The Boston Globe
Saturday, May 4, 2002
Holes in their story about deficits
By David G. Tuerck
The citizens of Massachusetts are about to become victims of
a fraudulent claim that the state is on the brink of running "huge" deficits that will, barring tax hikes, necessitate
equally "huge" spending cuts. To bolster this claim, the usual special pleaders are besieging Beacon Hill and
the airwaves with demands for tax hikes.
Students, the disabled, and school teachers descend on
Beacon Hill, warning about blood in the streets. The newspapers bolster their cause with headlines about cutbacks in school
spending and human services. But let's take a look at the numbers.
In Fiscal Year 1991, the state managed to conduct its
business by spending $13.7 billion. By the end of FY 2002, it will have spent $22.8 billion, an increase of 67 percent or, in
inflation-adjusted dollars, of 26 percent over what it spent in FY 1991.
Now what about FY 2003? We are told that the state has to
fill a $2.3 billion deficit and that, in order to fill that deficit without raising taxes, it would have to cut spending by
$1 billion. "Wow," you are supposed to say. "That's a lot to cut out of the budget!"
But look again. Even with this "cut," the state will spend
about $22.6 billion in FY 2003. The difference between that $22.6 billion and the $22.8 billion it will spend this year is
only $200 million. That is a cut of less than 1 percent in spending.
Where does the tax-and-spend lobby get a $1 billion cut?
Well, by inventing a budget that they say is needed in order to provide services at a level that they say we need. They never
explain the fine print, though. They just tell you to trust their claim that these are real cuts.
Why claim a $1 billion cut in spending when the actual
number is one-fifth that amount?
The answer is that, in 2000, the voters approved by an
18-point margin a ballot measure that cut the state income tax in steps from 5.85 percent to 5 percent. By taking a billion
dollars off the table, voters made things tough for the folks who want to see the state budget rise at
twice the rate of inflation.
Now, with the economy faltering and revenues temporarily on
the decline, voila! A golden opportunity to raise rates and permanently retrieve that missing billion dollars. That means
raising the personal income tax in direct contravention of what the voters mandated two
years ago. Hence, the trumped up budget crisis.
We do not have a crisis but a number of budget-busting
spending items that the state put on automatic pilot years ago and that make 5 to 10 percent spending increases the norm.
In 1997, the state talked itself into believing that it
could "reform" medical assistance to the poor without raising costs to the state. Since then, state Medicaid expenditures
have grown at an annual average rate of 9.7 percent and now run about $6 billion per year, with almost a
million people receiving coverage. State taxpayers would save around $600
million per year if the Legislature was willing to rein in Medicaid spending.
Then there's education spending. After 1993, the state spent
$5.6 billion to bring school budgets to a "foundation" level of support by FY 2000.
In order to maintain this level of support, the state has to
increase aid to the schools in line with growth in enrollments and inflation. But since FY 2000, state aid has grown by 7
percent, while inflation and enrollments have grown by 4 percent. It's time to trim the growth
of this program.
The state spends $476 million annually on "additional
assistance" to municipalities under a program that was created back in 1985 when local spending was almost entirely a local
responsibility. Things have changed. Now the state pays for more than 40 percent of local
spending on schools. Overall, state assistance to municipalities has grown to the point that
Additional Assistance represents only 9 percent of the total. This program needs to go.
Another issue has to do with state salaries. Everywhere
around us there are layoffs and earnings cuts in response to Sept. 11 and the slowdown. By FY 2003, the state will be
paying some $5 billion in salaries to its employees. Reducing this spending by a modest 3
percent, through furloughs or wage cuts, would save the state another $150 million.
The unwillingness of our leaders to regain control over the
budget is matched by their head-in-the-sand approach to the economic effects of tax increases. Never do they ask the
question, "What would raising taxes do to the economy?" They don't ask because they don't
want to know the answer. At the Beacon Hill Institute, however, we know the answer:
Raising the tax rate next year from 5 to 5.6 percent would destroy 63,000
jobs, $2.8 billion in payrolls, and $487 million in capital spending. All that so that the Legislature can get back
its billion dollars and avoid coming to grips with a budget monster that it created.
