CLT UPDATE
Thursday, May 14, 2009
"Reform before revenue"? What a joke!
New taxes likely coming
Lt. Gov. Tim Murray’s chief of staff
Jim Leary has landed a newly created six-figure job at the University of
Massachusetts Medical School despite widespread cutbacks throughout the
UMass system....
But Barbara Anderson, executive director of Citizens for
Limited Taxation, expressed frustration that UMass was hiring a
well-connected ex-lawmaker for a new community affairs job at a time
when state finances are tanking.
“I guess it’s further evidence we don’t really have a fiscal crisis,”
she said, sarcastically. “At least they could try to fool people into
thinking (the state) is in trouble.” ...
Anderson shot back that it doesn’t matter whether funds come from the
state or federal governments. “The federal government doesn’t have any
money either,” she said.
The Boston Herald
Wednesday, May 13, 2009
Lt. gov’s staff chief gets new UMass Medical post
Right-hand man for job
Mayors and city managers filled a Beacon Hill hearing room
yesterday urging lawmakers to boost the meals tax to help avert a fiscal crisis,
but opponents say it’s a bad idea.
“We have the fourth-highest per capita tax burden in the country,” said
Barbara Anderson, executive director of Citizens for Limited Taxation.
“No more tax increases.”
The Boston Herald
Wednesday, May 13, 2009
Food fight: Debate erupts over tax
Dining out may cost more
Even as public ire rises over pension abuses by public
officials, the Legislature's Joint Committee on Public Service is littered with
special bills that would make the problem worse.
A Boston Globe editorial
Sunday, May 10, 2009
How pensions go awry
The task of cleaning up pension abuses has deeply divided
Massachusetts lawmakers, who are not only wrangling over sweeping reforms, but
also confronting whether they should give up pension enhancements for many
members of their own chambers.
On one side of the debate are Senate negotiators and Governor Deval Patrick, who
believe all current state officials should give up pension rights critics have
called dubious. On the other side are House leaders and advocates for the
state's judges, who argue that it would be unfair to apply the changes to
already-vested public servants.
The stakes are particularly high for lawmakers, who in many instances will be
determining the size of their own retirement benefits....
Bradley H. Jones Jr., a Republican from North Reading and the minority leader,
said doing away with the termination pension for incumbents is a matter of
principle over personal financial interest.
"I think it is inappropriate," he said of enhanced pensions for legislators.
The Boston Globe
Monday, May 11, 2009
Pension debate divides the Hill
Changes may mean legislators lose perk
State Treasurer Timothy P. Cahill backed down in 2004 from a
push to curb retirement abuses by lawmakers, after top legislative leaders on
Beacon Hill privately objected to the changes, Cahill said.
Cahill said he received a visit from Representative John Rogers, House Ways and
Means chairman, who was sent by House Speaker Salvatore F. DiMasi to tell him to
abandon his quest to eliminate termination pensions for lawmakers.
Termination pensions allow legislators and other elected officials to collect
early, enhanced retirement benefits if they are voted out of office. The law has
also been stretched by the state Retirement Board to allow lawmakers who step
down voluntarily to get the special lifetime benefit, equivalent to one-third of
their salary.
The Boston Globe
Tuesday, May 12, 2009
Cahill yielded on pension issue in '04
Says legislators advised against reforms
Attorney General Martha Coakley is investigating whether the
state can reclaim pension payments doled out to lawmakers who took advantage of
a state loophole and doubled their retirement earnings.
The Boston Herald
Tuesday, May 12, 2009
Martha Coakley probes pension policy for ousted pols
There is no ambiguity in the state law that allows for
so-called “termination pensions.” Nope, no law degree needed to understand that
a lawmaker must “fail of nomination or re-election” to qualify for enhanced
pension payments, assuming all other conditions are met.
But that didn’t stop the State Retirement Board in years past from granting
padded pensions to several lawmakers who simply decided to step down
voluntarily. And now it falls to Attorney General Martha Coakley to clarify
whether the state can demand the money back.
Gee, wonder where the taxpayers would come down on that one . . .
Regardless of what Coakley says on Cahill’s specific legal question, this costly
provision must be stripped from the books for once and future state workers -
all of them.
A Boston Herald editorial
Wednesday, May 13, 2009
End terminal greed
It would be grossly unfair to say that reform only comes at a
snail's pace on Beacon Hill.
Grossly unfair to snails, that is. After all, they have feelings too....
A termination pension for any state employee is ridiculous, but neither the
House nor the Senate would eliminate that. They are focused only on elected
officials. Incredibly, the House would only change the law for future elected
officials. Further, that chamber has left it highly ambiguous whether
legislative language addressing other pension abuses would apply to current
employees or merely to future hires. One legal analyst thinks that if the House
language prevails in conference committee, most of the rest of the pension
reform package wouldn't affect current workers either....
Thus I think it's fair to surmise that blatant self-interest is at work here.
[Rep. Robert Spellane, House chairman of the Joint Committee on Public Service]
scoffs at the notion that scores of his colleagues would someday take advantage
of the system.
But it's better to foreclose the possibility of abuse than to trust that future
outrages won't occur.
After all, it's not snails we're dealing with here, but rather the fleet and
furtive denizens of the State House.
The Boston Globe
Wednesday, May 13, 2009
Why wait to enact reforms?
By Scot Lehigh
The unresolved question now being debated in a legislative
conference committee is whether the reforms should apply to current employees or
just to new hires. House leaders insist that state law protects current workers
from losing any benefits....
The House is inviting decades of further pension abuse by exempting current
officials. In the Legislature, nearly half of the 200 members stand to benefit
from enhanced termination allowances. The restoration of public trust requires
immediate reform that extends to the widest number of public employees and
elected officials in the widest number of cases. The Senate bill is preferable,
but doesn't go far enough....
The Legislature should close the loopholes for current and prospective employees
alike. If some selfish public official dares to sue to keep these garish perks,
the courts can sort out the legal issues.
A Boston Globe editorial
Wednesday, May 13, 2009
Don't prolong pension agony
A Senate plan to bolster state ethics rules would actually
cripple the State Ethics Commission instead of strengthening it, stripping away
much of its authority and transferring key powers to another agency, the
commission's chief and other critics said yesterday.
"This is a far cry from ethics reform," said Ethics Commission chairman Charles
Swartwood, a former federal magistrate judge.
The Boston Globe
Thursday, May 14, 2009
Bill is called blow to ethics panel
Senate plan weakens commission, critics say
The state Senate's ethics reform package is short on reform
in important ways. But it has revenge covered.
"The whole point of this is to make ethics enforcement tougher. This is a step
backward," said Pamela Wilmot, executive director of Common Cause/Massachusetts.
The long-awaited Senate bill does little to address issues raised by the
high-profile bribery case involving former state senator Dianne Wilkerson....
Scott Harshbarger, the former attorney general and ex-president of Common Cause,
calls it a "bald effort to remove the Ethics Commission of fulfilling its
primary function as adjudicator of the ethics law - the finder of fact and
credibility." ...
Also falling short of what both Patrick and the public want is the Senate ethics
proposal. Beacon Hill interprets Patrick's decision to take it on as an obvious
political ploy aimed at reviving sinking poll numbers. To some degree, it is.
But the governor is right about one thing. The public does want change. It helps
him if lawmakers look less interested in reform and more interested in
protecting their peers and settling political scores.
