and the
Citizens Economic Research Foundation

Wednesday, February 1, 2006

Credit Card Identity Theft Alert!

The Boston Globe is frantically attempting to rectify a major distribution blunder after accidentally releasing the credit card numbers of up to half its subscribers, the paper said yesterday.

As many as 240,000 people around New England may have been victims of last weekend’s distribution blunder, it said.

Globe subscribers’ names, addresses and credit card numbers were inadvertently sent out with 9,000 bundles of the Worcester Telegram & Gazette’s Sunday edition after internal reports were recycled as routing slips or "toppers" placed on top of bundles....

The Globe has contacted the four major credit card companies — American Express, Discover, MasterCard and Visa — to explain the situation and is contacting the banks of affected customers.

The Boston Herald
Wednesday, February 1, 2006
Globe goofs in releasing subscribers’ credit numbers

Credit and bank card numbers of as many as 240,000 subscribers of The Boston Globe and Worcester Telegram & Gazette were inadvertently distributed with bundles of T&G newspapers on Sunday, officials of the newspapers said yesterday.

The confidential information was on the back of paper used in wrapping newspaper bundles for distribution to carriers and retailers. As many as 9,000 bundles of the T&G, wrapped in paper containing subscribers' names and their confidential information, were distributed Sunday to 2,000 retailers and 390 carriers in the Worcester area, said Alfred S. Larkin Jr., spokesman for the Globe.

In addition, routing information for personal checks of 1,100 T&G subscribers also may have been inadvertently released.

The Globe and T&G, which are both owned by The New York Times Co., share a computer system....

So far, newspaper officials said, there have been no reports that the financial information has been misused.

The Boston Globe
Wednesday, February 1, 2006
Subscriber credit data distributed by mistake
Globe, Worcester paper affected

We regret to tell you of an unfortunate event that occurred over the weekend which we are working diligently to address.

Confidential credit and bank card account information of Boston Globe and Telegram & Gazette subscribers who pay for their home delivery subscriptions by credit card was inadvertently disclosed on the back of slips used to label bundles of the Worcester Sunday Telegram. The bank routing information of some Telegram & Gazette subscribers who do not pay by credit card may also have appeared on some of these newspaper bundle sheets.

The records of approximately 240,000 customers may have been released....

A hotline has been established for concerned customers who may have questions regarding their accounts. That number is 1-888-665-2644.

The Boston Globe
Wednesday, February 1, 2006
An important message regarding
the confidential financial information
of Boston Globe subscribers

Chip Ford's CLT Commentary

If you are a Boston Globe or Worcester Telegram & Gazette subscriber paying by credit card or check, you may have just become victim of "an unfortunate event,"  as Globe publisher Richard H. Gilman termed it.

Your credit card or bank routing number may now be in the public domain, subject to identity theft and/or fraud.  If you're a Boston Globe or Worcester Telegram & Gazette subscriber, you should act immediately to protect your financial security or what remains of it.

Almost a quarter-million Boston Globe and Telegram & Gazette subscribers are affected by this incomprehensible security give-away.  I haven't read that any subscribers of its parent company, The New York Times Publishing Company, are also affected.  Are they?

I'm in the midst of an eight-month battle against a fraudulent credit collection scam.  I have fought tooth-and-nail to claw my way inch-by-inch to first successfully removing myself from its cross-hairs, and; second, to end the widespread and ongoing fraud that's preying upon others across the nation.  This battle has not been easy:  don't let it reach that point for you.  (See:  "Merchants' Credit Guide Co. -- A notorious rip-off scam")  And for me it isn't over yet.

Just two weeks ago, because of that battle, I pulled my credit reports from the three major credit reporting agencies:  Experian, TransUnion, and Equifax.  There it was, the "inquiry" last June from the scam collection agency, listed on my Experian credit history.  Since finding it, I've arranged to have my credit history "frozen" for the next 90-days:  nobody gets it from any of the Big Three without my expressed permission or me being personally notified.  (You can obtain a free copy of your credit history from all three companies once in every 12-month period by going to U.S. Federal Trade Commission's website.)   Subsequently I was also  able to correct some inaccuracies in my personal credit history through the three reporting companies.

Unfortunately, the credit card I use for CLT's newspaper subscriptions is not primarily in my name, but is a CLT business expense-related credit card.  Therefore, it's not covered in my personal credit report or by the "freeze" limiting my personal credit information.  So Barbara and I spent considerable time this morning on the phone:  CLT will no longer use a credit card to subscribe to the Boston Globe.  Barbara spoke with CLT's credit card issuing company to further protect us.

