CLT Update
Sunday, November 11, 2001

Stop!  Think!  Do the math!
"Fiscal crisis" only a halt of spending growth

In the News Today:

Temporary tax insanity:
Pols should keep mitts off voters' rollback

Swift threatens cuts if no new budget soon

Governor eyes trim of 5,000 state jobs
Swift proposes $700m budget cut

Swift eyes $700M cuts in budget showdown

Stop! Think! Do the math!

According to today's AP report, "Total spending in the 2001 fiscal year was $22.2 billion."

Boston Globe reporter Rick Klein yesterday recognized, "Even if all the other pieces are put in play, state leaders will still be forced to cut at least $400 million and perhaps as much as $800 million from the proposed $22.9 billion budget, which is $800 million more than what was spent last fiscal year."

If our "full-time professional" legislators don't get off their collective butts and finally do the job we pay them over $55,000 a year to do -- even if it's five months too late -- Governor Swift intends to cut their proposed FY 2002 budget by $700 million.

The Legislature's proposed budget is $700 million more than last year's budget. Gov. Swift intends to remove $700 from it.

The budget will not be cut beneath last year's level:  Only the Legislature's usual budget growth will be eliminated.

This is the "fiscal crisis" our over-worked legislators are using to hopefully rationalize "freezing" -- repealing -- our tax rollback!

Too many in this irresponsible Legislature are only over-worked scheming to kill the rollback by any means that might possibly succeed.

Chip Ford

The Boston Herald
Sunday, November 11, 2001

Temporary tax insanity:
Pols should keep mitts off voters' rollback

by Wayne Woodlief

OK, folks, you've done it before, let's do it again.

Shout it out, so loud that Senate President Thomas F. Birmingham, House Speaker Thomas M. Finneran and anybody else out to thwart our will can finally hear: Stop messing with our tax cut!

They aim to undo what we did just a year ago, in November 2000, when an overwhelming majority of Massachusetts voters approved a rollback of a "temporary" income tax increase, back in the Dukakis administration, that lasted a decade instead.

By law, the state income tax rate is now due to fall from 5.6 percent to 5.3 percent in January on the way to 5 percent in January 2003, where it was before the "temporary" increase. That's an estimated savings of $175 a year for a family of four with a $70,000 annual income.

Not a fortune, but enough to bring home a load of groceries, surprise Sarah with a new bike or buy a suit off the rack -- and thus pump some needed stimulus back into a slowing economy.

But no, says Birmingham. He is now supporting a freeze on the tax cut, "temporarily," just for a year mind you (we've heard that before), until the current fiscal crisis passes.

And Finneran -- playing cute as he did when he made the voter-approved Clean Elections Law just disappear -- is leaning toward tying an economic "trigger" to the tax cut. It would force the tax rate to stay the same as long as the economy is dipping. Hey, Mr. Speak-uh, if it quacks like a duck, it's got webbed feet.

So we have to let them know again that we're sick and tired of that decade-old "temporary" tax increase. Write, phone, e-mail, pay a personal call on your local rep or senator, do whatever it takes to get their attention.

And deliver this message: We voted that increase out. We can do the same to you.

The message might work. Rank-and-file legislators are already nervous about defying the voters on this one. And our target threshold is lower than it was in the referendum.

Thanks to acting Gov. Jane Swift's vow to veto any repeal of the tax rollback, we don't need to persuade a majority of legislators to do the right thing. It takes just one-third plus one, in either house, to sustain her veto.

Birmingham said he won't even bring the tax-cut freeze up for a vote unless he knows the two-thirds needed to override a veto is there in both houses.

That's because he's running for governor in 2002 and a lot of his members are either up for re-election or gunning for higher office. And none of them is a kamikaze.

"I'm not going to put the membership through the crucible of a very perilous vote unless we know we have the numbers to actually achieve some savings," Birmingham said in an interview. "This is not some Parisian salon," engaged in debate for the sheer joy of it. (Funny, I never would have confused the Massachusetts Senate with a Parisian salon.)

