The Boston Herald
Wednesday, May 1, 2002
Budget 'crisis' sparks hackdom feeding frenzy
by Howie Carr
First of all, there is no budget crisis in Massachusetts.
There is only a budget "crisis."
And when they talk about earmarking the sales tax increase, that should be "earmarked," and by the way, if the hacks succeed in jacking up the sales tax from 5 to 6 percent, that's not a 1 percent increase.
It's a 20 percent increase.
And when the reps talk about sunsetting the freeze in the income-tax cut, they're lying, because the last time the Legislature promised to "sunset" a tax increase, back in 1989, they flat-out refused to even consider it until the voters took matters into their own hands and repealed that Dukakis tax hike in 2000 by a 59-41 percent margin.
But now, the Legislature tells those 1.6 million tax-cutting voters to stick it in their earmark. It would be laughable, this "crisis," if it wasn't turning into yet another mugging of everybody in Taxachusetts who doesn't get Bunker Hill Day off.
Poor people are suffering, it is alleged. So the Democrats propose to hike the cigarette tax by another 50 cents per pack. Who smokes - rich people or poor people? The governor and the GOP propose to cut the Lottery payout. Who plays the Lottery - rich people or poor people?
The welfare-industrial complex claims there's a $2.7 billion shortfall, or should I say "shortfall." What happened was, the hacks thought - or claim they thought - they were going to collect $24 billion in the next fiscal year. Instead, they're going to collect $21.3 billion.
"It's lucky they didn't project they were going to take in $30 billion," says Chip Ford of Citizens for Limited Taxation. "Then we'd have an $8.7 billion shortfall."
What this is really about is that the House speaker, Tommy Taxes, is grasping a rare opportunity. First, thanks to the pervert-priest scandal, they're operating way below the media's radar screen. Yesterday there were as many TV crews in San Diego hunting down Paul Shanley as there were at the State House.
Number two, the Corner Office is occupied by the lamest of lame duck governors, who is desperately seeking employment, and will do whatever she is told to do by whatever corporate fatcats will promise to put her on a board.
Of course the so-called activists claim they're robbing the taxpayers on behalf of the most vulnerable members of society, etc. The wheelchair brigades and the students - make that "students" - with their misspelled signs have besieged Beacon Hill, and reporters with trust funds are asking, "Where are the taxpayers?"
We're working. Thanks for asking.
Funny thing about working for a living. It leaves you with a lot less time for demonstrating outside the State House, especially during business hours. The "activists," though, have plenty of time to protest the budget "cuts," which means the increase in next year's budget isn't as outrageously large as the layabouts had hoped it would be.
If things are so terrible, why don't the pols tap some of these slush funds that Tommy Taxes and the rest of them have set up over the past decade?
The tobacco slush fund - $250 million a year. Oh, excuse me, I forgot that they need that money to run cigarette-buying stings at the 7-11. What about the rainy-day fund, where another $2 billion or so is stashed.
It's not even raining, really, but maybe you could make an argument that it's misting, maybe even drizzling. But no, the hacks refuse to draw down more than one-third of that rainy-day money. Why not rename it the tornado fund? We'll use it the next time there's a tornado.
The income tax, the tobacco tax, and now the sales tax - other than Tommy Taxes, who is behind this feeding frenzy? The State of New Hampshire, perhaps? Yesterday the Retailers Association of Massachusetts issued a press release predicting that if the sales tax is raised by 20 percent, the commonwealth will be facing yet another expense - building "several more lanes to I-93 North."
A lot of us will soon be using those lanes, to escape Taxachusetts. But before we leave, we'll vote for Carla Howell's referendum question to abolish the income tax. Not cut it, abolish it. Now that'll be a crisis, hold the quotation marks.
Howie Carr's radio show can be heard every weekday afternoon on WRKO-AM 680, WHYN-AM 560, WGAN-AM 560, WEIM-AM 1280, WXTK 95.1 FM, or online at howiecarr.org.
