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CLT UPDATE
Wednesday, May 16, 2012
"Doing Less With More"
Record-breaking state revenue still not enough
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Gov. Deval Patrick has ushered in the return of
Taxachusetts — taxing and spending more than ever, new figures show.
The latest state numbers show Massachusetts has
taken in a record $17.21 billion in income and sales taxes and other
levies during the current fiscal year’s first 10 months.
That’s $91 million more than the previous record
of $17.13 billion that the state netted during the same period of
fiscal year 2008 before adjusting for inflation.
Other figures show Massachusetts will spend an
all-time high of $30.6 billion in the 12 months ending June 30 — up
14.1 percent in four years.
The Boston Herald
Friday, May 11, 2012
Taxachusetts redux
Revenues, spending on record-breaking track
Amid all the talk on Beacon Hill of
belt-tightening and streamlining and cuts in the number of state
employees, taxpayers can be forgiven for thinking the state is still
in the revenue dumps.
But as the Herald reported on Friday the state
actually took in a record $17.21 billion in income, sales and other
taxes during the first 10 months of the current fiscal year.
And naturally spending has rebounded right along
with revenues, with the state set to spend an all-time high of $30.6
billion in the fiscal year ending June 30....
Meanwhile we’re still paying that higher sales
tax that was meant to get us through the “crisis” stage. The crisis
is clearly over, but the thirst for taxpayer dollars is never
satisfied.
A Boston Herald editorial
Monday, May 14, 2012
Spending defies gravity
Massachusetts spent nearly $1 billion more on
state and local government employees in 2011 than in 2010 even as
half of states cut labor costs, a Herald review shows.
U.S. Commerce Department figures reveal that
Massachusetts state and municipal workers raked in $799 million more
in salary and benefits last year.
That’s significantly more than any other state.
In fact, state and local governments collectively cut workforce
costs by $3.4 billion nationwide last year....
“Instead of leading the nation in job creation,
it looks like Massachusetts is leading the pack in fattening state
payrolls,” state GOP spokesman Tim Buckley said. “It is easy to
spend more when the Patrick-Murray administration has no qualms
hitting up taxpayers again and again.”
Massachusetts’ higher tab came at a time when the
District of Columbia and 24 states actually cut labor costs....
But Wells Fargo economist Mark Vitner said that
with Massachusetts’ economy recovering faster than the nation’s as a
whole, governments simply have more money to spend here than
elsewhere.
For instance, Vitner said home values “seem to
have bottomed out sooner in Massachusetts than in other parts of the
country” — boosting property taxes.
The Boston Herald
Friday, March 30, 2012
Bay State spending spree
Governments here buck trend
As Massachusetts emerges from the depths of
recession, local communities are struggling to find their financial
footing, with most asking homeowners to pay the maximum increase
allowed under Proposition 2½, the state’s tax cap law.
A review of state Department of Revenue records
found that 44 area communities are setting the highest property-tax
levy that doesn’t require approval by voters....
Under Proposition 2½, which went into effect in
1982, communities cannot increase the total amount of property tax
revenue they collect by more than 2.5 percent each year, plus any
tax revenue attributable to new growth or construction, without
obtaining permission from voters....
Forced to pinch pennies during the recession,
many cities and towns issued pink slips, instituted wage freezes,
and embraced changes to their health insurance coverages. Some also
adopted a new local meals tax or increased their hotel tax....
Geoffrey Beckwith, executive director of the
Massachusetts Municipal Association, a nonprofit group that
advocates for the state’s cities and towns, is calling on the
Legislature to earmark a portion of the approximately $1.2 billion
in the state’s added tax revenue to guarantee local communities the
same level of unrestricted aid as they received this fiscal year,
rather than making level funding contingent on a state surplus....
The Boston Globe
Thursday, March 29, 2012
The new normal: Mass. cities and towns are making do with less
A survey of property tax bills for the average
single-family homes in area cities and towns found an increase in
all but one community — Hamilton — between fiscal years 2011 and
2012.
