In her State of the State address last week, Swift
reiterated her plans to reject any new tax or tax hike plan, if one should reach her desk. Swift's
critics say she and former Gov. Paul Cellucci pushed an income tax cut question in 2000 in part
by promising that its passage would not cause cuts in services. "That's not happening right now," said
Rep. Cory Atkins (D-Lexington).
Because of that broken promise, Atkins said, everyone she asks in her district supports
freezing the voter-approved income tax rollback to help the state preserve services during
hard times.
Citizens for Limited Taxation director Barbara Anderson defended the tax cut at Widmer's
briefing, demanding to know why it is referred to as a "burden" by MTF since the voters
passed it. The 5.3 percent income tax rate is due to fall to 5 percent on Jan. 1, 2003, giving
workers a $450 million tax break.
Anderson said MTF and others should spend more time
analyzing other proposals, like one aired earlier in the day by Rep. George Rogers (D-New Bedford), who
wants the Legislature to legalize casino gambling. Anderson also questioned MTF's data, noting its
revenue projections have been off over the years. "MTF may be right this time too, or it may
be wrong," Anderson wrote in a news release.
State House News Service
Jan. 22, 2002
With elections nearing, expert warns legislators
to resist easy fixes
Swift's Democratic rivals seized on the early
outrage to skewer Swift's support for the voter-approved $1.2 billion income tax cut.
Senate President Thomas Birmingham said many program cuts could be avoided, if the tax
cut's final $450 million phase were halted. "What (Swift's budget) highlights is the cost of the
straitjacketed, damn-the-torpedoes, full-speed-ahead approach to the implementation of
the tax rollback," Birmingham said.
Citizens for Limited Taxation chief Barbara Anderson warned Birmingham, a gubernatorial
candidate, not to mess with the voters' tax cut. "I just don't think calling the voters stupid is
the wisest thing for any politician to do," Anderson said.
The Boston Herald
Jan. 23, 2002
Finneran takes shots at Swift's 2003 budget
State Rep. John Slattery (D-Peabody), a Democratic
candidate for lieutenant governor, demanded that Swift consider delaying the final, $450 million
phase of the voter-approved income tax cut.
"They're going to hurt the kids in the classroom,"
Slattery said.
The Boston Herald
Jan. 22, 2002
Swift plans deep cuts:
D.A.R.E. program, sewer relief face ax
At about $23 billion, the Swift spending plan - up
hundreds of millions of dollars from this year's spending - is anything but budgetary apocalypse. It
properly would implement the voter-approved income tax rollback, maintain local aid and increase
education funding by $100 million, to $3.3 billion.
A Telegram & Gazette editorial
Jan. 22, 2002
Getting real
The so-called Massachusetts Taxpayers Foundation "forum,"
held at the State House yesterday, provided the doom-and-gloom predictions that have been useful to those who want to take or
keep more of our money.
The Gimme crowd is just warming up.
Watch the outcry later today when Gov. Swift releases her
FY 2003 budget proposal ... and keep in mind it's for $23 Billion, a 3 percent
INCREASE over this year's state budget.
All that will matter is that she refuses to go along with
killing the tax rollback.
 |
|
Chip Ford |
State House News Service
Tuesday, January 22, 2002
With elections nearing,
expert warns legislators to resist easy fixes
By Michael P. Norton
STATE HOUSE, BOSTON, JAN. 22, 2002 ... The recession, freefalling tax collections, and double-digit health care inflation are creating a budget mess, and lawmakers and the Swift administration may be tempted to seek the least painful solution in an election year - using state reserves to plug a gap estimated at $2 billion.
But Massachusetts Taxpayers Foundation President Michael Widmer said Tuesday there's a "grave danger" that the $1.5 billion pot of reserves - all the savings state government has left from the go-go 90s - will be exhausted to help shrink next year's budget problem and balance this year's budget, which has fallen about $200 million out of whack.
The budget woes on Beacon Hill are approaching the magnitude of the late 1980s, when lawmakers raised taxes and borrowed their way out of gargantuan deficits. This time, Widmer warned, using reserves alone will only worsen the fiscal imbalance and "set us up for a fall after the election." He said the budget woes will last at least three more years and urged lawmakers to make their reserves last at least that long.
