CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

CLT UPDATE
Wednesday, January 7, 2009

Let their collapse speak for itself



It now seems likely that drivers will face an increase in tolls, gas taxes, or MBTA fares, or some combination of the three, in the year ahead. As the negotiations begin, lawmakers will have to navigate a thicket of differences, drawn largely along geographical lines, as they try to figure out how to fairly distribute the cost of getting rid of potholes and keeping the trains running....

Toll increases have become the most immediate public concern. Patrick has backed a Turnpike Authority proposal that would double cash tolls to $7 at the Ted Williams and Sumner tunnels and raise them to $2, from $1.25, at the Weston and Allston-Brighton booths....

House Speaker Salvatore F. DiMasi backs raising the gas tax to avoid a toll increase. Patrick has not backed a gas tax but recently has suggested that it could become part of an agreement, given the level of interest in the Legislature.

Any tax increases will face opposition as the state and national economy struggles.

"It's a scam," said Barbara Anderson, executive director of the Citizens for Limited Taxation, "to neglect the things that everybody agrees [are needed] so you can spend the money on the things that voters don't like."

The Boston Globe
Wednesday, January 7, 2009
Shifting dynamics complicate transit plans


Tax collections in Massachusetts were up $21 million last month from the same time in 2007, but they would have been sharply off without sizable one-time corporate tax payments, and the state's financial outlook remains troubled. Revenue Commissioner Navjeet K. Bal said yesterday that the preliminary total for December tax collections was $1.866 billion, $55 million above benchmarks set in October.

The Boston Globe
Wednesday, January 7, 2009
NEW ENGLAND IN BRIEF
State tax revenue up $21m last month


Governor Deval Patrick is pushing lawmakers to expand the state's ability to collect sales tax on products sold over the Internet, which could add millions of dollars in revenue each year and alleviate a severe budget crisis....

But opponents argue such a tax would unfairly burden Internet retailers with the cost and complication of setting up systems to collect the tax and expose them to audits if tax collectors argue they did not collect enough.

"Why in the world would you think increasing taxes on people buying stuff would help the economy?" said Grover Norquist, president of Americans for Tax Reform. "It won't do anything other than throw sand in the gears of commerce."

The Boston Globe
Tuesday, January 6, 2008
Patrick wants Net sales tax created
Mass. coffers would gain $15m per year


Members of a panel charged with recommending financing ideas in light of Gov. Deval Patrick’s ambitious education reform plans are considering a hike in the state’s sales tax as part of a package that would also include cost-saving measures.

A draft report obtained by the News Service portrays an 18-member panel of businessmen, academics, and policy experts, known as the Readiness Finance Commission, wrestling with the prospect of a tax increase and its possible impact on both public education and the state’s economic competitiveness.

The draft report noted that a majority of the commission agreed on the need for new revenues, with savings alone not being able to meet immediate funding needs. Some felt that the governor should “first consider an increase in the sales tax.” ...

“In this context, based on a review of the various revenue measures available, the Commission favored the sales tax as the best mechanism to include in a finance reform package that would also feature the cost savings and restructuring measures being recommended,” according to the draft....

The commission, co-chaired by Suffolk Construction CEO John Fish and Bentley University President Gloria Larson, has been meeting privately since it was first convened over the summer, looking at various proposals over the course of six meetings and one public hearing.

State House News Service
Monday, December 22, 2008
Sales tax hike, cost savings mulled
by education panel appointed by Patrick


Mayor Thomas M. Menino has kept secret his cop son’s side job with a politically wired construction firm, claiming he didn’t have to disclose the potential conflict because he has no role in the company’s city business.

“Suffolk has had no business with the city that the mayor has had direct control over,” said Menino spokeswoman Dot Joyce.

However, Suffolk Construction, which employs Menino’s son, Boston Police Detective Thomas Menino Jr., as a safety engineer, has built schools, government buildings and other multimillion-dollar projects in the city. And Suffolk executives frequently venture to City Hall seeking permits before agencies under the mayor’s control....

Besides the mayor’s son, Suffolk employs former Boston Redevelopment Authority officials, as well as Menino’s former top City Hall adviser and longtime political operative Peter Welsh. Menino’s brother, David, also works for Suffolk.

Suffolk executives have long supported the mayor, including the company’s president John Fish, who has been a campaign donor.

The Boston Herald
Wednesday, January 7, 2008
Mayor tight-lipped on son’s part-time job


Education policy-makers are praising an education financing panel’s consideration of a number of cost-saving reforms, along with an increase in the state’s sales tax.

State House News Service
Tuesday, December 30, 2008
Education, business leaders debate merits and pitfalls of new taxes


Additional funds will be necessary to maintain basic educational services and to pursue "vital" investments in public education, but any revenue-generating measures should be tied to restructuring and cost-saving reforms, according to the final report of Gov. Deval Patrick's Readiness Finance Commission released on Wednesday....

