CLT
UPDATE
Friday, June 18, 2004
Legislature passes FY'05 budget
Your editorial "Be prudent with surplus" (June 7) charged: "That loose change is burning a hole in Romney's pockets. Last week he gave into the temptation, unveiling a supplemental budget that not only spends the surplus but endorses an income tax cut that is anything but prudent."
The temptation is failing to learn from history....
The MetroWest Daily News
Tuesday, June 15, 2004
Chip Ford's letter to the editor
Return tax rate to 5 percent
House and Senate budget negotiators reached agreement late last night on a roughly $24 billion budget plan for fiscal 2005, the first in several years that doesn't include severe cuts in popular programs and services.
With state revenue increasing after a three-year slump, the legislative budget writers are proposing modest spending increases in K-12 education, criminal justice, and mental retardation programs....
The lawmakers' package does not include a broad-based tax increase, which Governor Mitt Romney had vowed to veto, and it relies on about $670 million from rainy-day reserves and other one-time revenues, or money that does not regularly flow into state coffers....
The Boston Globe
Tuesday, June 15, 2004
Panel reaches accord on $24b state budget
Policy issues left out of compromise
Gov. Mitt Romney ... has 10 days to review the $22.5 billion budget bill.
The spending bill pushes $1.6 billion in pension and school construction costs "off budget," creating more than $2 billion in such expenditures, when off budget state spending on the MBTA is also considered.
State House News Service
Tuesday, June 15, 2004
Budget negotiators make big reserve drawdown
to restore services
After three years of deep cuts in human services, the Legislature is set to approve a budget that restores health coverage for tens of thousands of low-income children, people with HIV, and immigrants and that increases spending on vaccination and other disease-prevention programs.
The $24.8 billion compromise budget for fiscal 2005 also includes $140 million more to pay for hospital care for the uninsured, whose numbers have soared since the economy soured....
"The tide has begun to turn for human services," said Michael Widmer, president of the Massachusetts Taxpayers Foundation, a business-funded nonprofit that monitors government spending. "The cuts have largely stopped."
But he said the small increases don't restore the approximately $3 billion in reductions across the budget in the last three fiscal years....
Another item would allow about 400 undocumented immigrants to qualify for in-state tuition at state colleges and universities as long as they have lived in the Bay State for three years, graduated from a Massachusetts high school, and filed an affidavit saying they are beginning the process of becoming a citizen. Supporters argue that it isn't right to punish students who may have been brought here illegally when they were toddlers, but the measure may put Massachusetts as odds with federal law.
The Boston Globe
Wednesday, June 16, 2004
Health is winner in budget talks Funds revive human services
The Massachusetts court system has just hired 130 new court officers to beef up security around the state.
If people think this is a good move, they don't know anything about how the patronage system works in Massachusetts. But maybe this fact will help: More than half of the 1,300 applicants for the jobs had recommendations from politicians or judges....
There is not much doubt the Legislature will approve the $5.2 million for the new hires. How can the pols go home and explain to their wives or husbands that Cousin Jimmy will have to get a real job instead of doing crossword puzzles at the courthouse? The way the system is set up, the politicians, judges and court workers all win. The only people who lose are the millions of taxpayers who support this corrupt system.
A Brockton Enterprise editorial
Wednesday, June 16, 2004
More workers for corrupt court system
The Legislature yesterday sent a timely $24.7 billion budget to Gov. Mitt Romney. It's the second year in a row that the state will have a budget in place in time for the start of the fiscal year on July 1. That's a good thing - demonstrating to employers and Wall Street that the state's fiscal picture has stabilized.
Stability is a virtue, but legislators still apparently see reform as a vice....
Lawmakers took a dive on any real public pension reform, and put off common-sense coordination of transportation agencies.
A Boston Herald editorial
Thursday, June 17, 2004
Reform in short supply
In the final days of her governorship in December 2002, Jane Swift quietly signed a bill that changed state law and shielded her from personal liability in a lawsuit brought by Christy
Mihos, the Massachusetts Turnpike Authority board member she fired earlier in her tenure.
The bill, attached to an unrelated bill and approved during an informal session on Dec. 27, requires the state to pay all legal costs and punitive damages up to $1 million for constitutional officers -- even if they lose a lawsuit that alleges they intentionally violated someone's civil rights.
The Boston Globe
Thursday, June 17, 2004
Swift OK'd a law that protects her
The legislation itself isn't troubling. State officials should not be burdened by fear they could be personally bankrupted by actions they take while in office, even actions, like firing
Mihos, that are politically self-serving.
What is troubling is the secrecy involved. The legislation was attached to an unrelated bill by House Ways and Means Chairman John Rogers and never publicly discussed. It was approved during an informal session, when issues of substance aren't supposed to be brought to the floor, and came to light 18 months after it was signed.
Had Swift or Rogers filed the bill openly and allowed the Legislature to debate it, we'd likely give it our support. But the way they did it stinks to high heaven, and reflects badly on Swift and anyone else who helped sneak the bill through.
A MetroWest Daily News editorial
Friday, June 18, 2004
A sneaky maneuver from Swift
Next year's state budget imposes a one-year moratorium on new charter schools. (Charter schools, part of the 1993 reforms, are public schools that exist free from local control and largely unfettered by traditional union work rules.) The moratorium, a seemingly mild proposal to explore improvements in the funding formula for charters, is a wolf in sheep's clothing....
What's going on here? Paul Grogan, the head of the Boston Foundation (which has encouraged the growth of pilot schools and would have given $100,000 to the Gardner to help it convert), blames the teachers unions. "Their vision of the future," he says, "is fighting everyone's good ideas for change." He's right. Competition is deeply threatening to unions' power and they have mobilized to stop it.
The Boston Herald
Friday, June 18, 2004
Education also needs taste of competition
By Thomas Keane Jr.
STATE BUDGET - HOW TO SPEND $24 BILLION
A five-part Patriot Ledger series -- see below
Chip Ford's CLT
Commentary
The Legislature passed its FY'05 budget this week and
sent it on to the governor. Its budget total came to $24.8 billion,
including "off-budget" spending (see CLT's "Truth
in Budgeting" explanation). We're gratified to see the media
reporting the budget's bottom line this year using that real
total, without the sleight-of-hand "off-budget" gimmick used
by the Legislature. It was even explained in one report. If the state is
spending then it's spending, whether on- or off-budget.
There's little reform included in it, nothing much if
anything improves in how our money's spent. In fact, one negative is the
"moratorium" on charter schools -- charter schools were an
integral part of the multi-billion dollar "Education Reform"
program. "Moratorium" to me sounds a lot like
"temporary" and "freeze" in Beacon Hill Speak. The
teachers unions can't tolerate competition, and doesn't feel bound to
honor its end of the Education Reform package now that it's got our
money, and managed to eliminate the threat ... for now at least.