The Boston Globe
Thursday, May 14, 2009
Senate ethics bill falls short on reform
By Joan Vennochi
“Tell your state legislators, in this economic emergency, we
need new revenues, to keep these hard times from getting even worse,” the
voiceover urges. Not surprisingly the ad is paid for by unions representing
teachers and state workers, who must take radio listeners for utter dolts.
We’re just waiting for the day when State House phone lines are jammed with
voters urging lawmakers to please raise our taxes - because we’re not taxed
nearly enough.
A Boston Herald editorial
Wednesday, May 13, 2009
Just sitting by the phone
Senate Ways and Means chair Steven Panagiotakos predicted
Wednesday his panel’s budget would come off the floor next week with new taxes
to mitigate the $2.4 billion in cuts from the level of spending officials say
the state requires to preserve services.
“I think it will,” said Panagiotakos. “I don’t know to what level or what
stream.”
State House News Service
Wednesday, May 13, 2009
Senate's slimmed-down budget amps up tax talk
Sentiment in the state Senate quickly grew yesterday in favor
of a sales tax increase to combat falling revenues and deep budget cuts,
possibly paving the way for a hike to match the increase from 5 to 6.25 percent
approved earlier this month in the House.
Senate President Therese Murray said she favors increasing taxes to avoid some
of the heavy cuts in services proposed yesterday by the Senate Ways and Means
Committee. She said that she is leaning toward an unspecified increase in the
sales tax.
The Boston Globe
Thursday, May 14, 2009
Sales tax increase gaining traction in state Senate
"If it bleeds, it leads." Or so we see from headlines
prompted by a recent hearing on state revenues conducted by the Senate Committee
on Ways and Means. "Worst fiscal crisis in state's history," said one headline.
Declining revenues pose a "catastrophe" for the state, according to one expert.
We're in for "the worst single year in the state's history," he said....
True, the state has come to spend more generously in recent years, but a return
to the standards of 1995 can hardly be seen as "catastrophic." To argue
otherwise is to engage in Chicken Little economics.
The Boston Globe
Thursday, May 14, 2009
The state's Chicken Little economics
By David G. Tuerck
Chip Ford's CLT
Commentary
"Reform before revenue"?
What a joke! Another Bacon Hill middle-finger salute to
voting fools. Whether it's pension reform or ethics reform --
transportation reform, any true reform is being gamed, advantages
shifted about around the edges. The usual fix is in.
Incumbents are protecting their sinecures as always, through the usual
smoke-and-mirrors calling anything "reform" so they can move on
quickly and reach their ultimate goal: The "revenue" part of this
alleged equation. No reforms finalized yet -- even bogus
ones -- but already they're talking tax hikes!
Note the rare occurrence --
as if all the stars and planets are in alignment on this.
Editorial boards agree, both the liberal Boston Globe's and the more
conservative Boston Herald's. In the past, if the Globe agreed
with my position, I'd be forced to reevaluate. Everyone's in sync
with the need for drastic reforms -- except those who benefit from the
status quo. And they don't care -- they believe they have
their jobs for life -- or until they choose to cash in on "enhanced"
pensions.
Watch the changing
terminology. What has been called "enhanced" pensions has recently
morphed into "termination" pensions. I can't see what the
relevance might be, but we've learned long ago to watch for changes in
lexicon for political advantage. You know, like "revenue
enhancements" instead of "tax hikes" -- "investments"
instead of "spending"?
I don't expect we're going
to see much in reforms. I never have. The pols will
tap-dance around the edges -- rearrange the deck chairs -- so that most
of their constituents think something good has happened, you know
-- "change we can believe in"? You and I will know nothing
of any significance has occurred when they reach deeper into our pockets
for more, more, more. Hey, somebody's got to keep them living in
the style to which they've become accustomed! As far as they're
concerned, they aren't going to derail their personal gravy train:
"Not on my watch!" That goes too far.
We'll keep you informed on
when it's critical to act, to contact your alleged Bacon Hill
"representatives" in both the House and Senate, for whatever it's worth.
It wouldn't hurt to start now, let them know how you feel about the
Legislature's level of reforms (or not) and proposed tax hikes.
Get them running scared maybe -- at least thinking about where they'll
find their next job in this economy come 2010.
CLT is focusing on throwing
these bums out in 2010. "No Reelection for Tax Hikers." Without a
significant turnover in the Legislature, as you can see -- nothing will
ever change. This has become our mission, and we are
watching them. Very closely.
 |
|
Chip Ford |
|
The Boston Herald
Wednesday, May 13, 2009
Lt. gov’s staff chief gets new UMass Medical post
Right-hand man for job
By Jay Fitzgerald
Lt. Gov. Tim Murray’s chief of staff Jim Leary has landed a newly
created six-figure job at the University of Massachusetts Medical School
despite widespread cutbacks throughout the UMass system.
The appointment of Leary, a former state representative from Worcester,
comes as UMass Medical School beefs up its community relations and
economic development units.
Two other six-figure vice chancellor posts are also being created and
the total annual bill for the three new positions could run about
$500,000.
Leary, who begins his new job next month as associate vice chancellor of
community affairs, will be paid $104,000, the same salary he’s now
making as Murray’s right-hand man on Beacon Hill.
The new job was posted and received a total of 38 applications, said a
UMass spokesman, adding that Leary, a Worcester native and cousin of
comedian Denis Leary, had an “interesting background” in law, politics
and government that qualified him for the position.
But Barbara Anderson, executive director of Citizens for
Limited Taxation, expressed frustration that UMass was hiring a
well-connected ex-lawmaker for a new community affairs job at a time
when state finances are tanking.
“I guess it’s further evidence we don’t really have a fiscal crisis,”
she said, sarcastically. “At least they could try to fool people into
thinking (the state) is in trouble.”
But UMass Medical School spokesman Mark Shelton said the medical school,
while it has recently undergone some budget cutbacks and layoffs, is
still a growing institution in Worcester. Only about $40 million of its
$800 million budget comes directly from the state, he said.
Anderson shot back that it doesn’t matter whether funds come from the
state or federal governments. “The federal government doesn’t have any
money either,” she said.
Leary, whose old Beacon Hill job with Murray will be filled from within,
declined comment, as did Murray, the former mayor of Worcester.
The entire UMass system’s state appropriation was slashed by $27 million
last October, in the middle of the current fiscal year, as the state
grapples with plummeting tax revenues.
The Boston Herald
Wednesday, May 13, 2009
Food fight: Debate erupts over tax
Dining out may cost more
By Thomas Grillo
Get ready to pay more at your favorite restaurant.
Mayors and city managers filled a Beacon Hill hearing room yesterday
urging lawmakers to boost the meals tax to help avert a fiscal crisis,
but opponents say it’s a bad idea.
“We have the fourth-highest per capita tax burden in the country,” said
Barbara Anderson, executive director of Citizens for Limited Taxation.
“No more tax increases.”
Legislators are considering a package of proposals including raising the
meals tax by 2 percentage points to 7 percent. Under the plan, cities
and towns could opt for a 1 percent increase in the meals tax and the
state would get the other 1 percent. The measure would raise $47 million
annually for Boston.
“Would paying an extra dollar on a $50 meal stop you from eating out?”
Mayor Thomas M. Menino asked the Joint Committee on Municipalities and
Regional Government. “The meals tax in Vermont is 10 percent, in Rhode
Island and New Hampshire it’s 8 percent and in Maine it’s 7 percent. . .
. I can assure you that people are still dining out in all of those
places.”
