If you ever needed proof that "More Is Never Enough!" (MINE)
thank Framingham school superintendent Mark Smith for this classic example. Now granted, I was never introduced to the
"New Math"; I still figure one and one equal two ... but maybe not? Here's the context of his quote, from one of today's
legion of "the sky is falling" Boston Globe reports, "Schools see mixed message from Swift; State budget for
fiscal 2003 forces changes":
Framingham, for example, would see a $900,000 increase in Chapter 70 money under Swift's proposal,
Smith said. But if a local charter school opens in the fall as planned, he said, the town would get
$590,000 less than it expected in covering those costs.
"That's going to hit us hard," he said.
As I was taught (in the public schools of yore), if you
"expected" $590,000 and instead received $900,000, you were getting $310,000 more than you "expected"; you were $310,000
ahead of the game plan. Uh, uh ... not today. Still not enough.
Christopher Martes, executive director of the Massachusetts
Association of School Superintendents, must have learned under that same dumb old math as me when he noted:
"I think what's happening is that people tend, because it's been so long, to expect the same
increases that have happened in the past," he said.
Apparently, "More Is Never Enough!" is the quotient of any
New Math problem.
Again the Boston Globe reports "Michael J. Widmer, president
of the nonpartisan Massachusetts Taxpayers Foundation said Swift's budget is significantly out of balance."
We struck back with the above CLT News Release asking who is right,
Widmer or Federal Reserve Board Chairman Alan Greenspan, who yesterday testified before the U.S. Senate Budget Committee
"There have been signs recently that some of the forces that have been restraining the economy over the past year
are starting to diminish and that activity is beginning to firm."
Nonetheless, the Globe reports, "The Democratic-controlled
Legislature is considering several tax increases even though Swift will veto any hike. The taxpayers foundation wants to
stall the income tax rollback until the economy improves."
Yesterday, the State House News Service reported: "During a
private caucus of House members Wednesday ... Finneran raised the idea of involving all 160 House members in launching
statewide public hearings to solicit ideas from the public about ways to raise revenue to balance the state budget."
The Globe also again today advocates the issue it raised
yesterday, that in Florida Gov. Jeb Bush postponed a tax cut, so temporarily delaying one isn't a tax increase.
In "Swift vows not to slow income tax rollback; Reserves
expected to decrease deficit," Yvonne Abraham reports:
In the most celebrated case, Bush, of Florida, called emergency sessions of the Legislature to deal with a
$1 billion gap in the state's finances, persuading legislators to postpone for 18 months a tax cut on
stocks and bonds that was to have taken effect this year."
Yesterday, Globe columnist Joan Vennochi opined: "Governor
Jeb Bush did it in Florida. Now, Acting Governor Jane Swift should do it in Massachusetts."
She further noted: "Florida TaxWatch, an independent, nonpartisan research institute, led the fight for the
phaseout of the tax on stocks and other investments.
"Keith G. Baker, the institute's chief operating officer..."
said, 'Even though we were the progenitors of the tax cut, we supported the responsible
position' to delay it, says Baker. 'It's a matter of timing. In a time of recession, given the
9/11 events and the worsening of the economy, the state was in need of additional
revenues.'"
"An independent, nonpartisan research institute" ... hmmm.
You won't find it too surprising to learn that the
so-called Mass. Taxpayers Foundation is its Massachusetts affiliate, will you?
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Chip Ford |
The Boston Globe
Friday, January 25, 2002
The silver lining in the fiscal cloud
By Scot Lehigh
FINGERS ARE pointing. Activists throng the State House halls.
Predictions of disaster echo in the air. If your memory goes back to the last budget crisis, no doubt you're like the figure
in Edvard Munch's famous painting. Your scream: No, please, not this again.
But there's a silver lining to every cloud, and that
includes the fiscal squall that has beset the Commonwealth. This year will present opportunities for reforms that are never
made during flush fiscal times.
