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CLT UPDATE
Monday, June 13, 2016

Bottom of the barrel for the Bay State, again


A ban on single-use plastic bags from large stores and chains around the state, approved by the Massachusetts Senate on Wednesday, will feed the anger of store owners upset with recent government actions, according to their chief spokesman.

On Wednesday, the Senate added a rider to its budget on a 29-to-9 vote banning single-use plastic bags at many checkouts throughout the state. Under the legislation, checkout bags at certain stores would need to be reusable or made of recycled paper and sold for at least 10 cents apiece.

"It's becoming a bit frightening this big government I-know-better-than-you attitude," Retailers Association of Massachusetts President Jon Hurst told the News Service after the vote. He said, "This is what small business owners are angry about - all the red tape and everything that is occurring as they try to stay in the black."

State House News Service
Thursday, May 26, 2016
Retail group: Senate bag ban vote the latest in string of mandates


Come August of 2018 in Massachusetts, you may rarely hear the question “Paper or plastic?”

The Senate passed an almost $40 billion budget bill Thursday that included a provision banning single-use carryout bags at all retail establishments that are 3,000 square feet or larger, or have at least three locations in the state. The bag push, adopted by a bipartisan vote, is meant to make the state more environmentally friendly and was cheered by green advocates....

And Governor Charlie Baker telegraphed significant worry through a spokesman.

The administration, said Baker senior adviser Tim Buckley, “has serious concerns about enacting such a sweeping mandate through the budget process with little to no debate, especially due to the potential impacts on low-income families’ grocery bills, and retailers across Massachusetts.” ...

The Senate vote adopting the bag ban was 29-9, with some Republicans voting for it and some Democrats voting against it. The chamber’s budget will now be reconciled with an earlier House-passed budget in a committee that includes senators and representatives.

Once they hash out a final package, it will go to Baker who can, among other options, veto it or sign it into law.

The Boston Globe
Friday, May 27, 2016
Mass. Senate moves to ban plastic shopping bags


A plastic bag ban. Restrictions on pipeline siting. A moratorium on a proposed rattlesnake habitat on an island in the Quabbin Reservoir.

All of these policy ideas were attached to the Senate budget bill over three days of debate this week, and they're giving Gov. Charlie Baker more heartburn than a belly full of hot dogs on Memorial Day.

"I thought we all decided that was a bad practice and that policy issues should be debated by committee and dealt with through hearings and handled separately and not incorporated into the budget," Baker said Friday in an interview with the News Service.

While watching the Senate budget debate unfold, Baker said he grew concerned with the volume of policy proposals being added to the spending bill that he saw having little relation to state spending.

While adding policy riders to the annual budget is nothing new on Beacon Hill, lawmakers have had an on-again, off-again relationship with the practice over the years, at times attempting to limit the amount of non-budgetary legislating that takes place without the bounds of the budget, but not always adhering to that goal.

"I was actually kind of surprised by how far away from the practice of the past few years, which is to make the budget about the budget, the Senate budget process has gone," Baker said. "There's a lot of stuff that's in that budget that is not where we have been, as a commonwealth, putting that stuff in recent years." ...

"And frankly, I think it's good government to separate, unless the policy is directly related to the budget, to separate policy from the budget process, and that's been generally the rule of thumb around here for a long time," Baker said.

State House News Service
Friday, May 27, 2016
Citing "bad practice," Baker holds dim view of budget policy riders


The Senate wrapped up three days of fiscal 2017 budget deliberations around 11 p.m. Thursday, voting unanimously to pass an annual spending bill after adding a total of $61.3 million on the floor.

"Thanks to all your advocacy this week we made additional investments in our shared priorities for an even stronger budget," Senate Ways and Means Chairwoman Karen Spilka said ahead of the vote. According to her office, the new bottom line on the bill is $39.558 billion.

The House passed its version of the budget unanimously on April 27 with a $39.508 billion bottom line, according to the House Committee on Ways and Means.

The bill that cleared the Senate 38 to 0 Thursday includes myriad policy positions, banning plastic bags from major retailers, empowering dental practitioners and easing veterans' access to medical marijuana.

State House News Service
Friday, May 27, 2016
Senate passes $39.5B budget


Mimicking the way the House handled the issued last month, the Massachusetts Senate on Thursday tacked onto its budget bill an amendment intended to bring Massachusetts into compliance with the federal Real ID Act.

The Real ID Act, a federal post-2001 anti-terrorism initiative, requires states to begin issuing secure and compliant forms of identification that for many residents will replace their current driver's licenses.

Gov. Charlie Baker in March had his top transportation officials brief legislative leaders on the legislation he filed last October to bring Massachusetts into compliance, warning that without action this year residents might have to start carrying their passports to access federal buildings or travel through domestic airports by January.

On Thursday, the Senate considered an amendment filed by Minority Leader Bruce Tarr to adopt the provisions of the federal Real ID law as part of the state's spending plan. Tarr said his amendment largely mirrored the governor's bill.

"It's imperative, imperative, that we take action to bring our state into compliance with the federal Real ID Act so that our licenses do have integrity, that our licenses do represent truthful information and that those licenses can contribute to the security of our commonwealth and nation, rather than be used potentially to undermine and threaten the security of our commonwealth and our nation," Tarr said.

Lynn Sen. Thomas McGee offered a further amendment, one that would require the registrar to issue two different types of licenses -- one that complies with Real ID and one that does not -- rather than just giving the registrar the option of issuing two types of ID as the Tarr amendment would have.

"The Real ID Act allows states that adopt it to have a two-tiered system," he said. "This further amendment would offer the option for current license and ID holders as well as new applicants ... to chose a Real ID so long as they meet the federal documentation requirements or the current non-compliant licenses and ID cards for those that do not need or want the Real ID for either personal or privacy reasons." ...

The McGee further amendment was ultimately adopted on a 25-13 roll call vote.

State House News Service
Thursday, May 26, 2016
Senate adopts two-tiered Real ID compliance plan as part of budget


Massachusetts ranks behind only Connecticut in a survey of all 50 states' fiscal health released by Wednesday by the Mercatus Center at George Mason University.