Does he have the numbers now to override?

"We're close, but we're not there," the Senate president said. The same is said to be true in the House: Close, but no cigar.

It's up to us to keep it that way, to remind them, as Barbara Anderson and her Citizens for Limited Taxation are doing, that there are consequences, even for Finneran's ploy.

According to Anderson, a "moratorium for one year" or the "Finneran Trigger Plan" would say: "Dear Voter, you took a whole lot of dumb pills if you really believe that this is not the first step of a permanent repeal. Just look at our track record, dummy."

Besides, if the tax rollback is suspended, its demise would mark a double thwarting of the voters' will in the new budget.

That's because Finneran succeeded in torpedoing any effective funding for the Clean Elections Law in the House, though it was approved 2-1 in a 1998 referendum. And though Birmingham steered adequate funding for Clean Elections through the Senate, he hasn't busted his hump for it in conference committee.

"I don't know" if there'll be funding for Clean Elections in the new budget, Birmingham said on Friday. "My focus now is on balancing this budget."

Now, I can sympathize with our leaders in the Legislature. We are in hard times, revenues are in free fall and our reps do face some very large cuts in the budget, enough to enrage another set of voters.

"It's a difficult decision," Birmingham said last week. He said he opposed the tax cut ballot question, even debated on it (against former Gov. Paul Cellucci). But he had accepted the will of the voters. Until now.

Revenues dropped $30 million in July, $30 million in August and then an astounding $230 million in September, the Senate president said. "So we are now facing a shortfall of $1.3 billion to $1.4 billion for the year. And we have to take measured, disciplined steps."

They include whacking hundreds of millions of dollars out of a budget that slipped into a House-Senate conference committee months ago. The budget has yet to emerge to allow individual members to join the tight little band of conferees (plus Birmingham and Finneran) in deciding which whacks are sound and which are not.

And, said Birmingham, another $400 million could be taken from the state's main "rainy day fund" of $1.7 billion (another $579 million is available in a separate fund) -- money set aside in good times for use in crises like this one.

Yet, he said, he is convinced that to avoid deeper cuts in programs (citing some of the more popular ones such as local aid, youth jobs and the like), the tax cut should be suspended for a year, with a total saving for state government of $200 million.

"Look, I'm not naive," Birmingham said. "I'm running for governor. I know this could be perilous for me. But what's the point of being in a position of leadership in a time of crisis if you can't do the right thing, at least present something for consideration?"

Yet it's a hot potato he's handing his members.

State Sen. Susan C. Tucker (D-Andover) was in the House in 1990 when the last fiscal crunch arose. She voted for tax increases over deep spending cuts and lost her seat. She finally got back in office, winning a Senate seat in 1998. Now she's polling her constituents by mail on what they'd like her to do.

Then there are the Tolman brothers -- former state Sen. Warren Tolman, who is one of Birmingham's rivals for governor, and Sen. Steven Tolman (D-Brighton) -- who keep goading Birmingham. "I don't think it's in our best interest as elected officials to continue to thwart the will of the voters," said Steven Tolman. And Warren added, "We should look first more to the rainy day fund and the tobacco suit settlement."

Birmingham, who said he isn't trying to muscle fellow senators on this issue, sighed, "There are no white hats, no black hats" in this drama. Maybe not. But there were an awful lot of voters who thought they had used the ballot box in 2000 finally to rid themselves of an onerous tax increase. If they see that dream dashed, they may well decide who are the villains in the mix.

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Associated Press
Sunday, November 11, 2001

Swift threatens cuts if no new budget soon
By Ken Maguire

BOSTON (AP) Acting Gov. Jane Swift on Saturday challenged legislative leadership to produce a budget by the end of next week or she'll make unilateral cuts to close $1.2 billion in deficits.

Swift would cut up to $800 million from state government, including up to $300 million in aid to cities and towns, and request legislative appropriation of $500 million from free cash and tobacco settlement money, the administration's financial experts said.

