STATE HOUSE, BOSTON, OCT. 3, 2001 ... House Speaker Thomas
Finneran warned today that some severe fiscal belt-tightening is in order, but said consideration of delaying or
halting the voter-approved income tax cut is "entirely premature."
Speaking to reporters outside his office, Finneran spoke
ominously about a gloomy-looking economic picture and expressed a desire to trim the House's proposed $22.9 billion budget
by about $300 million before it emerges from negotiations with Senate leaders.
"We have to look at the expenditure side of the budget," he
said moments after the House approved a bill freezing unemployment insurance rates in 2002 and sparing businesses of
$100 million in new costs.
Finneran said he preferred to first "pare down" state agency
budgets, noting some have "swelled" up to 70 percent over the past 10 years. He said he'd also prefer not to tap into the
state's $1.8 billion rainy day fund. And tinkering with the shrinking income tax rate is "entirely
premature," Finneran said.
He pointed out that during the height of the state's last
economic slowdown in 1991, the state budget stood at $12 billion -- nearly half of the current proposed budget. Finneran
said departments whose budgets have swelled over the last decade should be able to absorb
some cuts "without undue hardships."
Like other Beacon Hill leaders, he declined to recommend
areas of the budget he'd look to cut first.
"Everyone must be prepared to make a collective sacrifice,"
said Finneran.
Finneran is meeting regularly with Senate President Thomas
Birmingham but wasn't able to say when he expects the budget conference committee to settle the now three-month late
2002 fiscal year budget.
Finneran supports Acting Gov. Jane Swift's plan to increase
spending on public safety by $23 million, but said it will be difficult to find the money for it. He later offered the
observation that the amount Swift requested to hire 150 new state police officers is close to
the amount Clean Election Law supporters want to fund the voter-mandated campaign
finance program. Finneran opposes public campaign financing.
State House News Service
Tuesday, October 2, 2001
Rogers says cigarette tax hike generating interest
as budget evolves
By Michael P. Norton
STATE HOUSE, BOSTON, OCT. 2, 2001 ... The House budget chief
said Tuesday that a 50-cent-per-pack cigarette tax hike is getting a second look from Beacon Hill lawmakers
who are growing increasingly worried about the economic slump's impact
on government services, especially health care.
House Ways and Means Committee Chairman John Rogers
(D-Norwood) acknowledged there's a chance that the tax hike may be included in this year's budget deal. It could only be
included if lawmakers were sure they had the two thirds majority in both branches to
override a promised veto from Republican Acting Gov. Jane Swift, he said. Lawmakers are
due to complete formal sessions this year by Nov. 21.
"I think it has a slightly better chance of passage," Rogers
said of the cigarette tax hike proposal, which is being pushed throughout New England. "With tax receipts dwindling,
many representatives and senators are looking to shift tax burdens onto different activities."
Rogers said that if the tax hike were enacted, he would
prefer dedicating the resulting new revenues to preserving existing public health programs, which might otherwise face
cuts, rather than launching new efforts to cover the uninsured or bail out struggling health care
providers, as many advocates prefer.
The tax hike push is coming from the American Cancer Society
and a large group of health care providers and experts. Their goal is to use the new revenues to expand health care
access to the poor and working uninsured residents, to shore up fiscally
ailing hospitals, and to hire more community health workers.
The House-approved budget calls for a study of the proposed
tax hike; the Senate budget directs the Swift administration to apply for federal waivers needed to cover more uninsured
residents and receive federal funds. Tax hike supporters believe they have majority support
for the bill in both branches. The questions are whether they have two thirds
support and whether lawmakers are willing to raise taxes at all.
Rep. Rachel Kaprielian (D-Watertown), a key sponsor of the
cigarette tax hike in the House, said she is concerned that Senate leaders who also support the higher levy are
reportedly back pedaling due to concerns about raising taxes during an
economic downturn.
But Kaprielian said the issues -- raising taxes and paying
to treat the uninsured -- won't go away. "It's a political issue anytime you talk about a levy of any kind," she said.
"People are asking about it."
Senate Ways and Means Chairman Mark Montigny (D-New Bedford)
wants to shore up existing programs by spending more of the tobacco settlement windfall on health programs.
Montigny said a 21-cent cigarette tax hike in 1996 fueled a great expansion of
insurance coverage and a second hike is the best hope for substantially reducing the remaining
uninsured population -- largely the working poor.
Montigny said it's "very premature" but not impossible to
believe a tax hike will be part of a budget deal.
Rogers and Montigny are the architects of budgets that are
more than three months overdue and about to undergo substantial revision due to the slumping economy. They met Tuesday
night and are in "general agreement" on a fiscal 2002 spending cap that is even lower than the
$22.63 billion figure recommended by Swift budget deputy Stephen Crosby. "We're trying
to decide on a spending cap," said Rogers.
With tax collections plummeting, Montigny and Rogers are
looking to trim almost $300 million from the respective $22.9 billion budgets approved earlier this year by the House and
Senate. The budgets require a roughly 4.5 percent surge in revenues. Tax receipts are down
7.4 percent during the first quarter.
"We do not have an agreement yet on what the exact level of
cutting should be," Montigny said.
Rogers said that as they revisit the budgets, they have
generally agreed to attempt to "hold harmless" from cuts any spending on education, health care, local aid to cities and
towns, and critical public safety accounts -- areas that Swift also agrees are top priorities.
The rest of the state budget is "subject to major revisions
and cuts," said Rogers, adding that millions of dollars saved over the past three months by spending at last year's budget
levels will only serve to lessen the amount of required cuts.
While all lawmakers are concerned about preserving local
projects and initiatives, Rogers said that so far, they unanimously accept the need to pare back spending to keep the
budget balanced.
Two years ago, House and Senate leaders didn't agree on a
final budget until November. Rogers downplayed that possibility today, saying budget writers have seen a full quarter of
"dismal" collections and that is sufficient to make assumptions about the nine months
remaining in the fiscal year.
But Montigny, citing conflicting and conditional reports
from economists, said he doesn't share Crosby's belief that a significant economic turnaround will begin in January. "I'm not
convinced that we will see the pick-up that everyone has been using in their wishful thinking,"
Montigny said.
A $580 million fiscal 2001 surplus would be Montigny's first
choice to help with fiscal problems. Tapping the $1.7 billion rainy day fund is a less appealing alternative, Montigny
said, because no one has a handle on the economic downturn's length or depth.
Montigny added that in hindsight, failing to reach a budget
accord earlier is the "luckiest" thing legislative budget conferees have done this year. The delay is allowing lawmakers
to adjust to a deluge of troubling economic news, which is profoundly affecting talks between
Rogers and Montigny.
"All of the arguments over minor spending differences and
philosophy were put aside," Montigny said. "The only thing we care about now is being very very careful because we're
going to have to make major cuts. We are under a whole different set of operating rules in
conference than I've ever been under certainly."