Will the Legislature and the lobbyists to whom it answers be
able to pull off this scam? Perhaps so. But perhaps as the economy recovers and the budget balloons and the
shabbiness of this episode sinks in, voters will find a way to send a message
to Beacon Hill. For that we can only wait in eager anticipation.
David G. Tuerck is executive director of the Beacon Hill
Institute and chairman and professor of economics at Suffolk University.
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The Boston Herald
Saturday, May 4, 2002
Tax hike foes say new $$ could become root of evil
by Elisabeth J. Beardsley
Liberal advocacy groups showered praise on tax-hiking
lawmakers yesterday, while Republicans warned that the $1 billion in new booty would spark a "spending frenzy."
A new analysis by the Tax Equity Alliance for Massachusetts
found the House's $1 billion in new levies falls heavily on the wealthiest 1 percent of taxpayers.
"The costs of the tax package are being borne primarily by
the people who can afford it," said TEAM Director James St. George.
Except one piece - the proposed 75-cent cigarette tax hike,
which St. George acknowledged is highly regressive.
The bottom 20 percent of the state's income-earners would
pick up 3 percent of the House's tax-hike package, and the middle bracket would bear 9 percent, according to the TEAM
report.
But the richest Bay State residents - who make over $412,000
per year - would bear 39 percent of the new burden, or nearly $400 million.
The House's five-tax package of increases, which faces a
long legislative journey before becoming law, passed the House Thursday by an overwhelming 131-24 margin.
The package reneges on voter initiatives to roll back the
income tax and give deductions for charitable contributions. It hikes taxes on capital gains and ratchets back the personal
exemption.
The state Department of Revenue estimates that the House
package socks the average taxpayer for an extra $317 per year.
The package now heads to the Senate, which has already
snubbed components such as the personal exemption rollback.
Acting Gov. Jane Swift, who has abandoned her "no new taxes"
pledge, continued to balk at the giant package - even while acknowledging that it's a futile endeavor. While pledging a
veto, Swift threw in the towel, noting that lawmakers appear to have a "supermajority" that
could trump any veto.
"Doing what you think is right is something that should
happen, whether or not you think you will ultimately be successful," she said.
Business leaders, meanwhile, signaled that they're comfortable with the House tax hikes -
except the high-tech community, which resisted the reinstatement of taxes on capital
gains.
The capital gains tax is worth about $240 million right now,
but when the economy recovers, Beacon Hill pols could grab up to $800 million a year, said Mass High Tech Council
President Chris Anderson. "There's a stealth impact in this thing that
nobody has quite reckoned with," Anderson said.
All eyes will be back on the House next week, as lawmakers
prepare to debate a blizzard of 1,565 amendments to the full budget.
Some of the amendments seek to restore massive cuts to
education and human service programs, but many try to squeeze pet programs and local pork projects back onto the
state's ledger.
The House GOP, on the defensive since being crushed by the
Democratic majority, accused Democrats of "returning to their roots" and pleaded with citizens to rise up in outrage.
"Next week they'll go on a huge spending frenzy," said
Assistant House Minority Leader Brad Jones (R-North Reading). "Quite frankly, the only thing that's going to stop stuff like
this is if the people of Massachusetts sit up and take notice."
Meanwhile, the external drumbeat continued, with the
Massachusetts Federation of Teachers launching a $40,000 advertising blitz - the largest-ever in organization history.
The 100 ad spots, which will appear on five leading radio
stations over the next week, showcase students' educational progress and implore the public not to punish lawmakers for
hiking taxes.
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The Telegram & Gazette
Worcester, Mass.
Friday, May 3, 2002
A Telegram & Gazette editorial
Beacon Hill dance
Torn between relentless tax-and-spend advocates and
taxpayers who will have to pay the bills, some House members seem to be on the verge of cracking.
Even before voting on the massive tax packages the leadership says are needed to balance
the fiscal 2003 budget, rank-and-filers went on a spending spree.
As the Tuesday deadline for amending the $21.8 billion
spending plan approached, representatives filed 1,555 amendments, calling for billions of dollars in new spending,
mostly for hometown pork and pet projects.
The uncontested poster girl for bad budget behavior is Rep.