The Boston Globe
Thursday, March 29, 2012
Tracking property taxes
[Click link to view chart]
Unless policymakers intervene, the soaring costs
of Medicaid and surging expenses for public sector retirees’ health
care will swamp state and municipal budgets over the next 50 years,
according to an analysis issued Thursday by the U.S. Government
Accountability Office.
The report paints bleak picture, estimating that
without policy changes, states and local governments would need to
cut spending or raise taxes by 12.7 percent each year over the next
five decades to keep their budgets in balance.
According to the GAO, the “fiscal position” of
state and local governments will “steadily decline through 2060
absent any policy changes.”
“Since most state and local governments are
required to balance their operating budgets, the declining fiscal
conditions shown in our simulations suggest that the sector would
need to make substantial policy changes to avoid growing fiscal
imbalances in the future,” according to the report....
Yet a decline in public sector employment, driven
in part by pressure to curb spending, is actually a drag on the
national economy, according to a separate report issued Thursday by
the Economic Policy Institute, whose board is chaired by Richard
Trumka, president of the AFL-CIO.
The Institute, whose board also includes
Northeastern University Professor Barry Bluestone, American
Federation of Teachers President Randi Weingarten and former U.S.
Labor Secretary Robert Reich, estimated that private sector jobs
have increased by 2.8 million since the recession ended in June
2009, while public sector jobs had decreased by 584,000.
State House News Service
Thursday, April 5, 2012
Reports paint bleak economic picture for public sector
When it comes to doing more with less, the
Patrick administration thinks it has a compelling story to tell; one
dog-eared page in the administration’s book of self-promotion
focuses on the shedding of 6,000 state government jobs since 2008.
Cities and towns, meanwhile, cite their own budget-driven efforts to
shrink the size of government.
But the claims of surpassing fiscal prudence are
undercut by figures that suggest employee costs for state and
municipal workers in Massachusetts actually grew last year — by an
astonishing $799 million. That’s even with a net reduction in
headcount.
Sounds to us like doing less with more . . .
taxpayer money, that is.
As the Herald reported on Friday, U.S. Commerce
Department figures reveal that Massachusetts spent $799 million more
in salary and benefits for state and municipal workers in 2011 than
it did the year before....
Now, the increase is partly driven by health care
costs, and as the head of the Massachusetts Municipal Association
notes, at the local level it is partly driven by lump-sum payouts
that were paid to laid-off employees.
But it is also a result of
contractually-negotiated pay raises....
A 6,000 drop in the state employment rolls sounds
remarkable. And cities and towns have indeed shrunk their payrolls.
But there’s always more to the story.
A Boston Herald editorial
Tuesday, April 3, 2012
Doing less with more
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Chip Ford's CLT
Commentary
Part of my job every morning and evening, seven
days a week, is investing a few hours poring through reports from
around the state and nation searching for taxpayer-relevant news.
Sometimes there's a specific event or major story we're following
(such as the recent EBT card reform issue). Other times it's
cherry-picking factoids that I come across and sense could and well
might become important. "Forewarned is forearmed."
Often the latter don't mean too much separately,
but I save them, and perhaps more importantly, I remember them.
Sooner or later the dots begin to connect, a pattern develops.
Today's update is such a case. The individual reports have come
together and reached critical mass. Together they now paint a very
clear picture of the state of the state, how taxpayers continue to
be taken for a ride.
"Those who fail to learn from history are doomed
to repeat it," George Santayana noted long ago. It is a lesson yet
to be learned on Bacon Hill.
When the money is flowing into the state's
coffers it is spent. When there isn't enough, more is borrowed and
spent.
What is borrowed or owed (i.e., unfunded public
employee pension and contractual health care benefits) is pushed off
into the future while the spending races onward.
When the next fiscal crisis inevitably explodes,
tax hikes are the immediate solution. When the crisis recedes, the
higher taxes remain and the new surplus becomes the new baseline for
increased spending.
