The Boston Globe
Saturday, November 17, 2001
Analysts see harsher budget cuts
looming
Some say state just delays the inevitable
By Rick Klein
Globe Staff
Legislative leaders call their
budget pact grim, harsh, but prudent -- a plan that will close the
state's $1.4 billion deficit but inflict pain across state government.
But some analysts fear that the
spending plan actually delays action on tough financial problems that
confront the state, and fails to make the deeper cuts needed to
prepare for the lean times ahead.
The budget agreed upon Thursday by
Senate President Thomas F. Birmingham and House Speaker Thomas M.
Finneran actually increases spending by about 2 percent over last year
-- less than in years past, but an increase nonetheless.
That means that even as the state is
taking in less money this year -- due to plunging revenues -- it is
spending more.
Birmingham and Finneran have spoken
at length about how challenging it has been for them to find areas to
cut. They and their aides are meeting on Beacon Hill through the
weekend to finalize their list of $650 million in cuts.
But some suggest their difficulty
stems from the fact that state government has been growing at a rate
of 6 percent a year for five years. Bureaucrats and other constituents
have become accustomed to generous expansions.
The legislative plan, for example,
does not affect some politically untouchable programs: Aid for local
education is likely to increase by $220 million over last year, a
boost of 7 percent.
Outside of a few hard-hit areas --
including higher education, human services, and the judiciary -- this
year's spending will be about the same or only slightly lower than
last year's in most programs.
Michael J. Widmer, president of the
nonpartisan Massachusetts Taxpayers Foundation, said the Legislature
should slash spending more aggressively. His group called for $850
million in cuts this year and said lawmakers are putting off making
tough decisions on where to scale back state services.
Widmer said state leaders may have
to slash another $650 million in state spending next year. And next
year's cuts will probably be more painful because the easiest
reductions -- administrative cuts, salary freezes -- will not be
available to them.
"The first cuts may not be
easy, but they're always easier than subsequent cuts," Widmer
said. "The second round, which is almost inevitable, will be
tougher still. It will require at least as many cuts, and more
sacrifices."
The legislative leaders are also
relying on $700 million from the state's cash reserves, plus $50
million from the settlement with tobacco companies to make up the rest
of the deficit. They plan to tap the reserve accounts for another $1
billion over the next two years, leaving $600 million for future use.
At a press conference yesterday,
Finneran defended the plan, but he acknowledged the state could easily
be facing another difficult budget cycle next year. "There's
always that fear, that you have not come to grips with the dimensions
of the problem early enough," Finneran said. "Next year
could involve more cuts."
Finneran and Birmingham believe the
sudden plunge in state revenues is an aberration, resulting in part
from the Sept. 11 terrorist attacks, and justifies the use of $700
million from the rainy day accounts.
"We were quite frankly
horrified with what we saw because it was far worse than anything that
even we had considered," Finneran said.
The legislative leaders are hoping
to close the books on their 4 1/2-month budget deadlock by Wednesday.
Massachusetts is the only state still operating without a final
spending plan.
Senate Ways and Means Chairman Mark
C. Montigny said if next year's budget has to be tighter, the
Legislature will have six months to prepare. By that time, it could
become obvious how long the slowdown will last.
But costs beyond the state's control
are likely to continue to rise. Medicaid costs are rising beyond
anyone's comprehension.
Shortfalls are all but certain at
independent agencies that are especially reliant on economic activity,
like the Massachusetts Port Authority and the Massachusetts Turnpike
Authority. The state could also be forced to pitch in more to pay for
the Big Dig.
This puts more pressure on the rest
of the budget, because the money for those priorities will have to
come from current programs. And both Birmingham and Acting Governor
Jane Swift will be running for governor next year and neither wants to
be associated with harmful budget cuts.
"They always put off the tough
decisions, and they particularly don't like to make them in an
election year," said Barbara Anderson, executive director
of Citizens for Limited Taxation.
Rank-and-file lawmakers have yet to
receive copies of the budget plan and their leaders have not provided
details of the revisions. Lawmakers expect to get copies of the plan
in time to vote on it Tuesday or Wednesday.
Both the House and Senate approved
initial budgets for this year in the spring, when times were flush and
state government was expected to expand by 5 percent.
Material from the Associated Press
was used in this report.
Letter from the Mass. Human
Services Coalition
on Freezing the Tax Rollback
The Massachusetts Human Services
Coalition
November 16, 2001
To all members of the Great and
General Court,
In a recent condescending message to
you all, Barbara Anderson
of Citizens for Limited Taxation said that any move you
might make to freeze the implementation of the Question 4 income
tax rate rollback would be "a slap to the face" of Massachusetts
voters who would then toss you all out of office. Are
Ms. Anderson's anti-tax, anti-government rose-colored glasses
so thick that she does not see the daunting challenge you
face in fulfilling your fiscal duties to protect the well being
of Massachusetts residents while producing a balanced budget?
