The Boston Herald
Friday, November 16, 2001
Gov rejects Legislature’s ‘conceptual’
state budget
by Elisabeth J. Beardsley
Legislative leaders reached a
"conceptual" state budget agreement yesterday that calls for
$650 million in spending cuts, but acting Gov. Jane Swift fired back
that a vague outline isn't good enough.
House and Senate leaders hammered
out the general outline of a fiscal 2002 spending plan late last
night, but the outline lacks any details about which programs will be
cut, or even a bottom line.
Over the weekend, the two branches'
Ways and Means committees plan to haggle around the clock, with hopes
of finalizing the full budget document in time for a Tuesday vote.
"It is a grim budget,"
said Senate President Thomas Birmingham.
Despite the conceptual agreement,
the budget is not at all a done deal. Two years ago, during a
similarly protracted stalemate, House Speaker Thomas Finneran and
Birmingham trumpeted a deal on Oct. 13.
But sketching out the details -- the
same task facing negotiators this weekend -- proved to be a rancorous
chore. The final budget wasn't sent to the full Legislature until Nov.
10, and wasn't finished, veto overrides and all, until Nov. 17.
That history prompted Swift
yesterday to dismiss the Legislature's deal and threaten to push ahead
with huge spending cuts if she doesn't receive a budget by today's 5
p.m. deadline she issued earlier this week.
"We want a budget -- not an
outline, not a white paper, not a conceptual agreement -- a
budget," said Swift spokesman James Borghesani. "Or on
Monday, we file our own budget."
A $1.4 billion hole gaped open in
the state's ledger over the past few months, worsening with the Sept.
11 terrorist attacks.
In addition to the $650 million in
cuts -- more than the Senate wanted, less than the House and governor
demanded -- the lawmakers' plan includes drawing on $700 million of
the $2.3 billion the state holds in reserve.
Of the $700 million in reserves,
$350 million will come from the $1.8 billion "rainy day"
fund, and $350 million will come from the roughly $550 million
remaining from the fiscal 2001 surplus.
The Senate won a big victory by
convincing Finneran to bend his ironclad position on the state's
annual tobacco settlement payments.
Finneran has insisted for several
years on spending only 30 percent of the annual kitty, squirreling the
rest away into an interest-bearing trust fund for health programs. But
with a huge fiscal crisis under way, Finneran agreed to spend half of
the money this year and in each of the next two fiscal years.
Finneran, who could not be reached
for comment, warned House members in a letter that fiscal times are
going to be hard for a while to come.
"We cannot spend more than we
take in," Finneran wrote.
As frantic negotiations unfolded
behind closed doors, hundreds of human service and health care
advocates protested at the State House over the Swift administration's
slashing of $66 million from the Department of Health budget.
With the budget so badly overdue,
lawmakers are already plotting an end-run around the internal rules
that require them to recess for the year after next Wednesday. The
Senate yesterday scheduled a special session for Dec. 5 to override
gubernatorial vetoes and take up the congressional redistricting map.
The House has not yet agreed to a
special session.
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The Boston Globe
Friday, November 16, 2001
Leaders outline a 'grim' budget
Legislature eyes cuts of $650m
By Rick Klein
Globe Staff
Legislative leaders are poised to
enact cuts in higher education, human services, and health care as
part of their long-delayed plan to close the state's $1.4 billion
budget gap.
After 4 1/2 months of private
negotiations, Senate President Thomas F. Birmingham and House Speaker
Thomas M. Finneran last night unveiled an outline of a budget
agreement they said would be finalized over the weekend.
The plan calls for $650 million to
be shaved from spending plans approved earlier this year -- affecting
just about all services provided by state government.
"It is a grim budget,"
Birmingham said. "I don't think that too many people are going to
celebrate when they see it."
The lawmakers said some jobs would
be eliminated, but they do not expect anywhere near the 5,000 job cuts
that Acting Governor Jane Swift has called for.
Funding for most state programs
would be frozen at last year's spending levels, Birmingham said, or
cut modestly, and nearly all proposed expansions will be shelved.