Round and round, over and over, Bacon Hill
perpetuates this cycle, never learning a lesson, pushing off the day
of reckoning into the future — when
hopefully they'll be out of "public service," in theory collecting
their fat taxpayer-funded pensions and benefits, no longer
accountable for the financial Armageddon they contributed to if not
created.
It is in large part those taxpayer-funded
pensions and benefits that are herding us quickly to the fiscal
cliff and over.
As we are in town meeting time, and heading into
override election season, we hear that the cities and towns need
more revenue because of local aid cuts. After our Prop 2½ passed,
CLT supported state increases in local aid. Then the ‘90s happened
and we saw that much of the state local aid was used to increase
public employee pay and benefits, which caused the present unfunded
liabilities. So, CLT opposes general overrides as a matter of
principle.
As for the cities and towns, as far back as Feb.
18, 1999 [CLT Update —
"Embarrassment of riches" - Towns rolling in cash] we were
alerted of the barrels of cash flowing into the coffers of
municipalities, and passed on the warning.
On Dec. 7, 2007, Barbara
participated in a "municipal meltdown" forum sponsored by MassInc.
in Boston. Geoff Beckwith, executive director of the Massachusetts
Municipal Association, Amesbury Mayor Thatcher Kezer, and
Massachusetts Teachers Association President Paul Toner also took
part in the discussion.
In the CLT Update of December 10,
2007 -- ["Municipal
Meltdown" getting closer] we noted the Lowell Sun report of the
event:
Anderson, a fierce critic
of wasteful government spending, said Bay State residents no
longer trust local government officials when they say their
towns are in dire fiscal straits.
That lack of trust has
built up over the years, said Anderson, pointing to the
Legislature's refusal to reduce the state income tax to 5
percent, despite voters approving the reduction on a ballot
question.
She also didn't hesitate
in blaming unions for soaking cities and towns....
"Until we take on the
unions, we aren't going to be able to save ourselves from
this fiscal meltdown," Anderson said.
Where did that "embarrassment of riches" go? Ask municipal
government employee unions. [MORE]
I'll close with my commentary from January 14th [CLT Update
—
$31B state budget still not enough without new "revenue"?].
Today's update is one of those situations in which anyone armed with
the facts, even with half their brain tied behind their back, could
see coming:
Next fiscal year (FY2013) the state
expects to extract $21.95 Billion from taxpayers, a 6.9
percent increase over the original estimate used to build
this year's state budget. That will be $1.44 Billion more
than the state took in last fiscal year; almost $3.5 Billion
more than was extracted from taxpayers just two years
before....
This fiscal year's initial budget of $30.6 Billion (fattened
by an additional $480 million "supplemental budget" last
October — bringing spending up to at least $31 Billion) is
$3 Billion larger than just the previous year's $27.6
Billion initial budget. But the state still needs even more
money from us to function?
Is anyone with a straight face still arguing whether it's a
revenue or spending problem?
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Chip Ford |
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The Boston Herald
Friday, May 11, 2012
Taxachusetts redux
Revenues, spending on record-breaking track
By Jerry Kronenberg
Gov. Deval Patrick has ushered in the return of Taxachusetts —
taxing and spending more than ever, new figures show.
The latest state numbers show Massachusetts has taken in a record
$17.21 billion in income and sales taxes and other levies during the
current fiscal year’s first 10 months.
That’s $91 million more than the previous record of $17.13 billion
that the state netted during the same period of fiscal year 2008
before adjusting for inflation.
Other figures show Massachusetts will spend an all-time high of
$30.6 billion in the 12 months ending June 30 — up 14.1 percent in
four years.
“I think taxpayers have every reason to demand a slowdown in the
growth of spending,” David Tuerck, of Suffolk University’s Beacon
Hill Institute, told the Herald.
State officials claim the recession left Massachusetts with a slew
of budget woes, but Patrick and lawmakers did increase the sales-tax
rate to 6.25 percent from 5 percent in 2009 to plug a huge budget
gap.
That higher levy remains in place despite an improved economy.