In a statement, Reville said the report is a “significant contribution to our efforts to achieve maximum efficiency and educational effectiveness in these challenging times.” Reville was not available for comment Wednesday.

Commission co-chairs John Fish, CEO of Suffolk Construction, and Gloria Larson, president of Bentley University, did not return phone calls seeking comment.

State House News Service
Wednesday, December 31, 2008
Patrick panel identifies education finance,
cost savings options


Massachusetts residents are more willing to embrace higher gas taxes to repair the state's crumbling transportation system than any other proposed solution, including higher tolls or more booths at the state's borders, a Boston Globe poll shows....

"None of them are popular," Smith said, "but it's the least unpopular option. It's the medicine that people know that may taste the best going down." ...

While the poll suggests that political leaders might be able to sell a gas tax increase to Massachusetts residents, they would not have carte blanche. A plurality of those who responded, 47 percent, said they would accept an increase of only 5 cents per gallon. Support dropped as the increase got higher.

The Boston Globe
Sunday, December 21, 2008
Grudging support for gas tax hike in poll
Funding option favored over increase in tolls


Chip Ford's CLT Commentary

Alright, all that we've predicted about the end results from over-spending year after year is again visited upon us.  The "Best Legislature Money Can Buy" and our local elected officials have delivered something finally, on time and on schedule:

The current fiscal crisis.

I'm not going to waste your time predicting what's ahead -- heck, none of them even have a clue.  But the tax-borrow-and-spenders have the governor's ear, obviously.

Get ready.

We taxpayers are being assaulted.

This is war.

We've got a lot of work ahead in the coming year just to hold our own . . .

Chip Ford


The Boston Globe
Wednesday, January 7, 2009

Shifting dynamics complicate transit plans
By Noah Bierman

Legislators and Governor Deval Patrick have promised that fixing the state's crumbling transportation system would be near the top of the agenda as the yearly session begins today. But with a new transportation secretary preparing to take office next week and a very unpopular toll increase set for a vote later this month, the dynamics have begun shifting even before any plans have officially been submitted.

It now seems likely that drivers will face an increase in tolls, gas taxes, or MBTA fares, or some combination of the three, in the year ahead. As the negotiations begin, lawmakers will have to navigate a thicket of differences, drawn largely along geographical lines, as they try to figure out how to fairly distribute the cost of getting rid of potholes and keeping the trains running. At the same time, Patrick and others have promised voters they would fundamentally change the system to get rid of the culture that led to the current problems.

"The fundamentals in our transportation system, quite frankly, are broken," said Senator Steven A. Baddour, a Methuen Democrat who cochairs the Joint Committee on Transportation, during a committee hearing yesterday.

Observers and political leaders say that Beacon Hill must take advantage of the political opportunity - now that the toll proposal and ensuing debate have attracted the public's attention - to fix the transportation problems all at once, while legislative elections are still more than a year away.

"Every time you turn around, the numbers keep coming back to us," said Stephen J. Silveira, chairman of the state Transportation Finance Commission. Silveira testified at yesterday's hearing. "If anything, the numbers have gotten worse. . . . As much as we'd like to give everything away and have cookies and ice cream for everybody, that's just not going to happen."

Silveira's commission, created in 2004, said two years ago it would cost an extra $15 billion to $19 billion over the next 20 years to maintain the existing road and public transit network. Commission members who testified yesterday said the state cannot fix the problem with reform alone, and they recommended a higher gas tax, along with increases in MBTA fares and tolls. The commission said many of its recommendations from 2007, including one to reduce MBTA worker benefits, have not been accomplished.

Toll increases have become the most immediate public concern. Patrick has backed a Turnpike Authority proposal that would double cash tolls to $7 at the Ted Williams and Sumner tunnels and raise them to $2, from $1.25, at the Weston and Allston-Brighton booths. A final vote is scheduled Jan. 22, with the new rates scheduled to take effect in early April.

But incoming transportation secretary James A. Aloisi Jr., who will lead the turnpike's board when he takes office, has said he will give the toll proposal a fresh look, leaving the Patrick administration an opening to shift its position. Residents in the western suburbs, the North Shore, and East Boston have been strongly opposed. Some lawmakers have said they would refuse to look at higher gas taxes and other transportation proposals, including Patrick's, if the tolls rise as proposed.

Over the next few weeks, lawmakers are expected to negotiate what all players are calling a comprehensive solution.

Patrick has promised to submit a plan this month that would abolish the Turnpike Authority - removing most tolls west of Route 128 and turning over the eastern portion of the turnpike to the Massachusetts Port Authority. Baddour said the Senate will submit its own plan and talked yesterday about merging more transportation agencies.

House Speaker Salvatore F. DiMasi backs raising the gas tax to avoid a toll increase. Patrick has not backed a gas tax but recently has suggested that it could become part of an agreement, given the level of interest in the Legislature.

Any tax increases will face opposition as the state and national economy struggles.