Other proposed cuts are $100 million in reduced payments to the state's pension fund; $96 million from Health and Human Services; up to $66 million from Public Health; $34 million from the Education Department; and $20 million from higher education.

Swift says she has the legal power to make cuts when the latest interim budget expires Friday. A top aide said the administration can't wait any longer for the Legislature to pass a 2002 fiscal year budget, which is five months late.

"They don't give a good God damn," Administration and Finance Secretary Stephen Crosby said of the Legislature. "Where the hell are they?"

The overall budget shortfall is $1.35 billion, but the administration said it's already dealt with a $250 million deficit announced in September.

Swift ordered Crosby and his staff to produce a menu of cuts from which she'll make decisions. They worked at it late Friday and all day Saturday.

Crosby said Swift will examine the plan Monday, Veteran's Day, in her office. He said House Speaker Thomas Finneran and Senate President Thomas Birmingham are invited.

But unless they produce a budget or agree to a budget summit with her, she'll go ahead with her own plans, Crosby said.

Birmingham is not interested in a summit.

"When the Speaker and I met on Friday with the House and Senate chairs of Ways and Means the issue of Governor Swift's involvement arose and we agreed we did not need her direct involvement at this time," he said.

Birmingham said he spoke to Swift earlier Saturday and told her that "we were making progress and would likely have a final proposal soon."

Finneran was contacted and said he'd meet "anywhere, anytime," according to Crosby.

In addition to the proposed cuts, Swift is calling for spending of $300 million from the state's Rainy Day Fund and $200 million from annual tobacco settlement money.

Unlike the cuts, however, only the Legislature can appropriate funds, which will be difficult.

Swift floated the tobacco idea last month and Finneran called it "troubling." He prefers spending just $100 million annually and putting the rest in a trust fund for future health care needs. His spokesman said Finneran had no comment Saturday.

Massachusetts is the only state in the country that has yet to pass a budget for this 2002 fiscal year. The administration said this is the latest the state has gone without a budget since 1965.

Total spending in the 2001 fiscal year was $22.2 billion.

Crosby said they'll present Swift with up to $300 million in cuts in local aid, with the hope of keeping it to $100 million. He cited water and sewer subsidies as one area to reduce.

Specific proposed cuts include: $30 million form state employee health insurance; $16 million from welfare; $10 million from Medicaid benefits packages; $8 million from Housing and Community Development; $5 million from transportation and construction; $2 million from police details; and $2 million from the Registry.

Crosby said the proposed $20 million cut from higher education would be split between the University of Massachusetts system and the state's community colleges.

The administration's figures, he added, incorporate an expected reduction of 5,000 state employees by the first quarter of fiscal 2003, which begins next July. He said it would be accomplished through early retirement incentives. The state has 73,000 employees.

Program cuts are politically unpopular, but Crosby said they were forced to do so.

"It's coming from us because the Legislature didn't do it," he said. "We're going to put numbers on the table."

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The Boston Globe
Sunday, November 11, 2001

Governor eyes trim of 5,000 state jobs
Swift proposes $700m budget cut

By Rick Klein
Globe Staff

Frustrated by legislative inaction, the Swift administration yesterday proposed $700 million in budget cuts, including the elimination of 5,000 state jobs, to help close a swelling $1.4 billion deficit.

The administration's plan would slash $100 million in aid to cities and towns and $96 million from human services, including welfare funds, programs for the mentally ill, and public health awareness campaigns, according to the state budget chief, Stephen P. Crosby.

Acting Governor Jane M. Swift will also call for a 7 percent reduction in the state work force, but Crosby said she hopes most of the jobs can be eliminated through a new early retirement program.

"This is sober stuff we're talking about," Crosby said. "What we're telling you now is the toughest stuff in this business."

Swift's plan is the first offered for large-scale cuts, as state leaders struggle to cope with the shrinking economy and plummeting revenues.

The proposal will require legislative approval, and Crosby warned that if the Legislature lets its session end Nov. 21 without a budget, even steeper cuts will be needed.