While Patrick finance chief Jay Gonzalez admits tax receipts have
returned to pre-recession levels, he counters that welfare, Medicaid
and other social spending soared by $2.8 billion a year as people
lost jobs and sought state help. But, according to state figures,
the Bay State jobless rate has been going down for more than two
years.
Total state spending has risen some 24 percent since Patrick took
office, said Tuerck, who thinks Massachusetts could solve all of its
budgetary problems by simply slowing spending increases.
Jim Stergios of the conservative Pioneer Institute think tank said
the commonwealth has plenty of room to downsize its staff.
The Patrick administration admits the state workforce has expanded
by 3,007 jobs since 2008 to hit 90,465 employees. That includes
4,039 Turnpike Authority and county sheriff workers previously
accounted for separately — but excludes state “authorities” such as
the MBTA.
Stergios believes few, if any, reductions have taken place when you
count everything.
“The state (has) not cut back in the number of employees in any way
that reflects the (economy’s) changes,” he said. “In fact,
state-employee costs continue to increase every single year.”
The Boston Herald
Monday, May 14, 2012
A Boston Herald editorial
Spending defies gravity
Amid all the talk on Beacon Hill of belt-tightening and streamlining
and cuts in the number of state employees, taxpayers can be forgiven
for thinking the state is still in the revenue dumps.
But as the Herald reported on Friday the state actually took in a
record $17.21 billion in income, sales and other taxes during the
first 10 months of the current fiscal year.
And naturally spending has rebounded right along with revenues, with
the state set to spend an all-time high of $30.6 billion in the
fiscal year ending June 30.
Now, lawmakers and the Patrick administration argue that the
spending reflects huge increases in health care costs (which devour
40 percent of the budget), partly thanks to a drain on government
health programs amid a sluggish economy, as well as welfare and
other social spending.
What they aren’t likely to talk about is the expansion of the state
work force since 2008 — some of which can be chalked up to a shift
of certain public workers to the state payroll; much of which is
just because, well, state agencies never seem to get smaller. (Any
progress on your pledge to eliminate Turnpike toll-takers, gov?)
Meanwhile we’re still paying that higher sales tax that was meant to
get us through the “crisis” stage. The crisis is clearly over, but
the thirst for taxpayer dollars is never satisfied.
The Boston Herald
Friday, March 30, 2012
Bay State spending spree
Governments here buck trend
By Jerry Kronenberg
Massachusetts spent nearly $1 billion more on state and local
government employees in 2011 than in 2010 even as half of states cut
labor costs, a Herald review shows.
U.S. Commerce Department figures reveal that Massachusetts state and
municipal workers raked in $799 million more in salary and benefits
last year.
That’s significantly more than any other state. In fact, state and
local governments collectively cut workforce costs by $3.4 billion
nationwide last year.
Massachusetts Republicans slammed the Bay State’s higher numbers.
“Instead of leading the nation in job creation, it looks like
Massachusetts is leading the pack in fattening state payrolls,”
state GOP spokesman Tim Buckley said. “It is easy to spend more when
the Patrick-Murray administration has no qualms hitting up taxpayers
again and again.”
Massachusetts’ higher tab came at a time when the District of
Columbia and 24 states actually cut labor costs.
Recession-wracked Michigan slashed its employment bill the most,
reducing expenses by $964 million, or 2.84 percent.
The District of Columbia cut labor costs the deepest in percentage
terms, dropping spending by 6.42 percent.
By contrast, Massachusetts’ spending rose 3.26 percent, trailing
only Rhode Island and North Dakota in percentage terms.
The bill went up even though Massachusetts state and local
government head counts fell. The latest available figures show that
Bay State cities and towns cut 2,868 government jobs in the 12
months ended Sept. 30, more than offsetting a 809-worker gain by the
state.
Patrick administration spokeswoman Alex Zaroulis said the state has
shed a net of 6,000 jobs since 2008.
“We have been working to do more with less,” she said.