"It's a scam," said Barbara Anderson, executive director of the Citizens for Limited Taxation, "to neglect the things that everybody agrees [are needed] so you can spend the money on the things that voters don't like."


The Boston Globe
Tuesday, January 6, 2008

Patrick wants Net sales tax created
Mass. coffers would gain $15m per year
By Casey Ross

Governor Deval Patrick is pushing lawmakers to expand the state's ability to collect sales tax on products sold over the Internet, which could add millions of dollars in revenue each year and alleviate a severe budget crisis.

Patrick's revenue commissioner, Navjeet K. Bal, has submitted a report to the Legislature asking it to approve an Internet sales tax by the end of this year. Currently, only Internet retailers that have in-state locations, such as stores and warehouses, collect and remit sales taxes on purchases by Massachusetts residents.

The proposed law would expand that to collect taxes from Internet retailers that have agreed to participate in a multistate compact, called the streamlined sales tax initiative. Because participation is voluntarily, Massachusetts officials estimate the state would collect only an additional $15 million in taxes a year.

Still, state officials said passage of the law would help spur Congress to approve a broader version of an Internet sales tax that could produce hundreds of millions of dollars in additional revenue.

So far, 22 states have adopted Internet, phone, and mail-order sales taxes based on the streamlined sales tax system.

Legislation by Congress would require all 45 states that have sales taxes to collect on those transactions. Because it would be a federal mandate, the law would dramatically increase the number of retailers required to participate, generating as much as $545 million for Massachusetts alone, according to an analysis by the University of Tennessee.

The US House version of the bill is sponsored by Representative William Delahunt, Democrat from Quincy, who has argued that implementing the tax agreement is more about creating a fair tax policy than raising revenue.

"This will protect Massachusetts businesses that are disadvantaged by the current system," Delahunt said. "Small- and medium-sized businesses need this in order to compete with large sellers from out of state" that aren't required to collect and remit sales taxes.

But opponents argue such a tax would unfairly burden Internet retailers with the cost and complication of setting up systems to collect the tax and expose them to audits if tax collectors argue they did not collect enough.

"Why in the world would you think increasing taxes on people buying stuff would help the economy?" said Grover Norquist, president of Americans for Tax Reform. "It won't do anything other than throw sand in the gears of commerce."

In Massachusetts, the tax proposal appears to enjoy broad support in the Legislature, where members are grappling with anticipated budget cuts that could reduce local aid to communities, hurting schools and cutting public safety services. A special corporate tax committee that studied the issue voted 14 to 1 in 2007 to support its implementation here.

Even the one lawmaker on the committee who voted against it, Brad Jones, a North Reading Republican, now sounds more supportive. Jones said an Internet sales tax would be a far better option for the state than an across-the-board tax increase. He noted that taxing Internet sales is technically not a tax increase, because consumers are currently required under a seldom-enforced law to pay tax directly to the state on those items they've purchased from out-of-state vendors.

"There are some questions that need to be vetted and explored, but this is something that is deserving of consideration," Jones said.

Some of those questions include whether the state can reconcile conflicts in its tax code with the system being developed by the streamlined project. For example, the current system does not allow states to use price thresholds when taxing certain categories of products, but Massachusetts only taxes clothes that cost more than $175.

Last month the members of the multistate organization gave preliminary approval to allowing the Massachusetts clothing threshold. A final vote is expected within months.


State House News Service
Monday, December 22, 2008

Sales tax hike, cost savings mulled
by education panel appointed by Patrick
By Gintautas Dumcius

Members of a panel charged with recommending financing ideas in light of Gov. Deval Patrick’s ambitious education reform plans are considering a hike in the state’s sales tax as part of a package that would also include cost-saving measures.

A draft report obtained by the News Service portrays an 18-member panel of businessmen, academics, and policy experts, known as the Readiness Finance Commission, wrestling with the prospect of a tax increase and its possible impact on both public education and the state’s economic competitiveness.

The draft report noted that a majority of the commission agreed on the need for new revenues, with savings alone not being able to meet immediate funding needs. Some felt that the governor should “first consider an increase in the sales tax.” But the draft report added, “Additionally, some members felt the state should require implementation of cost-savings measures before looking to new revenues.”

A commission member who declined to be named said the panel has not reached consensus on revenues.

A spokesman for the Executive Office of Education stressed the report was still in draft form.

Patrick tasked the commission with coming up with a way to pay for his proposed education reforms, aimed at bringing the state’s education system into the 21st century over the next 10 years. He directed them to consider all options except raising local property taxes.

Analysts predict a fiscal 2010 budget gap of $2 billion to $3 billion, and school districts, early education providers and public higher education institutions are preparing for a “nearly unprecedented reduction” in funding, according to the draft. The state is also struggling with rising health care costs and transportation funding deficits.

