State House News Service
Advances - Week of Nov. 19, 2001
STATE HOUSE, BOSTON: The state may finally have a budget this week after a wait of nearly five months, or it may not.
Formal legislative sessions for the year 2001 may end this week as required by House and Senate rules, or they may not.
The only certainty over the next several days is that this will be a very significant week. Legislative leaders say they've ended their long budget stalemate and, if staffers are able to translate that very general accord into a budget law proposal over the weekend, it could go before the House and Senate for a vote on by mid-week.
The new week will bring answers to many remaining questions. In addition to higher education and the judiciary, what other state programs and services will be slashed to allow state spending this fiscal year to barely grow over fiscal 2001, when the state spent $22.1 billion?
Contractual obligations and unavoidable caseload-driven spending increases mean some government programs are in for deep and real cuts. Health and other human service providers are prepared for the worst possible news. Municipal officials are waiting for real numbers to back up the claims that local aid will be spared from cuts. How much outrage will there be?
How will the budget bills affect the gubernatorial aspirations of Acting Gov. Jane Swift and Senate President Thomas Birmingham? Will the voter-approved public campaign financing system be funded, or dismantled?
And will legislative leaders who haven't been able to agree on a budget for months now force their members to meet up until midnight on the eve of Thanksgiving?
It's been a long haul. Because it's taking so long to arrive at a budget resolution, lawmakers are expected, for the first time, to suspend their own rule preventing any important business from being transacted after midnight on Wednesday. A Dec. 5 session is in the works to consider budget vetoes and an as-yet-unreleased Congressional redistricting map that could have broad political implications.
Facing a projected $1.35 billion budget gap, legislative leaders have agreed to cut $650 million from spending blueprints of $22.9 billion approved in May and June. Paying bills with $700 million withdrawn from the state's $2.3 billion reserve fund will cover the rest.
The cuts were precipitated by a slowdown in the economy before and after the events of September 11 and all the uncertainties that came in the aftermath of the terrorist attacks.
In the last state without a budget, Democratic legislative leaders have done battle for the past five months over a handful of policies. For the second time in three years, House Speaker Thomas Finneran and Senate President Thomas Birmingham have dragged budget talks into November.
Finneran said last week that he's embarrassed and stunned and doesn't know why they can't agree more. His only guess was that perhaps he's not persuasive enough. The speaker said that in general, disputes boil down to the House being more fiscally conservative than the Senate. It was not surprising that Finneran and Birmingham did not appear together to announce their budget breakthrough.
But once the budget is approved, Finneran and Birmingham may soon be doing battle not with each other, but with GOP Acting Gov. Jane Swift.
The calendar adds to this week's confusion. Joint legislative rules require that work on controversial bills, or even on routine ones if they require roll call votes, end by midnight on the third Wednesday in November during the first year of every biennial session. Formal sessions start up again in January, when the second year of the legislative session begins.
That rule was imposed in 1995 to stop the late-night marathon sessions that had come to typify the end of most years. Members hope that leaders will view Tuesday, rather than Wednesday, as the last big legislative business day since Thursday is Thanksgiving and most have family travel plans or obligations.
The week will also be significant because initiative petition sponsors have to meet a deadline that will test their signature gathering skills and ability to keep their ballot dreams alive. Individuals and groups frustrated with the lack of activity on Beacon Hill usually spawn such efforts. Petitioners who want to abolish the income tax, alter the state's bilingual education laws and define marriage as only allowable between a man and a woman have already indicated they're making solid progress gathering signatures.
THE BUDGET: What's in it? While a budget accord has been announced, no one, except perhaps those negotiating it, knows its details, including which programs and services will be cut to meet the stated $650 million reduction in proposed spending levels.
Speaker Finneran says the conference committee's report will be filed Monday or Tuesday, for floor consideration on Tuesday or Wednesday.
Meanwhile, Acting Gov. Swift plans to file her own revised fiscal 2002 budget proposal Monday. Swift aides have also outlined a general plan to get through this difficult budget year.
Administration and Finance Secretary Stephen Crosby on Friday said the legislative leaders' budget framework is not a budget. He pledged to follow through Monday morning on Swift's plan to file a so-called recovery budget. Crosby also indicated the administration is still reviewing the appropriate level for local aid to cities and towns. Swift's bill will call for $750 million in cuts and the drawing of $500 million from reserves.
EMPOWERING THE POWERFUL: The Senate has already adopted an order suspending rules that limit House and Senate budget conferees from the ties that bound them. Rules require them to only consider items of differences in the dueling budgets that were sent them last spring.
But, because the fiscal picture has changed so dramatically since then, senators have already given conferees the right to consider, and cut, line items that had been agreed upon between the branches and were not previously considered negotiable.