The researchers grouped the Bay State with Connecticut, Illinois, New Jersey and Kentucky, states with "ongoing structural deficit problems in addition to long-term debt and pension pressures." ...

Basing its findings on comprehensive annual financial reports from 2014, the center's researchers measured all 50 states and Puerto Rico against 14 metrics intended to "assess the extent to which the states can meet short-term bills and longer term obligations." The center, which seeks market-driven public policy solutions, found that revenues cover 96 percent of expenses in Massachusetts, leaving a per capita deficit of $342.

Massachusetts is "reliant on debt financing," with a total debt of $26.73 billion, unfunded pension liabilities of $94.45 billion and other post-employment benefits adding $15.38 billion to the total. The fiscal 2017 budget, approaching $40 billion in spending, has yet to be finalized.

State House News Service
Wednesday, June 1, 2016
In state fiscal health rankings, center ranks Mass. near bottom


Debt-laden Massachusetts is “walking on the same road as Puerto Rico,” said the author of a George Mason University study on the fiscal condition of states that ranks the Bay State a dismal 49th for fiscal solvency — ahead of only Connecticut and the Caribbean territory.

“It’s the ongoing habit of issuing lots of debt and unfunded liabilities and having a poor cash position and taking on more spending than you can finance­, and that, if it’s done over a significant period of time, does lead to a crisis,” said Eileen Norcross, a senior research fellow at GMU’s Mercatus Center. “Massachusetts’ economy is far stronger than Puerto Rico, their debt loads are nowhere near Puerto Rico, but it’s that habit they’ve got to look out for. If it’s an ongoing habit, you might be early on that road, but you’re walking on the same road as Puerto Rico.” ...

“This report is a wake-up call to elected officials in Massachusetts,” said former state Inspector General Greg Sullivan, now a government watchdog at the Pioneer Institute. “Looming beyond the horizon is billions of dollars of unfunded obligations. ... We’ve got to confront these problems.”

The Boston Herald
Thursday, June 2, 2016
State ranks 49th in fiscal solvency study


Alarm bells are going off on Beacon Hill, or ought to be.

A survey of the fiscal health of all 50 states plus Puerto Rico found Massachusetts on the critical list — ranked in the bottom five of all states. The only state with a worse outlook is Connecticut, followed by the U.S. territory of Puerto Rico, which is on life support.

Joining Massachusetts and Connecticut in the bottom five are Illinois, New Jersey and Kentucky....

The Bay State is in a worsening bind because for years it has lived beyond its true means, using fiscal gimmicks like one-time revenue sources and debt-financed spending to paper over the gap between income and expenses. It's still doing it, forever seeking ways to siphon more money from the pockets of the public by promoting more public sector "investments" and new "revenue streams" like the graduated income tax — the longtime holy grail of "progressives," though it's been rebranded as the "millionaires' tax" to sway the gullible.

An Eagle-Tribune editorial
Thursday, June 2, 2016
For fiscal health, Bay State ranks 49th among 50 states


The House and Senate on Thursday steered fiscal 2017 budget bills to a six-member conference committee, which will have less than one month to work their way through spending plans that have similar bottom lines but many other differences.

The Senate last Thursday approved a $39.5 billion spending plan after tacking on many policy amendments that quickly drew an unfavorable review from Gov. Charlie Baker. It will be up to the conference panel to settle the scores of differences in the budget bills (H 4201 and S 2305), including line item levels, policy proposals and earmarked spending requests that were popular in the House budget....

Once a budget is agreed upon and forwarded to the Corner Office, Baker will have 10 days to review the bill, sign it and announce any vetoes and amendments....

Negotiations will kick off amid uncertainty over fiscal 2016 revenues, which were trending $260 million behind benchmark through April with a key report on May revenues due out on Friday.

According to the Massachusetts Taxpayers Foundation, the Senate over three days last week added $61.4 million to its budget through amendments, including nearly $32 million for local spending earmarks, and tacked on 181 new policy sections to the spending bill.

MTF pegged the bottom lines of the House and Senate budgets at $39.539 billion and $39.558 billion, respectively. Baker's budget, filed in January, called for $39.553 billion. The Senate budget has the largest bottom line, by $16.2 million, and represents spending growth of 3.59 percent, less than projected tax revenue growth of 4.3 percent, according to MTF. Tax revenues have risen just 1.9 percent over the first 10 months of fiscal 2016, compared to fiscal 2015.

The Senate added policy proposals to its budget dealing with the use of student performance data when evaluating teachers, banning retailers from providing "single use" plastic bags to customers, and prohibiting MBTA fares from rising more than 5 percent over a two-year period.

Other policy riders added to the Senate budget deal with retiree health care premiums, the federal Real ID law, dental hygiene practitioners, and eligibility for health safety net services.

"I thought we all decided that was a bad practice and that policy issues should be debated by committee and dealt with through hearings and handled separately and not incorporated into the budget," Baker told the News Service on Friday.

State House News Service
Thursday, June 2, 2016
Six Mass. lawmakers to craft plan to spend nearly $40 Billion


With just days left in the state’s fiscal year, Massachusetts is grappling with a $311 million tax revenue shortfall that will force a quick budget tightening across government and portends trouble for the spending plan being ironed out by the Legislature for the new fiscal year that begins in July.

The Department of Revenue announced Friday afternoon that tax revenue in May had fallen below expectations for the second month in a row, putting the state, which must have a balanced budget, in a bit of a pinch....

Eileen McAnneny, president of the business-backed Massachusetts Taxpayers Foundation, emphasized there isn’t an easy fix.

“Obviously, the fact that we have days left to the fiscal year and they are $311 million short means that addressing it is a Herculean task,” she said. “They have very few options at this point. Most of the state’s money has been spent.”

She said possibilities include paying some bills in the new fiscal year, which begins July 1.

McAnneny said two months doesn’t make a trend, but “it certainly should cause budget writers to pause.”

The Boston Globe
Friday, June 13, 2016
Mass. faces $311 million shortfall


After another lackluster month of collections, tax receipts are now running $311 million behind budget benchmarks with just one month left in the fiscal year, leaving Gov. Charlie Baker with an immediate budget problem.