But Peter Christie, president of the Massachusetts Restaurant
Association, blasted Menino, saying he’s trying to balance the city’s
budget on the backs of suburbanites who work in Boston. “This idea is
all about taxing the suburbs to feed the cities,” he said.
State Senator Pat Jehlen, a Somerville Democrat who supports a higher
meals tax, said the plan has a good chance of passage. “Massachusetts
communities have less ability to raise money than any state in the
country and are more dependent on state aid and the property tax,” she
said.
The Boston Globe
Sunday, May 10, 2009
A Boston Globe editorial
How pensions go awry
Even as public ire rises over pension abuses by public officials, the
Legislature's Joint Committee on Public Service is littered with special
bills that would make the problem worse. The state pension system
divides workers into four tiers, which in theory reflect how risky and
physically demanding their jobs are. But in every session, there are
attempts to slip individuals or entire groups of workers into more
generous pension tiers. If successful, these efforts can cost taxpayers
plenty.
Part of the effort to reform the pension system must focus on bringing
clarity and consistency to the tier system, which determines when
workers can retire and how much pension they receive.
Reclassification requests are as common as mud. A few current examples:
Saugus Representative Mark Falzone filed a bill that would move
maintenance workers at higher-education institutions from tier 1, which
is occupied by office and technical workers, into the tier 2 category,
reserved for workers at higher risk, such as mental health aides in
state hospitals. Another Falzone bill would elevate tier 2 mechanics at
the state Department of Conservation and Recreation to tier 4, which is
normally reserved for police officers and firefighters. The changes can
add up. A 2006 blue ribbon commission on pension reform found that tier
4 personnel retire at a median age of 53 with an annual $32,814 benefit.
Tier 1 workers, by contrast, retire at 60 with a $19,691 benefit.
Representative Stephen Canessa of New Bedford wants to upgrade some
court workers, including psychologists and interpreters, from tier 1 to
tier 2.
Representative Jennifer Callahan of Sutton has a bill to move municipal
fire chemists, who conduct tests and respond to some emergencies, from
tier 2 to tier 4.
In some cases, the representatives believe the proposed changes have
merit. In others, they are filing bills as a courtesy for constituents
exercising the right of free petition open to any Massachusetts citizen.
But in no case should these potentially costly bills be taken up by the
Legislature before a major overhaul of the state's pension system.
Representative Jay Kaufman of Lexington, the former chairman of the
Public Service Committee, set a high bar for reclassification bills by
insisting they include a price tag showing the impact on the retirement
system's unfunded liability. Representative Robert Spellane of
Worcester, the new chairman, appears to be taking the same sensible
approach to the 72 reclassification bills now crowding his desk.
Spellane says he has no intention of moving the bills forward in the
current legislative session. Better still, Spellane says he is "open to
an absolute overhaul of the group classification system."
At this point, there is little logic to which job titles end up in which
tier. Recognizing this, the 2006 blue ribbon commission on pension
reform recommended several ways to fix the system. The best idea was
collapsing the system into just two tiers. Police, firefighters, and
corrections officers - who face the kinds of physical dangers and
exertions that shorten their careers - would be put in one tier. Their
earlier and higher retirement benefits would be offset by higher
contributions to their retirement funds. All other public-sector workers
who could expect to be on the job productively until age 65 would be put
in the lower tier.
Governor Patrick's new task force on pension reform should take up this
challenge. Decisions about retirement, by workers and employers alike,
depend on facts about workplace safety and life expectancy - facts that
evolve over time. Meanwhile, the state pension classification system
seems stuck in prehistoric ooze.
The Boston Globe
Monday, May 11, 2009
Pension debate divides the Hill
Changes may mean legislators lose perk
By Sean P. Murphy
The task of cleaning up pension abuses has deeply divided Massachusetts
lawmakers, who are not only wrangling over sweeping reforms, but also
confronting whether they should give up pension enhancements for many
members of their own chambers.
On one side of the debate are Senate negotiators and Governor Deval
Patrick, who believe all current state officials should give up pension
rights critics have called dubious. On the other side are House leaders
and advocates for the state's judges, who argue that it would be unfair
to apply the changes to already-vested public servants.
The stakes are particularly high for lawmakers, who in many instances
will be determining the size of their own retirement benefits.
Under existing law, at least 93 of the Legislature's 200 members are on
track to be eligible for early, enhanced pensions potentially worth
hundreds of thousands of dollars each in additional lifetime payments,
according to a Globe review.
State Representative Robert P. Spellane, chairman of a conference
committee that is trying to forge a compromise and may issue
recommendations as early as today, said last week that he believes the
law requires the Legislature to exempt current members from elimination
of the benefit.
Spellane cited a 1973 advisory opinion of the state Supreme Judicial
Court saying pension rights are contractual obligations the state must
honor.
"The SJC is very clear that pension rights begin the day an individual
begins public service and participates in a retirement system," Spellane
said in an interview in his office. "The House clearly supports the SJC
ruling."
The Massachusetts Judges Conference, the Beacon Hill lobbying
organization that represents most of the state's 370 judges, also
supports that position, he said.
Patrick, however, wrote in a letter to legislative leaders last week
that they must apply the pension changes to themselves for the sake of
credibility.
"The issue that is most important to me is applying most provisions of
the legislation to current employees," he wrote. "Without this, the
benefits of these essential reforms will be delayed for a generation,
and public confidence in our retirement system will suffer."
Patrick termed the letter confidential, but its contents were published
by State House News Service and a copy was also obtained by the Globe.
In an interview, Senator Steven C. Panagiotakos, chairman of the Senate
Ways and Means Committee, declined to discuss the application of the
pension changes to current members, even though it is contained in the
Senate bill.
But he was adamant that enhanced pensions had to be eliminated. "You
can't justify them," he said.
The key pension enhancement at issue was authorized by the state in 1945
to protect employees who were fired to make way for patronage
appointees. In 1950, lawmakers expanded the law to include elected
officials who were ousted by voters or who failed to gather enough
signatures to qualify for the ballot. Such "termination pensions" allow
officials, if they have worked for the state for 20 years, to collect
immediate pensions worth one-third of their pay, which is a big
retirement advantage for people who are in their 40s or early 50s.
Additionally, the law has been stretched over the years to include
former lawmakers who voluntarily stepped down from office and were not
defeated by voters. A Globe story May 3 documented the cases of 10
former representatives and senators.
Both houses of the Legislature, reacting to a series of stories in the
Globe, filed bills earlier this year to rein in public pensions. On the
subject of termination pensions, the Senate would make the proposed
change applicable to existing employees, including the Legislature's
incumbents, while the House version would not.
All members of the Legislature filed one-page disclosures of financial
interest forms with the Ethics Commission in anticipation of voting on
the pension-change bill. The forms are required when any public official
takes an action "which would substantially affect such official's
financial interest."
On Thursday, Spellane met with Senator Thomas M. McGee, Panagiotakos,
and a handful of other legislators to reconcile the difference between
the two bills. That meeting was closed to the press, and participants
refused to say whether there was a resolution.
The Globe checked legislative biographies and found that more than 45
percent of legislators are presently qualified for the benefit or will
be qualified while still in their 40s or early 50s if they keep their
seats. Spellane said he would expect very few legislators of that pool
of 93 to take the termination pensions. "In the eight years I have been
in the Legislature only three put in for it."