But the teachers and other public employee unions are
losing big time on the local front! Last Saturday Abington
croaked three debt exclusions overrides, and this week Hubbardston,
Stoneham and Gloucester voters skunked pro-override forces big time too.
(Hubbardston: 316-48 or 87 to 13 percent; Stoneham: 5081-2222 or 69-31
percent; Gloucester: 4238-1041 or 80-20 percent, according to CLT
members!) We've got eight override questions on our Marblehead
ballot next week, so wish us luck.
It's business-as-usual on Beacon Hill. We learned
this week that outgoing acting-Governor Jane Swift took care of herself
on her way out, getting a law slipped through during an "informal
session" with the able assist of House Ways & Means Committee
Chairman John Rogers. If you ever wonder where we get our "them-vs-us"
cynicism, here's one more "bipartisan" example. There's only
two reasons for "informal sessions" and keeping the
Legislature "on the clock" year round: the first is so our
solons can keep collecting their per diems and the federal tax
write-offs; the second is so sneaky things can occur when nobody's
looking.
We've also been informed that the courts need another
130 "court officers" at an additional $5.2 million. If you're
not politically-wired, "connected," do you suppose you'd
stand a chance at one of these no-heavy-lifting slots?
|
|
|
Chip
Ford |
The MetroWest Daily News
Tuesday, June 15, 2004
Letter to the editor
Return tax rate to 5 percent
Your editorial "Be prudent with surplus" (June 7) charged: "That loose change is burning a hole in Romney's pockets. Last week he gave into the temptation, unveiling a supplemental budget that not only spends the surplus but endorses an income tax cut that is anything but prudent."
The temptation is failing to learn from history.
In 1989, when the income tax rate was last at its historic five percent, before it was hiked "temporarily" we were promised, the state budget was about $12 billion. Today, 15 years later, with new bookkeeping "off-budget" sleight-of-hand, all three branches have proposed a budget hovering at around $26.5 billion -- more than doubled since the "temporary" tax hike.
As we learned in the late '80s, and should have learned again in the late '90s in the latest cyclical economic downturn, so long as our money is on the Legislature's table excuses to not return it will abound and it will be spent, setting us up all over again for the next "fiscal crisis" and the next round of tax hikes to sustain the overspending.
It's past time to return the tax rate to five percent, as the voters in 2000 mandated at the polls. That debate should have ended with that vote four years ago.
Now is the time. If not now, when?
CHIP FORD, Citizens for Limited Taxation, Peabody
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The Boston Globe
Tuesday, June 15, 2004
Panel reaches accord on $24b state budget
Policy issues left out of compromise
By Scott S. Greenberger, Globe Staff
House and Senate budget negotiators reached agreement late last night on a roughly $24 billion budget plan for fiscal 2005, the first in several years that doesn't include severe cuts in popular programs and services.
With state revenue increasing after a three-year slump, the legislative budget writers are proposing modest spending increases in K-12 education, criminal justice, and mental retardation programs. But the plan wouldn't represent a return to the booming 1990s: Some agencies would receive the same amount of money they are getting now, which wouldn't be enough to cover growing costs, and some individual programs would be cut. Furthermore, the budget plan would not restore many of the reductions of the past three fiscal years, which total about $3 billion.
The lawmakers' package does not include a broad-based tax increase, which Governor Mitt Romney had vowed to veto, and it relies on about $670 million from rainy-day reserves and other one-time revenues, or money that does not regularly flow into state coffers. It does not envision state employee layoffs, despite a prediction of layoffs in April from House Ways and Means Committee Chairman John H. Rogers.
"This is the smoothest one I've ever been associated with," Rogers, a Norwood Democrat, said of this year's budget process.
The conference committee, composed of three legislators from each body, left several contentious issues out of the final compromise. The panel declined to include proposed measures encouraging stem-cell research, restructuring state transportation agencies, and repealing the 1913 residency law that Romney has used to block out-of-state gay couples from marrying in Massachusetts. The lawmakers said all three issues will be taken up separately in the coming weeks.
Members of the panel also said they restored funding for several agencies, such as the Department of Public Health and the Department of Environmental Protection, that would have lost money under the earlier House and Senate plans. Budget writers said they were able to tap extra federal dollars to accomplish that feat, but could not provide details late last night.
The full House and Senate still must approve the $24 million compromise, and Romney has the power to veto all or parts of the measure. The new fiscal year begins on July 1, and Romney and legislators are confident that a final budget plan will be in place by then.
In the last several months, the House and Senate approved separate budgets, and in meetings that began two weeks ago the conference committee plowed through 800 line items. But because the two blueprints didn't differ much on spending, the committee spent much of its time on policy questions rather than money.
The more liberal Senate was pushing for provisions promoting stem-cell research and eliminating the 1913 law, while the socially conservative House, dominated by House Speaker Thomas M. Finneran, resisted those measures.
The Senate's stem-cell proposal, which was pushed by Senate President Robert E. Travaglini, didn't include money for research. Instead, it expressed the Legislature's support for stem cell research and clarified that state law doesn't prohibit it. The goal was to give biotechnology companies the confidence to remain here rather than decamping for other states.
But many social conservatives view stem cell research, which usually involves the use of cells from human embryos, as a violation of the sanctity of life. The stem cell provision explicitly permitted the use of embryos in research, while banning the use of cloning to produce human beings. Nevertheless, opponents believe the use of embryonic stem cells is wrong, because those embryos could develop into fetuses.
Stem cells, which are found in human embryos, newborns' umbilical cords, and some adult tissues, have the potential to develop into a range of muscles, organs, nerves and other types of tissue in the body. But researchers are most interested in stem cells from human embryos, since they are the most versatile.
"Massachusetts needs to undergo a great deal of discovery on that issue; we want to get it right," Rogers said in explaining the decision to leave the stem-cell provision out of the budget.
Senator Therese Murray, chairwoman of the Senate Ways and Means Committee, said the issue remains a priority for Travaglini and promised that "we will be revisiting that."
The committee also debated whether to scrap the 1913 law, which bars out-of-state couples from marrying in Massachusetts if their marriages would be void in their home states. Since Massachusetts is the only state that currently allows same-sex marriage, the residency rule prohibits out-of-state gay couples from marrying here. The law was rarely enforced, and largely forgotten, for three decades. But it ended up at the center of the roiling gay marriage controversy when Romney, who opposes gay marriage, ordered city and towns clerks to enforce it.
Last month, the Senate amended its budget plan to repeal the law. But Finneran, who keeps a tight rein on the House, had said such a controversial issue should be debated on its own, not as part of the overall spending plan.
The committee also weighed a Senate proposal to integrate the state's transportation agencies and authorities by allowing the transportation secretary to lead a restructured Massachusetts Turnpike Authority board. It also would shift responsibility for certain highways to the Turnpike Authority. The panel also deferred that debate to a later day.
Globe correspondent Elise Castelli contributed to this report.