Most lawmakers are not privy to budget talk details and will be allowed to vote only yea or nay on the final conference report. The House is likely to adopt the order as soon as Monday, vesting even more authority in their legislative leaders.
INTERIM BUDGET: Swift aides thought the latest interim budget would provide enough money to last until Monday, but now say there's enough to last until Nov. 26. But another interim budget may well be required to avoid a government shutdown. Some House dissidents have already vowed to prevent another temporary budget from moving during any informal session. That means there could be trouble ahead if there's no action on the full budget this week.
SWIFT'S OPTIONS: While legislators have spent the past several months extending the deadline for having a budget on the books, Acting Gov. Swift can't turn back the clock that will apply to her review of the document that may reach her desk this week. She has to play by the rules and gets just 10 days to review hundreds of line items and policy changes before signing it and issuing her vetoes of any provisions she finds objectionable. It will take a two-thirds vote in each branch to override any gubernatorial veto.
SESSION ENDS, OR DOES IT? The state Senate has already adopted an order to suspend Joint House and Senate rules and come back on Dec. 5 for a special session to override any potential Swift budget vetoes and to act on new Congressional redistricting plan that has yet to wend its way through either branch. It's up to the House this week to decide whether those rules will be suspended for a return to formal business.
It takes a two-thirds vote in each branch to suspend the rule extending the session beyond Wednesday. The Senate adopted the order on a unanimous voice vote. It will be the House, and Speaker Finneran, who will decide whether any vetoes will be considered for overrides since all such actions begin in the House.
CARRYOVER: The House and Senate may very well suspend for the first time the 1995 rule imposed to prevent late-year sessions.
The rule adopted then also allows bills not approved by Wednesday's midnight deadline to have continued life. The only measures that cannot be carried forward under the rule are budgets and any gubernatorial budget vetoes.
Other bills still pending at the end of year one of each two-year sitting can be carried forward into the second year without losing their status. While action on most this week will be delayed until 2002, a handful of major bills and dozens of others that may be time sensitive, will likely move through the process this week.
For the remaining five weeks of this legislative year, the two branches will continue to meet in informal sessions twice each week. During such meetings, bills that are deemed routine or don't require roll call votes can be advanced through the process and onto the governor's desk.
Occasionally, more significant bills can also be processed if no one objects. Just one objection means the bill is blocked and must await the start of the second year's session. During this biennial session, that means their fate will have to wait until the new legislative year begins on Jan. 2, 2002. Rules require that formal sessions next year, an election year, end on July 31.
CONGRESSIONAL REDISTRICTING: Preoccupations with the state budget probably means there'll be no congressional redistricting plan this week but principals in the process believe a compromise will surface soon thereafter. The state's 10 incumbent Democratic congressmen, and any candidates planning to challenge them in 2002, are eager to know the boundaries of the new districts, which will remain in effect for 10 years. Last week, the Senate adopted an order calling for a special session on Dec. 5 to address the new congressional canvas that has yet to be painted. The House is likely to follow suit.
NO ACCORD ON CLEAN ELECTIONS: While legislative leaders say they have a budget agreement, House Speaker Thomas Finneran on Friday morning confirmed that the issue of whether to fund the voter-approved public campaign financing system isn't resolved yet. It's up to Senate Ways and Means chief Mark Montigny and House Ways and Means chairman John Rogers to settle that this weekend, the speaker said. While there are major differences between the House and Senate-approved approaches to Clean Elections funding, Finneran maintained the issue, even though it's still unresolved, has never been a sticking point between the House and Senate.
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The Boston Herald
Monday, November 19, 2001
Bay State budget is ripe for cutting
by Charles D. Chieppo
At a recent forum on government reform sponsored by local think-tank MassINC, panelist and former Senate Ways and Means Chair Patricia McGovern correctly pointed out that trying fiscal times are often the catalyst elected officials need to make wise but difficult decisions.
It is for precisely that reason that lawmakers are right to have abandoned attempts to freeze the voter-approved rollback in the income tax, which is scheduled to drop from 5.6 percent to 5.3 percent on Jan. 1.
The commonwealth is facing a $1.4 billion shortfall out of a budget of about $22.5 billion. It represents a challenge, particularly given that the war against terrorism will require increased investment in public safety and public health. Still, the challenge is in many ways less daunting than the $1 billion deficit we faced a decade ago when state spending was around $13.5 billion a year.
That budget growth is perhaps the biggest reason that freezing the tax rollback was unnecessary. Just a few months ago, the Legislature was talking about spending $22.9 billion during the current fiscal year - a figure double the fiscal 1988 outlays. Even the slightly pared down version currently under consideration represents increases that far outstrip the rate of inflation over the last 14 years.
