill Institute said it foresees a final tally of about $730 million.
"I'd say it's the first good news in a long time," said Michael J.
Widmer, who heads the Taxpayers Foundation, a business-funded nonprofit that studies taxes and government spending.
While the monthly revenue numbers haven't yet shown it, he said, "what all the forecasters are picking up on is that the national economy seems to have kicked into a higher gear, and there are at least some initial signs of the turning around of the economy locally."
But Senator Therese Murray, chairwoman of the Senate Ways and Means Committee, said she is worried that the recovery is not producing new jobs at a rapid rate.
The state relies heavily on personal income tax for revenue, but the administration's economic advisers project that employment in the second half of fiscal 2004 will only rise between 0.2 percent and 0.7 percent above the second half of last year.
"I haven't seen any real job growth," Murray, a Plymouth Democrat, said during the hearing. Afterward, she told State House News Service that the numbers are "not as rosy as people think."
Two months ago, Murray predicted a 2005 shortfall of nearly $2 billion. Murray based her estimate on a revenue increase of 2 percent. Murray's House counterpart, Representative John H. Rogers, could not be reached for comment on the predictions made public yesterday.
The new, more optimistic predictions fall short of the state's typical revenue growth rate, which is about 6 percent a year. But they are a far cry from the figure during the depths of the fiscal crisis: Revenue declined 14.6 percent in the 2002 fiscal year. State revenue has increased since then, in large part because of a $1.1 billion tax hike.
Advocates for the health, welfare, and education programs that are likely to be targeted as Romney and the Legislature try to close any remaining shortfall were heartened by yesterday's hearing.
"We think, quite frankly, that the state could be a little looser with the purse strings, based on this news," said Stephen E. Collins, executive director of the Massachusetts Human Services Coalition. "We still have a long way to go to repair over $1.4 billion in cuts" to health and human services programs over the past several years, he said.
While the state almost certainly will collect more in taxes than it anticipated, it is likely to get less money than it expected from other sources, Kriss said. Federal aid will total $100 million less than the administration figured at the beginning of the fiscal year, and lottery revenues may fall short of the administration's projections by more than $200 million. State Treasurer Timothy P. Cahill has said that Romney's lottery numbers weren't realistic.
Kriss also said the Legislature might subtract additional dollars next month by overriding Romney's recent vetoes of parts of two bills lawmakers approved at the end of the legislative session last month. Just before Thanksgiving, Romney vetoed $50 million of the roughly $100 million economic stimulus package that cleared the House and Senate and $30 million of the $111 million in extra spending lawmakers added to the budget for the current fiscal year. The governor signed the two bills after subtracting from them.
The stimulus package is largely composed of tax credits and grants designed to promote the growth of the technology industry, while the supplemental spending bill includes money to rehire rape counselors, cancel cuts to mental health and homeless programs, and deliver long-delayed raises to teachers and other workers at campuses of the University of Massachusetts.
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The Worcester Telegram & Gazette
Tuesday, December 9, 2003
A Telegram & Gazette editorial
Murky outlook:
Spending commitments outpace revenue growth
The latest economic forecast from the Massachusetts Taxpayers Foundation predicts significant revenue growth in the next 18 months, but it is unlikely to spread seasonal joy among the advocates of stepped-up spending.
The foundation presented its forecast at the Statehouse yesterday to the legislative Ways and Means panels and the Romney administration financial team.
On the revenue side, the prospect is mildly encouraging. The foundation predicts growth in state tax revenues of about 4 percent in both this fiscal year and fiscal 2005. The admittedly middle-of-the-road estimate assumes that the recent vigorous growth of the state and national economies will slow.
As the foundation notes, continued strong growth would boost revenues in fiscal 2005, but not this year.
The $15.42 billion revenue estimate for this year is $620 million higher than the $14.8 billion figure used by the Legislature and governor's office in developing the budget. The foundation estimates fiscal 2005 revenue at just over $16 billion, about $670 million more than the Romney administration's October estimate.