Geoff Beckwith of the Massachusetts Municipal Association blames
higher labor spending on rising health-care premiums and lump-sum
payouts that laid-off government workers get for things such as
unused vacation time.
But Wells Fargo economist Mark Vitner said that with Massachusetts’
economy recovering faster than the nation’s as a whole, governments
simply have more money to spend here than elsewhere.
For instance, Vitner said home values “seem to have bottomed out
sooner in Massachusetts than in other parts of the country” —
boosting property taxes.
The Boston Globe
Thursday, March 29, 2012
The new normal: Mass. cities and towns are making do with less
By Brenda J. Buote
Globe Correspondent
As Massachusetts emerges from the depths of recession, local
communities are struggling to find their financial footing, with
most asking homeowners to pay the maximum increase allowed under
Proposition 2½, the state’s tax cap law.
A review of state Department of Revenue records found that 44 area
communities are setting the highest property-tax levy that doesn’t
require approval by voters. Meanwhile, 13 cities and towns -
Amesbury, Boxford, Burlington, Everett, Hamilton, Lowell, Methuen,
Middleton, Peabody, Rockport, Salem, Topsfield, and Woburn - that
could have raised property taxes an additional 1 percent or more
this fiscal year chose not to burden residents, many of whom are
struggling to hold onto their homes.
Methuen and Woburn top the list, each falling 6.43 percent below
their maximum levy. In Methuen, that translates into $4.44 million
that could have been tacked on to taxpayers’ bills without an
override of Proposition 2½; in Woburn, it’s $5.92 million.
“We’re trying to shield property owners,’’ Salem Mayor Kimberley L.
Driscoll said of her community, where taxes are 4.91 percent - or
$3.7 million - below the levy limit.
“We realize that the economy has slowed and people are hurting
within our community,’’ Driscoll said. “We’re not seeing big-ticket
building permits, there aren’t as many additions being built, and
folks aren’t buying new vehicles, so we’re not seeing an increase in
our excise taxes.’’
According to Carolyn C. Ryan, a policy analyst for the Massachusetts
Taxpayers Foundation, an independent watchdog group, Salem’s fiscal
picture is emblematic of what she called “a new normal.’’
Statewide, 75 percent of the 351 communities in Massachusetts are
collecting the maximum amount possible in property taxes, up from 67
percent in 2007, the start of the recession. Cuts to state aid and
other forms of local revenue have forced cities and towns to rely
more heavily on property taxes to make ends meet. Last fiscal year,
property taxes rose to 56.5 percent of total local revenues, the
highest level in three decades.
“It will be a long, slow slog’’ before municipalities can get back
to prerecession funding levels, if they ever do, Ryan said. “There’s
a new fiscal reality; a new normal. It’s a permanent squeeze.
Communities have to do more with less.’’
In Chelmsford, local leaders had to scale back plans for a new fire
station. Winchester and Revere are partnering to curb the cost of
essential services. And several communities are implementing changes
to their municipal health care plans to save taxpayers money.
Under Proposition 2½, which went into effect in 1982, communities
cannot increase the total amount of property tax revenue they
collect by more than 2.5 percent each year, plus any tax revenue
attributable to new growth or construction, without obtaining
permission from voters.
In Hamilton, where voters passed 10 overrides between May 2001 and
May 2008, homeowners are getting a break this year. It is the only
community in the region where the tax bill for the average
single-family home dropped for the 2012 fiscal year, to $7,988 from
$8,165 last year.
Forced to pinch pennies during the recession, many cities and towns
issued pink slips, instituted wage freezes, and embraced changes to
their health insurance coverages. Some also adopted a new local
meals tax or increased their hotel tax. With some lower base costs
and a slight uptick in some local revenues, communities are finding
they can afford to restore services, or take on new debt for
renovations and repairs to local schools and municipal buildings as
their revenues stabilize.
John Dunn, director of municipal finance for Beverly, is
anticipating an estimated $1.2 million in savings as a result of the
city’s reduced health care costs, money that will be used to repair
local roads and sidewalks.