Carol Donovan, who not only favors a 20 percent increase in Massachusetts' sales tax -- to 6 cents on the dollar -- but
also has plans for spending most of the $750 million the hike would bring in. While schools
and local governments scramble to cope with state aid cuts of up to 10 percent, the Woburn
Democrat filed amendments totaling $730 million.
Her bizarre rationale, evidently shared by many of her
colleagues: 'We'll have all this money, now we have to decide how to spend it."
Such doubletalk is in character for the House's unabashed
tax-and-spenders. It is harder to reconcile the position of other Democrats who claim paradoxically to represent the
interests of working families, yet support tax hikes on income, sales and retirement nest eggs that hit
working families hardest.
To be sure, the frenzied goings-on at the Statehouse this
week are in large part political theater. House Speaker Thomas M. Finneran and his inside circle wrote the script weeks
ago and now are making sure that the painstaking choreography is followed step for step.
But make no mistake: Finneran & Co. couldn't mount this
lavish production without the rank-and-file chorus that dances so lively to their tune.
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The Boston Globe
Saturday, May 4, 2002
House bill targets hiring by judges
By Frank Phillips
Globe Staff
In another strike at the state's judiciary, House Speaker
Thomas M. Finneran's leadership team is pushing a little-noticed budget rider that would dramatically overhaul
the court system and strip judges of all powers to hire court personnel, including their own secretaries and law
clerks.
The plan, filed by one of Finneran's top lieutenants,
Representative Angelo M. Scaccia, would give clerk magistrates control over all nonjudicial positions in their courts. The
clerks would also "supervise and assign duties to all justices ... who are assigned to their courts,"
greatly weakening the judges' influence in courthouses.
For years, judges have controlled hiring and firing of court
personnel, though the Legislature has slowly eroded those powers in recent years. The chief judges in district courts
are, by statute, the administrative heads of their courts. Legislators are more comfortable with clerk
magistrates, who are more politically oriented.
The amendment, slipped in among 1,600 filed in anticipation
of next week's budget debate, comes after months of constitutional showdowns between the Supreme Judicial Court and
the Legislature over the Clean Elections Law.
Finneran has taken the lead on Beacon Hill to prevent
funding of the voter-approved campaign finance law. The justices ordered the law be funded, and have allowed Clean
Elections supporters to auction off state property to raise the money. The advocates have
tried to seize Finneran's furniture to sell it at public auction, further inflaming the bitterness
of the legal wrangling.
"This struck like a bolt out of the blue ... coming like a
thunderclap," said James Dolan, the former chief justice of the Dorchester District Court, a strong critic of the Legislature's
ongoing encroachment on the judiciary branch. He described the amendment as "another
shot across the bow" of the judiciary branch.
"This has to be taken in the backdrop of the decision on
Clean Elections ..." Dolan said. "One has to be somewhat skeptical of the motives."
Under the language of the 34-page budget rider, the position
of chief justice for administration of the trial court - now held by Barbara Dortch-Okara, who has resisted the
Legislature's patronage demands - would be eliminated. The justice's power would be given
to an administrator, appointed by a majority of the Supreme Judicial Court.
The budget rider also offers incentives to the judges to
support the measure: a $10,000 pay raise to $122,777 and a sweetening of their pension benefits.
Scaccia, chairman of the House rules committee, also filed a
separate amendment that would require justices to appear for reconfirmation before the Governor's Council six years after
their initial appointment - an unheard-of requirement in Massachusetts, where judges are now
appointed for life. Finneran, in a heated moment during the Clean Elections court
battle earlier this year, suggested that judges be elected rather than appointed.
It follows a similar move made in last year's budget
negotiations on Beacon Hill, in which a Finneran-led rider to take away judges' hiring and management powers over probation
officers and assistant clerks was inserted without debate or public notice. It passed and was
signed into law.
But the sheer magnitude of the court overhaul in Scaccia's
amendment caught the legal and judicial world off guard. The last major revamping of the courts came in 1978 after a
two-year study by a special commission.
Charles Rasmussen, Finneran's press secretary, said the
House speaker has not seen Scaccia's amendment and would not comment on it. Scaccia, a member of Finneran's inner
circle, who does not serve on either the Legislature's judiciary or criminal justice committees,
did not respond to a message left at his Beacon Hill office.