The Boston Herald
Wednesday, May 1, 2002
A Boston Herald editorial
The tax stampede is a political reflex
Watching developments on Beacon Hill prompts a rephrasing of Samuel Johnson's aphorism on patriotism: In Massachusetts, tax increases are the first resort of political scoundrels.
The menu of options for increases seems to lose support when the figure of $1 billion in increases is reached, claimed Rep. John Rogers (D-Norwood), chairman of the House Ways and Means Committee.
Oh really? That's $1 billion out of the pockets of citizens, all of whom have better uses for the money. Are we supposed to be grateful that there's some limit to the appetite of the machine?
The entire budget process this year has been a game aimed at protecting the favorite programs of the political old-boy network and the state's massive human service lobbies. The Ways and Means Committee threw out a budget proposal last Thursday hacked to the bone to arrive at a figure that, in the judgment of Rogers and Speaker Tom Finneran (D-Mattapan), could be spent without raising taxes. Did they defend it, make a case for it? No, within four days Finneran's lieutenants were canvasing the members: "So, what taxes do you think we should raise?"
Many of the committee's cuts make sense even in normal times. For example, a 10 percent cut in school aid (more than doubled over a decade) would, if properly targeted, force schools to rethink priorities and seek efficiencies.
There has been practically no discussion of harm to the state's economy from tax increases or of balancing that harm against the benefits of the status quo.
Make no mistake, tax increases degrade the state's economy. The Beacon Hill Institute, to take one example, estimated that 32,000 jobs would be lost if the income tax rate were frozen at 5.3 percent. The job loss number may be debatable, but the point is that nobody else is even thinking about the issue.
The lawmakers have learned nothing and forgotten nothing. Those who would raise capital gains taxes seem unaware that 42 percent of taxpayers with capital gains have incomes under $50,000 a year.
And there has been precious little discussion about breaking faith with the voters, something our lawmakers do with cavalier abandon, as the Clean Elections debacle showed. The voters approved the income tax rate rollback after the lawmakers refused to do so. The voters also approved a tax deduction for charitable contributions, which the Legislature welcomed. That means nothing to our political scoundrels; both provisions are on the scaffold.
There has not even been a real attempt to minimize tax hikes. If there had, the governor's proposal to shrink Lottery payouts to what other states offer would have been endorsed by Finneran and Rogers. Most people think that $274 million is nothing to sneeze at; but Finneran and Rogers have said ah-choo. Excuse us for not offering gesundheit.
The Boston Herald
Wednesday, May 1, 2002
Pols hit tax snag
by Elisabeth J. Beardsley and Karen E. Crummy
House Speaker Thomas M. Finneran's tax-hike train unexpectedly stalled yesterday as rank-and-file lawmakers could not agree over which levies to raise.
The House had been set to begin the tax-hike debate today, but Finneran abruptly pushed the meatiest issues - namely, freezing the voter-approved income tax cut - back another day.
The balk came after a private caucus in which rank-and-file lawmakers were unable to agree on anything except that the cigarette tax should be ratcheted up.
"The leadership isn't in disarray," said Rep. Kevin Fitzgerald (D-Boston). "There's a disconnect between (members') priorities and how much they cost, and how much they're willing to raise in taxes."
Lawmakers aren't anywhere near Finneran's $1 billion in new taxes, given that the overwhelming majority entered office during the economic boom and still resist unfamiliar spending cuts and tax hikes.
And most are so focused on restoring massive cuts to schools, mental health and retardation services, that they're ignoring other programs, said Fitzgerald, a floor division leader who's been polling members.
Finneran wants lawmakers to ferment for another day - and perhaps come around to a higher tax-hike dollar figure, Fitzgerald said.
"We've got to let this sink in with people," Fitzgerald said. "We might act differently if we give people a chance to think about it."
At the caucus, Finneran presented lawmakers with a package that would raise $1 billion by freezing the income tax rollback, hiking the cigarette tax and reinstating taxes on capital gains.