The Boston Globe's "hotline" was busy for over half an hour before I was able to finally redial through; then I was on-hold for about five minutes -- with the usual lame apologetic customer service mantra, "We apologize for your inconvenience."  I told the Globe "representative" I finally spoke with that this "unfortunate event" will cost dearly today's productivity in Massachusetts among its quarter-million affected subscribers.  I cancelled CLT's credit card subscription and was assured that the credit card number was immediately purged from any/all of its databases.

But it was one of those passed out to anyone who wants to use it.

I ran our telephone number and zip code as required on the  Globe's online "resolution" page.  The Boston Globe website returned the following:

Subscriber Lookup

Yes, we have located your name on the list of impacted accounts. We have tried to recover as much of the data as possible from our retailers and branches, but we recommend that you monitor your bills and report any unauthorized transactions to your bank or credit card company immediately. As a further precaution, we also recommend that you place a fraud alert on your credit file. If you have further questions, please contact The Globe hotline at 1-888-665-2644.

We sincerely apologize for the inconvenience that this incident may cause.

The bold highlights and underscores are mine -- [Chip]

Leaving early for work in a snowstorm is an inconvenience; having to stop for groceries on the way home is perhaps an inconvenience; needing to detour around road construction enroute is an inconvenience; having your e-mail service disrupted for much of the day is a big inconvenience.

Having your credit card number and address disclosed to the world, subject to identity theft and fraud is  not  an  "inconvenience"!

Just having to now contact your credit card company and the credit reporting agencies to alert them to potential identity theft and fraud is more than simply an "inconvenience."  When you punch through the menu choices and sit on-hold interminably waiting for "the next available representative" -- as I did with The Boston Globe itself earlier once I redialed through half-an-hour of busy signals and finally reached the "please hold" message -- you'll agree, and you'll be lucky if that's all it costs you.

It's one thing when scammers and identity thieves obtain your credit card information deceptively, nefariously, fraudulently.  It's another entirely when a business you're supposed to trust inexplicably publishes your confidential financial information, circulates it.  Making your credit card and bank routing numbers available is unconscionable; today it is inexcusable -- and chilling.  Somebody needs to take responsibility for whatever fraud occurs -- punishable by damages.  "We apologize for your inconvenience" just doesn't cut it.

If you are a Boston Globe or Telegram & Gazette subscriber, be warned and protect yourself.  At the very least, inspect your credit card bills very carefully each month for alleged debts you don't owe.

For follow-up see:
World of trouble unfolds over Globe identity gaffe  (Feb. 2)
Hot lines deluged after T&G, Globe leak  (Feb. 2)

Chip Ford

The Boston Globe
Thursday, January 26, 2006

Budget would hike spending 5.3 percent
By Scott S. Greenberger, Globe Staff

Capitalizing on the Bay State's rising tax revenues, Governor Mitt Romney unveiled a $25.2 billion state budget yesterday for fiscal 2007 that would raise overall spending by 5.3 percent and funnel more money to most areas of state government, from state colleges to prisons to public health.

Although annual spending increases have sometimes exceeded 5.3 percent during Romney's tenure, which began in 2003 in the midst of a fiscal crisis, he has never proposed a budget with such a large boost.

The governor's blueprint is the starting point for Beacon Hill's budget debate, which typically concludes in June after the House and Senate have weighed in with their own plans. The 2007 fiscal year starts July 1.

Romney had already revealed the key components of his proposal, a 7.3 percent increase in school aid and a 17 percent jump in other help for cities and towns.

Yesterday he highlighted increases in other areas and renewed his call for a cut in the state income tax rate. Legislative leaders, saying the state cannot afford it, have resisted cutting the rate to 5 percent, which voters called for in 2000. Citing rising revenues and the will of the voters, the Republican governor has proposed lowering the tax rate to 5.15 percent next year and to 5 percent the year after.

Michael J. Widmer of the Massachusetts Taxpayers Foundation, a business-funded group, said that while the local aid increases are significant, "the other areas of the budget, despite modest increases, remain well below where they were five years ago, certainly in inflation-adjusted dollars."

Romney would raise spending in two areas that were hit hard during the budget crisis: environmental programs and public health. The Department of Environmental Protection, the Department of Conservation, and other environmental agencies would receive increases of about $4.8 million, or 2.6 percent. The Department of Public Health would get an additional $25 million, a jump of about 6 percent.