Particularly hard hit, he said, will be the judiciary, which will be
cut by $20 million, or about 4 percent. Aid to cities and towns,
including local education assistance, will actually be increased, but
not as generously as lawmakers had hoped earlier this year.
Last night's announcement was the
first definitive sign of progress to emerge out of long-stalled budget
talks between House and Senate leaders. Massachusetts is the only
state operating without a budget. The Legislature is now 139 days late
in sending the document to the acting governor -- the longest such
delay since 1965.
Because both the House and Senate
are dominated by Democrats, the plan put forth by Birmingham and
Finneran is all but certain to be approved without major changes.
Yet despite the areas of agreement,
House and Senate leaders still haven't settled on where to cut several
hundred million dollars in spending. Legislative aides could offer no
details on the fate of most specific programs last night, and it's not
clear the Legislature will be able to finish its work on the budget by
the end of the legislative session next Wednesday.
"There's still a lot of
work," said Michael J. Widmer, president of the Massachusetts
Taxpayers Foundation. "The really tough decisions are in front of
them, namely where to cut. The outlines of this are positive, but the
pain has yet to come."
Beyond the $650 million in cuts, the
budget gap will be closed by using $700 million from state reserve
accounts -- more than twice as much as Swift is calling for.
The agreement also would use about
half, or $140 million, of the state's settlement with tobacco
companies. For the past two years, Massachusetts has spent just 30
percent and saved the rest for health-care needs. House and Senate
leaders are agreeing to keep the 50-50 spending-to-savings ratio for
three years and then revert to the 30-70 split after that.
Finneran and Birmingham hope to
bring the budget to the House and Senate floor by the end of the
legislative session next Wednesday. Lawmakers will be given a simple
yes or no vote on the compromise. Swift will then have 10 days to
decide which line items to veto. The Senate voted yesterday to hold a
special session Dec. 5 to take up those vetoes, and the House is
expected to do the same.
A final legislative agreement would
probably remove Swift, a Republican, from much of the budget process,
because Democrats greatly outnumber her party and her vetoes are
expected to be easily overridden.
But, hoping to play a role, she said
earlier in the day than an outline of an agreement wouldn't convince
her the Legislature will be able to promptly finish the budget. She
still plans to file her own budget recommendation -- which includes
slashes to local aid accounts, public health programs, and social
services -- on Monday.
Birmingham said that the Legislature
will preserve most K-12 education aid, including a $10 million
increase in MCAS remediation spending, which would pay for afterschool
and weekend tutoring. Also saved is the $20 million affordable housing
trust fund and about $100 million for Prescription Advantage, a new
state program that provides drug insurance to elderly and disabled
residents, said Senate Ways and Means Chairman Mark C. Montigny.
The Legislature will not pursue an
early retirement program Swift is backing to help eliminate 5,000
state jobs, though Birmingham acknowledged that some state agencies
may have to lay off workers under the agreement. Birmingham and
Finneran agreed on $74 million in savings in contributions to the
state pension plan, but would not cut as deeply into that spending as
would Swift.
Finneran was not available for
comment last night. In a prepared statement, he said the compromise
"will protect the Commonwealth's essential financial and policy
interests."
With their joint letter to all
members of the Legislature, Finneran and Birmingham are hoping that
recent history doesn't repeat itself. Just two years ago, Finneran and
Birmingham triumphantly announced an end to their extended budget
deadlock Oct. 13. They sent out a one-page summary showing that they'd
reached agreement on most major issues. But their talks subsequently
broke down, and the Legislature didn't approve a budget until Nov. 10,
which was, until this year, the latest legislative action on the
budget in more than 30 years.
"I'd like to think we've
learned from that and it won't happen again," Birmingham said.
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The Boston Globe
Friday, November 16, 2001
A Boston Globe editorial
Budget deferrals
MASSACHUSETTS House and Senate
leaders still have not agreed on a budget, but at least they are
arriving at the outlines of a deal. They will surely have more work to
do next year to see the state through the recession.
The leaders have decided to tap $700
million from the state's reserves, which is about $150 million more
than the watchdog Massachusetts Taxpayers Foundation suggests. The
foundation expects that fiscal troubles will continue for at least
four years. The leadership, by taking almost a third of the $2.3
billion in reserves this year, may be postponing difficult decisions,
which will make budget cuts worse later in the decade.