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State House News Service
Tuesday, June 15, 2004
Budget negotiators make big reserve drawdown
to restore services
By Amy Lambiaso
House and Senate budget writers filed a "progressive" compromise spending plan early this morning that drains $673 million from the state's reserves to help restore health and human service programs and maintain local aid and education spending.
"Just about every account that we all care about, we were able to go back and revisit and make it a little better than it has been in the past," Senate Ways and Means Committee Chairwoman Therese Murray (D-Plymouth) said at an afternoon press conference. Murray said budget writers aimed to maintain current levels of spending or increase funding when appropriate, with a specific emphasis on health care.
Negotiations between the six-member House and Senate budget conference committee concluded late Monday night and all six Democrat and Republican conference committee members signed onto the fiscal 2005 budget bill, which will likely be ratified by the House and Senate Wednesday and sent to Republican Gov. Mitt Romney. He has 10 days to review the $22.5 billion budget bill.
The spending bill pushes $1.6 billion in pension and school construction costs "off budget," creating more than $2 billion in such expenditures, when off budget state spending on the MBTA is also considered.
The new fiscal year begins July 1. Democrats eager to focus on the national convention coming to Boston in late July agreed to complete budget talks early this year, while leaving time to consider vetoes.
The compromise bill increases MassHealth spending by 11 percent, or $700 million, to fully fund children's health insurance, as well as breast and cervical cancer screening programs. Lawmakers also allotted $640 million to hospitals that provide care for the uninsured, a $140 million increase, with an additional $56 million going to community health centers that treat the uninsured.
"We in the Legislature recognize that it is our priority to reform the Uncompensated Care Pool," said House Ways and Means Chairman John Rogers (D-Norwood), referring to the state-administered pool that reimburses providers who care for the uninsured. "It is the single-most needed area of reform on which thousands of lives and thousands of jobs depend."
But while lawmakers celebrated their accord, the majority of ambitious policy reform proposals tacked onto the budget were held back to be separately debated at a later date. "The effort here was to get a budget done and on time that included what was necessary to be included," Rogers said.
Senate-approved initiatives legalizing stem cell research, allowing the re-importation of prescription drugs from Canada, establishing specific nurse staffing ratios, and repealing the 1913 marriage law that prevents out-of-state same-sex couples from marrying in Massachusetts were "held in conference" with scores of other policy proposals.
Rogers said such issues are "still in play," but Murray said reaching an agreement in the Legislature "might be difficult by the end of July."
Senate President Robert Travaglini told reporters there will be "continuations of discussions on at least two of the items" not included in the final plan, specifically stem cell research - a top priority for Travaglini.
"There is an acknowledgement that this is the beginning of an ongoing discussion and we are far from completing our action on those issues," Travaglini said.
Murray said the conferees were "very close" to agreeing on stem cell research language, but want to learn more about the issue from industry experts before moving forward legislatively. "We in the Senate are very interested in promoting the industry here in Massachusetts," she said.
In addition, Murray said a Senate-approved reform of the state's transportation agencies was held back to allow the House time to debate its own proposal, approved by the Transportation Committee last week. Once that bill is debated, Murray said, a separate conference committee will be appointed to hash out differences and negotiate a comprehensive reform.
Citing an imminent need to reform the way charter schools are funded, budget conferees included a one-year moratorium on any new charter schools until a new funding formula is in place. Murray said chairmen of the Education Committee are working on such a formula; budget negotiators were unable to agree on a new formula.
The budget plan also includes measures to relieve senior citizens struggling to pay rising property taxes with a local option exemption for income-eligible seniors. Under the plan, communities could opt to exempt low-income seniors from between 5 and 20 percent of their property tax bill.
Seniors enrolled in the first-in-the-nation Prescription Advantage drug insurance program will also see relief with a plan that dedicates $5 million for offsetting co-payments to participate in the program. Prescription Advantage is funded at $110 million for next year, a $14 million increase, and includes language allowing for a one-month open enrollment period for all seniors over 65 before Oct. 1.
Health care advocates and hospital representatives immediately applauded increases in health care spending and reimbursement for the so-called free care pool, calling it a "fantastic budget" that "truly addresses" pressing needs, said John McDonough, executive director of Health Care For All.
"They get high marks across the board," McDonough said, specifically noting that the budget fully funds Medicaid insurance for children, services for pregnant women, and the 3,000 disabled and elderly legal immigrants kicked off the Medicaid rolls last year.
Local officials, however, called on lawmakers to revisit Lottery distribution and local aid funding, citing the $150 million of Lottery revenue the state uses to balance its budget each year, rather than being distributed to cities and towns. The conference committee recommends returning that revenue to cities and towns with a formula that begins in fiscal year 2007.
"Cities and towns should not be forced to wait until fiscal year 2007 until they get access to money that is supposed to go to them," said Geoffrey Beckwith, executive director of the Massachusetts Municipal Association that lobbies for cities and towns on Beacon Hill. "They need access to this money now."
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The Boston Globe
Wednesday, June 16, 2004
Health is winner in budget talks Funds revive human services
By Alice Dembner and Scott S. Greenberger, Globe Staff
After three years of deep cuts in human services, the Legislature is set to approve a budget that restores health coverage for tens of thousands of low-income children, people with HIV, and immigrants and that increases spending on vaccination and other disease-prevention programs.
The $24.8 billion compromise budget for fiscal 2005 also includes $140 million more to pay for hospital care for the uninsured, whose numbers have soared since the economy soured.
"They solidly began ... repairing the damage of the past several years and addressing some significant health needs," said John McDonough, executive director of Health Care for All. "At least for now, state government has stopped contributing to the problem of the growing numbers of uninsured."
The House and Senate are expected to give final approval to the budget today and send it to Governor Mitt Romney, who can veto any provisions he disagrees with. A spokesman for Romney said he had not yet reviewed the budget and had no comment.
The budget compromise, which Senate and House leaders announced around midnight Monday, also includes a tax break on property for some seniors, lower tuition for some immigrants at state colleges, and a $5 fee for boat owners to pay for combatting a noxious aquatic weed.
Overall, lawmakers are proposing modest increases in most areas of the budget, although some programs would be cut and others would receive the same amount of money they are getting now.
Lawmakers were able to avoid substantial cuts with the help of slower than expected growth in the Medicaid program, rising tax collections, and the use of nearly $700 million from reserves and other money that does not regularly flow into state coffers. House Ways and Means Committee chairman John H. Rogers said the state believed that spending on Medicaid, the joint federal-state health program for the poor, would rise by 7 percent. But the actual increase is closer to 4 percent, giving budget writers another $250 million to spend. The budget includes nearly $7 billion for Medicaid.
"The tide has begun to turn for human services," said Michael Widmer, president of the Massachusetts Taxpayers Foundation, a business-funded nonprofit that monitors government spending. "The cuts have largely stopped."