May tax collections were up just 1.8 percent and fell $50 million below the monthly budget benchmark, the Baker administration reported late Friday.

After April tax receipts declined, Baker's budget team ordered a halt to non-essential state spending and ruled out the use of rainy day reserve funds as a means of pulling money into the state budget, which was predicated on tax revenues growing by 4.8 percent this fiscal year....

Legislative leaders are in the final stages of assembling a $39.5 billion budget for next fiscal year starting on July 1, which is predicated on ta collections growing by 4.3 percent.

Income tax collections in May were $101 million below the monthly benchmark and withholding collections ran $53 million behind in May, according to the Department of Revenue. Total tax collections in May hit $1.868 billion, up $34 million over May 2015.

State House News Service
Friday, June 3, 2016
Tax collections now running $311M behind benchmarks


Chip Ford's CLT Commentary

We at CLT have been scrambling furiously trying to keep up after the passing of our leader, Barbara Anderson, with all the changes in responsibilities and additional burdens it delivered upon us.  Still, I've still been following and tracking evolving events on Beacon Hill.  Finding, reading, and saving them is time consuming in itself.  Sorting through them then putting them together into an Update and getting it out to you is another lengthy process.  But if I didn't get this out now I might never get you caught up.

The House and the Senate have passed their branch's individual budgets for the next fiscal year, beginning on July 1.

On April 27 the House passed a budget of $39.54 billion; the Senate passed its $39.56 billion version on May 26.  While the final bottom lines are similar the contents of each vary widely.  Both versions are now in the House/Senate conference committee.  I expect that whatever comes out as a "compromise" will only expand the bottom line.

While I was recently watching old VHS videos of Barbara's media appearances from the mid-80s for our ‘celebration of life’ event for her, leading up to CLT's repeal of the income surtax in 1986, I noted that the debate at that time was over a state budget of $9-$10 billion.  That was a mere quarter of what it is today, only thirty years ago.  That's an average state budget increase of one billion dollars each and every year since then.

According to the U.S. Bureau of Labor Statistics, $100 in 1986, adjusted for inflation, is today equal to $218 a little more than double.  That $10 billion state budget in 1986, adjusted for inflation alone, today would amount to $21.8 billion.  Instead, that amount will almost double again to $40 billion in the next fiscal year state budget, from additional programs and spending aka, "investments."

And still that's not enough.  More Is Never Enough (MINE) and never will be in Taxachusetts.  As the Eagle-Tribune noted in its editorial:

The Bay State is in a worsening bind because for years it has lived beyond its true means, using fiscal gimmicks like one-time revenue sources and debt-financed spending to paper over the gap between income and expenses. It's still doing it, forever seeking ways to siphon more money from the pockets of the public by promoting more public sector "investments" and new "revenue streams" like the graduated income tax — the longtime holy grail of "progressives," though it's been rebranded as the "millionaires' tax" to sway the gullible.

Massachusetts has the fifth-highest tax burden per capita.  Massachusetts taxpayers are the fourth-latest to reach national Tax Freedom Day, followed only by New York (#48), New Jersey (#49), and Connecticut (#50).  And now we learn our state Massachusetts is among the bottom five in debt burden:  "The only state with a worse outlook is Connecticut, followed by the U.S. territory of Puerto Rico, which is on life support," the Eagle-Tribune editorial noted.

Still, it could be worse.  We can take some consolation in that at least we don't live and pay taxes in Connecticut which isn't saying very much at all.

Let's shout it out once again:  Massachusetts does not have a revenue problem Massachusetts has a very grave spending problem.  A dire and dangerous spending problem that, if it is not halted soon, will bring on another self-imposed fiscal crisis and the usual hue and cry for more and higher taxes.

We have been duly warned, and warned, and warned again.  Watch the vast majority of Bacon Hill pols whistle past the graveyard, continuing to play musical chairs, hoping they're collecting their taxpayer-funded pensions and benefits by the time the music stops.

Chip Ford
Executive Director


 

State House News Service
Thursday, May 26, 2016

Retail group: Senate bag ban vote the latest in string of mandates
By Andy Metzger


A ban on single-use plastic bags from large stores and chains around the state, approved by the Massachusetts Senate on Wednesday, will feed the anger of store owners upset with recent government actions, according to their chief spokesman.

On Wednesday, the Senate added a rider to its budget on a 29-to-9 vote banning single-use plastic bags at many checkouts throughout the state. Under the legislation, checkout bags at certain stores would need to be reusable or made of recycled paper and sold for at least 10 cents apiece.

"It's becoming a bit frightening this big government I-know-better-than-you attitude," Retailers Association of Massachusetts President Jon Hurst told the News Service after the vote. He said, "This is what small business owners are angry about - all the red tape and everything that is occurring as they try to stay in the black."

Sponsored by Sen. Jamie Eldridge and four other Democrats, the measure would ban giving away single-use bags at points of sale at stores with gross square footage of 3,000 or more or chains with three or more locations.

Eldridge, an Acton Democrat, said plastic bags are used for only an average of 12 minutes, and wind up as litter stuck in trees or as harmful micro-plastic. According to Eldridge's office the U.S. annually uses 100 billion plastic shopping bags made from the equivalent of 12 million barrels of oil.

Hurst said the mandated 10-cent price on checkout bags would be subject to the state's 6.25 percent sales tax, calling it a "tax on a tax," and he said shoppers re-use plastic bags from stores for a variety of purposes.

"Don't they realize that these consumers are going to have to go out and buy plastic bags?" Hurst asked. He said, "I think small businesses are better equipped to make these decisions on their own."

While plastic shopping bags are ubiquitous at many pharmacies and grocery stores, many customers prefer to shop with an environmentally friendly reusable bag.

A statewide plastic bag ban would add to small business grievances that include mandated sick leave, a hike in the minimum wage and legislation increasing the statewide smoking age, Hurst said.

"The consumer should be blaming the elected officials," Hurst said. Asked whether the bag ban would relieve businesses from the cost of providing free bags to customers, Hurst said the stores would have to "take the grief from the consumer," and they don't want to make money by "making the customers unhappy."

