CLT
UPDATE
Tuesday, July 6, 2004
A battle of purpose and
ideologies: Barbara vs. Finneran
Despite dire predictions during the past few years by the Massachusetts Taxpayers Foundation, we never did actually "walk through the shadow of death." Though the income tax rate wasn't raised, the Commonwealth didn't sink.
Yes, every year during the so-called "fiscal crisis," the state budget increased. The Great Four Billion Dollar Budget Gap was merely the difference between reality and wishful thinking, between available revenues and new tax revenues that would have encouraged billions more of state spending....
Now that the latest "crisis" is over, and the state has a giant surplus, Governor Mitt Romney has moved to respect the voters, defrost the freeze, and return the rate to 5 percent for 2005.
Yay!
It's not just about the money. Some of us can certainly use it, coming out of recession ourselves. However, the real issue is the future of the Commonwealth....
The price of long-term viable government in Massachusetts is reform and respect for the voters: restoration of the 5 percent income tax rate is one means to that end. Doing what the voters said will encourage reform, before lack of it creates a real crisis in the future.
The Boston Globe
Tuesday, July 6, 2004
Roll back the tax rate
By Barbara Anderson
The Massachusetts Legislature will soon convene in a Constitutional Convention to consider establishing a permanent rainy day fund.
Our debate on this matter comes at a time when the state's economy has hit bottom and may soon begin a welcome recovery. Our state has been here before, and therefore our history provides great guidance in support of this proposal....
I believe that a permanent and constitutionally mandated rainy day fund represents our best chance to ensure steady, stable, predictable funding for the core services which advance our economy and our society. The amendment is an exercise in fiscal discipline born out of the cyclical nature of our economy and the painful experience of previous recessions. It is worthy of strong legislative and public support.
The Boston Globe
Tuesday, July 6, 2004
A permanent savings plan
By Thomas M. Finneran
Legislative sessions are blessedly brief in election years. We won't be sorry to see the House and Senate close up shop for a while come the end of July. But lawmakers shouldn't hit the DNC party scene before some important unfinished business is attended to.
First and foremost, they should make good on the income tax roll-back plan supported by voters at the ballot box. The Legislature no longer has the excuse of anemic state revenues to keep the rate at 5.3 percent. Unofficial reports at the end of last week pegged the fiscal 2004 surplus at some $700 million.
A Boston Herald editorial
Tuesday, July 6, 2004
Pols: Finish the job and then go away
The state budget was never cut by $3 billion. Not even by $1 billion. In fact, not even by a single dollar. State spending, even in the depths of the recession, increased every year. It is just that it didn't increase as fast as the cost of providing services did. The alleged draconian cuts in services were not because of stingy taxpayers, but because of cost increases largely due to unaffordably generous contract settlements, health benefits and pensions, not to mention rampant patronage in areas like the courts....
Members of the Legislature are also patting themselves on the back for exercising what they consider to be remarkable fiscal restraint, but also not caving to alleged zealots who want the income tax rate to drop back to 5 percent....
So it is also legitimate to question the self-described "wisdom" of legislators who refuse to acknowledge the will of the voters, who voted 3-2 in a referendum to reduce the state income tax rate to 5 percent, where it was before what was promised to be a "temporary" increase more than 15 years ago.
An Eagle-Tribune editorial
Monday, July 5, 2004
There's still no fiscal restraint on Beacon Hill
More than the fate of five not-yet-opened charter schools depends on the outcome of the vote to override Gov. Mitt Romney's moratorium veto. That vote will determine who is going to control the direction of public education in this state: legislators and state policymakers or teachers' unions.
A Boston Herald editorial
Tuesday, July 6, 2004
Education gains on the line
Chip Ford's CLT
Commentary
The Lowell Sun's editorial of July 24 demanded:
"Give back the surplus."
Lawrence's Eagle-Tribune's editorial yesterday
("There's still no fiscal restraint on Beacon Hill")
questioned why the voters' rollback hasn't been implemented yet is these
days of soaring surpluses.
Today's Boston Herald editorial ("Pols: Finish the job and then go
away") instructs legislators "First and foremost, they should make good on the income tax roll-back."
Barbara's column in the Boston Globe today ("Roll back the tax rate")
warns, "The price of long-term viable government in Massachusetts is reform and respect for the voters: restoration of the 5 percent income tax rate is one means to that end. Doing what the voters said will encourage reform, before lack of it creates a real crisis in the future."
House Speaker-for-Life Tom Finneran's opposing Boston
Globe column today -- as always -- has, in his mind-of-all-minds, a
better plan, one that keeps taxpayers and their money separated for
a while longer, e.g., forever as always.