The leadership has yet to finish
work on the actual cuts that are required to keep the budget in
balance. The difficulty of this task was suggested by a public health
advocates' protest outside the State House yesterday. All programs
facing cuts have supporters, many of whom, like the public health
advocates, can make strong cases for their programs. The Legislature
ought to cut administrative accounts for all state agencies before it
reduces direct services to people in need.
And the lawmakers should not resort
to the gimmickry that in the past has gotten budget writers through
one's year crisis but caused trouble later. No raid on the pension
funds, no deferral of essential maintenance, and no underfunding of
Medicaid. The Taxpayers Foundation fears that the Legislature will
have to increase Medicaid spending sometime next year. The Legislature
ought to meet this obligation forthrightly now.
A sensible proposal to delay phasing
in the tax cut approved by the voters last year, which would have
saved at least $200 million, was rejected by the leadership for lack
of the votes to override a gubernatorial veto. The issue will come up
again next year when another round of tax cuts is scheduled.
At a conference Wednesday about the
last budget crisis, in 1989-91, Patricia McGovern said: "When
things are tough, you can make profound structural changes." As
chairman of the Senate Ways and Means Committee then, she focused on
the "budget busters," which, with the exception of Medicaid,
have largely been tamed.
The Legislature similarly has an
opportunity next year to do a thorough examination of state government
to root out patronage, expose inefficiencies, and provide new methods
of delivering essential services.
The budget is more than four months
overdue, an unconscionably long time when so many people depend on
state programs. Next year the Legislature should approve a budget
without delay, informed by hard analysis that yields improvements
across the entire range of state government.
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The Boston Herald
Friday, November 16, 2001
A Boston Herald editorial
Small sacrifices add up
Some state officials are beginning
to do the same kind of calculations that private companies have been
doing for the past couple of months -- seeing where they can trim
costs, even if it means in their own salaries.
Acting Gov. Jane Swift has pledged
to take a 3 percent hit to her $6 million office account and that may
well include her salary -- a gesture state Treasurer Shannon O'Brien
has already made. A similar effort in the Legislature's expenses (not
including their salaries) would save $1 million.
Also on the chopping block are paid
State House interns, who earn between $7 and $13 an hour, which adds
up to about $4.2 million a year. Sen. Cheryl Jacques (D-Needham) runs
her own office internship program -- 32 worked in her office over the
summer and nine are on board now. But it's an all-volunteer program
and there seems no shortage of willing candidates.
The kind of belt-tightening being
encouraged by Swift not only saves money, but sends the message that
state officials are willing to make the same kind of sacrifices their
constituents are already making.
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Associated Press
Friday, November 16, 2001
Lawmakers unveil outline of
"grim" state budget plan
By Steve Leblanc
BOSTON (AP) Legislative leaders have
agreed to make deep cuts and dip into the state's "rainy
day" accounts to balance a state budget rocked by the Sept. 11
attacks and a slowing economy.
The budget outline calls for $650
million in cuts to higher education, the courts, social services and
health care to help close an estimated $1.3 billion budget shortfall.
"It's a grim budget. I don't
think many people are going to celebrate," Senate President
Thomas Birmingham, D-Chelsea, said Thursday.
The budget is already more than four
months late.
The plan, which is still being
hammered out, closes the rest of the budget gap by spending $700
million of the state's $2.3 billion reserves.
Lawmakers considered delaying the
second year of the three-year income tax cut approved by voters last
year. The move, which would have brought in $200 million, failed to
receive enough support to withstand a veto by Republican acting Gov.
Jane Swift.
A proposed increase in the state's
cigarette tax was also scuttled.
But the House and Senate did agree
to increase the amount of money they will spend from the tobacco
settlement fund.
Currently the state sets aside 70
percent of the $280 million it receives each year from the tobacco
industry, and spends 30 percent. The budget plan calls for a 50-50
split.
One of the few increases is in a
program designed to help failing students pass the MCAS test. The
agreement will add $10 million to the tutoring program.