Christopher J. Hodgkins, a Democrat from Lee who stepped down from the
House in 2003 at the age of 45, is one of those. He got a pension boost
of $15,800 annually on his lifetime pension of an estimated $550,000, if
he lives to age 80, as actuarial charts predict.
Paul E. Caron, a Democrat from Springfield who retired in 2003 at age
47, got a $14,500 annual boost, worth $480,000 in estimated lifetime
payments.
Paul C. Casey, who retired as a Democratic representative from
Winchester in January, applied for a termination pension, but it was
turned down by the State Retirement Board on April 30.
The denial occurred after the Globe pressed the board for the legal
underpinnings for awarding such pensions to legislators who retire,
rather than are defeated, but officials representing Treasurer Timothy
Cahill, who oversees the retirement board, said the board would have
denied it even without the Globe inquiries.
James E. Vallee, a Democrat from Franklin and majority leader, said
there was no public policy justification for the termination pension
being available to legislators, however they leave the job.
"The public doesn't like it," especially when the economy is causing so
many layoffs, pay rollbacks, and other damage to working people, he
said. "If we can't change it now, then when can we?"
Bradley H. Jones Jr., a Republican from North Reading and the minority
leader, said doing away with the termination pension for incumbents is a
matter of principle over personal financial interest.
"I think it is inappropriate," he said of enhanced pensions for
legislators.
Judge Peter W. Agnes Jr., president of the Judges Conference, said in an
interview that he lobbied Spellane and McGee against changes in pension
laws that his fellow judges would consider unfair. Judges are not
eligible for termination pensions, but they are concerned about a
precedent that could be applied to already-vested public employees.
"Our concern is that the Legislature not upset expectations people have"
in their pensions, he said.
The Boston Globe
Tuesday, May 12, 2009
Cahill yielded on pension issue in '04
Says legislators advised against reforms
By Frank Phillips
State Treasurer Timothy P. Cahill backed down in 2004 from a push to
curb retirement abuses by lawmakers, after top legislative leaders on
Beacon Hill privately objected to the changes, Cahill said.
Cahill said he received a visit from Representative John Rogers, House
Ways and Means chairman, who was sent by House Speaker Salvatore F.
DiMasi to tell him to abandon his quest to eliminate termination
pensions for lawmakers.
Termination pensions allow legislators and other elected officials to
collect early, enhanced retirement benefits if they are voted out of
office. The law has also been stretched by the state Retirement Board to
allow lawmakers who step down voluntarily to get the special lifetime
benefit, equivalent to one-third of their salary.
Rogers, joined by another lawmaker and Cahill ally, Representative
Ronald Mariano, told Cahill that House members opposed the initiative,
Cahill and Mariano said in interviews.
Sending Rogers, whose Ways and Mean Committee was in charge of setting
the state budget, was a not-so-subtle warning of possible financial
consequences. At the time, Cahill was seeking additional money for the
operations and staff at the state Lottery.
In an interview, Mariano said lawmakers were upset by what they
considered Cahill's bid to make political hay out of the pension issue.
"It was contentious," he said. "It was the tenor of the report that
people didn't like."
Mariano, whose political ties to Cahill are rooted in their home city of
Quincy, denied that he or Rogers conveyed any warnings to Cahill that
his budget would face cutbacks if he did not back off his threat to end
their pension perk.
"We tried to get him to see the wisdom," Mariano said. "We just laid out
our position, saying to him, you have a lot of big salaries over here
and the legislators who are only making $50,000 or $60,000 a year need
those benefits."
Rogers did not return a call seeking comment. DiMasi could not be
reached for comment.
The message was clearly heard. Cahill quickly abandoned the plan to end
lawmakers' use of termination pensions. He said yesterday that Rogers
and Mariano convinced him of the political realities and that the Senate
was also lined up against the changes. In fact, Cahill said, he and his
staff could not find one lawmaker to file the bill on his behalf.
"I didn't think of it as intimidation in terms of the budget," Cahill
said in an interview yesterday. "They [Rogers and Mariano] came down as
friends to tell me it was not going anywhere and that it would tick off
everyone in the building. I appreciated it."
The two lawmakers made their visit as Cahill was saying that pension
reform was a priority for him. Cahill said at the time that he
especially objected to an interpretation of the law by the State
Retirement Board, which he oversees, that allowed legislators to win
enhanced pensions after deciding not to run for re-election.
"It bothers me because termination means termination," Cahill told
Commonwealth Magazine in 2004. "Quitting or leaving is not being
terminated. . . . It is being twisted to help the higher-up people."
Cahill, who has privately told colleagues he plans to run for governor
even if it means challenging Governor Deval Patrick for the Democratic
nomination, criticized Patrick last week for "grandstanding" in his push
to revoke such retirement benefits.
A legislative conference committee is expected to report out pension law
changes within days or weeks that are aimed at dealing with a variety of
special pension provisions, including enhanced benefits for lawmakers.
A key point of contention is the push by the Senate and Patrick to deny
early, enhanced "termination" pensions for state employees who retire in
future. The House argues that the Legislature is legally handcuffed
because retirement benefits for current workers are contractual
obligations that cannot be taken back.
In recent weeks, Globe articles have highlighted how the State
Retirement Board granted pensions to 10 former legislators who
voluntarily gave up their seats. Two of them got their pension in 2003
when Cahill, as treasurer, chaired the board. He said he was "just
trying to follow the law," although he felt it was a stretch. The
Cahill-led board later denied another such pension.
Patrick's legal counsel asked the Retirement Board yesterday to repeal
the termination benefits it had given to lawmakers, including those
approved on Cahill's watch.
"I am writing to respectfully request that the board promptly take
action . . . to correct the errors and recoup any excessive amounts that
have been paid to the former legislators," wrote Ben T. Clements, the
governor's chief legal counsel. He urged action "given the relative
clarity of the error and the erosion in public confidence that results
from these and other pension abuses."
But Cahill said he will seek an opinion from Attorney General Martha
Coakley on the legality of such action.
Sean Murphy of the Globe staff contributed to this report.
The Boston Herald
Tuesday, May 12, 2009
Martha Coakley probes pension policy for ousted pols
By Hillary Chabot
Attorney General Martha Coakley is investigating whether the state can
reclaim pension payments doled out to lawmakers who took advantage of a
state loophole and doubled their retirement earnings.
Gov. Deval Patrick asked the state retirement board to stop payments and
recoup money from lawmakers who had increased their pensions using a
provision that allows legislators who aren’t re-elected or are forced
out of office to double their pension.
“A review indicates that the former legislators were not entitled to
receive these enhanced pensions and that they were granted in error,”
wrote Ben Clements, Patrick’s top legal counsel.
State Treasurer Tim Cahill, who oversees the state retirement board,
asked Coakley to review the request because there hasn’t been any formal
judicial ruling on the perk.
Cahill added that he intends to “hold the line” on such pension boosts.
The retirement board denied a request from former state Rep. Paul Casey
on April 30.
The House and Senate are also clashing on the issue, with Senate
officials pushing to get rid of the pension perk for lawmakers currently
in line to receive it. The House, citing constitutional law, would apply
it only to newly elected lawmakers.
The Boston Herald
Wednesday, May 13, 2009
A Boston Herald editorial
End terminal greed
There is no ambiguity in the state law that allows for so-called
“termination pensions.” Nope, no law degree needed to understand that a
lawmaker must “fail of nomination or re-election” to qualify for
enhanced pension payments, assuming all other conditions are met.