Hurst said it would also give a leg-up to the online retailer Amazon.

According to Eldridge's office, 32 municipalities have approved plastic bag bans: Aquinnah, Barnstable, Bridgewater, Brookline, Cambridge, Chatham, Chilmark, Concord, Edgartown, Falmouth, Framingham, Great Barrington, Hamilton, Harwich, Ipswich, Lee, Manchester, Marblehead, Nantucket, Natick, Newburyport, Newton, Northampton, Provincetown, Shrewsbury, Somerville, Tisbury, Truro, Wellesley, Wellfleet, West Tisbury and Williamstown.

Hurst said the business community would be more amenable to statewide mandates if lawmakers also took steps to pre-empt local mandates. The legislation adopted by the Senate specifically allows municipalities and the state to establish any "further limitation of single-use carryout bags."

In addition to larger retail locations, the bag ban would be imposed on stores with "at least 3 locations under the same ownership or brand name" within the state and would go into effect Aug. 1, 2018.

The measure would need to survive budget negotiations with the House in order to be included in the final budget expected to reach Gov. Charlie Baker's desk this summer.


The Boston Globe
Friday, May 27, 2016

Mass. Senate moves to ban plastic shopping bags
By Joshua Miller


Come August of 2018 in Massachusetts, you may rarely hear the question “Paper or plastic?”

The Senate passed an almost $40 billion budget bill Thursday that included a provision banning single-use carryout bags at all retail establishments that are 3,000 square feet or larger, or have at least three locations in the state. The bag push, adopted by a bipartisan vote, is meant to make the state more environmentally friendly and was cheered by green advocates.

But it drew an immediate rebuke from local retail groups, which worry it will erode consumer choice at perhaps 20,000 retail locations and hurt mom-and-pop stores in their battle with online merchants for customers.

And Governor Charlie Baker telegraphed significant worry through a spokesman.

The administration, said Baker senior adviser Tim Buckley, “has serious concerns about enacting such a sweeping mandate through the budget process with little to no debate, especially due to the potential impacts on low-income families’ grocery bills, and retailers across Massachusetts.”

The budget provision, which faces major hurdles before it could become law, would allow stores to make a reusable grocery bag or recycled paper bag available for purchase at the point of sale, but retailers would have to charge at least 10 cents per bag.

Senator James B. Eldridge of Acton, a lead backer of the effort, said more than 30 of the state’s 351 cities and towns have already approved plastic bag bans. They include large cities like Cambridge and Newton and small towns like Truro and Lee.

Eldridge said plastic bags are harming sea creatures and wildlife, and littering Massachusetts’ landscape. He said the proposal is sensitive to small businesses because it exempts all retail stores under 3,000 square feet, unless they are part of a chain. And it’s sensitive to consumers, he asserted, because it allows plastic produce bags and dry-cleaning bags.

Plastic bags, he said, are “something that we really don’t need, given that there are alternatives like a reusable bag or a paper bag.”

But Jon B. Hurst, president of the Retailers Association of Massachusetts, decried the ban as “bad public policy” for both consumers and mom-and-pop retailers. He said people go into retail stores to be served, and part of the service they expect is a bag for the goods they purchase. Hurst worried that the ban, if put into law, would lessen the advantages stores on Main Street have over online retailers like Amazon.com.

“The local store is being put in a position of telling the consumer: ‘Well, you’ve got to pay me to get a bag,’ ” Hurst said. He emphasized he uses plastic shopping bags to line the trash bin in his bathroom and paper shopping bags to recycle his newspapers. And, he said, stores wouldn’t be offering plastic bags if consumers didn’t want them.

He estimated that 20,000 retail locations, out of about 60,000 in the state, would be affected by the ban.

Another trade group had a different take.

“Our board has voted to support a statewide plastic bag ban if it were part of a comprehensive recycling bill,” said Brian Houghton, the vice president of the Massachusetts Food Association, a supermarket and grocery trade group. But since this week’s push is not part of such a comprehensive effort, the association does not support it, he said.

And, continued Houghton, “the 10-cent fee might be a bit high and there shouldn’t be a distinction by the size of the store. We feel it should apply to all retailers to make it fair.”

Jack Clarke, director of public policy at Mass Audubon, said just as retail groups cried foul about recycling measures that have been successful in Massachusetts for 20 years, so too are they worrying about the bag ban.

Clarke framed a statewide bag ban as inevitable: “We’re either going to eventually have 351 municipal restrictions on bags, or we’ll have the Commonwealth do one standard that all the businesses and industries can match.”

Senator Brian A. Joyce, a Milton Democrat who has long been a bag-ban proponent, said he was delighted with the bag vote.

Plastic bags are created from fossil fuels, he said, and are used only briefly before they become litter or take hundreds of years to decompose in landfills, releasing toxins.

The Senate vote adopting the bag ban was 29-9, with some Republicans voting for it and some Democrats voting against it. The chamber’s budget will now be reconciled with an earlier House-passed budget in a committee that includes senators and representatives.

Once they hash out a final package, it will go to Baker who can, among other options, veto it or sign it into law.


State House News Service
Friday, May 27, 2016

Citing "bad practice," Baker holds dim view of budget policy riders
By Matt Murphy


A plastic bag ban. Restrictions on pipeline siting. A moratorium on a proposed rattlesnake habitat on an island in the Quabbin Reservoir.

All of these policy ideas were attached to the Senate budget bill over three days of debate this week, and they're giving Gov. Charlie Baker more heartburn than a belly full of hot dogs on Memorial Day.

"I thought we all decided that was a bad practice and that policy issues should be debated by committee and dealt with through hearings and handled separately and not incorporated into the budget," Baker said Friday in an interview with the News Service.

While watching the Senate budget debate unfold, Baker said he grew concerned with the volume of policy proposals being added to the spending bill that he saw having little relation to state spending.

While adding policy riders to the annual budget is nothing new on Beacon Hill, lawmakers have had an on-again, off-again relationship with the practice over the years, at times attempting to limit the amount of non-budgetary legislating that takes place without the bounds of the budget, but not always adhering to that goal.