Over the last few months, the court systems have felt the
sting of legislative moves to take away judges' authority in the administration of the court, all part of a growing and
bitter division that developed between the two branches. For example, Dortch-Okara, as she
pushes to add more minority employees to the courts' staffs, has not been responsive to
legislators' patronage requests, leading to the House moves in last year's budget deliberations
to diminish the judges' authority.
The courts have traditionally been a rich source of
patronage for legislators. A study conducted by Dolan for the Pioneer Institute, a fiscally conservative public policy
research group, found the Legislature has packed the state courts over the last four years with
hundreds of patronage jobs that court administrators never requested or needed, costing
taxpayers $4.8 million.
Since then, two judges - Juvenile Court Judge James M.
Cronin and District Judge Robert F. Kumor Jr. - filed a suit with the SJC, charging the Legislature usurped the judiciary's
power to operate the courts. The suit, which is still pending, marked the first public display of
frustration that simmers among judges, who must depend on the lawmakers for their pay
raises and administration budgets.
If the measure passes as part of the House $21.8 billion
budget for fiscal 2003, it would then move to the Senate. If it is included in the final budget version agreed to by House and
Senate negotiators, it would be sent to the desk of Acting Governor Jane Swift for her
signature or veto. In Massachusetts, governors also have a line-item veto, allowing
them to kill specific portions of a bill while approving the rest of it.
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Shays' Rebellion
by Stephen C. O'Neill
Supreme Judicial Court Historical Society
The American Revolution ended in 1783, but the young
republic it created faced a difficult time. Nowhere was this more evident than to the farmers of Western Massachusetts. A
severe economic depression forced people unable to pay their debts first into court, then into
jail. These troubles were viewed as arising from the mercantile elite of Eastern
Massachusetts, especially Boston, who demanded hard currency to pay foreign creditors.
The farmers of Western Massachusetts, after years of frustration, reacted with an armed
uprising that lasted for six months at the end of 1786 and start of 1787.
The Rebellion started with petitions to the government for
paper currency, lower taxes, and judicial reform. When this failed, the farmers took more drastic measures. The first
target of the Rebellion was the Court of Common Pleas at Northampton, which an armed body of
farmers kept from sitting on August 29th. Similar groups of insurgents stormed the courts
at Worcester, Concord, Taunton, and Great Barrington in the following weeks. They hoped to
prevent further trials and imprisonment of debtors.
The man who rose to lead the insurgents was Captain Daniel
Shays (1747?-1825), a veteran of the Revolution and a farmer from Pelham. The Supreme Judicial Court had indicted eleven
other leaders for sedition, more would follow. Shays and 1,500 followers, many wearing
their old Continental Army uniforms with a sprig of hemlock in their hats, occupied the
Springfield Courthouse from September 25th to 28th, preventing the Supreme
Judicial Court from sitting. Governor James Bowdoin assembled 4,400 militiamen under the command of
General Benjamin Lincoln to defend the courts and protect the Commonwealth.
Shays and the others insurgents chose the Federal Arsenal in
Springfield to be the next target. General Lincoln marched to defend the debtor court in Worcester on January 20th.
Shays, with 2,000 farmers behind him, assaulted the arsenal on January
25, 1787. General William Shepard successfully defended the arsenal with 1,200 local militiamen. The rebels
suffered four dead and twenty wounded in the attack.
General Lincoln soon arrived in Springfield and quickly
chased Shays' army into the neighboring towns. The insurgents were taken completely by surprise on the morning of
February 3rd in Petersham. General Lincoln had marched his troops through a snowstorm
the previous night. The farmers scattered, and the rebellion was ended. Most of the
insurgents took advantage of a general amnesty and surrendered. Shays and a few
other leaders escaped for a while.
The Supreme Judicial Court soon sentenced fourteen of the
rebellion's leaders, including Shays, to death for treason. They were later pardoned by the newly elected Governor John
Hancock. Only two men, John Bly and Charles Rose of Berkshire County, were hung for
their part in the Rebellion. A new Massachusetts Legislature in Boston began to undertake
the slow work of reform.
That summer, the Federal Constitutional Convention in
Philadelphia struggled to create a stronger central government that would "establish justice and insure domestic
tranquillity." Shays' Rebellion is considered one of the leading causes in the formation of the United States
Constitution.
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