“In this context, based on a review of the various revenue measures available, the Commission favored the sales tax as the best mechanism to include in a finance reform package that would also feature the cost savings and restructuring measures being recommended,” according to the draft. “Many Commission members believed that both cost-cutting and revenue strategies will be needed and should be pursued simultaneously. Commission members felt that, without this kind of multi-pronged approach, there would be a risk of losing ground in existing programs and infrastructure.”

The state in the next several years will be preoccupied with preserving the “existing level” of quality in the education system, the report states, and policymakers must “seize the moment” to make changes in the structure and operation. “In the long run, the Commission concluded that the state’s strategy for educational transformation must make efficiencies and restructuring a part of genuine education reform,” the draft report says. “As these changes are implemented any available revenues can then be directed to the education sector in the knowledge that they will be spent efficiently and effectively.”

The state sales tax is currently 5 percent of the sales price or rental charge of personal property or telecommunications services. Roughly 40 percent of sales tax revenues help fund the Massachusetts Bay Transportation Authority and the Massachusetts School Building Authority. Next to the income tax, the sales tax is the state’s second largest source of tax revenue, generating just over $4 billion in fiscal 2008.

The draft report does not recommend a specific increase in the sales tax and repeatedly points to a package that would also have to contain cost savings and restructuring measures that would be “pursued simultaneously” and implemented as soon as possible.

The report noted some of the concerns among commission members that they do not have tax policy expertise.

“Consequently, there was some reluctance to detail specific tax recommendations,” the draft report says. “Notwithstanding these considerations, because of existing needs and the dire outlook for the upcoming fiscal year, the Commission was convinced of the need for additional investment to attain the education goals set forth by Governor Patrick.”

The draft report also recommends linking increments of state aid to the implementation of some of the cost-saving ideas. “Small amounts of aid could be withheld to encourage particular practices that are sensible, consistent with statewide goals and ultimately beneficial to students,” the report says.

As an example, the report points to a group purchasing strategy for higher education institutions as a condition for issuing state aid.

“A positive side effect of such an approach is that practices once viewed as politically difficult become more feasible when state aid is the incentive,” according to the draft. “At the same time, the Commission acknowledged that municipalities and districts must be given the tools necessary to implement those changes before this kind of linkage is established.”

Other cost savings opportunities included in the draft report:

-- Reducing retiree benefit costs by moving retired teachers into Medicare;

-- Regionalization of school districts to increase efficiency and capacity;

-- Reducing procurement costs through procurement reform and coordinated purchasing;

-- Moving municipalities into the Group Insurance Commission to reduce employee health insurance costs;

-- Reducing energy costs through conservation campaigns, better purchasing and use of energy savings companies;

-- Maximizing federal Medicaid reimbursements for special education costs;

A partial list of priorities of the Readiness Project, as Patrick’s ten-year education reform effort is called, includes cost estimates for free community college ($92 million for all 51,000 full or part-time students in the community college system); universal pre-kindergarten ($302 million to $595 million); full-day kindergarten for high-need districts ($2.7 million); expanded learning time ($219 million); increased financial aid ($29 million, restoring MassGrants to a fiscal 1989 peak) and the higher education funding formula ($550 million), according to the draft report.

The commission, co-chaired by Suffolk Construction CEO John Fish and Bentley University President Gloria Larson, has been meeting privately since it was first convened over the summer, looking at various proposals over the course of six meetings and one public hearing.

Fish and Larson met with the governor on Monday to speak with him about the impending report, according to sources familiar with the meeting.


The Boston Herald
Wednesday, January 7, 2008

Mayor tight-lipped on son’s part-time job
By Dave Wedge

Mayor Thomas M. Menino has kept secret his cop son’s side job with a politically wired construction firm, claiming he didn’t have to disclose the potential conflict because he has no role in the company’s city business.

“Suffolk has had no business with the city that the mayor has had direct control over,” said Menino spokeswoman Dot Joyce.

However, Suffolk Construction, which employs Menino’s son, Boston Police Detective Thomas Menino Jr., as a safety engineer, has built schools, government buildings and other multimillion-dollar projects in the city. And Suffolk executives frequently venture to City Hall seeking permits before agencies under the mayor’s control.

State ethics laws require municipal officials to disclose all potential conflicts to the city clerk’s office. The law also requires elected officials to recuse themselves from decisions that could impact the personal finances of themselves or their immediate family members.

Suffolk has also built a slew of major developments backed by the mayor, such as the $30 million Boston Opera House renovation and the $55 million Landmark Center in Allston. The firm is also building the $5.8 million Camp Harbor View - reportedly at cost - for city kids on the Boston Harbor Islands, a Menino pet project.

In addition, the mayor chairs the George Robert White Fund, a public charitable trust administered by the city that paid $2 million in 2007 to renovate a Roxbury community center. Suffolk was the job’s contractor.

“The George Robert White Fund funds projects. It does not decide who the developers or construction teams are,” Joyce said.