Can Ms. Anderson not see the drastically different world
in which we all now must live? We believe it is Ms. Anderson
who insults the intelligence of the voters. A poll conducted
by Opinion Dynamics between October 19 and October 22 shows
51% of respondents supporting a freeze while only 38% supported
moving forward with the tax cut. Massachusetts voters know
that the state's fiscal health and the economy are much different
from November of 2000. All voters heard then were promises
from the Cellucci/Swift administration that we could pass
Q. 4 and still increase FY02 spending by 5% and have a FY01
surplus of a billion dollars. (We came up $440 million short
on that one.) Why isn't Ms. Anderson demanding that that political
promise be kept? You and your colleagues have kept your
promise that an income tax rate of 6.25% was indeed "temporary"
with the rate already now reduced to 5.6%.
Here in the human services
community, we are told that there are no
alternatives to making $650 to $700 million or more in cuts
to the FY02 budget. This simply is not true....
Acting Governor Swift tells us we
cannot freeze the further implementation of
Question 4 because it is providing the economic
stimulus that will pull us out of what is now clearly a
recession. How does providing a family of four with annual income
of $70,000 with an additional $175 in 2002 -- less than 48
cents a day -- provide anything that could be called an economic
stimulus? Just look at the stimulating effect that all those
$300 to $600 checks distributed by the Internal Revenue Service
have provided. Our recession has only grown worse....
Despite the mindless hue and cry
(and threats) raised by Citizens for Limited
Taxation, they are now in a minority. The simple
fact remains that a ballot initiative when passed becomes
a law like any other. And you have a fiscal and moral responsibility
to re-examine any law in times of drastically changing
circumstances. (For example, the circumstances supporting
the 67% voter approval of Question 2 in 1998 have not
changed. The circumstances supporting the 59% approval of Question
4 in 2000 have clearly changed.)
We urge you to fulfill your social,
moral and fiscal responsibilities to all the
residents of the Commonwealth by supporting a
freeze in the implementation schedule of the Question
4 tax rollback. We implore that you convey as quickly as
possible to your leadership your support for the freeze. We will
stand with you when you show your courage and resolve in taking
this important step....
Sincerely,
Stephen E. Collins,
Executive Director
MHSC, Inc.
The Boston Herald
Saturday, November 17, 2001
Top pols may take pay cut to help ease budget pains
by David R. Guarino and Steve Marantz
At least four of the state's top pols might take the budget
ax to their own wallets in symbolic givebacks meant to blunt the pain of $700 million cuts set to be rolled out in the
coming days.
House Speaker Thomas M. Finneran suggested yesterday that he
might volunteer a chunk of his beefy $85,000 salary, joining acting Gov. Jane M. Swift's call for personal austerity in the
budget crunch. State Treasurer Shannon O'Brien agreed as others opened the door to a pay
cut.
Finneran said the personal cuts and those to internal
legislative accounts, detailed in a Swift proposal in Thursday's Herald, are akin to a patriotic duty following Sept.
11.
"The nation has come together very, very nicely to the
challenge of Sept. 11," Finneran told reporters. "We are certainly not in uniform, engaged in war, but in our own
limited way we can demonstrate similar sacrifice and leadership."
Sources said closed-door budget negotiating this weekend
might also include cuts to sacred district office accounts and travel expenses.
Months of dickering over the spending plan came to a head at
week's end as leaders announced an outline of a budget deal with deep spending cuts. But the smoke cleared on no
real details yesterday, leaving Swift spinning.
From her Williamstown home, the acting governor held a rare
telephone press conference to harangue the Legislature.
"After 139 days of delay, a page-and-a-half outline is not
an adequate response," Swift said. The governor intends to file her own version of specific proposed cuts on Monday morning.
"Even as a former legislator, the governor is thunderstruck
by the lack of responsibility of this," said Stephen Crosby, Swift's secretary of administration and finance.
Swift has vowed to make a 3 percent cut on her own $6
million office account, cutting paid interns, newspapers, and possibly her own $135,000 salary.
Finneran agreed deep internal cuts would be made. "We prefer
to lead by example and I think you'll see when the budget comes out that we are not going to pretend that the
Legislature is somehow or other immunized from this exercise," Finneran said.
The pay of rank-and-file lawmakers, now tied to median
household income, rose to just under $50,000 this year. Leadership earns up to $20,000 more and many, like
Finneran, have lucrative law practices.
O'Brien, who with other statewide officers saw her pay jump
from $75,000 to $120,000 last year, seized the symbolic call. "In tough economic times, state government must cut its costs
and Treasurer O'Brien would be happy to join her fellow constitutional officers in sacrificing
a portion of her salary to save taxpayers money," said Treasury spokesman Dwight
Robson.
Secretary of State William Galvin said he's "open" to the 3
percent reduction and Auditor Joe DeNucci said he'd take the cut if it includes judges and college presidents, but called it
pure politics. A spokesman for Attorney General Thomas Reilly wouldn't comment.