Massachusetts is the only state in the nation that has yet to pass a budget for the current fiscal year. The Legislature is now 134 days late in sending a spending plan to Swift -- the longest such delay since the 1960s.

"It's staggering irresponsibility on the part of the Legislature," Crosby said. "She wants people to know what we're talking about."

Crosby said that Swift will finalize her list of proposed cuts tomorrow and will present them to House Speaker Thomas M. Finneran and Senate President Thomas F. Birmingham.

Several of the administration's ideas -- including a $100 million reduction in contributions to a state employees pension fund, spending $200 million more from a tobacco lawsuit settlement, and forcing state employees to pay $30 million more for their health insurance -- have been rejected by lawmakers before and will undoubtedly receive cool receptions from House and Senate leaders.

But others are new proposals to trim spending, and with no other suggestions in the public realm, they could shape the ensuing debate over what programs to cut. Crosby said Swift felt strongly about offering a broad plan of cuts -- including politically unattractive ones -- to force the Legislature to face a new economic reality.

Although it is the most detailed plan provided so far, Crosby was still unable to answer many questions about the plan, including which employees would likely lose their jobs, what incentives would be offered to encourage them to retire, and how much it could cost.

House and Senate leaders conducted budget talks by telephone over the weekend, but no one on either side is predicting an imminent breakthrough. Finneran and Birmingham are reportedly still far apart on the proper mix of spending cuts and reserve funds.

Crosby said the $700 million in cuts need to be combined with $300 million from state reserve accounts and the $200 million in tobacco money to close the budget gap. The administration has already moved to trim about $250 million from spending in its executive agencies.

Crosby said Swift wanted, as much as possible, to avoid cuts that directly affect state services, particularly to families and children. That's why, for instance, the $66 million proposed cut at the Department of Public Health trims screening and research programs and public-health advertising campaigns rather than aid to hospitals, he said.

"They're easier to cut because they don't involve [state] employees," Crosby said.

The proposed cuts in local aid -- which could affect everything from school spending to roadway maintenance -- are expected to be controversial. Even before they were announced, representatives of cities and towns had planned a meeting at the State House Tuesday to ask that municipalities be protected.

Swift is also likely to call for cuts to water and sewer subsidies and a $34 million cut in K-12 education aid. Also eyed are $20 million in aid to the University of Massachusetts system and community colleges; a $10 million cut in environmental spending that could spell the end of a proposed network of bicycle paths; and a $7.5 million cut in public-safety spending that could mean less of a State Police presence near summer vacation and holiday shopping areas.

Though any cuts are likely to be politically difficult, Swift's reductions do not represent deep percentage decreases over current spending, which is about $23 billion annually. Her proposed local aid decrease is about 2 percent, as is the reduction in higher education. The social services budget would fall 1 percent under her plan.

Crosby said Swift has already invited Finneran and Birmingham to a special budget summit to deal with the state's fiscal problems. Finneran was open to the idea, but Birmingham said her input would not be necessary at this point, Crosby said.

Swift will send her proposal for dealing with the fiscal crisis directly to the Legislature by the end of the week if budget talks between the two leaders continue to be fruitless. If they don't come up with their own agreement and don't act on Swift's proposal, Crosby said drastic cuts will have to be made.

The state Constitution gives the governor special powers to curb state spending if administration officials determine that the state will be unable to pay its bills. But Swift cannot unilaterally access reserve funds, meaning more cuts would have to be made if the Legislature stays on the sidelines.

Finneran could not immediately be reached for comment after Crosby's announcement late yesterday afternoon, and a spokeswoman for Birmingham said he could not respond without seeing the plan.

The announcement seemed timed for maximum media exposure and to present an administration focused on the seriousness of the fiscal crunch. A Crosby aide even led reporters and photographers through State House offices yesterday where eager administration budget analysts worked with spreadsheets and calculators.