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State House News Service
Wednesday, January 26, 2006

Romney budget would raise spending by $1.3 billion
By Jim O’Sullivan

Gov. Mitt Romney’s budget for the next fiscal year proposes a 5.3 percent hike in spending, drawing on revitalized state revenues to invest substantially in programs that were pared during the recent fiscal crisis.

Based on a tax revenue projection of nearly $19 billion, Romney’s plan includes a phased, two-year rollback of the residential income tax, and a boost of more than $250 million in spending on kindergarten-through-high school education. With an eye on the debate over a health care reform law crackling on Beacon Hill, Romney followed through on last week’s promise to funnel $200 million to a health care reserve that he hopes will make it easier for Democratic legislative leaders to reach an accord.

The Republican governor’s "balanced budget," which now heads to the Democrat-run Legislature, would enlarge total state spending over this fiscal year by $1.3 billion to $25.19 billion – the budget also used federal reimbursements and fee revenues. Over the past four years, budgetary increases have averaged 3.7 percent, Romney said. Last year, his initial budget plan would have bolstered spending 2.4 percent.

"We’re generating the surpluses that allow us to invest where we care most deeply," Romney said at a press conference here. "And for me, that’s education, it’s health care, it’s supporting our municipalities. And, of course, it’s listening to the voters and doing what they, in a democratic system, told us to do."

Earlier this month, Romney told local officials at an annual convention that he would push non-school local aid to climb by $198 million to $1.353 billion, a 17 percent hike.

Early objections to Romney’s budget included doubts about how the state could bankroll the plan.

Michael Widmer, president of the Massachusetts Taxpayers Foundation, questioned whether state revenues could underpin the Romney budget. Widmer said the governor’s budget may be $500 million out of balance.

"In fiscal crises, we have to dip into resources," Widmer told reporters after the administration’s presentation. "But in better fiscal times we should not be spending any more than we’re taking in in any given fiscal year."

Widmer acknowledged the "ironic" nature of his criticism, given that Democrats and local officials have historically pilloried Romney for not spending enough. He called the governor’s spending propositions "very generous."

Romney communications director Eric Fehrnstrom said Widmer’s criticism didn’t take into account this year’s surpluses, which mean next year’s revenues are growing off a larger base.

The Romney budget includes several "savings" proposals. Romney would freeze nursing home reimbursement rates that have stayed ahead of inflation while nursing home usage has declined, netting $102 million. By raising state employee group health insurance contribution percentages to 25 percent from their current 15 percent levels, Romney said, another $85 million could be saved.

Since 2001, the cost to the state of furnishing health insurance to state employees, both active and retired, has soared by almost 30 percent. The Legislature briefly agreed to increase the portion of health care costs paid by state employees, but this year restored previous benefit ratios, citing recovering state revenues.

The budget also calls for the elimination of the Inspector General’s office and consolidating its powers under the state Auditor, saving another $2.6 million. Lawmakers have rejected that idea in the past.

Through the final budget he files as the Commonwealth’s chief executive, Romney wants to alter significantly the state’s formula for parceling out school aid. The new policy would determine Chapter 70 distributions by taking into account residential incomes and property values in a manner that is similar to a funding method the Senate has twice approved.

Currently, the formula weights property values heavily, and schools adversely affected by the current formula have been clamoring for a major redraft.

Romney’s budget takes a step towards implementing a new capital gains tax law. It appropriates $60 million to reimburse taxpayers who paid taxes in 2002, before passage of a law this year that changed the date of that tax hike. The $60 million would be drawn from the state’s so-called rainy day fund, which Romney said would still rise to a record $2.3 billion.

Repeating his call for rolling back the personal income tax, the governor’s plan puts forth a staged, two-year plan sliding the 5.3 percent rate back first to 5.15 percent, then to 5 percent, the level decreed by voters in a 2000 vote. Those rollbacks would cost the state $132 million in calendar 2007 and $488 million the next year, according to the governor’s office.

Fielding questions from reporters after his presentation, Romney said that proposal’s fate in the Legislature, which has traditionally resisted the voter mandate, would be "kind of hard for me to predict."

"It’s very hard to go to the voters and say, 'We still need your money.' And, I think for that reason, that there will be a recognition that bringing it down, in a stepped fashion, will work," Romney said, noting that he would prefer a one-year reduction to 5 percent.