Following his arcane and convoluted scheme allegedly
to "unfreeze" the 15-year old "temporary" income tax
hike -- the mandate of the voters notwithstanding -- that won't come
about until 2014 at best, now he wants a constitutional amendment to
perpetually build up the state's "rainy day fund." Anything to
avoid keeping the 15-year old promise, even as the good times again begin
to roll!
The state should have a massive, multi-billion dollar
savings account -- before the pols keep their promise and finally stop
over-taxing us?
Tom, keep the damn promise! Then we'll listen
to all your oh-so-astute plans. Get the income tax rate back down to 5
percent at long last, where it used to be a decade-and-a-half ago. Then you can toss out all the
high-minded and far-reaching ideas your superior intellect can muster
and we'll discuss them.
Stop playing these silly deceptions. You're not
fooling anyone any more. It's our money, Mr. Speaker-for-Life --
not yours.
In 2000, 59 percent of your employers -- your board
of directors -- ordered you to give back our money. Stop defying
us like some cheap conman with your schemes and machinations and do as
you've been instructed, now.
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Chip
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The Boston Globe
Tuesday, July 6, 2004
Roll back the tax rate
By Barbara Anderson
Yay! Massachusetts began its new fiscal year on July 1, which means the Commonwealth survived the last fiscal year and is still functioning.
Despite dire predictions during the past few years by the Massachusetts Taxpayers Foundation, we never did actually "walk through the shadow of death." Though the income tax rate wasn't raised, the Commonwealth didn't sink.
Yes, every year during the so-called "fiscal crisis," the state budget increased. The Great Four Billion Dollar Budget Gap was merely the difference between reality and wishful thinking, between available revenues and new tax revenues that would have encouraged billions more of state spending.
There were fee hikes and an unfair nursing home tax. The Commonwealth used its rainy day fund, as is appropriate when a national recession hits. Some services were cut, as is inevitable when despite an economic slowdown, the Legislature still refuses to enact reforms and sustain the governor's vetoes of wasteful spending.
So Massachusetts muddled through and, according to the Tax Foundation, still has the fourth highest per capita state and local tax burden in the nation. Relative to personal income, our tax burden is near the bottom; some economists prefer this data, as if having many wealthy citizens makes taxes more affordable for the rest of us. It seems to me that the higher percentage of wealthy people we have, the fewer people that need state services. And since in Massachusetts, it is often wealthy business leaders calling for higher taxes, we might instead expect more from them in charitable contributions to those who are in need.
Taxpayers were promised that the income tax rate hike of 1989 would be temporary, lasting just long enough to get us through that earlier fiscal crisis. After waiting 11 years for this promise to be kept, 59 percent of us voted to roll the rate back to its traditional 5 percent over three years. But the Legislature was already busy spending us into another fiscal crisis, and in 2003 it "froze" the rollback at 5.3 percent.
Now that the latest "crisis" is over, and the state has a giant surplus, Governor Mitt Romney has moved to respect the voters, defrost the freeze, and return the rate to 5 percent for 2005.
Yay!
It's not just about the money. Some of us can certainly use it, coming out of recession ourselves. However, the real issue is the future of the Commonwealth.
Most of its problems have been caused by our political culture, with its waste, inefficiency, patronage, abuse of power, liberal fantasies, and fun boondoggles. But real problems are coming, caused by demographics out of our political control. As the baby boomers age and expensive medical miracles are more than ever in demand, as fewer workers support more retirees, Massachusetts will not be able to afford the increased demand for services along with its beloved "business as usual."
When that time comes, our Commonwealth's spending base must be as lean and efficient as possible, lest it lose even more productive citizens to lower-tax, more politically serious states. Tax limitation now is the only alternative to unlimited taxation later. And tax limitation this year begins with respect for the voters, another good habit to cultivate and carry forward into the expensive future.
The Legislature can begin to get the Commonwealth in line by accepting Romney's tax rollback bill and sustaining this year's vetoes. Since children are our future, they need to be able to choose charter schools. Since high medical costs are our future too, free prescription drugs will make a bad situation worse. Court spending and payraises for deserving human service workers must be conditional on court reform and cuts in the overhead of the human service agencies. And illegal immigrants should become citizens before getting lower in-state tuition at state colleges.
Politicians must also move into the 21st century, where unions play a role but do not rule. Businesses and employees who get taxpayer dollars work for the taxpayers and should be accountable to them.