"The only time government can effectively reform and provide
cost savings is when there is a recession," contends Chester Atkins, who, as the Senate Ways and Means chairman, led just
such an effort in the early 1980s.
Why does it take hard times to catalyze reform? Because of
what Atkins calls the iron law of government spending: The less useful the program, the more powerful the constituency that
backs it.
"The only time that constituency can be overturned is in
times of severe crisis, when the alternative is to do damage to vulnerable people," he says.
Now consider another little-acknowledged truth about public
budgeting.
In good years there is rarely a systematic effort to
evaluate programs from top to bottom to decide which make sense and which don't.
Instead, spending increases the way a fir tree grows: small,
but noticeable expansions of each offshoot each spring. Last year's increase becomes part of this year's base, while this
year's increase blends seamlessly into next year's base, with little real cost/benefit analysis.
That may not seem fiscally logical, but it makes eminent
political sense. When there are no real consequences to spending more, but a constituency ready to holler at cuts,
pruning simply isn't worth the political bother.
"Is it impossible to imagine that, after a decade in which
the state budget nearly doubled, there isn't waste in every department that isn't direct services?" asks
Barbara Anderson, executive director of Citizens for Limited
Taxation.
Actually, that's not at all hard to imagine. One nonpartisan
budget expert, who asked that his name not be used, says that after years of expansion, most state government programs can
absorb a cut of at least 5 percent without decimating services provided able managers stand
ready to figure out more efficient ways of getting things done. One effective way of forcing
those savings is by imposing a standard reduction across discretionary programs.
"If you say, 'that's all there is,' and you can count on
managers to make tough choices in a way that is honest, then there is real value to those arbitrary limits," this person
says.
And, smaller systemic savings aside, the budget is rife with
spending that could use a gimlet eye.
Take, for example, health insurance costs for state
employees. Right now the state pays 85 percent of the premiums. The Massachusetts Taxpayers Foundation advocates reducing that
amount to 75 percent. The 25 percent contribution that would then be required from current
and retired state employees would bring their costs in line with those of private-sector
employees, says Michael Widmer, the foundation president. The state's saving: about $70
million.
Or how about the Quinn Bill? That program offers Massachusetts police officers in
participating communities a 10 percent pay increase if they earn an associate's degree, a 20
percent raise for a bachelor's degree, and a whopping 25 percent boost for a master's
degree.
As the Globe has documented, many of the educational
programs that law has fostered are exceedingly dubious. But the Quinn Bill pay increases now cost taxpayers nearly $100
million each year, half of which is paid by cities and towns, half of which comes from state
government.
"That should be an obvious one," says Ed Moscovitch, deputy
commissioner of administration and finance under Governor Frank
Sargent. It should be, but it hasn't been. In good times, that spending has proved a sacred cow. However, with services for
poor people on the block, legislators have every reason to put Quinn Bill benefits under the magnifying
glass.
Those are just a couple of the issues sharp-penciled
budgeteers should address. After all, there's no time like the present fiscal crisis.
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The Boston Globe
Friday, January 25, 2002
NEWS ANALYSIS
Uncertain underpinning to Swift budget proposal
By Rick Klein
Globe Staff
The fiscal 2003 budget Acting Governor Jane Swift unveiled Wednesday relies on as much as $1 billion worth of questionable economic assumptions, cost-cutting measures that have already been roundly rejected by the Legislature, and untested ideas that are unlikely to generate the immediate results that Swift is expecting.
Swift's entire blueprint is based on a quick and sharp economic recovery - a projection many budget analysts believe is overly optimistic. Her plan assumes the economy will begin to rebound this summer, and revenues will be up 5 percent in fiscal 2003, which begins July 1. Halfway through fiscal 2002, they're down 5 percent.
Swift's proposal would also spend money she says will be saved by slashing $114 million from the state's contribution to the public employees' pension plan and $20 million from a water and sewer rate relief fund. Both ideas were offered and rejected by the Legislature last year, with lawmakers attacking them as fiscally unwise.