Although tax collections now are rising faster than inflation, they are growing at barely half the rate of state spending commitments. Some of the biggest commitments - health care programs, increases in pension costs resulting from state retirement policies and the Wall Street slump - continue to grow at a double-digit pace. (The state-federal Medicaid program for the indigent now accounts for roughly $7 billion of the $23 billion budget.)
The bottom line: Under the most likely scenario, higher collections will offset less than one-half of the state's $2 billion structural deficit.
That means municipalities can forget timely increases in local aid. Nor should cities and towns count on state spending commitments for local projects to be fulfilled anytime soon.
It also means that, barring bold corrective action on Beacon Hill (as opposed to ever deeper program cuts and ever higher taxes and fees), budget woes will dominate Massachusetts' political landscape for years to come.
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The Boston Herald
Wednesday, December 10, 2003
Economy rebounding but hold the party
By Thomas Keane, Jr.
What a difference a year makes. Last December, the state government faced an almost incomprehensibly large deficit of $2 billion. By January 2003, it had grown, unbelievably, to $3 billion.
And now? No one's shouting it from the rooftops, but at legislative hearings this week administration officials and outside economists allowed that, perhaps, things just might be getting a bit better. To be sure, they were subdued about it. The next year would see some "modest revenue growth," said Michael
Widmer, who heads up the Massachusetts Taxpayers Foundation. State budget chief Eric Kriss, while acknowledging an improvement, stressed, that "the state still is lagging."
They understate the case. If the recent stunning rise in economic indicators holds true, Massachusetts may be headed for one of the fastest turnarounds it has ever seen. A year or two from now, we very well may be awash in cash.
Pop the champagne corks! Break out the truffles! It's time to gorge again!
Well, maybe not yet. But the improving numbers will change considerably this year's budget debates. Sure, the fiscally responsible thing would be to stand firm and keep spending tamped down. But for the last two years we've been like kids salivating outside of a candy store. Once let in, it will be hard to resist.
Building a budget first involves figuring out how much you have to spend, a process in which the Legislature is now engaged. The lion's share of revenues boils down to annual collections from three sources: personal income tax, sales tax and corporate income tax.
All three are fickle, notoriously subject to the ups and downs of the economy. It's really pretty simple stuff. If people are unemployed, they don't pay income tax (they don't have any income) and don't pay a lot of sales tax (they're short of money to buy things). The same is true of businesses. If they're losing money, they're not paying income taxes either.
You can see that in the state's tax collections. In fiscal year 2001, the state collected an all-time high of $16.7 billion. The following year? Revenues collapsed, falling by $2.4 billion to $14.3 billion. Collections increased slightly in FY 2003 but after the effects of inflation, it wasn't much of an improvement.
But in a reversal of Newton's second law, in the economic world things go in cycles: What goes down must also come up. Slumps wreak havoc on tax collections. But economic recoveries pump up revenues dramatically.
How dramatically? At this week's hearing, the administration, the Massachusetts Taxpayers Foundation and the Beacon Hill Institute all presented their numbers. The Romney administration was the most conservative, predicting revenues next year would rise $489 million. The MTF forecast a $620 million increase. The
BHI, the most optimistic of all, estimated revenues would grow by $730 million.
They're all probably wrong.
Take for example, the MTF's estimate. It based projections upon predictions about national and state economic growth. The numbers, prepared in October before the most recent spate of good economic news, were decidedly pessimistic. For example, they assumed that the current national unemployment rate was 6.3 percent and would rise slightly next year to 6.4 percent. Yet the unemployment rate today is actually a much lower 5.9 percent and is dropping steadily.
In other words, the MTF - and pretty much everyone else - is relying on excessively grim economic data. The MTF admits as much. Given the third quarter results, its projections are now "more unlikely than likely," says the foundation's Cam Huff.
So what really might happen? If the MTF looks at a modestly less conservative scenario (and one that's still more pessimistic than current data would support), state revenues jump another $300 million. And if the economy surges? It could be the '90s all over again.
Which should serve as a warning.