The price of long-term viable government in Massachusetts is reform and respect for the voters: restoration of the 5 percent income tax rate is one means to that end. Doing what the voters said will encourage reform, before lack of it creates a real crisis in the future.
Barbara Anderson is director of Citizens for Limited Taxation.
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The Boston Globe
Tuesday, July 6, 2004
A permanent savings plan
By Thomas M. Finneran
The Massachusetts Legislature will soon convene in a Constitutional Convention to consider establishing a permanent rainy day fund.
Our debate on this matter comes at a time when the state's economy has hit bottom and may soon begin a welcome recovery. Our state has been here before, and therefore our history provides great guidance in support of this proposal.
Economic cycles can ruin those who are unprepared. Budgetary upheavals cause frustrating setbacks in education, health care, public safety, and economic development. The resulting funding cuts and program reductions can lead our best and brightest public employees, such as school teachers, to leave public service for more lucrative and predictable professional pursuits. Ultimately, such cuts endanger the very services that we consider essential to our quality of life.
The 1987-92 economic downturn dealt Massachusetts a daunting challenge to sustain essential services in the midst of severe job losses and weak state revenues, with no reserve funds to draw upon. We hit rock bottom very hard with disastrous consequences for the state's reputation and quality of life. The long and winding road back to fiscal stability during much of the 1990s serves as a powerful reminder of the direct correlation between a state's fiscal stability and its ability to attract business investment and expansion.
The current recession has presented the Legislature with similarly stark choices. Plummeting revenues and significant job losses resulted in three consecutive years of budget cuts to state services for the poor, mentally retarded, and elderly. Due to a staggering $3 billion structural budget deficit, fiscal year 2004 even brought reductions in state aid to support local education, fire, police, and health services.
Fortunately, the budget cuts were held to a minimum by the availability of $2.2 billion in rainy day reserve funds. One shudders to think what would have been lost had we not had these funds to draw upon.
It is crystal clear that the size of our rainy day fund put Massachusetts on the very short list of states who have survived the current recession without doing damage to their credit ratings. Our foresight allowed us to avoid the fiscal gimmickry embraced by our counterparts across the country: securitization of tobacco settlement payments, pension obligation bonds, and deficit financing for operating budgets.
Our ability to keep taxes low and to maintain some stability in services could never have been predicted during our last recession and recovery. Our rainy day fund, which in 2001 totaled 10 percent of budgeted revenues, resulted from political will and good fortune. Although many of my colleagues were determined to save for an economic downturn, we were also the beneficiaries of uncommonly large surpluses from the capital gains boom of the late 1990s. Additionally, we were disciplined enough to fend off repeated attempts to exhaust these monies on new recurring programs or expand the size of the tax cuts being enacted at the time.
Those who pay heed to the lessons of history know that statutory requirements are always more easily avoided in times of extreme political pressure, particularly when revenues are exceeding expectations or falling short of forecasts. Why, then, would any prudent Legislature leave the continuation of a proven and essential budgetary tool like the rainy day fund to political chance or expediency?
Specifically, the amendment before the convention extends constitutional protection to an existing statutory requirement that dedicates revenues to reserves. It establishes the following three provisions: It directs one percent of annual state tax revenues to a rainy day fund; it requires a three-fifths roll call vote for the responsible use of these funds; and, lastly, it places an annual limit on withdrawals to secure the fund's solvency for future generations.
I believe that a permanent and constitutionally mandated rainy day fund represents our best chance to ensure steady, stable, predictable funding for the core services which advance our economy and our society. The amendment is an exercise in fiscal discipline born out of the cyclical nature of our economy and the painful experience of previous recessions. It is worthy of strong legislative and public support.
Thomas M. Finneran is speaker of the Massachusetts House of Representatives.
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The Boston Herald
Tuesday, July 6, 2004
A Boston Herald editorial
Pols: Finish the job and then go away
Legislative sessions are blessedly brief in election years. We won't be sorry to see the House and Senate close up shop for a while come the end of July. But lawmakers shouldn't hit the DNC party scene before some important unfinished business is attended to.
First and foremost, they should make good on the income tax roll-back plan supported by voters at the ballot box. The Legislature no longer has the excuse of anemic state revenues to keep the rate at 5.3 percent. Unofficial reports at the end of last week pegged the fiscal 2004 surplus at some $700 million.
We agree some of the surplus ought to go to replenish reserves and to close the state's structural deficit. But we're also realists, and we know that the demand to spend the surplus will be ferocious. Human service activists and municipal lobbyists are already asking, "Where's ours?"
Take the money off the table now.