But he said the small increases don't restore the approximately $3 billion in reductions across the budget in the last three fiscal years.
Spending on the Department of Public Health, which was among the agencies hardest hit during the state's fiscal crisis, illustrates the point: The department would receive nearly $389 million in the coming fiscal year, up from $368 million this year. But it got $535 million in fiscal 2001.
Included in the proposed public health budget is nearly $6 million more for vaccines than last year, which will restore immunization programs to prevent hepatitis, pneumonia, and meningitis in adults, according to Geoff Wilkinson, executive director of the Massachusetts Public Health Association. The budget also increased funding for school nurses and clinics that the governor had proposed eliminating.
Legislators also included a nearly $10 million increase for the Children's Medical Security Plan, which subsidizes health insurance for children of families who make too much to qualify for Medicaid, but can't afford private coverage. The money would cover all 15,000 children on a waiting list that began when the state capped funding in 2002.
That was welcome news to a Marlborough mother whose four girls have been on the waiting list for months. Maria do Socorro Leitao de Arruda said she and her husband make about $30,000 a year and do not get health coverage through their jobs cleaning and painting houses.
All four girls wear glasses, but she cannot afford eye exams, even though she knows at least one needs a stronger prescription. She is still paying off a $275 dentist's bill for her 11-year-old, who got fillings for three cavities months ago.
"I can afford to pay for one girl but what would happen if all four got sick," she said in Spanish, as one of her 13-year-old twins translated. "If there was an emergency, we couldn't afford to pay. This will give us security."
The budget fully funds the Medicaid Essential program, designed to cover 36,000 long-term unemployed adults cut from the budget in 2003. It restores coverage for 2,800 elderly and disabled legal immigrants, whose coverage would have expired at the end of September. And it will cover hundreds more people with HIV cut from Medicaid last year because their incomes were more than $13,000.
Also included is $24 million in raises for approximately 30,000 social workers, nurses, and aides who care for troubled children, the mentally ill, mentally retarded, homeless, and frail elderly at private agencies hired by the state.
Both houses rejected a controversial plan by the Romney administration that would have forced low-income patients on Medicaid to get primary care at community health centers instead of hospitals. They dropped a Senate proposal to mandate nursing staffing ratios at hospitals and a House proposal to prohibit doctors from referring patients to MRI facilities in which they have a financial interest.
Under the tax break for seniors, cities and towns could cut property taxes for individual seniors making less than $44,000 and couples making less than $66,000, offering exemptions worth between 5 percent and 20 percent of the average value of residences.
Another item would allow about 400 undocumented immigrants to qualify for in-state tuition at state colleges and universities as long as they have lived in the Bay State for three years, graduated from a Massachusetts high school, and filed an affidavit saying they are beginning the process of becoming a citizen. Supporters argue that it isn't right to punish students who may have been brought here illegally when they were toddlers, but the measure may put Massachusetts as odds with federal law.
A 1996 US law prohibits states from charging undocumented immigrants the lower rate, which in Massachusetts is about $6,800, as opposed to $12,000. Eight other states are defying the federal law, but the Federation for American Immigration Reform is readying a legal challenge in one of them.
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The Brockton Enterprise
Wednesday, June 16, 2004
An Enterprise editorial
More workers for corrupt court system
The Massachusetts court system has just hired 130 new court officers to beef up security around the state.
If people think this is a good move, they don't know anything about how the patronage system works in Massachusetts. But maybe this fact will help: More than half of the 1,300 applicants for the jobs had recommendations from politicians or judges.
The man in charge of the hiring, Robert A. Mulligan, said all the new employees would be hired on merit but we would like to know how many applicants with recommendations from Senate President Robert Travaglini or House Speaker Thomas Finneran did not get jobs. We also would like to know how many of the officers will be sent to Springfield and other courts that can actually use the help and how many will be sent to the Boston Municipal Court to gather cobwebs and watch the pensions grow.
If there is a true need for more court officers, no one has proven it to us. A report issued two years ago revealed that court caseloads had not increased in eight years, yet costs had soared by 79 percent.
These new court officers will not come cheap. Mulligan said it will cost $5.2 million, yet there is no money budgeted for them. Mulligan said he is confident (wink, wink) that the Legislature will come through with the cash.
Of course it will. The job of court officer, while vaguely necessary, has always been known as a patronage post. It is a hangout for a senator's unemployable brother-in-law or a rep's layabout cousin. These are not positions that do much to improve the quality of life for residents in Massachusetts or for anyone who spends time in a courthouse.
The problem is that, unlike in most other states, the Legislature has too much control over the court system. Every now and then, the Legislature makes budget cuts or at least threatens to make cuts to show the judges who is boss. That leads to the hiring of legislators' relatives, buddies and hangers-on to ensure the money keeps flowing. It is a poor system that Gov. Mitt Romney has tried to change, so far with little success.
There is not much doubt the Legislature will approve the $5.2 million for the new hires. How can the pols go home and explain to their wives or husbands that Cousin Jimmy will have to get a real job instead of doing crossword puzzles at the courthouse? The way the system is set up, the politicians, judges and court workers all win. The only people who lose are the millions of taxpayers who support this corrupt system.
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The Boston Herald
Thursday, June 17, 2004
A Boston Herald editorial
Reform in short supply
The Legislature yesterday sent a timely $24.7 billion budget to Gov. Mitt Romney. It's the second year in a row that the state will have a budget in place in time for the start of the fiscal year on July 1. That's a good thing - demonstrating to employers and Wall Street that the state's fiscal picture has stabilized.
Stability is a virtue, but legislators still apparently see reform as a vice. At least lawmakers didn't discriminate - bad ideas and good ones alike were nixed.
"It's an election year budget," an administration fiscal official said. "No controversy, and nothing the governor can take credit for."
Lawmakers took a dive on any real public pension reform, and put off common-sense coordination of transportation agencies.
The Legislature did approve public construction reform outside the budget process, so there's no need for Romney to throw the reform towel in just yet. Time is short, though. As revenue rolls in, the impetus for reform inevitably peters out. Keep the pressure on,
gov.
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The Boston Globe
Thursday, June 17, 2004
Swift OK'd a law that protects her
By Anthony Flint, Globe Staff
In the final days of her governorship in December 2002, Jane Swift quietly signed a bill that changed state law and shielded her from personal liability in a lawsuit brought by Christy
Mihos, the Massachusetts Turnpike Authority board member she fired earlier in her tenure.
The bill, attached to an unrelated bill and approved during an informal session on Dec. 27, requires the state to pay all legal costs and punitive damages up to $1 million for constitutional officers -- even if they lose a lawsuit that alleges they intentionally violated someone's civil rights.
Previously, state law said that the officials would be protected from having to pay damages if they were successfully sued because of actions taken in their official capacity, but not in cases where there was an intentional violation of civil rights.