Other highlights of the plan
include:
Cuts to almost all programs,
including aid to cities and towns, to levels below initial House and
Senate recommendations.
An agreement on a three-year pension
schedule designed to encourage bond-rating agencies to boost the
state's outlook from "stable" to "positive."
Maintaining level-funding for some
programs, including $20 million for affordable housing and $11 million
for education technology.
Swift has criticized the Legislature
for failing to produce a budget before the start of the new fiscal
year in July. She threatened to file her own budget on Friday if the
Legislature did not have a plan in place.
Swift has recommended a series of
cuts including $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.
In a letter to House members,
Speaker Thomas Finneran, a Boston Democrat, warned that the tough
budget choices may continue for the next few years.
"We know that many significant
challenges face us in the upcoming years which will cause us to cut
back in some of these areas where we have been most generous," he
said.
Birmingham said he hopes to have the
budget on Swift's desk by Wednesday.
The House and Senate are expected to
return on Dec. 5 to give themselves the chance to override any Swift
vetoes.
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The Telegram & Gazette
Worcester, Mass.
Friday, November 16, 2001
Legislators to cut $650M and borrow
$700M
By Shaun Sutner
Telegram & Gazette Staff
BOSTON-- With a $1.35 billion
deficit looming, budget brinkmanship continued yesterday at the
Statehouse as House and Senate leaders jockeyed to agree on a broad
outline of what their long-overdue fiscal 2002 budget will look like.
When the final product emerged at 8
last night, it contained deep and widespread cuts totaling $650
million lawmakers say will fall on social programs, higher education
and the court system, among other areas.
"I'm not sure how prepared
people are for cuts of this magnitude," state Sen. Harriette L.
Chandler, D-Worcester, said last night. "This hasn't happened in
10 years."
The framework released by House
Speaker Thomas M. Finneran and Senate President Thomas F. Birmingham
also set out a schedule to cushion budget cuts over the next three
years by drawing from reserve funds: $700 million this year and $500
million each in fiscal 2003 and fiscal 2004.
Details of what will be cut will not
be released until early next week. Budget negotiators say they plan to
decide on specific cuts over the weekend.
"While none of us relish this
budget predicament we are in, we have acted to define its scope as
$1.35 billion and are proposing legislation that addresses it
fully," the legislative leaders said in the two-page document,
addressed to lawmakers. "Our budget must be balanced, and it will
be."
Anticipating the release of the
document, Gov. Jane M. Swift said earlier in the day that she wanted a
budget, not a "press release." She has threatened to make
her own steep cuts and lay off state workers if the Legislature did
not give her a spending plan by today.
The Legislature's budget will
contain across-the-board reductions of 6 percent to 10 percent in most
areas other than education, health care and public safety, according
to Charles Rasmussen, spokesman for House Speaker Thomas M. Finneran.
The budget outline said cuts would
be achieved by "paring administrative costs, reducing program
funding, eliminating new initiatives and re-evaluating line
items."
The state budget was due July 1. The
four-month-plus delay makes Massachusetts the last state in the
country without a budget.
Expected at midday yesterday, the
outline was delayed by wrangling over the fine points of how to deal
with the deficit caused by the economic downturn and plummeting state
revenues.
The Senate scheduled a vote on the
plan for Wednesday, the last day of the legislative session. The House
is expected to vote on the budget Tuesday or Wednesday.
Both branches plan to take up
overrides of expected vetoes by Gov. Swift on Dec. 5.
Other framework features include:
-
The withdrawal from the tobacco
fund would be $150 million this year, based on taking 50 percent of
the revenues coming in and saving the other 50 percent. The 50-50
ratio is a compromise between the Senate's original proposal to use 60
percent of tobacco revenues and the House's intent to use 30 percent.
The ratio would stay at 50-50 until fiscal 2004 before reverting to
30-70.
-
The pension fund would receive
$912 million this year, $926 million next year and $940 million in
fiscal 2004, a schedule the legislative leaders said would continue
the practice of fully funding the pension liability.
The budget does not contain a
suspension of the income tax rollback approved by voters last year.