"I was actually kind of surprised by how far away from the practice of the past few years, which is to make the budget about the budget, the Senate budget process has gone," Baker said. "There's a lot of stuff that's in that budget that is not where we have been, as a commonwealth, putting that stuff in recent years."

While the number of outside policy sections in the budget have generally declined in recent years, it was only in 2011 when the final budget delivered to then Gov. Deval Patrick in July contained 218 outside section. And that was after Rep. James Cantwell said in April that House leaders had discouraged members from using the budget as a catch-all.

"They don't want to circumvent the legislative process," Cantwell said that year. "On non-budgetary matters that are outside sections, they're going to try to reduce outside sections and they're going to try to preserve the integrity of the legislative process."

The budget produced this year by Sen. Karen Spilka's Senate Ways and Means Committee contained almost 80 "outside sections," many of which introduced new policies only tangentially related to state spending, such as the new level of independence granted to the Office of the Child Advocate.

The House budget also contained outside policy sections, but Baker said he was concerned as the Senate continued to tack on new policy ideas that their actions could jeopardize the on-time delivery of a balanced spending plan by July 1.

"And frankly, I think it's good government to separate, unless the policy is directly related to the budget, to separate policy from the budget process, and that's been generally the rule of thumb around here for a long time," Baker said.

Senate Minority Leader Bruce Tarr on Thursday night after the final Senate vote on the budget suggested that the control the House can exert on the flow of legislation makes the budget bill an attractive vehicle for senators to advance their priorities when they feel they have no other option.

"Senators have always looked to the budget to look to advance things that might not have made it through the committee process," he said. "I know the House takes a different view and tries to minimize outside sections. I don't disrespect them for that. I don't criticize them for that."

The governor stopped short of threatening outright vetoes of budget policy on principle, but Baker's position could give House leaders some leverage as they enter into negotiations with the Senate over the fiscal 2017 budget.

"I hate to get too specific on this because who knows what's going to happen between now and then, but I would say we would probably take a pretty dim view on issues that resemble major policy that never got a hearing in the Legislature that aren't related to the budget that come through the final product," he said.

Some of the policy proposals tacked on to the budget bill, such as the ban on single-use plastic bags from large retail stores and chains around the state, have received public hearings, but have not been taken up separately by either branch.

Baker also acknowledged that not all policies are equal.

The Republican did not raise any objection in April when the House essentially attached his legislation to bring Massachusetts into compliance with the federal REAL ID Act, a time-sensitive issue with potential implications for residents traveling though airports should the Legislature fail to act this year.

"I do think there's a conferenceable item there between the House and the Senate. They both, I think, are working in good faith to try to get that issue resolved," Baker said.

Asked whether the REAL ID issue should also be dealt with through the normal legislative process, Baker said, "The answer is yeah, but there is a federal clock ticking on that which I think creates a different dynamic than the one that's associated with some of this other stuff."

Senate President Stanley Rosenberg declined through a spokesman to respond to the governor's comments on Friday afternoon.


State House News Service
Friday, May 27, 2016

Senate passes $39.5B budget
By Andy Metzger


The Senate wrapped up three days of fiscal 2017 budget deliberations around 11 p.m. Thursday, voting unanimously to pass an annual spending bill after adding a total of $61.3 million on the floor.

"Thanks to all your advocacy this week we made additional investments in our shared priorities for an even stronger budget," Senate Ways and Means Chairwoman Karen Spilka said ahead of the vote. According to her office, the new bottom line on the bill is $39.558 billion.

The House passed its version of the budget unanimously on April 27 with a $39.508 billion bottom line, according to the House Committee on Ways and Means.

The bill that cleared the Senate 38 to 0 Thursday includes myriad policy positions, banning plastic bags from major retailers, empowering dental practitioners and easing veterans' access to medical marijuana.

"It does have a fair amount of fiscal discipline," Senate Minority Leader Bruce Tarr told the News Service after the vote. Asked what the number of policy riders would mean when the Senate reconciles its budget with the House version, Tarr said, "Senators have always looked to the budget to look to advance things that might not have made it through the committee process. I know the House takes a different view and tries to minimize outside sections. I don't disrespect them for that. I don't criticize them for that."


State House News Service
Thursday, May 26, 2016

Senate adopts two-tiered Real ID compliance plan as part of budget
By Colin A. Young


Mimicking the way the House handled the issued last month, the Massachusetts Senate on Thursday tacked onto its budget bill an amendment intended to bring Massachusetts into compliance with the federal Real ID Act.

The Real ID Act, a federal post-2001 anti-terrorism initiative, requires states to begin issuing secure and compliant forms of identification that for many residents will replace their current driver's licenses.

Gov. Charlie Baker in March had his top transportation officials brief legislative leaders on the legislation he filed last October to bring Massachusetts into compliance, warning that without action this year residents might have to start carrying their passports to access federal buildings or travel through domestic airports by January.

On Thursday, the Senate considered an amendment filed by Minority Leader Bruce Tarr to adopt the provisions of the federal Real ID law as part of the state's spending plan. Tarr said his amendment largely mirrored the governor's bill.

"It's imperative, imperative, that we take action to bring our state into compliance with the federal Real ID Act so that our licenses do have integrity, that our licenses do represent truthful information and that those licenses can contribute to the security of our commonwealth and nation, rather than be used potentially to undermine and threaten the security of our commonwealth and our nation," Tarr said.

Lynn Sen. Thomas McGee offered a further amendment, one that would require the registrar to issue two different types of licenses -- one that complies with Real ID and one that does not -- rather than just giving the registrar the option of issuing two types of ID as the Tarr amendment would have.

"The Real ID Act allows states that adopt it to have a two-tiered system," he said. "This further amendment would offer the option for current license and ID holders as well as new applicants ... to chose a Real ID so long as they meet the federal documentation requirements or the current non-compliant licenses and ID cards for those that do not need or want the Real ID for either personal or privacy reasons."

McGee said 16 of the 24 states that have enacted legislation to comply with the federal law have adopted a two-tiered system.

The new licenses, which would be marked with a yellow star, would require an applicant to show proof of citizenship or lawful status in the country.