But that didn’t stop the State Retirement Board in years past from
granting padded pensions to several lawmakers who simply decided to step
down voluntarily. And now it falls to Attorney General Martha Coakley to
clarify whether the state can demand the money back.
Gee, wonder where the taxpayers would come down on that one . . .
Of course, the whole discussion of termination pensions these days has
the unmistakable whiff of politics.
Gov. Deval Patrick has asked the State Retirement Board to rescind the
extra pay - rightly, in our view - and seek repayment. His legal counsel
made a strong case in a letter to Treasurer Tim Cahill sent Monday.
But Cahill has recently accused Patrick, who hasn’t filed his own
pension reform bill but has chided lawmakers for not finalizing one, of
grandstanding. Truth is there’s a good deal of that on both sides.
But the broader issue is that this is a patently lousy law, as it
applies both to lawmakers and to other state employees. Over the years
workers at all levels have learned to play the system like a violin.
Regardless of what Coakley says on Cahill’s specific legal question,
this costly provision must be stripped from the books for once and
future state workers - all of them.
The Boston Globe
Wednesday, May 13, 2009
Why wait to enact reforms?
By Scot Lehigh
It would be grossly unfair to say that reform only comes at a snail's
pace on Beacon Hill.
Grossly unfair to snails, that is. After all, they have feelings too.
But even by Beacon Hill's usual glacial standards, waiting almost a
quarter century for changes worth tens of millions of dollars is absurd.
Yet that's how long the Legislature would take to end the MBTA
employees' ability to retire with close to a full pension after just 23
years on the job.
Nor, as the House sees it, can state government crack down immediately
on so-called termination pensions, which let state legislators and other
state employees with 20 years on the job start collecting a pension
equal to at least one-third of their salary upon losing their state
posts - regardless of how old they are or whether they've landed another
job.
A termination pension for any state employee is ridiculous, but neither
the House nor the Senate would eliminate that. They are focused only on
elected officials. Incredibly, the House would only change the law for
future elected officials. Further, that chamber has left it highly
ambiguous whether legislative language addressing other pension abuses
would apply to current employees or merely to future hires. One legal
analyst thinks that if the House language prevails in conference
committee, most of the rest of the pension reform package wouldn't
affect current workers either.
So why the ultra-cautious course? Ostensibly because of a 1973 advisory
opinion from the Supreme Judicial Court suggesting that in some
circumstances changing pension arrangements for current employees would
violate their contractual rights.
"Because you have worked for one week, you get '23 and out'?" says Mike
Widmer, president of the Massachusetts Taxpayers Foundation. "I don't
buy it - and I don't think the courts would either."
Certainly it's worth making the reforms apply now, even if there's a
chance the SJC will disagree.
With the prominent exception of its cop-out on MBTA pensions, the Senate
does better on making its changes explicitly applicable to current
employees. In one notable and commendable move, it would prohibit
current elected officials from getting termination pensions.
So would Patrick. As the Executive Office for Administration and Finance
reads the SJC advisory opinion, a pension law change affecting current
employees is only a problem if "the change infringes a contractual
right, the infringement is substantial, and the change is not
'reasonable and necessary to serve an important public purpose.' " In
three cases since its 1973 advisory opinion, the SJC has allowed pension
plan changes that apply to current employees, A&F's legal analysis
notes.
"Some of these changes can be imposed now," insists Secretary of
Administration and Finance Leslie Kirwan.
Patrick, for example, would end "23 and out" for T employees with less
than 10 years on the job.
But such resolution is not for the House. Not when preemptive surrender
is an option.
"We have read all three [SJC] cases and still stand behind what we
said," Representative Robert Spellane, House chairman of the Joint
Committee on Public Service, told me. "We have done everything that we
believe we legally can."
So let's play political detective for a moment, and go in search of a
likely motive. On Tuesday, the Globe's Frank Phillips reported that,
just a few years back, legislative leaders privately pressured state
Treasurer Timothy Cahill to abandon his efforts to end termination
pensions for legislators. Meanwhile, the Globe's Sean Murphy recently
reported that 10 legislators have received termination pensions even
though they left the Legislature voluntarily - and that another 93
legislators could eventually qualify for such early benefits.
Thus I think it's fair to surmise that blatant self-interest is at work
here.
Spellane scoffs at the notion that scores of his colleagues would
someday take advantage of the system.
"In the history, over 57, 58 years, there have only been 10," he says.
But it's better to foreclose the possibility of abuse than to trust that
future outrages won't occur.
After all, it's not snails we're dealing with here, but rather the fleet
and furtive denizens of the State House.
The Boston Globe
Wednesday, May 13, 2009
A Boston Globe editorial
Don't prolong pension agony
The Patrick administration and the Senate are making earnest efforts to
straighten out the state's twisted pension system. But House leaders are
standing in the way by protecting unfair pension perks for current
elected officials and employees.
All three sides on Beacon Hill are working from a common to-do list:
remove bloated "termination allowances" for politicians who quit or fail
to be reelected; eliminate a provision that allows elected officials to
earn a full year of pension service for working a single day in a
calendar year; redefine compensation for pension purposes to exclude
perks such as travel allowances; end the practice of combining
compensation from two positions to artificially increase retirement
allowances; and prohibit municipal officials from establishing pension
service for positions that have no compensation, such as town
moderators.
The unresolved question now being debated in a legislative conference
committee is whether the reforms should apply to current employees or
just to new hires. House leaders insist that state law protects current
workers from losing any benefits. They cite a 1973 Supreme Judicial
Court opinion saying pension rights are a contractual obligation.
Governor Patrick and the Senate view the issue through a different and
clearer legal lens that would allow for the closing of loopholes for
current public employees in most of the above cases.
The House is inviting decades of further pension abuse by exempting
current officials. In the Legislature, nearly half of the 200 members
stand to benefit from enhanced termination allowances. The restoration
of public trust requires immediate reform that extends to the widest
number of public employees and elected officials in the widest number of
cases. The Senate bill is preferable, but doesn't go far enough.
There are sound legal principles on which to accomplish these reforms.
According to a Patrick administration memo obtained by the Globe, the
changes could extend to current employees without violating contract
clauses. There is ample case law to show that modifying pensions is
justifiable when the aim is to "eliminate certain inequitable and
anomalous results" and "serve to maintain the integrity of the system."
The memo further contends that the state reserves powers that "may in
particular predicaments enable it to alter or abrogate even conventional
contractual rights."
Such a predicament now exists: loss of public confidence in a runaway
pension system, at a time when revenues are plunging.
The Legislature should close the loopholes for current and prospective
employees alike. If some selfish public official dares to sue to keep
these garish perks, the courts can sort out the legal issues.
The Boston Globe
Thursday, May 14, 2009
Bill is called blow to ethics panel
Senate plan weakens commission, critics say
By Andrea Estes
A Senate plan to bolster state ethics rules would actually cripple the
State Ethics Commission instead of strengthening it, stripping away much
of its authority and transferring key powers to another agency, the
commission's chief and other critics said yesterday.
"This is a far cry from ethics reform," said Ethics Commission chairman
Charles Swartwood, a former federal magistrate judge.
"The people of the Commonwealth have demanded ethics reform," he said.
"Unfortunately, in my opinion, the Senate's proposal will weaken, rather
than strengthen, the commission's ability to deal with ethics issues in
government."
The Senate was the epicenter of a major scandal to hit Beacon Hill last
year, the arrest and indictment on bribery charges of former senator
Dianne Wilkerson. Now its effort at ethics reform, which is expected to
be debated on the Senate floor today, is getting panned by watchdogs,
who said it represents a retreat even from existing law.