Widmer offered a sobering analysis of the multi-year budget problems at a standing-room-only briefing. The chief of the business-backed foundation said he doesn't believe state government can do much to stimulate the economy, but it can make problems worse. "That is the great danger here - that we actually make our recession worse," he said. "That's what we did in the late 80s."
In short, state spending is outpacing revenues by hundreds of millions of dollars, and Swift and the Legislature, on the heels of a heated budget debate, must either cut programs and services again or raise revenues - taxes or fees - to meet their constitutional obligation to produce a balanced budget.
"It's a chilling but objective review," said Taxation Committee co-chair Rep. Paul Casey (D-Winchester).
The recession has not prompted the state to reduce overall spending. Instead, it is cutting back on spending growth. But to make good on more than $1 billion in mandatory funding increases in areas like Medicaid, collective bargaining and debt services, decision makers are being forced to wipe out or severely curtail spending on non-essential programs, which are often among the most popular.
Widmer said that nearly 1 in 6 Massachusetts residents receives health care coverage under Medicaid, which serves income-eligible individuals and families and covers nursing home care. Enrollment has surged from 700,000 to 1 million. And at a cost of $5,100 per recipient, the program is by far the largest consumer of scarce discretionary state budget funds. Despite the enrollment boom, health care providers say state government pays only 70 percent of actual treatment costs, shortchanging them by $200 million.
Medicaid costs have surged 22 percent in two years and are due to rise at least another 10 percent next year. So the cost of insuring thousands of newly eligible residents - an objective shared by members of both parties - is catching up with the state budget.
The Legislature and Swift just approved more than $800 million in reserve spending and more than $600 million in budget cuts to balance this year's budget. On the heels of that exercise, Education Committee co-chairman Rep. Peter Larkin (D-Pittsfield) said the new budgetary choices - even more spending cuts or tax increases - amount to a "pick of poisons."
Lawmakers appear poised to join Acting Gov. Swift in recommending a much smaller increase in K-12 education funding than school systems have become accustomed to receiving. The new aid will make sure all schools provide the minimum amount required under state law, but may force districts with surging enrollments, or those that exceed minimum aid requirements, to absorb inflationary increases.
In her State of the State address last week, Swift reiterated her plans to reject any new tax or tax hike plan, if one should reach her desk. Swift's critics say she and former Gov. Paul Cellucci pushed an income tax cut question in 2000 in part by promising that its passage would not cause cuts in services. "That's not happening right now," said Rep. Cory Atkins (D-Lexington).
Because of that broken promise, Atkins said, everyone she asks in her district supports freezing the voter-approved income tax rollback to help the state preserve services during hard times.
Citizens for Limited Taxation director Barbara Anderson defended the tax cut at Widmer's briefing, demanding to know why it is referred to as a "burden" by MTF since the voters passed it. The 5.3 percent income tax rate is due to fall to 5 percent on Jan. 1, 2003, giving workers a $450 million tax break.
Anderson said MTF and others should spend more time analyzing other proposals, like one aired earlier in the day by Rep. George Rogers (D-New Bedford), who wants the Legislature to legalize casino gambling. Anderson also questioned MTF's data, noting its revenue projections have been off over the years. "MTF may be right this time too, or it may be wrong," Anderson wrote in a news release.
Desperate for a solution, some lawmakers asked whether the state should borrow money in the short term to continue services with the hope that the economy and tax revenues will rebound in a couple of years. Widmer advised against that, saying it only postpones unavoidable costs. He singled out the Big Dig as a project where managers have long relied on borrowing in anticipation of receiving funds down the road.
Widmer also said there's a great deal of uncertainty about the loss of state tax receipts due to a new voter-approved law allowing tax deductions for charitable contributions. Since it's a new law, no one knows for sure what it will cost state government. Estimates range from $100 million to $200 million, with a surge in post-Sept. 11 charitable donations contributing to the uncertainty over the revenue hit.
Swift budget aides feel the economy is about to rebound and the budget she will unveil Wednesday will to some extent reflect that optimism. Swift aides have been scouring the state government landscape in search of revenues that, combined with budget cuts, will close the estimated $2 billion gap. Swift in the past has supported grabbing money from a pension liability fund and the state's tobacco settlement savings. She is also considering a plan to reduce Lottery prizes and steer that revenue instead to cities and towns.