The freeze would have saved $200 million.
For fear of alarming constituents
and advocates, lawmakers have been exceedingly tight-lipped in recent
weeks about what programs and services may be cut.
But details began to leak out
yesterday about who would feel the budget ax.
A letter to House members from Mr.
Finneran and House Ways and Means Chairman John H. Rogers yesterday
listed eight budget areas that have grown from 42 percent to 371
percent since fiscal 1996.
They are: local aid, higher
education, public libraries, public health, early childhood education,
the court system, child care for low-income families and school
building projects.
House leaders indicated that cuts
would come in "some of these areas where we have been most
generous."
State Sen. Stephen M. Brewer, D-Barre,
said the judiciary and state college system "are going to take
very large hits" that will mean an end to hiring and expansion of
programs.
Mr. Brewer, Senate chairman of the
Legislature's Natural Resources Committee, warned environmental
funding is also likely to suffer, meaning state parks, ice skating
rinks and pools could face reduced staffing levels and closures.
"That $650 million is very
sobering," he said, referring to the total amount of cuts
identified by the Legislature.
Mr. Brewer called the $700 million
withdrawal from the rainy day and surplus funds "a conservative
raid on these funds."
"We want to be prepared if this
is a two- or three-year recession," he said.
The state's senior pharmacy program,
which subsidizes prescription drugs for low-income and middle-income
seniors, is likely to survive, at least for now, Ms. Chandler said.
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The Lowell Sun
Thursday, November 15, 2001
Editorial
Leadership failings
It's becoming clearer by the day
that the Massachusetts Legislature is ill-prepared to deal with the
state budget crisis.
House and Senate leaders ignored
early warning signs and now are scrambling to fulfill their duly
elected obligation -- to approve a sound state budget -- under
mounting pressure from a cynical public.
Their failure to act is
irresponsible and embarrassing. Massachusetts remains the only state
in the nation without a 2002 budget in place. Say what you want, but
49 other states have found the fortitude to make the difficult choices
without fomenting a panic.
Not so in Massachusetts.
Officials in cities and towns
throughout the Commonwealth are on pins and needles waiting for the
Statehouse shoe to drop. Local budgets, as mandated by state law, were
set July 1 -- the same deadline the Legislature faced to complete its
budget and set local aid figures for the coming year. The Legislature,
however, failed to meet its end of the bargain. Now, deep cuts in
local aid could severely affect cities and towns, robbing them of
vital services.
Once again, the Legislature is
forcing municipalities to sit on the hot seat. It's the 13th time in
15 years this has happened -- a most dubious achievement. But where
the Legislature's past tardiness could be attributed to political
arrogance, this year's problems approach the level of negligence.
Forecasts of a weakening economy hit
the radar screen in January. Declining state tax revenue receipts
became a reality in April. Yet House and Senate leaders greeted the
alarming data with passivity: they did nothing to revise competing
$22.9 billion budget proposals that added $800 million in new
spending.
As the budget deadline passed on
July 1, House Speaker Tom Finneran and Senate President Tom Birmingham
watched the economic news worsen without engaging in any serious
budget discussions. Now, five months later, the state's fiscal plight
necessitates quick action and painful cuts to resolve a $1.4 billion
deficit.
So far, the Legislature's response
has paled in comparison to that of acting Gov. Jane Swift's. She's
endorsed $700 million in spending cuts, including a 5,000 reduction in
state jobs, while tapping reserve accounts to make up the difference.
She also pledged to keep the income tax rollback on schedule, putting
an extra $175 in each taxpayer's pocket as of Jan. 1.
Finneran, Birmingham and their top
henchmen, meanwhile, are trying desperately to formulate a palatable
alternative. That collaboration, however, is mired by the deep
differences that stalled prior budget reconciliation. Birmingham, for
one, wants to freeze the voter-approved income tax rollback for a $200
million savings; Finneran agrees with Swift that the rollback should
proceed as planned.
It's obvious the state budget
process is in need of serious reform. The legislative leadership's
stranglehold on how and when things get done has resulted in a history
of frustration and delay -- all at taxpayers' expense. It's an abuse
of power that has to end.
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