Pamela Wilmot, executive director of Common Cause/Massachusetts, said
the bill contained some good elements but fell flat when it comes to
Ethics Commission powers.
"The bill is a significant step backwards for ethics enforcement," she
said. "We need a strong Ethics Commission empowered to do its job, not
one hobbled by inadequate laws."
Senator Frederick Berry, chairman of the Committee on Ethics and Rules,
defended the bill, saying its authors were trying more than anything
else to be evenhanded after listening to testimony that the Ethics
Commission sometimes was overzealous.
The bill would remove the right of the Ethics Commission to conduct
hearings into the actions of public officials and to make findings of
violations, a core part of its job.
Instead, it would turn over those duties to the state's Division of
Administrative Law Appeals, an independent agency that hears appeals
from other state departments. That division, advocates said, is
overburdened and not versed in the state's convoluted
conflict-of-interest law.
The Senate measure also would require the Ethics Commission to stop
investigating a case if the attorney general's office decides to launch
its own criminal probe.
The Senate bill would keep the statute of limitations on ethics
violations at three years. Proposals submitted by Governor Deval Patrick
and approved by the House would extend the limit to five years.
In another area, critics said the bill would water down the state's
conflict-of-interest law, which spells out when public officials can
accept gifts or outside employment. A bill unveiled by the governor in
the fall proposed strengthening the law, including a ban on gifts to
legislators and other public officials.
The Senate bill's original language also endangered whistle-blowers by
letting targets of ethics probes see their confidential case files.
But late yesterday the measure's sponsors said they would file
amendments to protect people who file anonymous complaints.
Senator Brian Joyce, chairman of the Committee on State Administration
and Regulatory Oversight, said the decision to deviate from the
governor's proposal for a stronger gift ban was based on public
testimony.
"We believe quite strongly that we took a very good bill proffered by
the administration and improved upon it," Joyce said.
The 100-page bill contains stringent campaign finance rules, outlawing
lobbyist campaign contributions, currently capped at $200 per candidate
per year, and curtailing the use of a special fund Patrick has used to
skirt $500 campaign donation limits.
It also mandates disclosure when groups sponsor campaign ads, such as
the Swift Boat Veterans for Truth ads, widely viewed as a deceptive
attack on US Senator John F. Kerry.
For his part, Patrick, who has criticized the pace of ethics legislation
and threatened to veto tax increases until reforms are approved, sought
to strike a conciliatory tone yesterday.
"I'm glad the Senate has moved a bill," he said. "I don't think it goes
far enough on the ethics and lobbying side, and I'm going to look
forward to working with the Senate as a whole and then the conferees to
get a good bill."
Matt Viser of the Globe staff contributed to this report.
The Boston Globe
Thursday, May 14, 2009
Senate ethics bill falls short on reform
By Joan Vennochi
The state Senate's ethics reform package is short on reform in important
ways. But it has revenge covered.
"The whole point of this is to make ethics enforcement tougher. This is
a step backward," said Pamela Wilmot, executive director of Common
Cause/Massachusetts.
The long-awaited Senate bill does little to address issues raised by the
high-profile bribery case involving former state senator Dianne
Wilkerson. She accepted tens of thousands of dollars from donors.
Current law prohibits gifts only if they were given to influence an
official act, and gives wiggle room to accept gifts from friends and
family.
Currently, breaking the law is only a civil violation. The Senate leaves
it that way. The governor's proposal would change it to a criminal
violation, with jail time as a possible penalty.
The Senate bill also fails to empower the attorney general to go to
court for permission to record conversations that back up bribery
prosecutions; it leaves such cases up to federal prosecutors.
But the worst aspect of the proposal, ethics specialists say, is the
attempt to shift enforcement authority away from the state Ethics
Commission. The initial determination of probable cause stays with that
agency, but any trial would be shifted to the Division of Administrative
Law Appeals. This adjudicatory agency has no ethics law expertise and
already suffers from a backlog of cases.
Scott Harshbarger, the former attorney general and ex-president of
Common Cause, calls it a "bald effort to remove the Ethics Commission of
fulfilling its primary function as adjudicator of the ethics law - the
finder of fact and credibility."
The Senate bill also requires the commission to freeze its own
investigation if the attorney general begins one. Under the Senate
proposal, a person called before the commission could simply refuse to
appear - as did ex-speaker Salvatore F. DiMasi. It keeps the burden on
the Ethics Commission to file a lawsuit to compel such an appearance. It
also allows the accused to obtain whistleblower information at a
preliminary stage in the inquiry - a move that stands to chill
whistleblowers.
The effect of the Senate bill on someone like Dick Vitale, DiMasi's
accountant friend, is unclear. The bill does not specifically expand the
definition of lobbying to "strategizing, planning, research and
background work," as the governor and the House did in their ethics
reform proposals. But it calls for employers of such people to report
all expenditures.
The bill is strong when it comes to campaign finance reform - and from a
political perspective, that also makes it strong on revenge. It seeks to
close a loophole that allowed Governor Deval Patrick to raise a large
sum of money in one check - $500 for himself and $5,000 for the state
Democratic Party. Patrick has taken full advantage of it, raising $1.2
million in his first two years in office.
Patrick said he is fine with that change. But the overall ethics reform
fight opens a new front in the war between Patrick and Beacon Hill
lawmakers. It's another sign that Together We Can is turning into Forget
About It.
Hostilities broke out after Patrick vowed, via e-mail and webcast, to
veto a sales tax increase unless lawmakers first enacted meaningful
reform. Revenge is best served cold. But when it comes to getting back
at Patrick, lawmakers wasted no time. House lawmakers quickly approved a
sales tax hike by a veto-proof margin
Then, House leaders proposed pension reform legislation that protects
benefits for current state legislators and state employees. For that
reason, it falls short of what Patrick wants - and what the public
should want.
Also falling short of what both Patrick and the public want is the
Senate ethics proposal. Beacon Hill interprets Patrick's decision to
take it on as an obvious political ploy aimed at reviving sinking poll
numbers. To some degree, it is.
But the governor is right about one thing. The public does want change.
It helps him if lawmakers look less interested in reform and more
interested in protecting their peers and settling political scores.
The Boston Herald
Wednesday, May 13, 2009
A Boston Herald editorial
Just sitting by the phone
OK, the ad has only been running a couple of days but already it is
annoying. It’s the one that talks about what dreadful cuts are on the
way in the state budget and basically how we are all doomed, doomed.
That there’s simply nothing left to cut and the only way to preserve
public services is yes, “new revenues.”
“Tell your state legislators, in this economic emergency, we need new
revenues, to keep these hard times from getting even worse,” the
voiceover urges. Not surprisingly the ad is paid for by unions
representing teachers and state workers, who must take radio listeners
for utter dolts.
We’re just waiting for the day when State House phone lines are jammed
with voters urging lawmakers to please raise our taxes - because we’re
not taxed nearly enough.
State House News Service
Wednesday, May 13, 2009
Senate's slimmed-down budget amps up tax talk
By Jim O’Sullivan
Senate Ways and Means chair Steven Panagiotakos predicted Wednesday his
panel’s budget would come off the floor next week with new taxes to
mitigate the $2.4 billion in cuts from the level of spending officials
say the state requires to preserve services.
“I think it will,” said Panagiotakos. “I don’t know to what level or
what stream.”