Other priorities that should be acted on in the remaining weeks are:
l Safe haven legislation which will give a fighting chance to abandoned newbornslike
"Vinnie," found by luck outside a chapel on Martha's Vineyard late last month.
l Fire safety legislation thoughtfully crafted to address inadequacies revealed in state laws after The Station nightclub fire.
l Transportation reform which gives real authority to the Romney administration over far flung transportation agencies.
l Construction reform to allow more efficient building methods to be employed on public construction projects.
Lawmakers bemoan the Supreme Judicial Court usurping their power over legislative matters with the ruling legalizing same-sex marriage. If they end a legislative session dominated by the court's decision and achieve precious little else, the court will have succeeded beyond its wildest dreams.
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The Eagle-Tribune
Monday, July 5, 2004
An Eagle-Tribune editorial
There's still no fiscal restraint on Beacon Hill
There is a fair amount of self-congratulation, along with some restrained sighs of relief, at the Statehouse following the release of the state budget for next year.
Whether it is deserved or not is debatable.
Gov. Mitt Romney has expressed pride that he has increased spending in a number of areas -- local aid, special education, public safety and health services for the poor among them -- without raising income taxes. Members of the Legislature are also patting themselves on the back for exercising what they consider to be remarkable fiscal restraint, but also not caving to alleged zealots who want the income tax rate to drop back to 5 percent.
And the restrained relief comes from what Statehouse inhabitants hope will be the end of what they have called "$3 billion in cuts."
All of this needs a bit of a reality check.
The state budget was never cut by $3 billion. Not even by $1 billion. In fact, not even by a single dollar. State spending, even in the depths of the recession, increased every year. It is just that it didn't increase as fast as the cost of providing services did. The alleged draconian cuts in services were not because of stingy taxpayers, but because of cost increases largely due to unaffordably generous contract settlements, health benefits and pensions, not to mention rampant patronage in areas like the courts.
There have been a couple of times in the past 10 years when it appeared that state spending was actually declining, but that was because the Legislature moved certain categories of spending, such as the
MBTA, Medicaid and some pension funding, "off-budget," in its words. That may look like fiscal restraint, but it has about as much connection to reality as a person claiming that his annual mortgage payments were actually a salary cut of that amount.
The reality is that state spending has risen by more than 50 percent in the past 10 years, from about $16.4 billion in 1994-95 to a proposed $24.8 billion for the fiscal year that starts this week. It is doubtful that the average Massachusetts worker has seen that kind of pay increase in that time. And with increased tax money coming in, thanks to an improved economy, the rate of state spending is increasing once again. The jump from the year just ending to the one beginning is from about $23 billion to $24.8 billion, or nearly 8 percent
The magnitude of that figure can be seen in the impending fight over Romney's vetoes, which total about $108 million, but most of which are likely to be overridden by the Legislature.
That figure -- $108 million -- sounds like a lot of money. It is. But as a percentage of the state budget, it barely registers. It is less than one-half of 1 percent.
So it is also legitimate to question the self-described "wisdom" of legislators who refuse to acknowledge the will of the voters, who voted 3-2 in a referendum to reduce the state income tax rate to 5 percent, where it was before what was promised to be a "temporary" increase more than 15 years ago.
State spending is still increasing out of control. Massachusetts still needs serious fiscal reform.
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The Boston Herald
Tuesday, July 6, 2004
A Boston Herald editorial
Education gains on the line
More than the fate of five not-yet-opened charter schools depends on the outcome of the vote to override Gov. Mitt Romney's moratorium veto. That vote will determine who is going to control the direction of public education in this state: legislators and state policymakers or teachers' unions.
It's that simple.
Many lawmakers now in office weren't around in 1993 when the Legislature faced down teachers' unions and passed the education reform bill. Nor do they remember the day teachers from across the state stood 10,000 strong on the State House lawn to protest Gov. Paul Cellucci's proposal to test veteran teachers and other education policies.
Remember how the teachers' unions vowed to defeat Cellucci in 1998 and poured millions of dollars and untold hours of manpower into the effort?
He won anyway. Just like education reform passed anyway. Political muscle matters, but having voters on your side matters more. And the people of this state are on the side of choice in education. That some 14,000 children statewide sit on waiting lists to get into charter schools proves it.
The question is, whose side is the Legislature on?
A nearly $7 million federal grant for charter capital costs will be lost if the veto is overridden. The potential of the Lynn children enrolled in the KIPP school - known nationally for its phenomenal rate of graduates attending prestigious colleges and universities - will be lost, too.
One is regrettable. The other is tragic. The governor's veto must stand.
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