Like last time, the downturn seemed to come with lightning speed. But this time, we are far better prepared, with state reserves of about $2.3 billion.
The length of any recession is uncertain, and a war in which American civilians are threatened only adds to the uncertainty. For that reason, we would be wise to follow the Massachusetts Taxpayers Foundation's advice and tap no more than $550 million of the reserves this year.
That leaves an $850 million deficit. Keeping the tax rate at 5.6 percent would have filled $200 million of the gap, but eliminated the stimulus a rate cut will provide.
A few episodes from the recent spendthrift years demonstrate just how much fat is in the current budget. While each example doesn't necessarily correlate to a cut that could be made today, they are nonetheless instructive.
In 1999, the Federal Transit Administration ordered the MBTA to put the operation of its commuter rail out to bid. The T split the service into four parts to maximize competition. The first and smallest contract, for train cleaning and maintenance, was awarded to Bay State Transit Services, whose bid for the five-year contract was $116 million less than that of Amtrak, the incumbent contractor. Despite the savings, the T was forced to bow to political pressure and continue contracting with Amtrak.
Had all four parts of the service been opened to competition, the five-year savings could have reached $750 million. The contract will be up for renewal again next year.
Two years earlier, the T attempted to contract out the operation of 40 percent of its bus routes, but the contract was scuttled by the state auditor under the provisions of Massachusetts' unique anti-privatization law. A 1998 Pioneer Institute study found that if not for the law, the taxpayers could have saved up to $86 million over five years.
The need to repeal or amend the so-called Pacheco Law, which gives state employees a virtual monopoly over every function they now perform, was a recurring theme at the MassINC forum.
Massachusetts spends $3 billion each year on public construction projects. In 1999, Pioneer found that the state could save $150 million simply by changing an archaic law that requires agencies to award contracts to subcontractors in specified areas before a general contractor is picked.
The tax and spend policies of the late '80s left Massachusetts in a [bind] with its credit rating hovering just above junk-bond status a decade ago.
The Weld administration opted to cut spending and resisted raising taxes further (even working to repeal some already passed but not implemented taxes), thus restoring fiscal health. An unprecedented triple upgrade in the state's bond rating in 1992 led to unprecedented prosperity the rest of the decade.
Every challenge brings with it new opportunity. Lawmakers should take the opportunity presented by the current budget woes to make decisions that were too easy to avoid during the good times.
Charles D. Chieppo directs the Shamie Center for Restructuring Government at Pioneer Institute, a Boston think-tank.
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The Boston Herald
Monday, November 19, 2001
A Boston Herald editorial
The budget deadline
The devil, as they say, is in the details. And House and Senate budget negotiators spent the weekend attempting to wrestle those to the ground.
The "conceptual" budget announced late last week put aside such contentious issues as the future of the Clean Elections Law and its funding. Now like it or not, the voters of this state passed the law and the Legislature has an obligation to fund it.
With all the budget trimming required on Beacon Hill these days, spending money on political campaigns likely wouldn't top anyone's list of priority causes. But that train left the station last November when voters decided otherwise -- just as they decided to cut back the income tax rate to 5 percent.
Most of all this week it is important to simply get a budget -- just as the legislatures of 49 other states have already been able to do.
Speaker Tom Finneran notified House members late last week that this budget was likely not even the most difficult one they might face, that the lean times might not get better any time soon.
"We cannot spend more than we take in," Finneran wrote.
Wise counsel that.
The drum beat from advocates for all kinds of special interests has been steady and intense. Civilization as we know it will end if the Legislature cuts funds for ... whatever.
But it cannot drown out the wisdom of Finneran's basic premise nor the deadline that looms.
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The Boston Globe
Monday, November 19, 2001
Legislative leaders plan to finalize the long-overdue state budget today and tomorrow, working out the painful details of $650 million in cuts to higher education, the judiciary, human services, and health care, lawmakers said yesterday.
The 2002 budget, which Senate President Thomas Birmingham called "grim," also spares local aid and draws heavily on a $750 million infusion of cash from the rainy day fund, last year's surplus, and the legal settlement with tobacco companies to close a $1.4 billion deficit caused by falling revenues.
"Most of the decisions are already made," said Senator Mark Montigny, chairman of the Ways and Means Committee. "And these are some of the most painful decisions I have ever had to make. It's ugly."
What remains to be done, the New Bedford Democrat said, is to analyze "thousands" of line-item cuts and make sure the figures balance before the document can be printed. The budget, 141 days overdue, is expected to be finalized by midnight tomorrow, with the House and Senate voting on Wednesday, the last day of this year's legislative session.