But the Swift budget, while drawing $500 million from reserves, will reportedly include $500 million in program cuts, including reductions in water and sewer rate relief, youth anti-drug programs, smoking cessation programs, and local roadwork accounts.
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The Boston Herald
Wednesday, January 23, 2002
Finneran takes shots at Swift's 2003 budget
by Elisabeth J. Beardsley
In a prelude to another budget battle, House Speaker Thomas M. Finneran warned acting Gov. Jane Swift he will "fill the vacuum of leadership" if the budget she files today relies on gimmicky accounting.
The conservative speaker - a longtime ally of Republican governors - has been publicly bashing Swift since she criticized lawmakers in her State of the State address 10 days ago.
Yesterday, Finneran slammed Swift's plan to shortchange the state pension fund by about $130 million, which Finneran said he regards as a "gimmick" that foists obligations - and about $8 billion in jacked-up interest costs - onto future generations. Finneran demanded that Swift take an "honest and forthright" approach to a looming $2 billion deficit that he said makes last year's five-month budget debacle "look like a day at the beach."
"If it's games and gimmicks, and accounting election-year games and schemes, then I think obviously the gloves do have to come off and we have to try to fill the vacuum of leadership," Finneran said.
The Mattapan Democrat's salvo is part of a storm of criticism that's expected today when Swift files a fiscal 2003 budget that slashes $500 million, while boosting education spending by $100 million.
Swift, meanwhile, defended her decision to lay waste to scores of popular programs, including the school-based anti-drug program
D.A.R.E.
With money so tight, Swift said she'd rather fund programs for abused and neglected children than other feel-good initiatives.
"It's not a choice that I relished making, but it was pretty clear to me that the priority is in the right place," Swift said.
Swift's Democratic rivals seized on the early outrage to skewer Swift's support for the voter-approved $1.2 billion income tax cut.
Senate President Thomas Birmingham said many program cuts could be avoided, if the tax cut's final $450 million phase were halted. "What (Swift's budget) highlights is the cost of the straitjacketed, damn-the-torpedoes, full-speed-ahead approach to the implementation of the tax rollback," Birmingham said.
Citizens for Limited Taxation chief Barbara Anderson warned Birmingham, a gubernatorial candidate, not to mess with the voters' tax cut. "I just don't think calling the voters stupid is the wisest thing for any politician to do," Anderson said.
But fiscal watchdogs are worrying that Swift's proposed cuts don't go far enough to rein in spending.
Massachusetts Taxpayers Foundation President Michael Widmer warned of a "grave danger" that Swift and lawmakers may try to take the easy way out - by draining the state's $1.5 billion rainy day fund.
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The Boston Herald
Tuesday, January 22, 2002
Swift plans deep cuts:
D.A.R.E. program, sewer relief face ax
by Elisabeth J. Beardsley
Acting Gov. Jane Swift is poised to quietly annihilate scores of popular initiatives - from smoking cessation to water and sewer rate relief - even as she tries to cast herself as the election-year savior of school programs.
Swift's 2003 budget, to be filed tomorrow, includes $500 million in cuts that whack everything from the huge state pension fund to the $4.3 million D.A.R.E. program, which teaches kids to avoid drugs, administration officials told the Herald.
"Oh wow - this blows me away," said Massachusetts D.A.R.E. Officers Association President Leonard Johnson, when told of Swift's plans to vaporize his popular program. "This is unbelievable."
Swift has also proposed wiping out a $20 million water and sewer rate relief fund to cities and towns, stunning and angering cash-strapped municipal officials and state lawmakers.
The 2.5 million people in 51 Greater Boston communities could face double-digit percent hikes in their water and sewer bills, according to local officials.
State Rep. Robert DeLeo, chairman of the Legislature's MWRA caucus, said families already struggle with steep rates to subsidize the Boston Harbor cleanup. People will have a fit if rates explode, he said.
"It wouldn't surprise me once again if we saw some of the revolts we saw back in the early 90s, when ratepayers were burning their water and sewer bills," said DeLeo (D-Winthrop).
An administration aide said the MWRA has about $100 million in "rainy day" reserves, which could possibly be put toward rate relief.