Some immigrant advocacy groups have expressed concern that the governor's bill could deny some legal residents driver's licenses due to its adherence the federal definition of "lawful status."

Tarr argued that the two-tiered system would undermine the point of the federal law.

"The purpose of this federal Real ID Act is to make sure that United States citizens and those that are in the country lawfully, which we all want to accommodate, have a license that means something," he said. "Not to create a second tier where we say, 'well, maybe you don't meet all those criteria but we're going to give you one of the most important pieces of identification available in our society and not guarantee that you meet those other criteria."

Tarr's amendment included a separate definition of "lawful presence" that would give the registrar some discretion, in consultation with the Department of Homeland Security, in issuing Massachusetts-only driver's licenses to those who can prove their legal presence, but don't meet the federal criteria for a Real ID.

The McGee further amendment was ultimately adopted on a 25-13 roll call vote. Democratic Sens. Jennifer Flanagan, Anne Gobi, John Keenan, Joan Lovely, Michael Moore, Michael Rush and James Timilty joined the Senate's six Republicans in opposing it.

Last October, the U.S. Department of Homeland Security issued the state a one-year extension to become compliant with the Real ID Act. Baker, however, has said that in order to get another extension this October the state needed to show progress toward compliance, which would require legislative action.

The Transportation Committee, which McGee chairs, took no action on the governor's bill (H 3814) by the May 16 reporting deadline, according to the committee.


State House News Service
Wednesday, June 1, 2016

In state fiscal health rankings, center ranks Mass. near bottom
By Andy Metzger


Massachusetts ranks behind only Connecticut in a survey of all 50 states' fiscal health released by Wednesday by the Mercatus Center at George Mason University.

The researchers grouped the Bay State with Connecticut, Illinois, New Jersey and Kentucky, states with "ongoing structural deficit problems in addition to long-term debt and pension pressures."

Massachusetts budget-writers for years have sought to wean the state off the use of nonrecurring revenues. This year state officials are trying to replenish state reserves and continuing their efforts to move transportation employees off debt-financed capital budgets and into operating budgets.

Basing its findings on comprehensive annual financial reports from 2014, the center's researchers measured all 50 states and Puerto Rico against 14 metrics intended to "assess the extent to which the states can meet short-term bills and longer term obligations." The center, which seeks market-driven public policy solutions, found that revenues cover 96 percent of expenses in Massachusetts, leaving a per capita deficit of $342.

Massachusetts is "reliant on debt financing," with a total debt of $26.73 billion, unfunded pension liabilities of $94.45 billion and other post-employment benefits adding $15.38 billion to the total. The fiscal 2017 budget, approaching $40 billion in spending, has yet to be finalized.

The academic center's analysis appears to diverge from the outlook of one of the major credit rating agencies. Moody's puts Massachusetts among 17 states with its second-highest rating, behind 14 states enjoying the top AAA rating. Another 16 states rate below Massachusetts, according to Moody's.

Nebraska, South Dakota and Wyoming have no general obligation debt, according to the agency. Eileen Norcross, an author of the study, said it gave "more weight to the short run than to the longer term," and in fiscal 2014 Massachusetts had a "very poor cash position."

The Bay State does "a little better" on longer-term obligations, while its reserves are lacking and it has "a lot of debt," Norcross told the News Service. "They're not necessarily recession-ready," Norcross said.


The Boston Herald
Thursday, June 2, 2016

State ranks 49th in fiscal solvency study
But economy strong, says Baker
By Jordan Graham


Debt-laden Massachusetts is “walking on the same road as Puerto Rico,” said the author of a George Mason University study on the fiscal condition of states that ranks the Bay State a dismal 49th for fiscal solvency — ahead of only Connecticut and the Caribbean territory.

“It’s the ongoing habit of issuing lots of debt and unfunded liabilities and having a poor cash position and taking on more spending than you can finance­, and that, if it’s done over a significant period of time, does lead to a crisis,” said Eileen Norcross, a senior research fellow at GMU’s Mercatus Center. “Massachusetts’ economy is far stronger than Puerto Rico, their debt loads are nowhere near Puerto Rico, but it’s that habit they’ve got to look out for. If it’s an ongoing habit, you might be early on that road, but you’re walking on the same road as Puerto Rico.”

The report, released yesterday, described a smorgasbord of poor financial management by Beacon Hill pols and bureaucrats, including:

• Spending more than the state receives in taxes and fees.

• Insufficient cash reserves to withstand a recession.

• Large unfunded liabilities, including pensions and health care spending obligations.

• A habit of borrowing to fund new projects.

“This report is a wake-up call to elected officials in Massachusetts,” said former state Inspector General Greg Sullivan, now a government watchdog at the Pioneer Institute. “Looming beyond the horizon is billions of dollars of unfunded obligations. ... We’ve got to confront these problems.”

The report is based on fiscal 2014, the most recent complete data available. Still, these are not issues­ that can be addressed with the flick of a switch, Norcross said, stressing the need to dramatically boost the rainy day fund.

The Baker administration yesterday said the rainy day fund has $1.25 billion, but said for the first time in years the state budget does not call for tapping emergency funds to cover routine spending, and plans to deposit more then $200 million in the fund.

Gov. Charlie Baker pushed back on the report, citing a new stable credit rating and Massachusetts’ strong economy.

Shortly after taking office,­ Baker told an audience of state bond buyers his goal is to get the commonwealth to a AAA rating. Late last year, Standard & Poors changed its outlook from “stable” to “negative.” Yesterday, Fitch rated Mass­achusetts bonds as AA+, with a stable outlook.

“Fitch actually came out and affirmed their rating today and said that among other things we have a diver­sified and very successful economy,” Baker said, referring to New York-based Fitch Ratings. “They also said we have a very strong working relationship with the Legislature. When we see problems, we artic­ulate them and we solve them, and that’s going to continue to be the way we handle our fiscal situation here in Massachusetts.”


The Eagle-Tribune
Thursday, June 2, 2016

An Eagle-Tribune editorial
For fiscal health, Bay State ranks 49th among 50 states


Alarm bells are going off on Beacon Hill, or ought to be.