Officials with the administration of Acting Governor Jane Swift, meanwhile, outlined the details of their latest budget plan, which would cut $50 million more in spending than the legislative version and draw less on the state's cash reserves.
Neither plan calls for a rollback or a delay of the $200 million state income tax cut scheduled to begin taking effect next year. Montigny said there was support in the Senate for postponing the tax cut, but that there were not enough votes on the House side to override an expected Swift veto.
The administration and the Legislature have been lobbing verbal grenades at each other for weeks.
Montigny said that the major cuts would include:
At least $20 million in cuts from the state court system, including an immediate hiring freeze.
Some $30 million from University of Massachusetts and higher education accounts, as well as another $10 million from state college libraries.
As much as $30 million from state highway repair accounts.
Montigny said the legislative plan avoids cuts in aid programs for cities and towns and for primary and secondary education. While making some cuts in public health spending, the plan spares the senior citizen pharmacy program and restores the state's hepatitis C prevention efforts.
The administration has been highly critical of the Legislature's long delay in finalizing the budget, and most observers expect a heated debate between the two branches this week. The war of words was already beginning yesterday.
Legislative leaders have predicted that Swift's budget would be dead on arrival. Swift's spokesman, James Borghesani, called that assertion "the height of arrogance" and said that the Legislature was only prodded into action by the governor's initiative.
Swift had seized the initiative in recent weeks, pushing her own budget agenda and ripping the House and the Senate, but at a political price.
The acting governor's call for cuts in politically sensitive areas such as public health and local aid prompted vocal criticism from municipal officials and groups such as the American Cancer Society. Over the weekend, Swift backed down on some of those proposals, eliminating the local aid cuts and slicing the public health cuts in half.
Yesterday, Stephen Crosby, the state secretary of administration and finance, said that local officials had persuaded Swift not to cut local aid until at least 2003. Instead, he said, the administration was proposing carefully targeted cuts ranging anywhere from $4 million to $90 million per agency.
The Legislature's budget and Swift's proposal now appear to be closer in content, sparing lawmakers from much of the political fallout Swift has encountered over the last two weeks.
Crosby acknowledged that Swift has taken a public relations hit. The Legislature, Crosby said, has shown a "shocking lack of courage, not to mention responsibility," in tackling tough budget issues.
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The Boston Globe
Monday, November 19, 2001
A Boston Globe editorial
Democracy in the balance
STATE LEGISLATORS who are about to conclude one of the least productive sessions on record can still rescue a significant accomplishment -- or they can earn a place in legislative infamy.
The pivotal issue is Clean Elections, the new system for financing campaigns that depends largely on public financing for statewide constitutional offices, the Governor's Council, and the Legislature.
The system has been the law in Massachusetts since it was approved by a large popular vote in 1998 and is due to take effect next year. But it is in danger of being scuttled completely by the Legislature's failure to fund it.
If this occurs, it will be one of the darkest days for democracy in state history -- a desecration of the proud tradition that has placed Massachusetts in the constitutional vanguard for centuries.
Fortunately, the issue is not completely lost -- not yet. Legislative aides say funding for Clean Elections is still in discussion between the branches. And the budget that Acting Governor Jane Swift is preparing for release today will include $23 million. This is the amount that was previously appropriated but that cannot be spent without another vote of the Legislature. It is more than half the amount thought to be needed for a full election cycle.
House Speaker Thomas Finneran has been an outspoken critic of Clean Elections, and his compliant membership has not moved to effectuate the clear provisions of state law. There is, of course, an obvious conflict of interest here: one goal of the reform is to increase competition for legislative seats, many of which have gone uncontested in recent elections.
Clean Elections can still achieve its two main aims - minimizing the corrupting influence of money in politics and encouraging competition -- for legislative races next year, if the law is funded. But the delay has already had a detrimental effect on statewide candidates. Several prospective Clean Elections candidates have opted out of the voluntary system. One Democratic candidate for governor, Warren Tolman, is still attempting to run as a Clean Elections candidate and says he is within days of qualifying for the $800,000 first installment of public funds he is entitled to under the law. But he will not get a penny unless the Legislature acts.
This would be a disgrace. Attempts to improve Massachusetts politics, after being rejected by the Legislature, were embraced by the voters. As Thomas Jefferson said repeatedly, the people have the inherent right to change their form of government from time to time. The strong-arm denial of such legitimate change is execrable.
Massachusetts has long been a laboratory of democracy, as Justice Louis Brandeis envisioned. Now it is in danger of becoming democracy's cemetery.
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National Federation of Independent Business
CONTACT: Bill Vernon, 617-482-1327
Valerie Bollman, 202-554-9000
November 16, 2001