The new Chapter 70 plan also incorporates enrollment trends, including cuts to 23 school districts that show enrollment declines. Romney said that the decision was made intentionally to discourage local officials from preventing population growth by cutting funding for 23 communities, a savings of under $1 million.

"We decided that that’s the wrong message to send," Romney. "Even though the number is small, we do want to communicate to cities and towns that if their schools are shedding students – because people don’t want to enroll in their schools or move to their towns or they’re not opening their doors to housing – that there will be a consequence of less funding."

In addition to its core spending directives, the document contains 91 outside sections, including a transfer of the Alcoholic Beverage Control Commission from the Treasury to the Executive Office of Public Safety. Several of the state’s largest spending priorities are funded "off-budget," and not included in Wednesday’s discussion: the public employee pension system, the state’s share of the Massachusetts Bay Transportation Authority budget, and the school building assistance fund.

The House of Representatives on Wednesday almost immediately referred Romney’s plan to its Ways and Means Committee. The document will wend its way through the House and Senate, respectively, before a conference committee returns the plan to his desk. The new fiscal year begins July 1.

Romney was joined at the late-morning press conference by Cabinet members and other high-ranking administration officials, including Administration and Finance Secretary Thomas Trimarco, in his first budget cycle as a Romney aide.

Lt. Gov. Kerry Healey, a candidate for governor, led off the budget presentation, highlighting spending increases in a number of programs – including substance abuse, domestic violence, and homelessness prevention – that she called "near to my heart."

One line item Healey hailed was $750,000 for the establishment of a "witness protection board," an anti-violence initiative tailored to prevent gangs from intimidating witnesses.

Despite the 17 percent proposed leap in a local aid account, Romney said, "It’s by no means a time of luxury in our municipalities. It’s still very tight – It’s still a time for conservative spending in our communities, and they don’t feel like they’re awash in cash by any means."

Medicaid spending would rise 3.4 percent, from $6.8 billion to $7.1 billion, while the state adds 30,000 new "lives" to the rolls, Romney said. Due to sound management of drug costs, he said, the Bay State’s Medicaid spending growth is "either the lowest or near the lowest rate of growth in the entire nation."

While acknowledging that many senior citizens have encountered problems subscribing to the new program, Romney said that the federal Medicare Part D changes have saved the state nearly $100 million. He is proposing a reduction from $92.2 million to $59.6 million in the state’s Prescription Advantage, with the difference going toward the implementation of the Part D changes.

"It’s hard to tell at this point what it’s going to cost, but we do know it’s going to cost significantly less," said Sue Kirby, director of the Massachusetts Senior Action Council. "As we’re sitting right now, it looks like that’s going to cover what’s there."

Higher education funding is marked for a 5 percent jump, with individual institutions receiving money based on changes in their enrollment figures. Romney’s "House 2" budget calls for an 80 percent, $8 million drop in Lottery advertising.

"We don’t think it’s terribly effective in generating additional revenue," Romney explained.

Lottery officials have touted advertising as an effective means of drawing customers to their games and boosting revenues to cities and towns. "We couldn’t disagree more," said Lottery spokeswoman Beth Bresnahan, pointing to an uptick in Lottery revenues over the last three years, when the commission’s advertising budget had been restored after its elimination in FY97.

Bresnahan said, "Our advertising capabilities have a direct effect on our ability to increase revenues and maximize the local aid return to cities and towns. We’re hoping the Legislature will take that into consideration when crafting their budgets for the next fiscal year."

One outside section would privatize urban skating rinks, an effort Democratic legislators have battled in the past. Sen. Jack Hart, the South Boston Democrat whose district includes two rinks, said reflexive community resistance to the privatizations has eased as their physical conditions have declined. Efforts to outsource other rinks have garnered positive reviews, Hart said.

"It hasn’t been met with fierce opposition of late, because I think people want to engage in the discussion about what the long-term fate of the rinks are," Hart said.

Grants for the Massachusetts Cultural Council would decline by $1.4 million to $6 million, a cut Hart said was short-sighted. The council distributes arts promotion grants for non-profits, schools, communities, and artists.

"It’s unfortunate that the governor seems to be unaware of how tourism, arts, and culture really play a huge role in our economy here," said Hart, chair of the Joint Committee on Tourism, Arts, and Cultural Development.

The state’s fiscal shortage taught policymakers lessons in resource management, Romney said.