Those three options garnered the most support during a weekend poll of House members, but the only one that's a "lay-up" is a cigarette tax hike on the order of 50 cents to $1, said Taxation Committee Chairman Paul Casey (D-Winchester).
A majority supports freezing the income tax at its current 5.3 percent rate, but many still disagree over whether to tie the tax rate to economic indicators, earmark the money for favored programs like education aid, or even hike the rate to 5.6 percent, Casey said.
A visibly frustrated Finneran emerged from the hour-long caucus, telling the Herald that the House was in "continued conversations" but that "no closure" appeared on the immediate horizon.
"Things are very fluid," Finneran said. As to whether the income tax issue would be resolved this week, he said: "It's hard to say."
Late last night, Finneran's inner circle began another round of polling members, presenting them with a specific list of options.
Lawmakers were being asked their appetite for hiking taxes on: cigarettes, capital gains, charitable deductions, personal exemptions, and sales and meals.
As consensus remains elusive, Finneran's lieutenants say they've all but given up on finding a veto-proof two-thirds "super-majority" on anything but the cigarette tax.
"Ultimately, I think we're just going to have to go with a majority, and not worry about what the governor's going to do, or the Senate's going to do," Casey said.
But acting Gov. Jane M. Swift telegraphed that lawmakers had better worry about her.
Swift, who has thrown the tax debate into disarray by sending mixed signals about where she stands, repeated her public mantra yesterday that she won't "negotiate through the media."
But a senior adviser said Swift would "absolutely" veto a tax package that weighed in at $1 billion - especially since lawmakers are giving short shrift to her other revenue-generating proposals.
"We do not need a billion (in new taxes)," the adviser said. "Yeah, she's willing to do it (raise taxes). But she's just not going to do it for the hell of it unless there's a sensible package."
While Swift kept a stiff upper lip, House Republicans went on the offensive. Minority Leader Francis L. Marini attacked Finneran's tax-hike plan, accusing the speaker of trying to "take advantage" of a bad situation to help shape his "legacy."
"Everything he's done has been to magnify the crisis," Marini said. "He's generating permanent new taxes on the backs of the people of Massachusetts so he can say he saved us when he's gone."
The tiny GOP caucus submitted a tax-free alternative budget, which restores about $1.2 billion through casinos, a tax amnesty and spending an extra $146 million of the state's tobacco settlement money.
Meanwhile, outside the State House, huge crowds of advocates massed to protest Finneran's proposed $1.5 billion in program cuts that fall heavily on education, human services and health care.
Public health workers carried magic-marker inscribed signs reading "You get raises. We lose our jobs," and "Cut the pork not critical services."
"What are these people supposed to do?" said Vicki Allen, waving her hand at a sea of mentally and physically challenged protesters on Beacon Hill. "I don't know what we will do."
Compounding budget woes was news that April state tax collections were down 13 percent from this time last year.
Although he characterized it as a "big falloff from last year," Administration and Finance Secretary Kevin Sullivan said that the state could make up the $3 million shortfall in May and June.
The Boston Herald
Wednesday, May 1, 2002
Budget hypocrisy: New low on the Hill
by Rachelle Cohen
The devil, as they say, is in the details. Isn't that always the way? And so it is with the House Ways and Means Committee version of the state budget.
And the details are sad and they are ugly. And they prove the good ol' boy Beacon Hill network is taking care of its own - at the expense of the state's most vulnerable and those who care for them.
Case in point: the Family Services Clinic run out of the Middlesex Probate Court since its founding in 1971. It provides "assessments and evaluations of families where there are disputes around children," explained the director, Barbara Hauser, who has been with the clinic since 1973.
The unit deals with "high risk families," especially where there are allegations of the sexual abuse of a child, incidents of domestic violence, substance abuse or serious mental illness (where a parent may be hospitalized or diagnosed as being suicidal).