Menino made no disclosure of his son’s 20-hour-a-week Suffolk job and has never filed any disclosures of potential conflicts with the clerk’s office, officials said.

Joyce said the mayor believes “there is no conflict,” but that city Corporation Counsel William Sinnott - appointed by Menino - is looking into whether the mayor is required to file an ethics disclosure over his 39-year-old son’s job.

Menino Jr., an $86,000-a-year Boston police detective, has been working mornings for Suffolk since January 2008, in addition to his nightly 4 p.m. to midnight shift in the BPD’s intelligence unit.

His moonlighting is a rarity in the BPD, where just 44 detectives and superior officers have department-approved outside employment. Among the secondary occupations held by cops are lawyers, carpenters, consultants, movie extras and college professors, records show.

Besides the mayor’s son, Suffolk employs former Boston Redevelopment Authority officials, as well as Menino’s former top City Hall adviser and longtime political operative Peter Welsh. Menino’s brother, David, also works for Suffolk.

Suffolk executives have long supported the mayor, including the company’s president John Fish, who has been a campaign donor.


State House News Service
Tuesday, December 30, 2008

Education, business leaders debate merits and pitfalls of new taxes
By Gintautas Dumcius

Education policy-makers are praising an education financing panel’s consideration of a number of cost-saving reforms, along with an increase in the state’s sales tax.

But a Bay State retailers’ association that routinely lobbies for an annual sales tax holiday says an increase would be ill timed and ill-advised during a recession economy that is blasting billion-dollar holes in the state budget.

Former Democratic gubernatorial candidate Christopher Gabrieli, a venture capitalist who is also chairman of the education think tank Mass2020, said he had not seen drafts of the report from the Readiness Finance Commission, the panel that Gov. Deval Patrick set up to cost out his reform proposals. The final report is due out Wednesday.

Gabrieli said the 18-member group, made up of businessmen, academics, and policy experts, is right in raising the prospect of an increase in the 5 percent sales tax.

“I’m glad that commission is helping put it on the table as the transportation commission did” in suggesting an increase in the gas tax, another revenue source Beacon Hill is now considering, Gabrieli said. “I think it’s difficult for the legislative leaders and the governor to raise it.”

He said Massachusetts no longer has the high taxes it was once notorious for and anecdotally pointed to his fellow venture capitalists in New York and California paying more than he does in taxes. Other states in the country are pursuing tax increases as the recession hits harder and seeking to avoid cuts in economic drivers like education, he said.

“I think sometimes the conversation in Massachusetts is in a time warp. California has a Republican governor calling for tax increases,” Gabrieli said, referring to California Gov. Arnold Schwarzenegger. “I think the notion that we all want to be careful about these things, the notion that it would be off the table, would put us in a radical position.”

In the draft report obtained by the News Service, the commission appears to struggle with the idea of raising the sales tax, but ultimately endorses the hike. But members also recommend cost-saving measures such as reducing retiree benefit costs by moving retired teachers into Medicare; the regionalization of school districts to increase efficiency and capacity; and moving municipalities into the Group Insurance Commission to reduce employee health insurance costs.

Jonathan Palumbo, a spokesman for the education secretariat, said they’ll be “more than willing” to discuss the recommendations when the final report is released Wednesday.

“Further, I would caution people from drawing any conclusions or reacting in any way to what is alleged to be a draft report,” Palumbo said. “The fact of the matter is, the report has gone through many iterations, and has grown and has developed, and is at a point where the commission is confident in the content of the report.”

Patrick directed the commission, co-chaired by Suffolk Construction CEO John Fish and Bentley University President Gloria Larson, to consider all options, except raising local property taxes, to pay for modernizing the state’s education system. The plans include costly items like free community college. Patrick has said that the downturn will likely force him to pare back some of his proposals.

Others in the education policy arena expressed hope for a sales tax increase and the other reforms the commission appears to be considering.

“We're sort of hoping the sales tax would be on the table,” said Glenn Koocher, executive director of the Massachusetts Association of School Committees. “There's a groundswell coming from the membership for the sales tax.”

Koocher added that moving retired teachers into the Medicare system is a “no-brainer.” “Joining the Medicare system is something that's critical, that's easy,” he said. “If those proposals are among the group is looking at, how great it is to hear the sound of one's own voice coming from another source.”

In the business community, the reaction was more mixed, with some saying a hike in the sales tax would put small business owners out of work and drive customers to New Hampshire, where there is no state sales tax.

“Downtowns are going to be hammered. All those employees are going to be put out of work. It's just an absurd suggestion,” said Jon Hurst, head of the Massachusetts Retailers Association. “They'll probably declare a holiday in New Hampshire, because it's what brings in a huge amount of New Hampshire's business.”

Hurst said that the sales tax, while providing the state with over $4 billion in revenue in fiscal 2008, is unstable.