In Winchester, Town Manager Richard C. Howard said an anticipated
$451,000 deficit for the 2013 fiscal year, which starts July 1, has
been avoided, and municipal services will be maintained without an
override. According to Howard, an anticipated $925,581 increase in
state funding for education - the governor’s proposed budget would
increase aid for schools by $146 million statewide - and an expected
drop in health care costs mean that Winchester will not have to
issue any pink slips.
In Chelmsford, Town Manager Paul E. Cohen has proposed hiring two
new police officers and spending $7.5 million on a new fire station
downtown. Voters had twice rejected a temporary tax increase,
through a debt exclusion, to replace the crumbling Center Fire
Station. Cohen said he believes the town will be able to move
forward with the project by using savings resulting from changes to
the municipal health insurance plan. Voters on Tuesday will decide
whether the town should earmark money in next year’s operating
budget to cover its debt payments on the project.
“The health care budget is going down by about $700,000,’’ said
Cohen. “The debt service on the fire station in the first year, when
the payments are the highest, would be $637,500.’’
New health-insurance bargaining rules, approved by Beacon Hill last
year, allow municipalities to shift some of the burden of spiraling
health care costs to their employees without having to go through
the collective bargaining process. In the past, cities and towns
could not alter the terms of the insurance plans they offered to
public employees without union consent.
Statewide, the law is expected to save cities and towns more than
$100 million in its first year. According to a recent report by the
Mass. Taxpayers Foundation, 91 communities have either voted to
adopt the measure or have votes scheduled.
The foundation noted that nine communities - including Beverly,
Chelmsford, Somerville, and Wakefield - have adopted the law and
implemented health plan changes that are expected to result in $30
million in first-year savings. Twelve other cities and towns -
including Lowell, Lynnfield, Medford, Reading, and Revere - have
been able to save a combined $30 million by negotiating changes
through collective bargaining.
Still, most communities face difficult decisions in assembling their
budgets for the upcoming fiscal year. Feeling the financial squeeze,
communities have regionalized services or are considering proposals
to do so. Winthrop and Revere, for example, are establishing a
regional emergency dispatch center; the towns also are considering
sharing a public library director.
“We’re still talking about it,’’ Winthrop Town Manager James M.
McKenna said of the library proposal, which would likely save each
community $20,000 to $25,000. “The spirit of willingness is there.
It’s just a matter of getting the details understood, and
considering how the operating side would work.’’
Geoffrey Beckwith, executive director of the Massachusetts Municipal
Association, a nonprofit group that advocates for the state’s cities
and towns, is calling on the Legislature to earmark a portion of the
approximately $1.2 billion in the state’s added tax revenue to
guarantee local communities the same level of unrestricted aid as
they received this fiscal year, rather than making level funding
contingent on a state surplus.
Those and other proposals may be weighed by lawmakers as they study
Governor Deval Patrick’s proposed $32.3 billion budget. The House
and Senate will put forward their own spending plans over the next
few months before working out a final proposal that will be sent to
the governor for his signature.
Local leaders are well aware that it’s still early in the budget
season, and are adopting a conservative approach to crafting their
budgets, in case the final state numbers are less than what is in
the governor’s spending proposal.
“We’re not using any of the surplus money in our budget figures,’’
said Cohen, Chelmsford’s town manager.
“We’re just using the base level of local aid. That’s why we’re
confident we’re in a solid position. We’re not being overly
aggressive in our estimates.’’
*
*
*
*
A survey of
property tax bills for the average single-family homes in
area cities and towns found an increase in all but one
community — Hamilton — between fiscal years 2011 and 2012.
CLICK HERE FOR CHART
State House News Service
Thursday, April 5, 2012
Reports paint bleak economic picture for public sector
By Kyle Cheney
Unless policymakers intervene, the soaring costs of Medicaid and
surging expenses for public sector retirees’ health care will swamp
state and municipal budgets over the next 50 years, according to an
analysis issued Thursday by the U.S. Government Accountability
Office.