The fiscal 2010 budget leadership unveiled Wednesday, pocked with deep
reductions in programs like low-income housing assistance and childhood
mental health services, prompted senators to gear up for major tax votes
next week.
Panagiotakos, Democrat of Lowell, said he would withhold his own support
from any tax hike other than the 25-percent sales tax increase already
approved by the House or “somewhere near that level. I don’t think I
would go higher.”
His colleagues, Panagiotakos said “are all over the board.”
Revenue estimates for the fiscal year that starts July 1 have dived from
$19.53 billion to $17.989 billion since the beginning of the year,
prompting the Senate draft budget to spend $26.7 billion, paring roughly
$1.3 billion from the House’s bottom line and $1.25 billion from
Patrick’s version.
“The decisions they made were difficult,” Panagiotakos said. “The
decisions we had to make were draconian.”
The budget spends $1.1 billion in federal stimulus money, withdraws $299
million from the stabilization fund, suspends a $90 million scheduled
deposit, and funnels $15 million in interest from the account. Another
$50 million comes from trust fund transfers, $47 million from a new
assessment on insurers to cover children’s immunizations, and $82
million in Registry of Motor Vehicle fees. Panagiotakos said the $1.4
billion reduction from the current year’s original budget includes a
$439 cut in local aid, including education funding.
A sales tax bump appears the most likely to clear the Senate, although
no consensus has emerged and members said Senate President Therese
Murray was not pressuring them in any direction. The House’s estimate of
$900 million in sales tax revenues from its higher rate has been
questioned repeatedly by fiscal analysts.
Sen. Robert O’Leary (D-Barnstable) said he did not plan to file any
spending amendments.
“I don’t think anybody is,” O’Leary said. “I think we’re going to have a
tax debate. I think people are pretty resigned to fact that we’re going
to have to live within this budget.”
Panagiotakos said the Chapter 70 account was shielded from cuts until
the last two weeks, when budget writers ratcheted their revenue
projections down three times amid April revenue numbers showing a
sharper-than-expected plunge in tax receipts. The final downturn led to
a steeper cut in unrestricted local aid, he said.
“I just think there has to be a stabilizing, and you’re going to have to
rein in some of this growth. We can’t afford it.”
The earmark-free budget strikes 77 line items, including Patrick
priorities like a paid volunteer corps and a Washington D.C. office, and
the Quinn Bill education incentive for police officers, a sewer rate
relief account that Patrick funded at $10 million, a “community-first”
program that fetched $20 million this fiscal year, a fund for
financially distressed community hospitals and health centers that cost
roughly $32 million this fiscal year, and a grants program for
alternative education that affected 16,000 students in fiscal 2009.
A summary of cuts obtained by the News Service contrasts with similar
documents perennially distributed by budget officials. Instead of
playing down the impact of reductions or promoting investments, the
Senate Ways and Means outlines underscores the effects the cuts will
have, particularly in the areas of human services and education.
Other programs whose line items were eliminated include community
policing and anti-gang groups, summer jobs for at-risk teens, and the
Department of Public Health End of Life Care Commission. A $2.4 million
program aimed at improving mental health for children was excised
entirely, eliminating services for as many as 3,000 children, committee
aides said.
The Senate followed the House’s lead in cutting from Patrick’s budget
$20 million in funding for the Mass. Life Sciences Center, the agency
implementing the state’s $1 billion life sciences industry incentive. If
the state runs a sufficient surplus, both branches would transfer $10
million to the center.
Lt. Gov. Timothy Murray said the draft budget underscores the need for
lawmakers to pass Patrick’s bid to allow cities and towns to raise
revenue by levying additional meals, lodging, and telecommunications
taxes.
“If we’re going to take the money, we’ve got to give them more options,”
Murray said.
Panagiotakos said he would take a hard line next week from delving into
the stabilization account to bankroll amendments. Under the Senate plan,
the so-called rainy day fund would dip below $500 million, in part due
to the current fiscal year’s deployment of roughly $1.3 billion worth of
reserves. That fund, Panagiotakos said, will likely be used for
unbudgeted costs, and needs to prop up spending over the following two
fiscal years as well.
He also issued an unusually strong call for a rapid conference committee
resolution with House budget officials, arguing that the fiscal climate
renders a timely budget vital.
Human service advocates clamored for new revenues to offset the
reductions.
Gary Blumenthal, executive director of the Association of Developmental
Disabilities Providers group, said in a press release, “Each person
living with developmental disabilities in Massachusetts, and their
family members, will feel the effects of the brutal and drastic cuts to
services.”
Advocates for affordable housing piled on the Senate budget for what
they say is a 32 percent cut from the current fiscal year. Citizens’
Housing and Planning Association executive director Aaron Gornstein
decried, in particular, a 45 percent cut to the state’s rental voucher
program to assist low-income families with paying rent.
“Given the current hardships, the commonwealth’s affordable housing
safety net will be decimated under the Senate Ways and Means proposal
and will be grossly insufficient to address housing instability and
subsequent homelessness,” he said in a statement. “CHAPA calls on the
Senate to raise the necessary revenue and restore funding to critical
affordable housing programs.”
Both Panagiotakos and committee assistant vice-chair Sen. Harriette
Chandler described vague but ominous long-term repercussions.
“The Commonwealth that will come out of this will run its systems and
its projects quite differently, because it will have to,” Chandler said.
“Better, worse, I don’t know.”
Panagiotakos said, “I think we all know that the Commonwealth is at a
crossroads. I think we’re at a crossroads here in the state, we’re also
at a crossroads nationally, and that crossroads is whether the private
sector can afford the public sector. We have to balance a lot of
different things as we go forward. I think this economic crisis has only
expedited us getting to that crossroads, but it is a crossroads we were
headed to.”
Sen. Michael Knapik, the committee’s ranking Republican, voted to
release the committee budget, he said, “not because it is a good budget,
but because it is an honest budget.”
Knapik said Senate Republicans would offer “deep reforms” next week
during debate.
The Boston Globe
Thursday, May 14, 2009
Sales tax increase gaining traction in state Senate
By Matt Viser
Sentiment in the state Senate quickly grew yesterday in favor of a sales
tax increase to combat falling revenues and deep budget cuts, possibly
paving the way for a hike to match the increase from 5 to 6.25 percent
approved earlier this month in the House.
Senate President Therese Murray said she favors increasing taxes to
avoid some of the heavy cuts in services proposed yesterday by the
Senate Ways and Means Committee. She said that she is leaning toward an
unspecified increase in the sales tax.
"I would hope that people in this body," she said of her fellow
senators, "who have been supportive of so many health and human
services, would step up and say these cuts are too deep and we can't put
this on the backs of the poor and that we have to do something to raise
revenue."
Murray said senators are divided along geographic lines, with lawmakers
representing border communities opposed to the sales tax proposal, those
in Southeastern and Western Massachusetts opposed to the gas tax plan,
and those in Greater Boston pushing for a higher sales or gas tax to
offset any toll increase.
Another powerful senator also backed a sales tax increase.
"I would rather do the sales tax than any of those other taxes,
especially the gas tax," said Senator Steven C. Panagiotakos, chairman
of the influential Ways and Means Committee.
When asked whether he would support increasing the sales tax to 6.25
percent, as House lawmakers voted for two weeks ago, Panagiotakos said,
"Somewhere near that level. I don't think I would go higher."