Discussion over the sales tax had previously arisen in a March “long term financing” report prepared by a subcommittee formed as part of Patrick’s Readiness Project. The subcommittee said at the time that a 1 percent increase would net $700 million in revenue and said the tax is “generally stable, but can fluctuate based on the economy.”

That subcommittee, which recommended that the Readiness Finance Commission be created to look into the issue and other taxes, added that the sales tax falls “disproportionately on lower income brackets.”

The MBTA and the Massachusetts School Building Authority are aided in part by 40 percent of sales tax revenues, which have continued to slump and have forced the state to cover the quasi-public agencies’ losses, as required by law.

Alan Macdonald, executive director of the Massachusetts Business Roundtable, said he was unsure what stance his group will take on a potential sales tax increase. Their task force on education meets on Jan. 15.

“We'll see where we go on this one. I can't predict where we are on the sales tax,” he said, adding that during the last round of education reform, in 1992, they supported an increase but a healthy economy rendered it unnecessary.

Readiness Finance Commission members have declined to return phone calls or speak on-the-record about the proposals, saying they are willing to talk only when the report is finalized.

House Minority Leader Bradley Jones (R-North Reading) voiced concern that a possible sales tax increase could lead to the MSBA and the MBTA receiving less in the end. “Are they going to be increased or reduced by some amount?” he said, adding that he is siding with commission members who say they want to see the reforms before talk turns to revenues.

Separately, the co-author of the state’s 1993 education reform law hammered the Patrick administration’s education reform efforts on another front.

Former Senate President Thomas Birmingham, a Chelsea Democrat, told a crowd of education policy-makers earlier this month that he was “personally discomforted” by the directions of the Readiness Project and a state task force that has recommended teachers include skills such as global awareness, technology and media literacy in the classroom.

Birmingham added that the proposals of the 21st Century Skills Task Force, a group of public and private sector leaders who issued their recommendations in November, “may threaten to dismantle the structure of our success and drive us back in the direction of vague expectation and fuzzy standards,” according to an audio recording of the Dec. 16 event at the Omni Parker House.

“As a political matter, the success of education reform is broadly enough acknowledged to make it practically unlikely to forge an explicit frontal assault on standards and knowledge-based education,” he said. “Instead of that, I worry about a soft subversion of objective assessments, a watering down of clear expectations with vague aspirations.”

Birmingham spoke at a forum on K-12 standards and liberal arts that was sponsored in part by the Pioneer Institute, a right-leaning think tank that has been frequently critical of Patrick’s education reform efforts.


State House News Service
Wednesday, December 31, 2008

Patrick panel identifies education finance, cost savings options
By Gintautas Dumcius

Additional funds will be necessary to maintain basic educational services and to pursue "vital" investments in public education, but any revenue-generating measures should be tied to restructuring and cost-saving reforms, according to the final report of Gov. Deval Patrick's Readiness Finance Commission released on Wednesday.

Commission members, who include lawmakers, corporate executives and education policymakers, are calling for the immediate commencement of cost savings proposals. Those proposals, including a number that would require legislative approval, could produce as much as $550 million in savings, according to the commission.

Citing the economic downturn, which is forcing sweeping state spending cuts, the commission concentrated largely on the cost savings “to maintain support for our education system in a time of inadequate resources.”

But saying savings alone won't be enough, commission members found increasing the sales tax the "most viable" of the revenue-generating options discussed, with the other revenue sources eyed being the gas tax, the income tax, interest and dividend taxes, and the licensing of casinos.

“I’m not saying that at some point, that’s not going to be part of the discussion,” said Rep. Patricia Haddad, co-chair of the Joint Committee on Education and a member of commission, of raising revenues. “But I think in fairness to everybody out there, the first thing you have to do is you make sure you have exhausted every possibility of making changes to the current system before you go ahead and ask people for more money.”

The report was released by the Patrick administration without fanfare during a New Year’s Eve snowstorm.

In fiscal 2008, education spending for schools topped $10 billion, according to the Department of Elementary and Secondary Education.

According the report, the potential cost savings measures include moving municipalities into the Group Insurance Commission to reduce municipal employee health insurance costs ($200 million); reducing teacher retiree benefit costs by moving them into Medicare ($135 million); regionalizing schools’ food services, transportation and building maintenance (almost $20 million); maximizing federal Medicaid reimbursements for special education (over $100 million); reducing energy costs through better purchasing, conservation campaigns and energy savings companies (over $100 million); and enacting procurement reform and coordinating the purchase of utilities, bookstore contracts, office supplies, vending contracts, (savings “range”).

Haddad said she would push for regionalization, which some communities oppose because they want to keep handling matters on their own, as a top priority. “I think that hard times like this are the times that you can make big institutional changes and they make sense,” she said. “You never make changes like this in good times.”

The commission is also encouraging private fundraising “as a means for jumpstarting the Governor's education agenda.” For instance, the Executive Office of Education is hoping to raise private money to support planning grants for Readiness Schools, which would include charter school-like aspects to encourage innovation, according to the report.