The report paints bleak picture, estimating that without policy
changes, states and local governments would need to cut spending or
raise taxes by 12.7 percent each year over the next five decades to
keep their budgets in balance.
According to the GAO, the “fiscal position” of state and local
governments will “steadily decline through 2060 absent any policy
changes.”
“Since most state and local governments are required to balance
their operating budgets, the declining fiscal conditions shown in
our simulations suggest that the sector would need to make
substantial policy changes to avoid growing fiscal imbalances in the
future,” according to the report.
GAO researchers pointed out that state and local income tax and
sales tax receipts have begun to return to 2007 levels, following a
collapse during the 2008-2009 recession, but property taxes have
remained stagnant. In addition the report notes that states are
receiving less federal assistance because of the expiration of the
federal stimulus law.
According to the report, Medicaid costs borne by state and local
governments are expected to grow from 3.9 percent of Gross Domestic
Product in 2012 to 7.1 percent in 2060, without policy changes. On
the other hand, other government expenditures, including wages and
salaries of public employees, are projected to decline from 10.4
percent of GDP in 2012 to about 7.8 percent of GDP in 2060.
Yet a decline in public sector employment, driven in part by
pressure to curb spending, is actually a drag on the national
economy, according to a separate report issued Thursday by the
Economic Policy Institute, whose board is chaired by Richard Trumka,
president of the AFL-CIO.
The Institute, whose board also includes Northeastern University
Professor Barry Bluestone, American Federation of Teachers President
Randi Weingarten and former U.S. Labor Secretary Robert Reich,
estimated that private sector jobs have increased by 2.8 million
since the recession ended in June 2009, while public sector jobs had
decreased by 584,000.
“The current recovery is the only one that has seen public-sector
losses over its first 31 months,” according to the report, which
showed substantial increases in public sector employment during
recoveries from recessions in 1981, 1990 and 2001. “If public-sector
employment had grown since June 2009 by the average amount it grew
in the three previous recoveries (2.8 percent) instead of shrinking
by 2.5 percent, there would be 1.2 million more public-sector jobs
in the U.S. economy today. In addition, these extra public-sector
jobs would have helped preserve about 500,000 private-sector jobs.“
The Boston Herald
Tuesday, April 3, 2012
A Boston Herald editorial
Doing less with more
When it comes to doing more with less, the Patrick administration
thinks it has a compelling story to tell; one dog-eared page in the
administration’s book of self-promotion focuses on the shedding of
6,000 state government jobs since 2008. Cities and towns, meanwhile,
cite their own budget-driven efforts to shrink the size of
government.
But the claims of surpassing fiscal prudence are undercut by figures
that suggest employee costs for state and municipal workers in
Massachusetts actually grew last year — by an astonishing $799
million. That’s even with a net reduction in headcount.
Sounds to us like doing less with more . . . taxpayer money, that
is.
As the Herald reported on Friday, U.S. Commerce Department figures
reveal that Massachusetts spent $799 million more in salary and
benefits for state and municipal workers in 2011 than it did the
year before.
That growth in personnel costs came despite a net decrease in state
and local government employee headcount (there was an increase of
809 state employees in the 12-month period that ended Sept. 30, but
cities and towns cut 2,868 jobs).
And it came as other state and local governments were, sensibly,
cutting such expenses. Nationally, state and local governments
collectively cut work force costs by $3.4 billion over the same
period.
Now, the increase is partly driven by health care costs, and as the
head of the Massachusetts Municipal Association notes, at the local
level it is partly driven by lump-sum payouts that were paid to
laid-off employees.
But it is also a result of contractually-negotiated pay raises.
Those are raises that the Patrick administration and local
governments have rarely been shy about funding, their budget woes
notwithstanding. And those benefits and payouts were at one time
blessed by government managers, too.
A 6,000 drop in the state employment rolls sounds remarkable. And
cities and towns have indeed shrunk their payrolls. But there’s
always more to the story.
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NOTE: In accordance with Title 17 U.S.C. section 107, this
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