In another move that appears at odds with political reality, Swift proposes to spend the entire $290 million annual payment the state will receive next year from its settlement with tobacco companies. But in a highly publicized move, Thomas M. Finneran and Senate President Thomas F. Birmingham agreed in November to spend no more than 50 percent of tobacco settlement revenues during fiscal 2003 and 2004.
The acting governor is also seeking to spend $750 million next year out of the state's $1.5 billion "rainy day" fund. Finneran and Birmingham support spending no more than $500 million in a single year, to ensure that state reserves can cover three years' worth of tight budgets.
Michael J. Widmer, president of the nonpartisan Massachusetts Taxpayers Foundation said Swift's budget is significantly out of balance.
"They resort to various sorts of fiscal games and practices that shield or only temporarily address the problem," Widmer said.
What's more, Swift assumes savings of $136 million from an early retirement program that will be offered starting next month. That assumes that 4,000 state employees - 6 percent of the workforce - will opt to retire under the program, which is not a sure thing.
In addition, Swift is seeking revenues of $274 million from a major reorganization of the state lottery that would reduce prize payouts to players and direct more money from sales of lottery tickets to cities and towns.
Legislative leaders have been lukewarm to that plan, saying they are wary of tinkering with the highly successful lottery. But even if lawmakers reversed themselves, it is not clear that the prize structure could be overhauled so quickly, since many scratch games - which generate the most prizes - stay active for years.
"It's a serious problem when approximately $1 billion of the shortfall is covered through risky or unwise assumptions," Widmer said.
Swift's budget chief, Stephen P. Crosby, said the acting governor did not engage in budgetary games. Other players in state government are free to disagree on the merits, he said, but Swift is not shrinking from the gravity of the problem.
"These are thoughtful, responsible, fully vetted, well thought-out options," Crosby said. "We are demonstrating that we can go through this recession and not put in jeopardy the core critical services that we deliver to needy people. If you don't like the source of revenue, then come up with your own plan."
The taxpayers foundation believes state revenues will rise by no more than 3 percent in fiscal 2003, more modest growth than that projected by the economists Swift relies on - DRI-WEFA and economy.com. If the foundation is correct, Swift will be short $100 million that she had been counting on to fund programs.
It is the economic assumptions Swift employs that seem most frustrating to legislators who are preparing their own version of the budget - because if the recession lingers, it's not simply revenues that are affected. Bad economic times put more demands on state government, and drive up the number of people seeking government aid.
Some legislators accuse the acting governor of being overly concerned about her election campaign, and unwilling to level with the public about what is ahead. She has ruled out any adjustment to the $1.2 billion, four-year tax rollback she and her predecessor Paul Cellucci championed in 2000.
As a measure of their own assessment of the severity of the situation, House leaders are considering convening hearings around the state to solicit ideas from the public about how to raise revenues to balance the budget.
The Democratic-controlled Legislature is considering several tax increases even though Swift will veto any hike. The taxpayers foundation wants to stall the income tax rollback until the economy improves.
House Ways and Means Committee chairman John H. Rogers said Swift failed to put forward a realistic spending plan, and will only make lawmakers' lives harder as they craft their own version this spring.
"It has more to do with building campaign brochures than with a balanced budget," said Rogers, a Norwood Democrat.
Senate Ways and Means chairman Mark Montigny, a New Bedford Democrat, said he was willing to give Swift the benefit of the doubt, but grew discouraged reviewing the details of her plan.
"What's troubling about her release is that she takes all the usual suspects, in terms of the games and the gimmickry, and lumps them all in," said Montigny. "I'm trying to give her the benefit of the doubt, but it's impossible to call it a balanced budget. Lots of small tricks add up to a magic show."