A survey of the fiscal health of all 50 states plus Puerto Rico found Massachusetts on the critical list — ranked in the bottom five of all states. The only state with a worse outlook is Connecticut, followed by the U.S. territory of Puerto Rico, which is on life support.

Joining Massachusetts and Connecticut in the bottom five are Illinois, New Jersey and Kentucky.

The survey released Wednesday was conducted by the Mercatus Center at George Mason University in Virginia.

The researchers found the Bay State and the rest of the bottom five are states with "ongoing structural deficit problems in addition to long-term debt and pension pressures."

New Hampshire did much better in the Mercatus Center survey. It ranked 20th, sandwiched between Virginia and North Carolina. The Granite States ranked highest in the nation for keeping spending low relative to its tax base and also was credited with having a debt that's more manageable than most, though some fiscal problems were noted.

The center, which advocates "market-oriented solutions" to public policy issues, said it based its rankings of the states' financial solvency in five categories, including whether they have enough cash on hand to cover short-term bills and how much debt they have.

The five cellar-dwelling states are where they are "largely owing to the low amounts of cash they have on hand and their large debt."

From the report:

— Each state has massive debt obligations. Each of the bottom five states exhibits serious signs of fiscal distress, making these states' debt levels look more like Puerto Rico's. Though the states' economies may be stronger than Puerto Rico's, allowing them to better navigate fis­cal crises, their large debt levels still raise serious concerns.

— Unfunded liabilities continue to be a problem. High deficits and debt obligations in the forms of unfunded pensions and healthcare benefits continue to drive each state into fiscal peril. Each holds tens, if not hundreds, of billions of dollars in unfunded liabilities — constituting a significant risk to taxpayers in both the short and the long term.

— The bottom five states have changed since last year. Kentucky's position has declined, placing it in the bottom five this year. New York is no longer in the bottom five. New Jersey and Illinois improved slightly, but remain in the bottom five. Connecticut and Massachusetts also remain in the bottom five, in slightly worse positions than last year.

The Bay State is in a worsening bind because for years it has lived beyond its true means, using fiscal gimmicks like one-time revenue sources and debt-financed spending to paper over the gap between income and expenses. It's still doing it, forever seeking ways to siphon more money from the pockets of the public by promoting more public sector "investments" and new "revenue streams" like the graduated income tax — the longtime holy grail of "progressives," though it's been rebranded as the "millionaires' tax" to sway the gullible.

Eileen Norcross, an author of the Mercatus Center study, told the State House News Service that Massachusetts had a "very poor cash position." Though does "a little better" on longer-term obligations, while its reserves are lacking and it has "a lot of debt," Norcross told the News Service.

"They're not necessarily recession-ready," Norcross said.

Let's hope the alarm bells are being heard loudly enough that our leaders are forced to get our financial house in order.


State House News Service
Thursday, June 2, 2016

Six Mass. lawmakers to craft plan to spend nearly $40 Billion
By Michael P. Norton


The House and Senate on Thursday steered fiscal 2017 budget bills to a six-member conference committee, which will have less than one month to work their way through spending plans that have similar bottom lines but many other differences.

The Senate last Thursday approved a $39.5 billion spending plan after tacking on many policy amendments that quickly drew an unfavorable review from Gov. Charlie Baker. It will be up to the conference panel to settle the scores of differences in the budget bills (H 4201 and S 2305), including line item levels, policy proposals and earmarked spending requests that were popular in the House budget.

For the second straight year, Rep. Brian Dempsey of Haverhill and Sen. Karen Spilka of Ashland will co-chair the budget negotiating committee. Conferences usually opt to conduct private meetings, although conferences on public records law reforms this year and one on criminal sentencing in 2012 kept their meetings open without any apparent disruption to their proceedings.

Once a budget is agreed upon and forwarded to the Corner Office, Baker will have 10 days to review the bill, sign it and announce any vetoes and amendments.

The new fiscal year begins July 1. Lawmakers have not hesitated in recent years to pass temporary budgets if they can't meet their deadline.

A large number of vetoes could lead to a significant override agenda, which would demand the attention of legislative leaders and add to their workload in July, the final month of formal sessions for the 2015-2016 General Court.

Another curveball? Legislative leaders plan to hold informal sessions for two weeks in July - normally crunch time for busy sessions - to allow members to attend the Democratic and Republican national presidential nominating conventions in Cleveland (July 18-21 for Republicans) and Philadelphia (July 25-28 for Democrats). Baker has said he does not plan to attend the Republican convention in part because he expects to be focused on legislative issues at that time.

House Ways and Means Vice Chairman Stephen Kulik and Rep. Todd Smola, the ranking Republican on Ways and Means, will join Dempsey on the House conference. Senate Ways and Means Vice Chairman Sal DiDomenico and Sen. Vinny deMacedo, ranking Republican on the Senate budget committee, were also named Senate budget conferees.

Negotiations will kick off amid uncertainty over fiscal 2016 revenues, which were trending $260 million behind benchmark through April with a key report on May revenues due out on Friday.

According to the Massachusetts Taxpayers Foundation, the Senate over three days last week added $61.4 million to its budget through amendments, including nearly $32 million for local spending earmarks, and tacked on 181 new policy sections to the spending bill.

MTF pegged the bottom lines of the House and Senate budgets at $39.539 billion and $39.558 billion, respectively. Baker's budget, filed in January, called for $39.553 billion. The Senate budget has the largest bottom line, by $16.2 million, and represents spending growth of 3.59 percent, less than projected tax revenue growth of 4.3 percent, according to MTF. Tax revenues have risen just 1.9 percent over the first 10 months of fiscal 2016, compared to fiscal 2015.

The Senate added policy proposals to its budget dealing with the use of student performance data when evaluating teachers, banning retailers from providing "single use" plastic bags to customers, and prohibiting MBTA fares from rising more than 5 percent over a two-year period.

Other policy riders added to the Senate budget deal with retiree health care premiums, the federal Real ID law, dental hygiene practitioners, and eligibility for health safety net services.

"I thought we all decided that was a bad practice and that policy issues should be debated by committee and dealt with through hearings and handled separately and not incorporated into the budget," Baker told the News Service on Friday.