Taking a drubbing in early election-year polls, Swift has been trying to seize the mantle of popular causes, orchestrating weekend media leaks to pump up her proposed $136 million boost for education.
The strategy seeks to dampen the sting of cuts aimed at partially filling a $2 billion deficit. But it sits badly with Democratic lawmakers who control Beacon Hill's purse strings.
"Even in good times, I find (Swift's) budget to be, at best, a thick press release," said Senate Ways and Means Chairman Mark Montigny (D-New Bedford). "I would rather see honest, balanced budgets."
In her budget proposal, Swift:
Eviscerates the state's anti-smoking program - slashing $44 million and leaving just $19 million.
Slices $30 million out of charter school reimbursements, which soften the blow for regular schools that lose students - and therefore dollars - to charter schools.
Guts a $42 million local roadwork fund, which local public works departments rely on to fill potholes and plow snowy streets.
Local officials say the cuts will be a deep blow to cities and towns.
"It's hard to imagine how communities could do anything but reel," said Massachusetts Municipal Association chief Geoff Beckwith.
Widely recognized as the most successful anti-smoking campaign in the nation, the anti-smoking program funds the critically acclaimed TV and radio ads that have been credited with sharp drops in Bay State smoking rates.
Swift had initially planned to wipe out all $50 million from the adult anti-smoking program, but sources said that sparked an internal skirmish with her own public health commissioner, Dr. Howard
Koh.
Koh launched a furious, last-minute lobbying effort, sources said. Swift conceded to keep the skeleton of the program - but only by cannibalizing $13 million from Department of Education youth programs.
"Spending money on a prevention program just doesn't fit the bill right now," said one administration official.
And advocates fear the concession won't be enough to save the anti-smoking campaign. Swift yesterday announced a unilateral, executive-level cut of $17 million in this year's anti-smoking budget.
"We're really feeling like we were sucker-punched here," said American Cancer Society spokesman Lori Fresina. "It is devastating."
State Rep. John Slattery (D-Peabody), a Democratic candidate for lieutenant governor, demanded that Swift consider delaying the final, $450 million phase of the voter-approved income tax cut.
"They're going to hurt the kids in the classroom," Slattery said.
The word on next year's looming budget cuts comes as Swift continues to try to mop up the fiscal damage in the current year.
Yesterday, Swift said she would unilaterally impose $53 million in immediate spending cuts, part of a plan to plug a $189 million hole that's opened up since the current budget was passed two months ago.
The immediate cuts fall heavily on anti-smoking programs, kindergarten expansion, dental plans and prostate cancer prevention.
Swift threatened to make massive cuts in education and human services if the Legislature refuses to save $134 million by shortchanging the state pension fund.
"I'm not happy about any of this," Swift said.
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The Telegram & Gazette
Worcester, Mass.
Tuesday, January 22, 2002
Editorial
Getting real
The annual state budget debate gets under way in earnest tomorrow as Gov. Jane M. Swift sends her fiscal 2003 spending blueprint to the Legislature.
The dynamic has changed radically from just a year ago, when tax revenue was pouring in faster than the Legislature could pass “supplemental” budgets for spending it.
Ms. Swift, who announced $55 million in emergency cuts yesterday, will submit a 2003 budget that trims projected spending by an additional $500 million. That means major reductions in smoking cessation programs, payments to reduce the state's unfunded pension liability, dental benefits for the poor and reimbursements to school districts who lose students to charter schools.
At about $23 billion, the Swift spending plan -- up hundreds of millions of dollars from this year's spending -- is anything but budgetary apocalypse. It properly would implement the voter-approved income tax rollback, maintain local aid and increase education funding by $100 million, to $3.3 billion.
Indeed, the Massachusetts Taxpayers Foundation suggests much deeper cutting will be needed to offset the 4.8 percent drop in tax collections from July to December 2001, even assuming an economic recovery.
While advocates lobby for reinstatement of programs, the foundation warned that, “like their counterparts a decade ago, state leaders have not coped adequately with the dramatically changing fiscal circumstances.”
Even under the most optimistic scenario, the situation calls for a moratorium on politics as usual -- and on the kind of shameful tomfoolery that marred the budget process last year.
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