Senator James B. Eldridge, an Acton Democrat, said some senators want to
increase various taxes to generate as much as $2.4 billion. He said one
option could be to freeze a planned decrease in the corporate tax rate,
although no Senate leaders have signed on to such a proposal.
The state's business groups have been fighting efforts by social
services advocates and unions to raise taxes, saying that residents and
businesses cannot afford a larger tax burden during a recession. But the
mood for raising taxes is likely to grow among senators after
yesterday's release of the Senate's proposed cuts, which hit hard at
human services programs, as well as dozens of other programs, from
public safety to libraries and parks.
Under the Senate plan, all youth violence prevention programs would be
eliminated, affecting more than 18,000 teenagers. Home-care programs for
elders would be cut by more than $18 million, resulting in more than
4,000 senior citizens losing their home-care services. Nearly 20,000
residents who have developmental disabilities would lose services,
according to the Association of Developmental Disabilities Providers.
"This represents the annihilation of nearly two-thirds of all services
going to Massachusetts citizens with disabilities," said Gary
Blumenthal, the association's executive director. "Simply put, this
budget will destroy the lives of thousands of people within the
Commonwealth. It cannot stand."
Governor Deval Patrick has proposed raising a series of taxes on
alcohol, candy, and soda, as well as hotel rooms and meals at
restaurants. He has also proposed increasing the state's gas tax by 19
cents per gallon and dedicating the revenue to transportation needs, but
the Legislature has been cool to that idea.
"They're feeling like they don't have the votes," Patrick said on
WTKK-FM's monthly "Ask the Governor" radio program. "You know, the
leadership have the votes when they want."
Patrick has said he will veto a sales tax increase unless the
Legislature first passes reforms of the state's ethics, pension, and
transportation laws. He repeated those conditions yesterday.
"Whatever it is, whether it's a targeted approach we've proposed or the
more broad-based proposal, we're going to work with the Legislature," he
said in an interview. "But not a dime until we have these meaningful
reforms."
As expected, the $26.7 billion budget proposed by Senate leaders
includes steep cuts throughout state government. It would slash general
local aid by $356 million and would also for the first time in recent
memory cut state education funding to cities and towns. The so-called
Chapter 70 education funding would be reduced by $79 million.
The move would force cities and towns to lay off more police officers
and firefighters and add more fees for such basic services as trash
collection.
"Communities will be cutting, cutting, and cutting," said Geoff
Beckwith, executive director of the Massachusetts Municipal Association.
Beckwith said his organization supports raising the sales tax as high as
7 percent.
Grim-faced members of the Senate Ways and Means Committee, which voted
unanimously to approve the budget proposal, characterized the problem as
the result of the economic meltdown.
"We've been dealt a hand we did not ask for," said Senator Stephen
Brewer, a Democrat from Barre.
"There are no rabbits to be pulled out of the hat," said Senator
Harriette Chandler, a Democrat from Worcester. "We are not magicians."
Senate Democrats spent much of the afternoon holed up in a closed caucus
as speculation about taxes began in earnest.
"Senators are all over the board, just like the general public,"
Panagiotakos said. "Some won't vote for any taxes. Some will vote for
certain ones to a certain level. Others would vote for just about every
tax. The question will be whether there's a majority that can come
together on a revenue stream."
Massachusetts currently has one of the lowest sales tax rates in the
country, and the state also exempts several items from the tax, such as
food and clothing that costs less than $175. The state passed a 3
percent sales tax in 1966, and it was increased a decade later to 5
percent, where it has remained.
Increasing the tax from 5 percent to 6.25 percent would hit consumers
directly in the pocketbook, even as lawmakers pledge to use the money to
restore state services. For a $400 iPod Touch now on sale at Best Buy,
the sales tax would increase by $5. Consumers would have to pay nearly
$30 more for a $2,300 dining room set at Jordan's Furniture.
"The cuts are so deep that you have to look at some kind of revenue,"
said Senator Michael Morrissey, a Quincy Democrat. "The House obviously
has taken the lead by increasing the sales tax. It's hard to leave that
on the table."
The Boston Globe
Thursday, May 14, 2009
The state's Chicken Little economics
By David G. Tuerck
'If it bleeds, it leads." Or so we see from headlines prompted by a
recent hearing on state revenues conducted by the Senate Committee on
Ways and Means. "Worst fiscal crisis in state's history," said one
headline. Declining revenues pose a "catastrophe" for the state,
according to one expert. We're in for "the worst single year in the
state's history," he said.
The fiscal frenzy has grown so strong that members of Governor Patrick's
own party have turned against him for refusing to go along with a tax
increase aimed at closing the supposed budget "gap." Senate President
Therese Murray calls him "disingenuous."
So, does the current situation justify this kind of invective?
One way to gain some perspective is to look back to how a different
governor faced the same problem. According to a Globe article of Oct.
15, 1994, the budget "was a chronic source of anxiety for taxpayers" and
"a ticking time bomb on the verge of wrecking havoc with Massachusetts's
economy" during most of Governor William F. Weld's first term in office.
That period of fiscal anxiety came to an end, however, with the FY 1995
budget, which was, according to the article, "in vintage ways, a vital
Weld achievement," aided by "original thinking" and "good fortune."
Members of both parties praised the governor, who went on to easy
reelection, for this fiscal accomplishment.
Now fast-forward to the 2010 budget. How much, we might ask, would the
state have to spend in 2010 in order to achieve what was seen as sound
budgeting just 15 years ago? The answer, after adjusting for inflation
and population growth, is $26.78 billion.
Next let's ask how much the state could budget for 2010, given the
existing revenue outlook. If we take the average of the highest and the
lowest forecasts offered at the Senate hearing, we get $18.35 billion in
state tax revenue. Combining this revenue with various non-tax revenues
already figured on by Governor Patrick in crafting his budget, the state
could spend $26.79 billion in 2010, $10 million more than it would need
in order to match what Weld accomplished with his vaunted 1995 budget.
True, the state has come to spend more generously in recent years, but a
return to the standards of 1995 can hardly be seen as "catastrophic." To
argue otherwise is to engage in Chicken Little economics. Patrick, who
has been faulted for not practicing this kind of economics, opposes a
bill that would raise the state sales tax from 5 to 6.25 percent.
Supporters claim that the tax increase would yield $900 million in badly
needed new revenue.
On this matter, it is the governor who is right and the bill's sponsors
who are being "disingenuous." For one thing, the $900 million estimate
apparently ignores the fact that sales taxes drive business to other
states and to the Internet. Under the new law, a TV set that could be
bought for $1,000 in New Hampshire will cost $1,062.50 in Massachusetts,
just another reason to drive an hour to make a big purchase and to stock
up, along the way, on liquor, cigarettes, and other items.
The proposed tax hike will have negative consequences for the state
economy. We predict a loss of 12,666 private-sector jobs, as stores in
Lawrence and Lowell lose business to stores in Salem and Nashua. And
because unemployed workers stop paying income taxes, the state will lose
revenue from that source even as it gains revenue from the sales tax. In
fact, the higher sales tax can be expected to yield only about $674
million in new revenue when losses in other revenues are accounted for.
Before the Legislature decides to inflict a new burden on state
taxpayers, retailers, and workers, it would do well to ask just why it
wants to enact a broad-based tax increase in the first place. A 25
percent increase in the sales tax would be a panicky response to what
was seen just a few years ago as an exercise not in fiscal ruin but in
fiscal dexterity.
David G. Tuerck is executive director of the
Beacon Hill
Institute and chairman and professor of economics at Suffolk
University.
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