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The Boston Herald
Sunday, November 11, 2001

Swift eyes $700M cuts in budget showdown
by Jules Crittenden

In a bid to force the Legislature to act on the state's long-delayed budget, Acting Gov. Jane Swift will lay out her own proposal tomorrow for $700 million in cuts to resolve a $1.2 billion deficit crisis.

"It's not supposed to come from us but it's coming from us because they (legislators) don't want to do it," Administration and Finance Secretary Stephen Crosby said yesterday, denouncing what he called the House and Senate's "staggering irresponsibility."

Today marks the longest the state has gone into a fiscal year without a budget in at least 25 years, Crosby said. In 1999, the budget was done on Nov. 10, although the state constitution sets a deadline of the fiscal year's start on July 1.

In the middle of a weekend number-crunching session, Crosby detailed "options" for cutting more than $700 million and tapping $500 in reserves to balance a $22.6 billion budget at a time when revenues are plummeting. Swift will make final choices on cuts in a holiday work session tomorrow.

Crosby said Swift spoke with House Speaker Thomas Finneran Friday and Senate Pres. Thomas Birmingham yesterday to demand a budget summit to resolve the crisis. He said Finneran agreed to meet "anywhere, any time."

Birmingham told the Associated Press he is not interested in a summit.

"When the Speaker and I met on Friday ... the issue of Governor Swift's involvement arose and we agreed we did not need her direct involvement at this time," Birmingham said. He said he told Swift yesterday that "we were making progress and would likely have a final proposal soon."

Crosby said, "If there is not a budget summit and there is not a (Legislative) budget submitted to her within five working days, she will file her own recovery budget which will do for the Legislature what they should have done."

The largest cuts in Swift's proposal include $100 million from the state's annual payment into the unfunded pension liability fund, and $100 million from the state's $5.9 billion aid to cities and towns.

Swift's plan calls for reducing the state's 73,000 workforce by 5,000 jobs by next August, but Swift hopes to avoid layoffs with early retirement incentives.

The Executive Office of Human Services is slated for $96 million cut in its $9.6 billion budget. That includes $10 million from Medicaid's $5.4 billion budget.

Other human service cuts include $16 million from the Department of Transitional Assistance's $881 million budget, through measures such as increasing the 20-hour work week requirement for recipients up to 30 hours.

The Department of Public Health would lose $66 million of its $520 million budget, targeting items such as the AIDS and HIV awareness campaign and prostate cancer research.

The Department of Education's $4.2 billion budget, mostly aid to school districts, is slated for a $140 million cut in grants, aid and reimbursements.

The Department of Higher Education, with a $1.72 billion budget, is due for a $20 million cut to be equally shared by the University of Massachusetts and the state's community colleges.

The Executive Office of Environmental Affairs's $250 million budget is slated for a $10 million cut, with $6 million of that coming from the Department of Environmental Management's $50 million budget. The Department of Public Safety's $997 million budget is facing a $7.5 million cut, with $2 million from the Registry of Motor Vehicles' administrative budget - forcing cuts in hours or the closing of branch offices - and a $2 million from State Police holiday details.

"For the most part, this is what our budget will look like," Crosby said, although he added that when Swift sits down tomorrow to make the final choices, "there will be some changes."

There is strong disagreement on how much to take from the state's cash reverses. Swift is proposing $300 million from the $2.3 billion "rainy day" fund and $200 million from the state's tobacco-settlement fund. Finneran has resisted the idea of using tobacco funds to balance the budget, while Birmingham reportedly wants to tap more of the state's reserves.

Crosby said that if the Legislature fails to match the cuts or fails to approve the spending of tobacco-settlement funds, Swift will be forced to make "draconian" cuts.

Efforts to reach Finneran and Birmingham late yesterday were unsuccessful.

Crosby said Swift's goal was to protect services to families and children, security and mandated programs; and to avoid cuts that jeopardize federal reimbursements.

"It's important people remember that there are areas we are not cutting," Crosby said. The Massachusetts Rehabilitation Commission and the departments of youth services, mental retardation, mental health and social services are slated for minor cuts or none at all.

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