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The Boston Globe
Friday, January 25, 2002
Swift vows not to slow income tax rollback
Reserves expected to decrease deficit
By Yvonne Abraham
Globe Staff
Faced with a fiscal crisis to rival the 1990 recession, Florida Governor Jeb Bush put the brakes on a state tax rollback that had been sacrosanct.
Across the country, Republican and Democratic governors, bracing for the worst shortfalls in more than a decade, are reconsidering tax reductions granted in headier economic times. Some are even gritting their teeth and proposing tax hikes.
But not here. Massachusetts Acting Governor Jane Swift, staring down the barrel of a $2 billion deficit in fiscal 2003, has said again and again that she would not touch the income tax rollback approved by state voters in 2000.
"We tried that in the late '80s," Swift said earlier this week. "It made the economy worse. It made the fiscal crisis worse. This is not the time to go back to
Taxachusetts."
Swift, who just released a budget that slashed funding for some programs, has proposed using $750 million from the state's reserves to make up the shortfall expected in fiscal 2003.
But some say that won't be enough, and that by refusing to touch the income tax rollback, she has put herself into an impossible position.
Forthy-three states and the District of Columbia are battling budget deficits this year, according to the National Conference of State Legislatures, putting the national shortfall at $40 billion.
"An explosion in the cost of health care, with a deteriorating tax base and a recession are all coming at the same time," said Arturo Perez, a policy analyst at the NCSL. "That's why the problem is more serious now than it was in the early '90s."
Many governors are running out of options for making up the shortfalls.
"You can do a fair amount of cuts, and then you can pull down some of your rainy day funds," said Raymond Scheppach, National Governors Association executive director. "But a lot of states can't get enough that way."
With voters in 36 states - including Massachusetts - heading to the polls this year, several governors are rethinking their tax policies.
In the most celebrated case, Bush, of Florida, called emergency sessions of the Legislature to deal with a $1 billion gap in the state's finances, persuading legislators to postpone for 18 months a tax cut on stocks and bonds that was to have taken effect this year. That is expected to save $130 million.
Bush had campaigned for the cut, and his actions have opened up an embarrassing gap between his solution to his state's fiscal crisis, and the insistence of his brother, President George W. Bush, that any delay of a tax cut amounts to a tax increase.
In Virginia and Rhode Island, governors are proposing that tax rollbacks on automobiles be frozen. Maryland, too, is considering pushing back the final phase of a five-year income tax cut.
In Michigan, state law requires that gradual business tax cuts introduced a few years ago be halted when the state's rainy day funds get low.
Other governors are proposing tax increases: in New York, taxes on cigarettes were just raised to make them the nation's highest; in Minnesota, extra taxes have been proposed on cigarettes, gasoline, and services like car repairs and legal consultations; North Carolina and Wisconsin are introducing tax increases, too.
"In a number of these states, they're finding that the magnitude of spending cuts necessary to balance the budget without putting revenue [increases] on the table is too much even for some Republicans to swallow," said Jim St. George, executive director of the Tax Equity Alliance of Massachusetts.
Republicans are at the helm in New York and Wisconsin, while a Democrat leads North Carolina and an Independent is governor of Minnesota.
According to Perez, the tax cut approved by Massachusetts voters in 2000 was the biggest in the nation, and without it, "the situation in Massachusetts would be clearly better."
Some Democrats, including Senate President and gubernatorial candidate Thomas F. Birmingham, are suggesting Swift consider delaying the last phase of the tax cut to offset a crisis.
"All anyone's suggesting is delaying it," said Senate Ways and Means chairman Mark Montigny, a New Bedford Democrat. "As the economy ramps back up, the tax rate ramps back down."
But Swift has made it clear that the voter-approved rollback is off-limits. It is sound fiscal policy to put more money into people's pockets, she said this week.
A delay would bolster revenues by $230 million, Swift said, but that would hardly be a solution to the state's fiscal problems.
"There would be cuts whether or not the tax rollback had passed," she said.