When it comes to budgeting, the time to start planning for the next recession is when the current one is ending. Massachusetts' mistake last time around was that it ignored what Gov. Mitt Romney and others call the structural deficit: Certain costs climb seemingly inexorably (this year, for example, Medicaid rose $600 million despite significant cuts). Moreover, human service needs rise during a recession. Given all that, one can see that it would make sense to hold back on new spending, funding programs we already have and adding to the state's rainy day fund so monies are there when they're truly needed.
Still, that will be hard to do. Everyone loves to spend. Mass Pike chief Matt Amorello plans to spend $200,000 in public funds for yet another foolish Big Dig grand opening. Cities and towns can hardly be blamed for wondering why, if the economy continues to improve, the state can't find the funds to repair their bridges.
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The Springfield Republican
Monday, December 8, 2003
A Springfield Republican editorial
Mass. exodus signals need for policy shift
If the middle class is the foundation of strong communities, the Bay State is in a heck of a lot of trouble, according to a new study showing that an increasing number of well-educated, native-born people are fleeing Massachusetts for other New England states that offer a more affordable living.
In each of the last 12 years, Massachusetts has suffered a net loss of population to the five other New England states - especially to New Hampshire - according to the report,
"Mass.Migration" from MassINC, a non-profit, Boston-based think tank.
The numbers demand attention.
MassINC estimates that the Bay State experienced a net loss of 213,000 from 1990 to 2002 - more than any other New England state.
The out-migration slowed in the late '90s, but shot up again in 2001, raising the specter of another mass exodus - one the state can't afford.
When the people who grew up in Massachusetts "cannot necessarily afford a house in their parents' neighborhood," according to one of the study's authors, the pressure on the middle class needs to be addressed.
While the report made no recommendations, it is clear that the state's policy makers must redouble their efforts to address the out-of-control costs of housing and living in the Bay State.
The loss of a well-educated class of workers puts the commonwealth's economy at great peril, according to the study's authors. If the economic turnaround we're hearing about ever takes hold in Massachusetts, the state - and the Pioneer Valley - will need well-educated, highly skilled and trained workers to fill new positions.
It would be unfortunate if Massachusetts business leaders had to compete with five other states for any new jobs that might be coming New England's way - just because potential workers can't afford to put a roof over their heads.
There is some positive news tucked in the study, although readers may need rose-colored glasses to see it. It's that newcomers to Massachusetts tend to be highly educated. But even with the influx of some well-paid, college-educated workers (some 14,000-plus migrated to Massachusetts from 1990 to 2002) from high-tech regions such as New York, North Carolina and California, the state is a net loser in the race to keep the middle class on solid footing.
The "folks we are gaining, while certainly high-octane, are not compensating for those we are losing," said Michael D. Goodman, director of public policy research for the Donahue Institute at the University of Massachusetts, co-author of the study.
If those newcomers notice that native Bay Staters are heading for the hills of New Hampshire, will they be far behind? Clearly both newcomers and natives need a good reason to stick around. Jobs are one reason. So is an affordable cost of living.
Another interesting question raised by the report is: Where does Western Massachusetts fit into the portrait? One local real estate professional said he doesn't come across people in Western Massachusetts selling their homes to seek a more affordable way of life in another state - although some experts say it's just a matter of time.
The migration of some 78,000 Massachusetts residents to New Hampshire, on the other hand, may indicate some flight from the high cost of living just south of the border in Greater Boston.
Somehow the logic of moving west of Interstate 495 - say to Springfield - hasn't yet occurred to people who believe that the Boston metropolitan area is the center of the New England universe, at least not in enough numbers to overtake the out-of-state migration. Creating some east-west movement - of people and jobs - is something local economic development officials have urged for years. It's possible to commute from Western Massachusetts to the eastern part of the state for work. Better transportation options, such as a high-speed train, could make a daily commute from Springfield to Boston a reasonable alternative to hours in bumper-to-bumper traffic around Boston. And advances in the way people work - notably telecommuting - make new ways of working possible.
Still, developing affordable housing across the commonwealth must continue to be a top priority for policy makers - and that effort must be carried out beyond I-495.