Michael Widmer, head of the business-backed Massachusetts Taxpayers Foundation and a member of the commission, said private fundraising to deal with ongoing costs is unrealistic. “If there’s special projects, private fundraising may be an option,” he said. “When we’re talking about costs in the hundreds of millions, billions of dollars, I think it’s an idea worth exploring but realistically it won’t have much of an impact.”

Widmer said the most important cost savings come from health care and giving municipalities the ability to adjust their own health plans without going through collective bargaining.

Chris Anderson, commission member and president of the Massachusetts High Technology Council, said the commission’s proposed efficiencies will be “very helpful” to lawmakers and Patrick’s education reform agenda.

“But that really just helps the communities manage what they have on their plate today,” he said. “There’s a disconnect where we ended up in terms of looking ahead and how to advance the agenda, mainly because of the deterioration of the state’s finances.”

Because of that, Anderson said he wasn’t sure how any revenues raised, as the report says commission members discussed, are going to advance Patrick’s reform effort, “even if the Legislature decided to raise the sales tax.”

A 1-percent increase in the 5-percent sales tax would draw $720 million in new revenue, according to the report.

Citing an analysis reported to the commission by Augenblick, Palaich and Associates Inc. (APA), the commission "learned that the tax burden in Massachusetts is lower than that of most nearby states and about the same as a handful of states that are similarly situated in terms off population, wealth and student education needs."

The APA report said the overall tax burden in Massachusetts has decreased “significantly” since 1995 and tax reductions were "generally greater" than those enacted in other states over the same timeframe.

In its report, the commission said any increase in the gas tax would likely be devoted to transportation spending and said commission members view increases in taxes on income and interest and dividends as “less tenable approaches given the need to balance any new revenue measures with the state's ability to remain economically competitive.”

The commission, in its conclusions, said the education sector “needs to be a top priority for the state, and represents a worthwhile, indeed critical, investment for the long-term growth and success of the Commonwealth.”

An appendix to the report outlines a series of areas where Education Secretary Paul Reville intends to recommend “modest” funding increases for fiscal 2010, “unless there is a continuing and steep decline in revenue projections.”

The items targeted for potential investment include home-based language and literacy; universal pre-kindergarten; extension of the school day; an increase in state aid, known as Chapter 70; financial aid; and free community college, which would be exclusively offered to teachers, potential early education teachers and low-income parents of public schoolchildren.

The “steep decline” in revenue projections appears to be in progress, with Gov. Patrick announcing another $1 billion in budget fixes appears necessary, on top of $1.4 billion in alterations put in place this fall.

In a statement, Reville said the report is a “significant contribution to our efforts to achieve maximum efficiency and educational effectiveness in these challenging times.” Reville was not available for comment Wednesday.

Commission co-chairs John Fish, CEO of Suffolk Construction, and Gloria Larson, president of Bentley University, did not return phone calls seeking comment.


The Boston Globe
Sunday, December 21, 2008

Grudging support for gas tax hike in poll
Funding option favored over increase in tolls
By Noah Bierman

Massachusetts residents are more willing to embrace higher gas taxes to repair the state's crumbling transportation system than any other proposed solution, including higher tolls or more booths at the state's borders, a Boston Globe poll shows.

In fact, higher tolls - as recently proposed by the Massachusetts Turnpike Authority with Governor Deval Patrick's support - are by far the least popular among an array of suggestions that have been floated to fix the state's transportation woes.

Patrick has called it a bad time, with the economy sagging, to raise the gas tax. House Speaker Salvatore F. DiMasi has said he would prefer a tax hike, which affects motorists generally, to toll hikes that burden only some.

When those polled were asked to choose between raising tolls on the turnpike or raising the gas tax, the tax won out 48 percent to 42 percent. The feelings about taxes or tolls varied considerably depending on where respondents live - toll hikes were the clear preference of those from the state's west and southeast sections, who are least likely to pay them.

But even some who do not regularly drive on toll roads object to the hikes.

"It's outrageous," said Steve Edelheit, a 62-year-old college teacher from Brookline who seldom pays tolls and responded to the poll. "Why should it fall on the backs of those folks to pay for the Big Dig?" The lingering costs of the $15 billion tunnel project and the resulting financial crisis for state roads and public transit have vaulted transportation funding to the top of the state's political agenda.

But residents - by a more than 2 to 1 ratio - say the final product was not worth the time and money invested in it. Sixty-five percent said the Big Dig has had no impact on their travel time, and some said it has even made trips longer. Fifty-four percent said they were at least somewhat nervous driving through the tunnels, which claimed a life in 2006 when a ceiling panel collapsed.

"You've got two-thirds of the people who say it wasn't worth it, but they're going to have to pay for it," said Andrew E. Smith, director of the University of New Hampshire Survey Center, which conducted the Globe's poll. "That makes a political problem."