While watching the Senate budget debate unfold, Baker said he grew concerned with the volume of policy proposals being added to the spending bill that he saw having little relation to state spending.

Adding policy riders to the annual budget is nothing new on Beacon Hill. Lawmakers have had an on-again, off-again relationship with the practice over the years, at times attempting to limit the amount of non-budgetary legislating that takes place within the bounds of the budget, but not always adhering to that goal.

"I was actually kind of surprised by how far away from the practice of the past few years, which is to make the budget about the budget, the Senate budget process has gone," Baker said. "There's a lot of stuff that's in that budget that is not where we have been, as a commonwealth, putting that stuff in recent years."


The Boston Globe
Friday, June 13, 2016

Mass. faces $311 million shortfall
By Joshua Miller


With just days left in the state’s fiscal year, Massachusetts is grappling with a $311 million tax revenue shortfall that will force a quick budget tightening across government and portends trouble for the spending plan being ironed out by the Legislature for the new fiscal year that begins in July.

The Department of Revenue announced Friday afternoon that tax revenue in May had fallen below expectations for the second month in a row, putting the state, which must have a balanced budget, in a bit of a pinch.

But officials in the administration of Governor Charlie Baker say they have no plans for layoffs, emergency cuts, or using the state’s rainy day fund, meant only for fiscal emergencies.

Still, tightening will be necessary. Even though $311 million is small in the sweep of a nearly $40 billion budget, the short time frame makes the hole difficult to fill.

“At this point in the year, it’s hard to close a gap,” said Noah Berger, president of the left-leaning Massachusetts Budget and Policy Center. “But there are tools — freezing spending wherever possible, finding savings when the number of people qualifying for specific programs is below projections, and there’s also the possibility of using reserves, as a last resort.”

Eileen McAnneny, president of the business-backed Massachusetts Taxpayers Foundation, emphasized there isn’t an easy fix.

“Obviously, the fact that we have days left to the fiscal year and they are $311 million short means that addressing it is a Herculean task,” she said. “They have very few options at this point. Most of the state’s money has been spent.”

She said possibilities include paying some bills in the new fiscal year, which begins July 1.

McAnneny said two months doesn’t make a trend, but “it certainly should cause budget writers to pause.”

Both the House and Senate have passed versions of the budget for the new fiscal year based on earlier projections of how much money the state will bring in. Now, members of each branch are working to reconcile their differences before July.

Seth Gitell, a spokesman for Speaker Robert A. DeLeo, said the revenue numbers are of concern to DeLeo. “It’s something he’ll be looking at with a watchful eye as the fiscal year comes to a close,” Gitell said.

Yet the more immediate crunch is the one faced by the administration.

Baker’s budget chief, Kristen Lepore, released a statement saying that the gap “remains in a range that we can manage through,” though she did not specify what that might entail.

In a legal disclosure Massachusetts released last month, Lepore and Treasurer Deborah B. Goldberg said budget management measures include restricting last-minute spending, working to boost revenue collection, and payroll caps.

The administration and outside budget analysts say the below-expectation numbers are not necessarily a sign the state’s economy is weakening — two months of concerning data is insufficient to draw sweeping conclusions, they say.

Fluctuations in how much companies are paying in taxes based on ripples in the stock market are partly to blame, officials say.

“We continue to have confidence in the state’s economy as overall sales tax and income withholding revenues remain healthy,” Revenue Commissioner Michael J. Heffernan said in a statement. Massachusetts’ unemployment rate — 4.2 percent in April, according to the US Bureau of Labor Statistics — sits at pre-recession levels. And many sectors of the state’s economy are humming.

But the announcement of the less-than-expected revenue numbers comes as national worries grow about the potential of a slowdown, from weak job growth to the potential for global economic woes to hurt business in the United States. Also on Friday, the federal government released nationwide job numbers — the weakest in six years — which some analysts see as indicating the post-Great Recession recovery may be quickly losing steam.

During his successful 2014 campaign for governor, Baker described himself as “a guy who is pretty facile with math.” Specialists say those skills will be put to the test again in coming days.


State House News Service
Friday, June 3, 2016

Tax collections now running $311M behind benchmarks
By Michael P. Norton and Matt Murphy


After another lackluster month of collections, tax receipts are now running $311 million behind budget benchmarks with just one month left in the fiscal year, leaving Gov. Charlie Baker with an immediate budget problem.

May tax collections were up just 1.8 percent and fell $50 million below the monthly budget benchmark, the Baker administration reported late Friday.

After April tax receipts declined, Baker's budget team ordered a halt to non-essential state spending and ruled out the use of rainy day reserve funds as a means of pulling money into the state budget, which was predicated on tax revenues growing by 4.8 percent this fiscal year.

Administration budget officials reiterated on Friday that they have no plans to turn to layoffs, emergency cuts or the use of reserves to balance the budget.

"We have been planning for the May revenue collections by treating it as a risk based on experience of the current filing season. The overall below-benchmark amount remains in a range that we can manage through," Administration and Finance Secretary Kristen Lepore said in a statement provided to the News Service.

Legislative leaders are in the final stages of assembling a $39.5 billion budget for next fiscal year starting on July 1, which is predicated on ta collections growing by 4.3 percent.

Income tax collections in May were $101 million below the monthly benchmark and withholding collections ran $53 million behind in May, according to the Department of Revenue. Total tax collections in May hit $1.868 billion, up $34 million over May 2015.

Revenue officials attributed the bulk of revenue growth last month to $112 million collected since April 1 in connection with a tax amnesty program designed to get tax scofflaws to pay what they owe without penalties.

Tax receipts over the first 11 months of fiscal 2016 are up 1.9 percent.

"May revenue collections continue to reflect the trends we saw last month with lower than expected payments with returns and higher than expected income cash refunds, as well as a shift in withholding from May to April," Revenue Commissioner Michael Heffernan said in a statement. "It appears that most of the adjustments being made to estimated payments due to the volatile stock market have leveled off at this point. We continue to have confidence in the state's economy as overall sales tax and income withholding revenues remain healthy."

In January, the Baker administration raised its estimate of expected tax collections for fiscal 2016.

 

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