Robert Nakosteen, professor at UMass-Amherst, said findings contained in the report he co-authored "illustrate a challenging economic reality: jobs are not enough to attract and keep workers in Massachusetts. Clearly, families are considering a range of factors - including those impacting quality of life - when deciding where to make their home.
Making the entire Bay State an attractive and affordable place to work and live is in the best interests of all.
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The Boston Herald
Saturday, December 13, 2003
Party's over: Big Dig bigwig caves in on $450G shindig
By Robin Washington, Jon Chesto, Eric Convey and Elisabeth J. Beardsley
After a week's worth of mental gymnastics trying to find a way to pay for Friday's planned celebration of the Interstate 93 southbound tunnel opening, Big Dig officials canceled the event yesterday.
"The public sentiments were not the directions we wanted to go in," Big Dig chief Matthew Amorello said. "Better to not do it and get on with the opening on the 20th," he said of the southbound Central Artery tunnel opening, which will go on without fanfare.
Gov. Mitt Romney, who had refused to attend the nearly half-million-dollar bash, said through spokesman Eric Fehrnstrom that project officials made the "right decision."
"The governor felt that anything that contributed to the perception of excess at the Turnpike Authority and the Big Dig should be avoided," Fehrnstrom said. "Now, hopefully the focus will be on finishing the job."
The gala celebration would have featured the Boston Pops playing the "Hallelujah Chorus" in the 65-foot-deep tunnel - at a cost of $175,000 -and Jumbotrons broadcasting the concert to downtown locations.
Citizens Bank had contributed $250,000 toward it, but Big Dig officials later revealed safety and security expenses could bring the actual cost to $450,000, which the bank balked at paying.
Officials from Romney to a majority of the project's board members decried any use of public money to make up the difference, including House Speaker Thomas Finneran, who was recovering from hip surgery yesterday and unavailable for comment.
But Finneran told the Herald earlier this week that "self praise is no praise," and called on Dig officials to stay focused on pushing the project across the finish line.
The Federal Highway Administration also banned any use of its funds on public celebrations, and said the project should not have used any funds on previous ceremonies, including walks of the Leonard P.
Zakim-Bunker Hill Bridge and the Bruce Springsteen concert at the bridge's opening last spring.
Mayor Thomas M. Menino, virtually the only major political figure to support the bash, said Amorello made the right choice.
"I support his decision," Menino said. "You had to take into consideration the use of public funds, especially with the deficit the Big Dig is running."
But he said the thousands of workers on the $14.625 billion project deserved recognition for creating the "engineering marvel."
"I would hope (Amorello) would have a celebration (for them,)" he said. "They did a great job."
Amorello said "Saturday morning (Dec. 20), we'll do something with the men and women who worked on it."
Citizens executives declined to offer more than a brief response to the news.
"We are pleased with the Turnpike Authority's decision," said bank spokeswoman Melodie Jackson. "We think it's the right one."
Amorello irked Citizens officials Wednesday when he issued a statement saying the project would use funds from Citizens earmarked for the Fast Lane program to make up the party's deficit.
Citizens then fired back with its own statement, declaring that it wouldn't give a penny more than its original $250K commitment.
Christy Mihos, a member of the Massachusetts Turnpike Authority board that oversees the Big Dig, expressed disappointment at the attempt to reappropriate Citizens' funds.
"Here, Citizens tries to offer a wonderful gift of $250,000and it just blew up like something I haven't seen in a long time," he said. "It would give any private business the chills to work within a system like this.
"I'm relieved that taxpayer and tollpayer money is not going to be wasted on another party," Mihos said. "The chairman owes the
tollpayers, the taxpayers and Citizens Bank a public apology."
Gerard Cassidy, a bank analyst at RBC Capital Markets, called the decision "a fitting end to a costly project" and said the fiasco did little to raise Citizens' goodwill.
"It may be an embarrassing situation for the time being," he said. "But in the end, I don't think Citizens will be harmed by it."
Of the ill-fated party for the budget-busting project, he said, "Why should it have surprised anyone that the party would in itself turn out to cost too much money? ... It would have been shocking if the party came in under budget."
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