The poll of 501 Massachusetts residents, which was conducted Dec. 11 through Dec. 18 and has a margin of error of plus or minus 4.4 percent, also measured the popularity of statewide political figures, several of whom are at the center of the transportation debate. DiMasi, although unknown by many of those polled, is viewed the least favorably. Since the Globe's last poll in September 2007, his favorability rating has dipped from 26 percent to 15 percent, as he has become enmeshed in multiple state and federal ethics investigations involving the lobbying efforts of his close associates. In the latest survey, the number of residents who view him unfavorably has grown from 20 percent to 41 percent.

In contrast, Patrick has seen his favorability rating grow from 57 percent last September to 64 percent, even as his constituents appear to be increasingly nervous about jobs and the faltering economy, the poll indicated.

Attorney General Martha Coakley's popularity is similarly high, 58 percent, with only 12 percent viewing her unfavorably; Patrick, by contrast, had an unfavorable rating of 24 percent. And, although the position of state treasurer is normally low-profile, Timothy P. Cahill, a potential candidate for governor, has a relatively strong rating - well-liked by 43 percent of those polled and viewed unfavorably by just 8 percent.

Another statewide issue, casino gambling, has grown slightly in popularity since last year's Globe poll, even as its chances appear slimmer in the Legislature. Fifty-seven percent of those polled favor it, while 40 percent oppose it, compared with 53 percent who supported it last year.

The Legislature, which earlier this year was preoccupied with Patrick's failed effort to legalize casinos, will turn its attention in January to the sagging finances of its transportation agencies. Both the Turnpike Authority and the Massachusetts Bay Transportation Authority are running deficits as they struggle to pay off billions of dollars in debt.

The Turnpike Authority last month gave preliminary approval to a proposal that would charge drivers $7 at the Sumner and Ted Williams tunnels, up from $3.50 now, and $2 at the Weston and Allston booths, up from $1.25. Meanwhile, the MBTA may consider steep fare hikes and deep cuts in bus, train, subway, and light-rail service over the next year.

Many politicians have been loath to endorse raising the state's gas tax, even though a key government commission recommended doing so last year. But the Globe poll suggests that a gas tax increase may be the most palatable.

Not one of the available options drew more than 40 percent approval when those polled were asked for an up or down vote.

"None of them are popular," Smith said, "but it's the least unpopular option. It's the medicine that people know that may taste the best going down."

Residents in the poll roundly oppose leasing out the turnpike to a private company - a proposal that has been floated by the state Senate - or charging drivers by the mile by putting a computer chip in inspection stickers - an idea recently raised by Patrick. Placed head to head against other money-raising options, a higher gas tax wins in every case.

Residents said they would prefer a higher gas tax to an MBTA fare increase, 51 percent to 37 percent. They prefer the gas tax to adding tolls to other highways - 48 percent to 37 percent.

Comparing the gas tax hike with a turnpike toll increase drew the slimmest margin, at 6 percentage points - 48 percent for a gas tax to 42 percent.

The preferences on the gas tax and tolls reflected geographic biases. Residents of Greater Boston, who are most likely to use toll roads, prefer a gas tax. Residents of Central, Western and Southern Massachusetts, who are less apt to pay tolls, would rather not raise the gas tax.

"When you raise the gas tax for those of us who live off of Route 2, how fair is that?" said Beth Atwood, a 43-year-old fitness center owner from Orange. "It only goes back into Boston. We never see it out here."

That schism is also reflected in the political debate. Legislators from Boston, the North Shore, and the western suburbs - whose constituents most frequently use the turnpike and airport tunnels - have led the charge against toll hikes and proposed replacing them with a higher gas tax.

The poll also indicated geographical differences in how people perceive the Big Dig's beneficiaries. The farther people live from Boston, the more likely they are to think the project benefited Boston residents. Boston residents themselves were less likely to believe the project helped their city than others who responded to the poll.


"When I'm on the motorcycle, I can see every crack," said Marie Salami, a 72-year-old Dorchester resident who reluctantly rides her Harley-Davidson through the tunnels. "It's terrible."

Similarly, the T earned relatively high marks for quality - 52 percent of all respondents rating it excellent or good. But those who actually ride it have a worse impression - 45 percent rate it excellent or good.

While the poll suggests that political leaders might be able to sell a gas tax increase to Massachusetts residents, they would not have carte blanche. A plurality of those who responded, 47 percent, said they would accept an increase of only 5 cents per gallon. Support dropped as the increase got higher. A 5-cent increase might head off the current toll increase, but it would not allow officials to take down existing tolls or forestall an MBTA fare hike.

"You've got to make a strong pitch for why that's necessary first," Smith said. "If you're a politician, you've got to lay out a case for it."


NOTE: In accordance with Title 17 U.S.C. section 107, this material is distributed without profit or payment to those who have expressed a prior interest in receiving this information for non-profit research and educational purposes only. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml


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