The changed language -- never publicized, and tucked away deep in obscure legislation -- means that taxpayers will foot the bill if Mihos prevails in his civil rights lawsuit seeking over $1 million, which is still pending.
State ethics law states that public officials should not participate in actions that would have a direct impact on their personal finances. The signing of the bill was potentially worth $1 million to Swift.
Swift declined to be interviewed. But her attorney, Cheryl Cronin, said the extension of protection, known as indemnification, was much needed, so that public officials would be completely "free of concerns regarding personal liability in their day-to-day decision making." The extension, she said, simply gives governors the more sweeping protection that police officers have.
When asked whether Swift proposed the change, Cronin said, "I'm trying to take myself back and think what the genesis was, who might have drafted it. I honestly can't remember right now. Obviously she and her team believed that this was an important concept. She was favorably disposed to it, and thought it was the right thing to do."
Asked why the change wasn't openly debated or publicized, Cronin said it was not a significant modification but rather a clarification of the law. She added, "I disagree with the contention that it was hidden."
She also said Swift was under no obligation to recuse herself from signing the bill into law because it applied to constitutional officers generally, and did not refer specifically to Swift.
"Every time a governor signs a tax bill, it applies to their own circumstances," Cronin said. "Governors sign hundreds of bills each year that apply to their own circumstances. If they took the position they should recuse themselves in each of those instances, they could not govern."
The state Ethics Commission declined to comment yesterday.
House Speaker Thomas M. Finneran also declined to comment. When asked if Finneran was aware of the bill at the time it was passed, his spokesman, Charles Rasmussen, said he would find out but then did not provide an answer. House Ways and Means Chairman John Rogers, who offered the modified language as an amendment to a bill regarding the Steamship Authority and state trust funds on Dec. 27, 2002, did not respond to a request for comment. Both the House and the Senate passed the amended bill that day in informal sessions, in which only noncontroversial bills are supposed to be considered, and no roll calls of lawmakers' votes are taken.
A spokesman for Attorney General Thomas F. Reilly, who under state law will represent Swift in the Mihos lawsuit, confirmed that officials at the attorney general's office were aware of the change, and that the state will pay any damages if Swift loses. Reilly has "not formed an opinion" about whether it was an appropriate change to state policy, said the spokesman, Corey
Welford.
Mihos, who clashed with Swift in part because he fought increases in tolls to pay for the Big Dig, was fired by her in 2001. The firing was overturned by a Supreme Judicial Court ruling in May of 2002, and he was reinstated on the turnpike board.
Mihos says he wants to pursue his lawsuit, alleging Swift violated his First Amendment rights. But he said he doesn't want the taxpayers to pay if she loses.
"This was the ultimate special interest legislation," Mihos said. "It was self-dealing."
Last February, the Mihos lawsuit was sent to US Judge Nancy Gertner to be scheduled for trial. Reilly is preparing an appeal to the US Supreme Court, asserting that Swift has immunity.
Steve Crosby, who served as Swift's chief of staff, said that the Mihos lawsuit "was very much an issue" in the closing days of the administration.
When a federal judge ruled in December 2002 that the Mihos lawsuit could go ahead, the Swift team had "tremendous concern that this was a very egregious and aggressive lawsuit that was designed to damage the governor personally, not as governor, but personally," Crosby said. "We were concerned about that. The governor lives on her paycheck. Even paying the legal bills would be a major issue. Any constitutional officer would feel quite strongly about that."
Pamela Wilmot, executive director of Common Cause, said she was concerned that the policy change was whisked through in informal session in the closing days of the legislative session, and that Swift did not recuse herself when the bill reached her desk. "This is troubling," Wilmot said.
Wilmot also said that if the bill had been openly debated, she would have expressed concern about extending the protections for public officials.
"In general, it's not a good idea to be indemnified for reckless violations, especially for civil rights," she said. Public officials should be shielded from liability if "they make a decision that negatively impacts somebody and they sue, and then it's found the decision wasn't the right decision, but [it] was made in the conduct of their office."
But, she said, that protection should not extend to "willful actions intended to harm people. Then you're basically giving a license for wrongdoing."
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The MetroWest Daily News
Friday, June 18, 2004
A MetroWest Daily News editorial
A sneaky maneuver from Swift
Former governor Jane Swift flouted state ethics rules when she was lieutenant governor, earning a fine and a load of bad publicity after she was caught using aides for babysitters and taking a state police helicopter ride home for a long weekend.
Swift blamed maternal instinct and political inexperience for the oversights, and largely got away with it. She eventually made history, becoming the state's first female governor when Paul Cellucci left for the greener pastures of an ambassadorship in Canada.
Maternal instinct doesn't explain away the latest questions about Swift's ethics, a self-serving maneuver delivered with the skill of an experienced Beacon Hill boss.
According to published reports, Swift quietly signed legislation three days before she left office protects constitutional officers from personal liability if they are sued because of actions they take while in office.
That one signature could potentially save her $1 million.
Without the legislation, Swift would personally be responsible for damages sought by Christy
Mihos, who was fired by Swift from the Massachusetts Turnpike Authority Board when he refused to support an increase in Turnpike tolls to pay for Boston's Big Dig.
The Supreme Judicial Court overturned the firing and Mihos sued Swift for violating his civil rights. The suit has yet to go to trial, and Attorney General Thomas Reilly is preparing an appeal based on Swift's supposed immunity.
The legislation itself isn't troubling. State officials should not be burdened by fear they could be personally bankrupted by actions they take while in office, even actions, like firing
Mihos, that are politically self-serving.
What is troubling is the secrecy involved. The legislation was attached to an unrelated bill by House Ways and Means Chairman John Rogers and never publicly discussed. It was approved during an informal session, when issues of substance aren't supposed to be brought to the floor, and came to light 18 months after it was signed.
Had Swift or Rogers filed the bill openly and allowed the Legislature to debate it, we'd likely give it our support. But the way they did it stinks to high heaven, and reflects badly on Swift and anyone else who helped sneak the bill through.
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The Boston Herald
Friday, June 18, 2004
Education also needs taste of competition
By Thomas Keane Jr.
We have too many restaurants in this city.
After all, food is food. McDonald's makes a decent hamburger. So why allow Wendy's or Burger King? Upscale, ethnic, fast food and other kinds of restaurants are everywhere, giving us too much choice and making life far too confusing. They wastefully compete against each other, all over something that is, after all, just a basic human need.
If I had my way, we'd permit just one kind of restaurant. No others would be allowed.
If that sounds foolish to you - and it should - then why are most of us loath to apply the same principle to another basic human need: education?
This year, in a number of significant ways, Massachusetts has begun to back off from an experiment it launched over a decade ago. That experiment, part of the 1993 Education Reform Act, sought to introduce competition into education, trying to change the most monopolistic of our state institutions into something that offered choice to all.
