The Boston Globe
Sunday, April 14, 2002
Grim talk seen as Finneran tactic to push taxes, cuts
By Rick Klein
Globe Staff
House Speaker Thomas M. Finneran is traveling the state,
visiting faraway districts, spreading this scary message: State government is about to be eviscerated.
Whole departments will be eliminated, as many as 25,000
state workers will lose their jobs, poor people could be thrown off Medicaid, and local aid - including education funding -
will be reduced by 10 percent. Finneran is calling it the biggest budget-cutting exercise in
Massachusetts history, and with $2 billion set to be slashed by House leaders, he's
warning that no service that state government provides will be unaffected.
"It is extraordinary to contemplate how quickly our fortunes
have been set back and reversed," Finneran told about 500 business leaders at a downtown Boston speech on
Wednesday. "It's going to require substantial, substantial budget-cutting,
and retreats from all those high-water marks that we achieved during those glorious days of the late 1990s."
If it sounds grim, that's the way Finneran wants it. His
vivid comments, dutifully reported in local newspapers in his members' districts, are part of a complex and careful strategy
to build support for what is shaping up to be the biggest challenge of his speakership: persuading his
members to vote to cut programs and raise taxes in an election year.
Four-fifths of House members began serving in the House
after 1992, meaning they've been in the Legislature only during economic boom times and have voted far more often to cut
taxes than to raise them. As Finneran is warning the public about the tough times ahead, he is
conditioning House members for the coming difficult decisions on spending cuts and tax
increases.
The state faces an $800 million budget shortfall this year,
and a $2 billion gap in the fiscal year that begins July 1.
Though Finneran is often assumed to have control over his
members, votes on taxes are often unpredictable, especially with a relatively untested House. Finneran is often criticized
for heavy-handedness, but it's a different Finneran on display this spring. His leadership is far
more subtle than normal, though his mission is unmistakably deliberate.
Finneran says he is not pushing members to raise taxes, and
says his "Straight Talk Express" campaign is about truth-telling.
But besides the gloom-and-doom scenarios he has painted for
newspaper editorial boards and business groups over the past two months, Finneran and his top deputies have taken
several other targeted steps that suggest they are laying the groundwork for taxes and budget
cuts. They include:
Scheduling the House floor debate over taxes so it won't
begin until at least April 30, the deadline for legislative candidates to file nomination papers. That way House members
will know if they're facing serious challengers before casting any votes on taxes. Finneran's team
appears to be betting that most representatives will be unopposed, freeing them to cast
unpopular votes.
Declaring that the House Ways and Means Committee will
propose a budget for fiscal 2003 that slashes spending by $2 billion - far more than the cuts being discussed by the other
major players in state government. That document, to be released later this month, will give
his members a detailed illustration of how deeply the state, agency by agency, will
suffer without new taxes, and arm them with vivid examples and explanations if constituents
complain about the tax increases.
Setting up a series of House "working groups" to examine
major issues such as Medicaid, revenue options, and local aid. Those task forces are now reporting back to the full House
and offering few major ideas for controlling costs, persuading new circles of House members
that the state's fiscal problems are as critical as Finneran has said.
Releasing a list of 16 proposed tax hikes worth $2 billion -
well beyond the level of new taxes that anyone is seriously discussing. After the publication of the lengthy list of all
the possible increases, any tax package actually approved by the House is likely to appear
restrained, by comparison. Members can say they resisted calls for huge amounts of taxes
and targeted just a few areas - most likely including the income tax and the cigarette tax.
Finneran's approach has been derided as scare tactics; no
one really expects 25,000 state workers - more than a third of the state work force - to be laid off, for example. And any
plan to eliminate whole state departments would face huge odds.
"He is definitely taking advantage of this situation to
raise taxes," said House Republican Leader Francis L. Marini of Hanson. "He's making the problem as big as he can, which will
result in the biggest cuts that you can imagine. We're going to see a Draconian budget come
out of ways and means, and that is going to get the advocates all working the phones, coming
to the State House, pleading for people to raise taxes."
Already, Finneran's formula appears to be having a profound
impact on the dialogue over taxes. Key business groups, local leaders, and legislators have come out in favor of freezing
or raising the income tax, in large part because of Finneran's campaign.
After being warned by Finneran's team about a likely 10
percent cut in aid to cities and towns, the Massachusetts Mayors' Association marched up to Beacon Hill and launched
their own campaign, calling not just for a freeze in the income tax but for it to be raised to
5.95 percent, which would generate about $1.2 billion.
Public opinion, as reflected in local newspapers, is
beginning to break Finneran's way. Headline in the Springfield Union-News: "State finances at desperation point." The Sun
Chronicle of Attleboro: "Finneran: Expect tougher times." And the Sun of Lowell: "Finneran:
State must raise taxes, tighten belt."
"He feels that dramatizing the problem will help galvanize
action, and I think he's right," said Michael J. Widmer, president of the Massachusetts Taxpayers Foundation.