Sometimes it is in the somewhat happier business of seeing if, say, a long-absent father might be fit to take over custody when a mother becomes disabled or dysfunctional.
And for more than three decades the clinic has been doing all of this on a relative shoestring with only one full-time director and four part-time clinicians.
Its budget for the current fiscal year: $238,866. Its appropriation in the Ways and Means budget for next year: $0.0.
"It's going to be very difficult and a lot of people will suffer," Hauser said. "People will fall between the cracks. Judges will have to make decisions without benefit of our input. And other services, such as probation, will be seriously taxed." It's difficult and draining work performed for a tiny fraction of the pay these dedicated professionals could earn in private practice.
Similar clinics serving probate courts in Worcester County (annual cost about $213,000), Norfolk County (cost $164,000) and Hampden County (cost $50,000) are also targeted for abolition in the budget.
Now all of this, however unfortunate, might be understandable if it weren't for the flip side of this coin - those deemed somehow more worthy of state funds than clinics like the one run by Hauser.
Meet one of the oh-so-worthy - Suffolk County Registrar of Probate Richard Iannella.
In additon to a rather substantial regular budget for his department, Iannella presides over one of the sweetest little boondoggles around - the Suffolk Probate Court Community Outreach Program. This program, begun under Iannella and well crafted to see that he remains registrar for life, has grown from $139,000 two years ago to $233,500 this year. The Ways and Means budget recommends that it take a slight ($8,383) hit but it is still slated to get $225,117 - yes, just about enough to fund Hauser's clinic.
But just look what Richie Iannella gives the taxpayers for their money - lots of nifty brochures (all with his name very prominently displayed) on how to file various papers with the probate court. (Each, of course, carries the disclaimer that the information "is not legal advice" and "is not a substitute for a competent lawyer" - which is a good thing since Iannella confessed that the "six to seven" employees include no lawyers.
Under the program, Iannella says, "I'm out there teaching people how to use the courts" and speaking to groups of senior citizens about estate and probate matters. Again, neither Iannella nor anyone in the "outreach" office is a lawyer.
And the winter edition of the registry's four-page brochure mentions Iannella's name no fewer than 21 times (plus two photos of the smiling registrar).
"Outreach" is a really, really big thing in Suffolk County.
In the criminal division of Suffolk Superior Court - that would be under Clerk-Magistrate John Nucci - there's another "Education and Community Outreach" pilot program, which during the past three years has been reaching into taxpayer pockets for $220,000 a year. In the Ways and Means budget it too would take a modest hit to get only $209,983.
So let's see, that's about $435,000 for "community outreach" in Suffolk County at a time when four court clinics dealing with families in crisis are shut down.
The irony, of course, is that no two men have whined louder than Iannella and Nucci about layoffs of their personnel this year.
Oh, and about those layoffs . . .
A piece of stealth legislation unearthed by reporter Matt Apuzzo of the Standard-Times of New Bedford requires that for every two clerical workers rehired, one assistant clerk magistrate must be rehired - thus assuring that those highly coveted patronage jobs won't be lost. At least 18 court workers have already been returned to their posts.
The patronage, the boondoggles would all be amusing little Beacon Hill games if it weren't for the fact that dedicated professionals like Hauser and the vulnerable families her clinic serves are the ones who are being sacrificed.
It's gross and it's hypocritical and if it's House Speaker Tom Finneran's idea of honesty in budgeting, he ought to hide in shame.
The Boston Globe
Wednesday, May 1, 2002
Finneran wooing House members on tax increases
By Yvonne Abraham
Globe Staff
State representatives, those rank-and-filers who have spent years in the House chamber at the mercy of the powerful Speaker Thomas M. Finneran, are encountering a rather novel state of affairs this week.
Suddenly, the speaker needs them, and he needs them badly.
Finneran is trying to recruit fully two-thirds of legislators to agree to tax increases over the next few days to overcome a possible governor's veto. Without the taxes, the speaker believes, the state cannot provide a basic level of services in areas such as education and health care.