That idea sparked excitement and seemed to herald a new era for education. Now, it appears, that era is coming to a close.
Next year's state budget imposes a one-year moratorium on new charter schools. (Charter schools, part of the 1993 reforms, are public schools that exist free from local control and largely unfettered by traditional union work rules.) The moratorium, a seemingly mild proposal to explore improvements in the funding formula for charters, is a wolf in sheep's clothing. Its short-term effect is to shut down five schools - in North Adams, Salem, Lynn, Marlborough and Cambridge - that were slated to open in September. (Gov. Mitt Romney has promised a veto, but it appears there are enough votes for the Legislature to override him.) More broadly, though, the moratorium is the culmination of a fierce campaign to dismantle the state's charter law. Its passage signals a major defeat to supporters of competition.
So too does a recent and stunningly crass action by the Boston Teachers' Union.
As charter schools became popular statewide, the city of Boston responded by creating pilot schools. Like charter schools, pilots were substantially more independent of the school system. Many of the first pilots were brand new schools but, as the concept began to prove itself, teachers (especially younger teachers) at existing schools became intrigued and began exploring converting a traditional school into a pilot.
That came to a seemingly abrupt end last week. Teachers at the Gardner Elementary School in Allston had voted by a two-thirds majority to become a pilot school. The head of their union, Richard
Stutman, vetoed the plan. Stutman's stated concern was that teachers at pilot schools didn't have sufficient seniority rights (never mind that the teachers apparently did not share that worry). The real issue, however, is that pilots have grown in popularity; there are now 15 of them. Once just an annoyance, they are now a genuine threat to the status quo.
What's going on here? Paul Grogan, the head of the Boston Foundation (which has encouraged the growth of pilot schools and would have given $100,000 to the Gardner to help it convert), blames the teachers unions. "Their vision of the future," he says, "is fighting everyone's good ideas for change." He's right. Competition is deeply threatening to unions' power and they have mobilized to stop it.
But that's always been true. Why are they now succeeding?
Part of the answer is that the reforms are becoming the victims of their own success. The sense of crisis that spurred the 1993 law has ebbed as dramatic rises in state spending, MCAS testing and innovations from competition have had a marked effect in improving many schools. True, many schools, particularly those in poor neighborhoods, are still failing. Yet education no longer dominates the front page, so the momentum for change has faltered.
There's another factor as well that abets the opponents of school choice: We here in Massachusetts don't really like competition.
I have a soft spot for charter schools and other efforts to promote competition in education. (In fact, I sit on the board of a national charter school management company, although one with no operations in New England.) But my sense is that most people in this state don't share the feeling. That's because, in general, we're uncomfortable with free markets. For many, capitalism and profits remain dirty words. This plays out in a host of ways, from the anti-privatization Pacheco law to our antipathy to for-profit hospitals and even to state laws that hamper the adoption of new technologies such as electronic pricing.
This is more than just about politics - it relates to our culture, a culture whose roots go back to the founding of the commonwealth (itself a term that bespeaks our discomfort with free markets). Schools really are like restaurants. In Massachusetts, though, that's an analogy we find hard to accept.
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STATE BUDGET - HOW TO SPEND $24 BILLION
(A five-part Patriot Ledger series)
Where the money goes: After a
year of infighting, squabbling and compromise, the state's most
important - and controversial - policy document finally emerges
First
of a five-part series
The Patriot Ledger
Monday, June 14, 2004
State budget process leaves many in limbo; With so much uncertainty, recipients would like more stability; but how?
By Tom Benner
Patriot Ledger State House Bureau
Second of a five-part series
Every year, Norman Smith wonders whether the prolonged budget debates on Beacon Hill will force him to cut back on staff and hours at the Blue Hills Trailside Museum, or even close the place entirely.
Smith, the director of the popular class-trip destination on the Milton-Canton border, has survived recommended budget cuts each of the past two years, but now he's worried about a third attempt by the governor's office.
In the last two years, lawmakers eventually overrode the governor's proposals and agreed to send money to the museum, which relies on the state for about half of its $500,000 annual budget.
But Smith is still waiting to find out whether the museum's funds will survive this time around.
"It makes for a very uncertain situation, all the time," Smith said. "In January, the governor's budget comes out (but) we never know until July what we might get."
That's just one line item in a budget that can be as thick as a phone book when printed, with a $23.5 billion bottom line. State aid to cities and towns, money for preschool programs and higher education, and hundreds of other line items all get caught up in a power struggle between the Republican administration of Gov. Mitt Romney and the Democrats who control the Legislature.
The result is far from the orderly budget planning that takes place in the corporate world. Instead, the tug of war on Beacon Hill leaves many beneficiaries of state aid unsure just how much money they'll receive for much of the year - making it tough for them to plan their own budgets.
Each January, the governor submits a spending plan for the state fiscal year that begins in July. But within a few months, much of that plan won't even matter.
By April, the House of Representatives comes up with its own plan, with Democratic legislators largely discarding the Republican governor's spending proposal.
Later each spring, the Senate writes its own version of a state budget. The House and the Senate then thrash out their differences before sending it back to the governor - who can use his veto pen to zero out any spending he disagrees with but can't add anything to the budget at that point.
All the while lobbyists and special interest groups fill the corridors of the State House, chatting up lawmakers in the hopes of influencing the budget-writing process.
Budget experts say it's difficult for states to adopt the more orderly budget process used by financial executives in the private sector.
"The budget process here is highly inefficient, but because it is a policy process, not just a fiscal process, that's why it is so complicated," said Linda Bilmes, a public policy lecturer at Harvard University's John F. Kennedy School of Government. "In business, the budgeting process is more of an internal thing. In government, the budget is where competing interests are reconciled."
The state uses a "maintenance" budgeting approach, which means state budget analysts begin the process by figuring out what it would cost to provide the same services as the previous year. As a result, most line items from the previous year make it into the budget untouched.
For better or worse, that's proven the best way. Previous attempts to apply private-sector budgeting techniques to public-sector spending plans have produced mixed results.
Former President Jimmy Carter was famous for his use of "zero-based" budgeting, through which budget-makers start with the assumption they will spend nothing and build up.
The process has proven unworkable for government, experts say, because it means budget analysts every year would have to go into every single agency and every single line item, and start the budgeting process from square one.
State Treasurer Timothy Cahill recalls Quincy Mayor William Phelan using zero-based budgeting when Cahill was a Quincy city councilor.
"I think it's a gimmick," Cahill said. "My last year in the city council, the mayor came up with this big zero-based budget, but it was really a sham. It wasn't a real change. You still base your budgets on what you spend the year before."
In 1992, then-Gov. William Weld employed a "performance-based" budgeting approach, which allocates money to broad areas such as "highway construction" and "homelessness services," and sets performance goals for each.
That approach failed, too. While the performance of private businesses can be measured through quarterly earnings or long-term dividends, in the public sector, many programs don't generate revenue and their bottom lines don't necessarily show how well a road was fixed or what type of assistance a homeless family received.