"We can economize and, in some agencies and some departments, the reductions were a good thing. They allowed us to look and see what things were really essential and what things were not," he said. Douglas Foy, Romney’s secretary for development, said the Department of Environmental Protection, which falls under his purview, is an example of savings through regulatory changes, such as paperwork costs transferred to computers. Foy called it "trying to get leaner and meaner at the same time."

While one $3.2 million investment would aid mentally ill homeless people, the Massachusetts Rental Voucher Program, which offers rental housing assistance to homeless families, would see a $2 million drop. Overall, lawmaker reaction to Romney’s announcements was muffled, as leadership remained intent on resolving conference committee disagreements on four different bills.

Senate President Robert Travaglini, an East Boston Democrat, said Romney’s restructuring of the Chapter 70 formula was not a novel venture. Senate Ways and Means chairwoman Therese Murray (D-Plymouth) had earlier approached him "to revisit and to modify the existing equation" already, he said.

"She is the chairwoman of Ways and Means. When she comes to the president and asks me to look at a condition that she finds disturbing, I’m going to look at it," Travaglini told reporters before the governor’s press conference. "And she’s already done that. So the governor is just reinforcing a condition that was brought to my attention by Senator Murray a year and a half ago asking me, in some way, to give some time and energy to that condition. And I’m going to do that."

Rep. Harriet Stanley (D-West Newbury), a self-described "fiscal conservative," said of the governor’s proposal, "I think that it reflects some needed spending, and I don’t say that lightly."

Of Romney’s suggested changes to the school aid system, Stanley said, "I think that the governor was right on to tackle the Chapter 70 funding formula. I don’t think he got where we need to go, but there has been no legislative process so far."

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The Boston Globe
Thursday, January 26, 2006

A Boston Globe editorial
Rejiggering school aid

With state revenues on the increase, this is a good year to reconsider the formula that provides education aid to Massachusetts school districts. Governor Mitt Romney, in his budget filed yesterday, proposed an overall increase that would benefit communities whose income levels do not match their high property values. The Legislature, as it considers his plan, needs to keep in mind the purpose of the 1993 school reform law -- to help communities that lack the taxing ability to provide a quality education.

Some communities have accused the state of maintaining an unfair school aid system. These complaints grew sharper as overall assistance declined as a percentage of school spending because of the budget crisis. Four years ago, state aid comprised 40.9 percent of total school spending. This year, the figure stood at 36.6 percent.

It is sound policy for the governor to propose an increase in school aid of $275 million. Even more may be justified depending on projections of state revenue growth. Legislators need to make sure that, as his budget message says, the new formula is ''directed to districts in greatest need of assistance." Additional aid should not go to wealthy communities that can easily afford to raise the money on their own.

The governor would increase the foundation budget for each student -- the amount the state guarantees to the neediest communities -- from $7,903 to $8,345. The higher figure would reflect a better estimate of inflation. The Legislature needs to consider whether this might be raised further to offer teacher training and support not considered as important a decade ago as they are today.

The growth in tax revenues offers the governor an opportunity to redress an injustice to cities and towns -- the decision by the Legislature to divert lottery income to the state. The lottery money should go where it was intended, to help pay for local services. Romney's budget also contains an incentive for housing construction and reserves $200 million for new health insurance initiatives. But there's pent-up demand for higher education and other state services that were pared back during the budget crisis. It's unwise to cut the income tax this year, as Romney proposes.

While state revenues are on the rise, another decline is inevitable in a few years. The governor, however, expects the rainy day fund, which provides a reserve to soften economic downturns, to stabilize at about $2.6 billion -- hardly enough to protect state programs from the ravages of a recession.

The need to increase the state's reserves strengthens the argument against a tax reduction. Cutting taxes now would be like rebuilding the New Orleans levees just as they were before Hurricane Katrina.

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The Boston Herald
Thursday, January 26, 2006

A Boston Herald editorial
Kiss for the commonwealth

Gov. Mitt Romney’s parting gifts — a huge boost in local aid, plus new money for health care, housing and education outlined in his budget yesterday — come at a hefty price. Politically, he won’t be around to pay for it. So does he care if the state spends more than it takes in next year?

Maybe not. Michael Widmer, president of the Mass. Taxpayers Foundation, says Romney’s $25.2 billion budget is off by half-a-billion dollars. Spending goes up by $1.3 billion, but revenue is only expected to grow by $800 million. "We don’t see how this state is going to pay for it on an ongoing basis," said Widmer, usually the last guy to question budgetary largesse. We’re wondering ourselves. But it makes for nice headlines, no?

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