But some members see voting for tax increases as tantamount to electoral suicide. On such a sensitive issue, and in an election year, members need to be won over. The usual carrots and sticks won't work.
And that has given legislators a power few of them have tasted before.
"I think the membership right now, the rank-and-file, is feeling as empowered as they have felt in a long, long time," said Representative David Linsky, a Natick Democrat. "Clearly, every single vote on this matters, both on the revenue side and on the spending side."
So, Finneran and his leadership team have been courting the members, soliciting their opinions on what taxes the state should raise and where the extra money should be spent. He has formed working groups, some of which include otherwise marginal legislators, to come up with recommendations for legislation the whole body will consider over the next few days.
He has invited small groups of members into his office to talk candidly about their preferences and concerns. He has gone to their districts, and made the case himself to editorial boards and business groups that taxes are needed.
He has even been feeling out liberal legislators, ordinarily his rivals, on what extra burdens their constituents will bear in this tough economy.
It's downright democratic, say members. And exceedingly rare.
"When does Halley's Comet come back again?" joked Representative James Marzilli, an Arlington Democrat. "I've never seen anything like this. This will be a broader debate than anything I've ever seen in more than 20 years of being in this building."
Recent budget deliberations have been decidedly different: In other years, legislators are presented with a budget, often quite late in the process, with little time for them to review it in detail before votes are taken. They offer a flurry of amendments and tax proposals, most of which sink without a trace, while others favored by leadership are gaveled through as soon as they come to the floor. For the most part, legislators say, what the leadership wants, the leadership gets. There is a solid enough core of Finneran loyalists - members who either agree with the speaker on issues, or who know how their bread is buttered - to make his priorities faits accompli much of the time.
So this year's process has been a bit disorienting for legislators.
A sign of the new order: Between Friday night and Monday morning, House leaders called 135 Democratic members, at home, to gauge support for the hikes. But this was no simple up-or-down poll. Legislators were asked for their opinions in detail: if they would support tax hikes, how many dollars in hikes they would be prepared to support, and exactly where they'd like to see the new revenues spent.
That last is a crucial question for legislators, who, in meetings with Finneran this week, have sought commitments from him on how money raised from taxes will be used. Legislators have been going about the delicate business of selling tax hikes to their own constituents for months, promising the revenue will be devoted to programs they care about, such as local education.
"We made it very clear we wanted our priorities funded if we're voting for tax hikes, and no one should count our votes as automatic if the money isn't going to go to programs we felt were most important," said Linsky, who praised Finneran for being receptive to members' concerns. "I'm confident the speaker listened to that message very carefully. I wanted to make it very clear I would not support earmarking funds for pork projects in members' districts."
The trepidation is understandable. In 1990, after legislators raised income taxes, 18 members of the House lost their seats.
House leaders were planning another poll of members overnight.
On Monday, Finneran met with members until 8:30 p.m., said his spokesman, Charles Rasmussen. He held a meeting with the House's "progressive caucus," of which Linsky is a member, with members of the leadership, with Republicans, and with the House Ways and Means chairman, John Rogers of Norwood. Yesterday morning, he had lunch with the leaders of legislative committees. Everybody is getting face time.
"This is the end of a process he started in January," Rasmussen said. "He started a speaking tour outside the building, delivering the message that the economy is in bad shape. And he set up five working groups, challenging members to step up and get involved."
Rasmussen said Finneran is always this open to his members. But many of them disagree.
"This is more unusual," said Representative Frank Smizik, a Brookline Democrat. "They're genuinely trying to find a consensus."
But will it continue?
Michael Rodrigues, a Westport Democrat who has been a representative for six years, thinks so.
"This has been a wonderful process, a learning process for each one of us," he said. "I would think we will be making budgets like this from now on."
Other members, particularly the dwindling group of Beacon Hill veterans, are more skeptical. Once this crisis is dealt with, the old order will return, they say. Representative Paul Caron, a 20-year legislator from Springfield, advises new members who might think this is how the Legislature works to enjoy it while they can.