House Speaker Thomas Finneran has another idea: a two-year budget. Passing a budget every second year would allow the governor and legislators to use the off-year to concentrate on policy. And Finneran would give incentives to encourage department heads to create efficiencies.
"I think a two-year budget would give a sense of stability and predictably to those department heads and agency heads, and we could align it with incentives," said Finneran, a Mattapan Democrat. "If they perform their functions in accordance with expectations and do that for less than the appropriation they've been given, I think they should be allowed to keep some or all of the savings and apply it as they see fit."
But budget experts say states that have switched to two-year cycles spend a lot of time making changes and adjustments to their spending.
"The story from states that do two-year budgeting is... that it really isn't better, because what they do is pass a series of supplemental budgets," said Bilmes of the John F. Kennedy School at Harvard.
Yet another approach - "activity" budgeting - can be used on a limited basis to help the state understand what it's getting for its money, Bilmes said.
Activity budgeting tracks what it costs to do things - for example, what it costs to bake a loaf of bread, as opposed to what it costs to run a bakery.
"The best way to get a grip on costs is not to see the public works budget, but to say per pothole, what does it really cost to fill them in?" Bilmes said. "Then you can see where you have a lot of excess costs. That is the frontier where budgeting need to go - getting away from the line-item budgets to what it costs to do things."
The Patriot Ledger
Tuesday, June 15, 2004
Stretching credit-ability; When it comes to finances, the state is forever in debt
By Tom Benner
Patriot Ledger State House Bureau
Third of a five-part series
It's considered acceptable practice to borrow money for construction projects like the new Fore River Bridge. The $53 million span is expected to last for generations, so the state can spread out the payments and interest over decades.
But financial experts object to borrowing to pay for day-to-day costs - from paper clips and fax paper to salaries for secretaries and engineers. That's the case at the state Highway Department, where about 75 percent of its operations are paid on credit.
"It's amazing," said Steve Adams of the Pioneer Institute. "We're using debt financing to operate a highway department.
"Whenever there's a budget crisis, there are more efforts by legislators to tap into debt. It's essentially using a credit card to pay for expenses we can't afford."
A longstanding practice of borrowing money to pay for state projects and related expenses, instead of paying up front, has lead to a $16.5 billion state debt, with annual borrowing costs that devour 11 percent of the state budget.
Massachusetts owes some $3,000 for each of its 6 million residents, the second-highest per-person debt in the nation, after Connecticut.
The problem is that it's easier for elected officials to borrow money - and let future leaders worry about paying it back - than to find the cash and pay up front for projects.
"The Legislature and the administration have recognized this is a problem and have vowed to try to fix it," said Glen Tepke of the Massachusetts Taxpayers Foundation. "But the only way to do it is to increase funding in the operating budget. That's difficult to do when you're in the middle of a fiscal crisis."
State Treasurer Timothy Cahill, who manages the state's debt load, isn't happy that the state borrows some $100 million a year for Highway Department operations, to be paid back over 20 years.
"That's not the proper use for bond money," Cahill said. "Bond money should be used for capital projects."
But he is cautiously optimistic that the state can handle its debt load, while adding new debt each year. The state has a $1.2 billion-a-year, self-imposed cap on new borrowing.
"We're a high-debt state," Cahill said. "(But) I don't think that causes unusual concern in that we're an old state with an old infrastructure, and the needs are great, whether it's our school buildings, our roads, bridges or public buildings."
When the state borrows money by issuing bonds, it agrees to pay it back with interest of up to 6 percent on longer-term bonds. Cahill notes that the state has saved hundreds of millions of dollars in recent years by refinancing some of its debt at record-low interest rates.
While the state's $2.2 billion-a-year borrowing costs are high, Cahill, a former Quincy city councilor, sees that as manageable.
"(In Quincy,) we tried keep our debt service at 5 percent of our total budget, but we have a lot more to bond for in the state," Cahill said. "If it goes beyond 10 percent, I would be nervous. It would be nice to bring it down a little bit, but there are needs and you can't always put off those needs."
Cahill said he'll worry more if Wall Street rating agencies begin looking askance at the state's borrowing habits.
"If I see that the markets are looking at us differently or that our ratings go down like they have in California, I'd be very concerned," he said.
Robin Prunty of the Wall Street ratings agency Standard & Poor's said that while Massachusetts has one of the highest debt loads of any state, its relative wealth works in the state's favor.
"Massachusetts has a pretty deep and diverse economic base," Prunty said. "That certainly is an offsetting factor to a high debt burden."
And while the state's AA- credit rating isn't perfect, it's a big improvement over the state's BBB rating - just above junk bond status - in the 1990s. States typically pay lower interest rates on their new debt after their credit ratings improves.
Gov. Mitt Romney's top budget chief, Eric Kriss, said the administration has sought to limit the amount of new debt the state incurs.
"The capital limitations we put in over the past year or so are working and the rate of growth is slowing, and it will slow down to what I would characterize as a sustainable rate," Kriss said. "We're in this condition of a lot of debt. Would it be better if we had none? Absolutely. But it is what it is, and the important thing is not to make it worse."
State Rep. Frank Hynes, a longtime member of the House Committee on Long Term Debt and Capital Expenditures, said he has seen too often the state borrow money to pay for operating costs during tough financial times.
"There has been some concern raised over the years about salaries being paid out of bond funds," said Hynes, a Marshfield Democrat. "Everyone recognizes that long-term, that's not a good practice and needs to be corrected."
But Hynes points to the fact that the state picks up the tab for many road projects and other costs that often would be handled in other states by county government agencies.
"We've got a handle on (the state's debt)," Hynes said. "We always have to be careful because there's this tendency to view capital financing like credit card financing."
The Patriot Ledger
Wednesday, June 16, 2004
After all the rainy days, savings suffer; State had the reserves to weather the storm, but little is left and the forecast is cloudy
By Tom Benner
Patriot Ledger State House Bureau
Fourth of a five-part series
State leaders have made some grim decisions during the latest economic downturn, cutting about $3 billion in four years from state-funded programs such as public education and health care for the poor.
But it would have been far worse if the state hadn't socked away $2.3 billion over seven years during the 1990s.
"It was the difference between surviving and not surviving," said Sen. Therese Murray, a Plymouth Democrat and the state's top budget writer. "Many other states didn't. We didn't have to borrow, we didn't have to go to heavy bonding, and we didn't have to do the massive cutbacks like many other states did. We were very lucky we put that money away."
Today, the rainy day account is all but dry again. Legislative budget writers want to spend $650 million of the state's remaining $800 million in reserves in the fiscal year that begins July 1. That would leave about $150 million in reserves, a far cry from the $2 billion to $3 billion experts would like the state to have tucked away -- at least when economic times are good.