Even if the rollback could solve the state's fiscal problems, it would come at too high a price: voters would lose confidence in the state for defying their will, said Swift.
Besides, some analysts say it isn't fair to compare the Bay State with others, because Massachusetts was better prepared for a recession.
"Unlike many other states, Massachusetts is in pretty good shape notwithstanding the recession," said Stephen P. Crosby, Swift's administration and finance secretary. "No other comparable state, except maybe California, has a rainy day fund as big as ours. Every other major industrial state has higher unemployment.
"Our fiscal underpinnings are much more stable. We don't need to delay the tax cut to present a totally responsible budget."
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The Boston Globe
Friday, January 25, 2002
Schools see mixed message from Swift
State budget for fiscal 2003 forces changes
By Scott W. Helman
Globe Staff Correspondent
Because it includes gains in some areas and cuts in others, the public education line item in the $23.5 billion state budget Acting Governor Jane Swift unveiled this week sends somewhat of a mixed message to local school officials.
Swift said repeatedly that she intended to bolster K-12 education spending despite a steep drop in state revenues. Her budget, for the most part, reflects that commitment: It recommends $100 million more for Chapter 70 aid to local communities and a $48 million boost in special education assistance.
But Swift's fiscal 2003 budget also cuts money from programs that local officials have come to count on, including money for charter schools, initiatives to reduce class sizes, and full-day kindergarten programs. Thus her budget recommendations, and the simple reality of the recession, have set off a flurry of policy discussions among local school officials about how to negotiate the dizzying additions and reductions.
"The state makes its policy decisions and then we have to make ours, but in this instance the state's made contradictory decisions," said Framingham Superintendent Mark Smith. "That catches us in the middle."
Framingham, for example, would see a $900,000 increase in Chapter 70 money under Swift's proposal, Smith said. But if a local charter school opens in the fall as planned, he said, the town would get $590,000 less than it expected in covering those costs.
"That's going to hit us hard," he said.
School districts are generally seeing annual increases in aid.
But school officials say it still amounts to a cut when their mandated spending on things like salaries and special education placements outpaces the increases.
In what's become a familiar refrain on Beacon Hill, Swift said this week that tough times call for tough choices.
"I'd like to make everyone happy," she said. "It would be nice to be able to say yes to everything, but this is what I thought represented the responsible blueprint."
Responsible, perhaps, school officials say, but helpful, no. In the weeks ahead, school officials - some of whom believe their districts have made great strides over the last decade - will have some wrenching policy decisions to make about what to keep and what to cut.
"That's obviously a debate that's going on on a state level and it will go on at the local level," said Natick Superintendent Jim Connolly. "People will have to make priorities in the services they wish to provide."
With the talk of big-ticket operational overrides in Natick, Framingham, and other communities, Town Meeting will also probably play a major role in policy-making this year.
"It's going to be a very, very difficult discussion," said Framingham School Committee chairman Phil
Dinsky.
Still, Christopher Martes, executive director of the Massachusetts Association of School Superintendents, said things aren't quite like the late 1980s, when Chapter 70 aid was actually cut.
"I think what's happening is that people tend, because it's been so long, to expect the same increases that have happened in the past," he said.
Martes said his association is working with school districts to help them craft short-term recession plans.
A major concern for suburban communities is the slowdown in spending for the School Building Assistance program, which gives reimbursment for school construction projects. The state Department of Education now says it will take longer to reimburse communities for construction dollars, and that it will be harder to even get a project approved.
This could put a major squeeze on Natick, where two big projects are underway. The town could face slower reimbursement payments for its middle school project, and could see its high school project put on the waiting list.
"That makes local planning just impossible," Connolly said.
Natick School Committee member Peg Broekel said it's hard enough to sway voters to spend money on school construction projects without the uncertainty of state funding.
"How can you even develop your plan," she said, "and then how can you represent it to the public when there are so many unknowns? "
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