"It could become addictive," Caron said. "But the thing is, right now, everyone's vote is needed and important. That's not always the way in here."
The Boston Globe
Wednesday, May 1, 2002
A taxing miscalculation
By Scot Lehigh
Might a more moderate, flexible Tom Birmingham have helped blunt the impact of the state's fiscal problems? With the topic of taxes center stage on Beacon Hill and the Senate president campaigning for governor, that's an intriguing question.
The Democratic story line, of course, is that it's Question 4, the $1.2 billion tax cut that passed at the ballot in November 2000, that has put the state in its current budgetary box. Back then, Governor Paul Cellucci assured us that the tax cut he backed could be accommodated without budget cuts. That was before the economy went south - and Cellucci headed north.
But the tax cut that the voters passed at the ballot is also the story of the tax reduction scheme that didn't make it through the Legislature. Fearing the appeal and the effects of Question 4 in the spring of 2000, the Massachusetts Taxpayers Foundation proposed its own plan.
That cut would have dropped the income tax rate back to the 5 percent it had been before the fiscal crisis of the late 1980s; assuming the economy stayed strong, the complete reduction would have taken five years. But Taxpayers Foundation's plan was keyed to economic indicators. Thus, if the economy went bad, the phased-in tax cut would be put on hold until good times returned. House Speaker Thomas Finneran liked the idea, and the House promptly adopted it. But Birmingham refused to go along.
Passing the foundation's tax cut probably wouldn't have been enough to persuade the Cellucci administration to abandon the ballot question. Still, opponents of Question 4 would then have been able to argue that the Legislature had already enacted a carefully calibrated tax cut that would achieve the same result as long as the economy stayed healthy.
With that alternative in place, beating Question 4 at the ballot would have been "an easy win," Finneran contends. "Then the argument to the people would have been, `It is not that we are against taxes, but this is the intelligent way to do it."'
Why wouldn't Birmingham agree? Finneran says he recalls Birmingham saying it was difficult for him because organized labor wanted to fight the ballot question head on.
"I don't remember any discussion like that," Birmingham retorts. "I might have mentioned that labor was the other way, but I never said it was hard for me because of labor." Rather, Birmingham says that for him, the issue was one of values.
"I felt the stronger argument was to say we can best use this prosperity by building our public schools, by expanding health care," he says, noting he had delivered a $500 million income tax cut (by doubling personal exemptions) back in 1998. "I thought that was a better argument than to say we can do this" - a tax cut - "but in a better, safer way."
Birmingham also objects to the speaker's contention that passage of the Taxpayers Foundation proposal would have made it easy to defeat Question 4. That's impossible to know, he says.
True enough, but my gut tells me Finneran has that right. It was, after all, impatience with legislative unwillingness to redeem what many considered a promise to bring the income tax rate back to 5 percent that helped power Question 4 to victory.
We can say where the income tax rate would be if MTF's tax cut had been in place and the ballot question had been defeated: frozen at 5.55 percent, says Michael Widmer, president of the Taxpayers Foundation. For the next budgetary year, that would mean about $650 million more for the next fiscal year than under Question 4's tax-cutting schedule.
Not adopting the foundation's plan "was a serious miscalculation," says Widmer - a miscalculation that leaves Birmingham in an uphill battle to raise the income tax back to 5.6 percent to fund the priorities he cares about.
That's not to argue that the current fiscal mess is Birmingham's fault. It's not.
However, it does highlight a legitimate concern about the Chelsea Democrat. Effective political leadership must be a savvy mixture of the principled and the practical. But as a pillar of the urban liberal coalition, Birmingham lost sight of the moderate middle that marks the state's political center of gravity. Indeed, even now, he can't quite concede that his approach to Question 4 was counterproductive.
"I was with 40 percent of the voters," he says.
That's one way to describe the losing end of a landslide.