The state also has some reserve accounts left over from federal sources, such as $444 million from the tobacco lawsuit settlement, money that is theoretically supposed to pay for health services.
"If we're talking about the kind of big recession that occurs every 10 years or so, you need that amount to make your way through it," said Cam Huff of the Massachusetts Taxpayers Foundation. "The question is, how do you get there?"
An unexpected increase in tax revenues means the state will have a little extra money for the fiscal year that begins July 1. But there's little agreement about how to spend it.
In the same breath, Gov. Mitt Romney announced an extra $250 million in the Medicaid budget and called for a tax cut. Romney said projections show as much as $1 billion more available in this fiscal year and the next than he believed when he filed his budget in January.
Romney wants to cut the state income tax from 5.3 percent to 5 percent, noting that voters in 2000 called for the rollback of the income tax. That has become a campaign platform for this year's Republican legislative candidates as well.
"It is time to carry out the will of the voters," said Romney, citing the recent turnaround in the state's economy. "Let's get this under way. It helps the taxpayers, it follows their voice at the ballot box and it further stimulates our economy."
House Speaker Thomas M. Finneran, however, wants to put more money back into a rainy day account. Finneran is calling for a constitutional amendment requiring the state to set aside 1 percent of all tax revenues in reserve, about $150 million at the current rate.
In the business world, companies are advised to keep at least six months of revenue in reserve in case of a sudden drop in revenue, said Northeastern University's Barry Bluestone, a professor of political economy.
For the state, that would mean having $12 billion on hand - an unrealistically high goal, Bluestone said. He suggests the state's reserves should be about $4 billion, or about two months' worth of state revenues.
"When times are rosy, we should be building up a much larger rainy day fund," Bluestone said.
"What you want to do is spread this out when revenue is flooding in ... so that when things really get tough there are more things to keep state and local programs going."
That's easier said than done, as elected officials often prefer to spend available money.
"Because states generally don't do this, they actually contribute to the depths of recessions when they have to lay off people and cut back on spending," Bluestone said.
Bluestone said he would not cut taxes now that the economy is picking up. He said he would put extra money in the reserve funds, but does not support a constitutional amendment requiring the state to do that.
One of Bluestone's former students, Larry Makovich of Lexington, studied state rainy day funds for his doctoral dissertation. He said that even at its height of $2.3 billion, the state's reserve fund was inadequate. And the Legislature compounded the problem by voting to raise taxes in 2002.
"Exactly what you don't want to do in an economic downturn," Makovich said.
On the other side of the debate are those who argue that excess money belong to the taxpayers and should be returned.
For that reason, the state has a cap on how big its reserve accounts can grow: 15 percent of the budget. On a $22.5 billion budget, the current cap is $3.5 billion.
For now, the state is a long way from reaching it.
The Patriot Ledger
Thursday, June 17, 2004
Save it for a rainy day; Lawmakers at a loss over budget surplus
By Tom Benner
Patriot Ledger State House Bureau
Last of a five-part series
When Thomas Finneran became the House of Representatives' top budget writer in 1991, he faced the state's worst economy since the Great Depression. The "Massachusetts Miracle" had become a joke as the state borrowed hundreds of millions of dollars to pay day-to-day expenses and saw its credit rating fall to near-junk bond status.
"It was a complete disaster, unlike anything I had ever experienced, frightening to the point literally of tears on my second or third day on the job," said Finneran, a Mattapan Democrat. "I didn't cry in front of anybody but my wife, but I cried. I was scared stiff."
Finneran and other state officials trimmed about $850 million from a $12 billion budget, making painful cuts and layoffs.
As the state slowly climbed out of that recession, Finneran urged his colleagues to set aside money in a rainy day account. The idea wasn't wildly popular with legislators who wanted to spend whatever money was on hand.
"We're classic short-term people," Finneran said. "We think month to month, year to year. Long-term thinking around here is two years."
But over seven years, largely thanks to Finneran's prodding, a $2.3 billion nest egg was set aside.
Now, as House speaker, Finneran is facing another battle as he squares off against Republican Gov. Mitt Romney over the rainy day fund.
Both agree on restoring some of the $3 billion in cuts that have hit towns, schools and health services. But Finneran wants to replenish the state's rainy day account, which has been nearly wiped out during the state's economic downturn. Meanwhile, Romney favors a less aggressive savings plan, and instead wants a tax cut.
The debate over whether it's too early to lower taxes is expected to dominate this fall's legislative elections, as well as next year's budget debate.
For now, many others on Beacon Hill are siding with Finneran.
"You can't go from a crisis to let's give a tax break,' " said state Sen. Therese Murray, a Plymouth Democrat and the Senate's top budget writer. "Is there the ability down the road to revisit going back to (a 5 percent income tax)? I think so, but not yet."
Murray adds that another tax break will kick in on Jan. 1, when rising tax revenues trigger an automatic increase in the personal exemption amounts for individuals and married couples. The trigger provision was included in a $1.2 billion tax package passed in 2002 and intended to provide relief to taxpayers once state collections improved.
State Treasurer Timothy Cahill also said he'll breathe easier after the state replenishes its rainy day account.
"It's very difficult to build up those reserves, because there is a lot of political pressure to spend it or give it back," said Cahill, a Quincy Democrat. "The more liberal side says spend more, the more conservative side says if you have a surplus, give it back. Neither one of those is the most responsible way to go."
Cahill said he'd like the state to keep in reserve roughly 5 percent of its budget, or about $1.2 billion. He also thinks cities and towns deserve a boost in state aid.
"Before we look at cutting taxes at the state level, we should look at fulfilling our obligations," Cahill said. "Because all the 20 percent cut did was force local governments to raise taxes. Our job is not to strip the cupboard bare here and force local communications to raise taxes, because it's coming from the same taxpayer."
But the Romney administration argues that with revenues up, the state must make good on a 2000 referendum in which voters endorsed a cut in the state income tax to 5 percent. Reducing the income tax from 5.3 percent to 5 percent would save the average taxpayer about $100, but cost the state between $400 million and $450 million in yearly revenue.
Massachusetts has collected $495 million more than anticipated so far in the current fiscal year, which ends June 30, and $787 million more than during fiscal 2003, when the state was still in an economic downturn.
Eric Kriss, Romney's top budget aide, argues that the state can afford to both put money back into the rainy day account and cut the income tax rate.
"One should not take one's strength to excess so that it becomes a weakness, and build up willy-nilly a stabilization fund for the mere sake of doing so," Kriss said.
He argues that state revenue increases should be used for a combination of capital spending, replenishing the rainy day fund, and cutting taxes.
Kriss adds that when the state was pulling out of its recession in the early 1990s, it took a few years before the state began putting substantial amounts back into its rainy day fund.
"The logic of not reducing taxes was because of the fiscal emergency in 2002," Kriss said. "That is over, we can afford to roll it back, and that's what the voters wanted."
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