Finneran said he is not loading the deck in favor of new
taxes, but is simply giving voters honesty that's sorely lacking in an election year. If those who listen to his talks
want to use that information to propose tax increases, that's their prerogative, he said. He says he's
staying out of that debate.
"Tax questions are almost a constant, but that's not the
objective," Finneran said. "I don't pretend it will be painless, I don't pretend it won't be ugly. But if we have to
cut $2 billion, we will. It's not a fiction. I can't stress that enough.
"From my perspective, none of it is about setting the
groundwork for taxes," the Mattapan Democrat said. "It is completely an informational and educational campaign. People,
when they're well-informed and apprised of the situation, find it refreshing, and they're grateful for
the honesty of the message."
Some on Beacon Hill worry that Finneran's strategy could
actually hinder the high-level budget negotiations underway on Beacon Hill, which were advanced significantly last week
when Acting Governor Jane Swift signaled she may abandon her earlier opposition to a delay
in the income tax rollback. Swift is scheduled for a second round of talks with legislative
leaders tomorrow morning.
While Senate leaders and the Swift administration are
willing to put everything on the table, Finneran won't yet commit to any new revenues - not just taxes, but other ideas,
such as reducing Lottery payouts and using more of the state's settlement money from the big
tobacco companies. Finneran may simply be holding back to allow the House more leeway
in coming up with its own plan after the tax debate this month.
But such a strategy may stall the progress. "I don't know
what help it is to make it sound as if the world as we know it is no longer going to be," said Senate Ways and Means Chairman
Mark C. Montigny, a New Bedford Democrat.
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The Boston Globe
Sunday, April 14, 2002
State leaders are moving toward a solution to the state's
budget woes that would close an $800 million deficit this year by limiting payments to the state pension fund, tapping
additional tobacco settlement money, and relying more on reserve funds to supplement mild budget
cuts.
New taxes seem highly unlikely to be part of any agreed
solution for this fiscal year, but some tax hikes now seem inevitable in fiscal 2003, which begins this July 1, according
to several high-ranking state leaders who attended a budget summit meeting Friday night. Besides the
$800 million gap this year, the state must close an estimated $2 billion shortfall in
the next fiscal year.
Administration officials and House and Senate leaders said
Friday night's four-hour, closed-door meeting was highly productive. Acting Governor Jane Swift will host a second
meeting tomorrow morning with Senate President Thomas F. Birmingham, House Speaker
Thomas M. Finneran, their chief budget-writers, and Republican legislative leaders.
No firm agreements emerged from the Friday night talks,
except for accord on the size of this year's and next year's problems. But speaking privately, the major players and their
top aides say that consensus is building around a few key areas that would help solve the fiscal mess
now confronting the state.
For this fiscal year, with only 2½ months remaining,
major additional budget cuts are impractical. State leaders will probably move to reduce spending by less than $100
million, with cuts to be rather evenly spread throughout government, according to meeting
participants.
Also for this year, Finneran has expressed willingness to
move on two areas he had previously said were off the table: limiting pension funding and the use of more tobacco
settlement money. Those moves could free up as much as $300 million this
year, and the other $400 million in this year's gap could be plugged with money from the state's $1.5 billion
rainy day fund and other reserves.
Agreements in all of those areas, however, may depend on
deals to close next year's budget gap. Swift appears open to dropping her opposition to some new taxes in fiscal 2003 in
return for movement by legislators on her priorities, including the pension and tobacco ideas
and a proposal to limit Lottery payouts.
So far, agreement appears possible on an increase to the
cigarette tax of between 50 cents and $1 per pack and a freeze of the voter-approved income tax rollback at 5.3 percent.
Those moves could generate between $375 million and $500 million, depending on the size
of the cigarette tax.
House and Senate leaders will have to decide whether to give
in to Swift's demands in exchange for commitments on those taxes, or whether to insist on additional taxes.
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The MetroWest Daily News
Thursday, April 4, 2002
Questions for the candidates
By John Gregg
Political debates mix substantive answers with more than a
fair share of campaign rhetoric and platitudes. Equally annoying are the political reporters and columnists who phrase
their questions as if they are the smartest people on earth.
In honor of such tedious campaign rituals, I offer the
world's most insightful queries, modestly phrased, to the gubernatorial candidates.
And, as a bonus, I deny them a chance to even reply, sparing
readers from having to hear which candidate is the "true outsider" in this race.
Fortunately, my questions are so wise and withering that the
answers - or likely evasions - are self-evident.
With that introduction over, let's get to our "debate." ...
For Treasurer Shannon O'Brien: Along with several other of
your Democratic opponents, you advocate a "temporary delay" in the rollback of the state income tax.
Of course, the only reason this issue went before voters is
the Legislature's decade-long failure to roll back a previous tax hike that was also supposed to be "temporary."
You claim you are not an insider, but you opposed the tax
cut in 2000 before voters approved it by a 60-40 margin. Why should voters now trust you and the Legislature to
enact a "temporary" freeze on their hard-earned tax cut?
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