The Boston Globe
Tuesday, July 16, 2002
Legislative budget plan would pass buck to Swift
By Rick Klein and Benjamin Gedan
Globe Staff
Legislative leaders, in a highly unusual and politically
risky move, plan to quickly end their negotiations over the state budget this week and hand off the problem to Acting
Governor Jane Swift, with the expectation that she will make deep cuts in the spending plan that they
will not reverse.
The move comes as the state faces plunging revenues and as
one of the chief negotiators, Senate President Thomas F. Birmingham seeks to avoid another late budget so he can wage
his gubernatorial campaign unencumbered by legislative business.
The legislative leaders say they can cut about $300 million
from the $22 billion budget this week by combing through the spending plans approved by the House and Senate last spring
and choosing the lower appropriation. But that would address only half of the state's newly
discovered $600 million budget gap. Lawmakers would then send the document off to Swift,
anticipating that she will veto $300 million more to balance the budget.
"In the end, it will probably be incumbent upon the governor
to rise to her constitutional duties and the magnitude of this challenge," House Speaker Thomas M. Finneran said. "It's a
full-blown crisis. I do not want it to become a catastrophe."
The plan would allow lawmakers to finish work on the budget
before the July 31 end of the legislative session. But several rank-and-file legislators and gubernatorial candidates blasted
leaders for forcing Swift to do their dirty work and make further cuts.
House minority whip George N. Peterson Jr. said the
Legislature will pass a budget that everyone knows is out of balance, a notion he derided as "political expedience and
convenience."
"It's an easy way out to let the governor make the tough
decisions, and because she's not running for office, she doesn't have the worries of reelection," said Peterson, a
Grafton Republican. "That's what we got elected to do: to make choices, to set up our priorities in the
budget."
The relatively quick conclusion to budget deliberations
could help Birmingham in his race for governor. The Senate president has been criticized in previous years because he and
Finneran failed to agree on a spending plan by the July 1 start of the fiscal year, dragging
budget negotiations for months past the deadline.
Birmingham's opponents said he and Finneran are shirking
their responsibilities by relying on Swift's veto pen to finish the budget.
"It's a failure of both Finneran and Birmingham's leadership, that they can't make the difficult
decisions when they need to," said former state senator Warren E.
Tolman, another Democratic candidate for governor.
Under the plan, legislative budget negotiators will come up
with the $300 million in cuts by reviewing the budget plans approved by the House and Senate this spring and accepting the
lower appropriations. While the final version they send to Swift would also call for using
$300 million in rainy day funds to make up the rest of the gap, that provision masks the
political and fiscal calculation at work: Finneran has already said he would like to see Swift
veto spending by that amount, and opposes further use of the fund.
Because the House must initiate any budget-related veto
overrides, he can control whether those cuts are reversed, and said yesterday that "very few" of the Swift vetoes would even
be taken up for a vote, so her cuts would stand.
The plan, which legislative negotiators expect will be
approved by the full House and Senate by the end of the week, would result in the most austere budget in a decade. State
spending would drop from the previous year for the first time in 11 years.
Finneran said local aid and education spending will suffer.
Sources involved with the discussions said that a Medicaid cut passed by the House that would eliminate health care
benefits for some 30,000 long-term unemployed residents also appears likely to be part of
the final budget plan.
Stephen E. Collins, executive director of the Massachusetts
Human Services Coalition, said the additional cuts would be "definitely bad news across the board" for those who rely on
state assistance, such as the mentally ill and mentally retarded.
Birmingham and Senate Ways and Means chairman Mark C.
Montigny declined to comment on the plan. But they released a statement saying that they could not cut the budget more
than $300 million, because legislative rules prohibit members of the conference committee
from cutting below the levels approved in the budgets passed by the House and Senate.
"We will not cut below the low appropriation in the House
and Senate, which would be a violation of budget rules," the statement read. " ... As in every year, we expect some
gubernatorial vetoes to be overridden and some to be sustained."
Those rules were easily suspended last year. But the results
proved politically disastrous for leaders in both branches, who made deep cuts in the budget, then faced widespread
discontent from members who were not included in the deliberations, but
had to explain the cuts to their constituents.
The budget agreement, with its tacit expectation of
gubernatorial vetoes, will empower Swift to play a significant role in coping with the state's budget shortfall. But that's
not necessarily an enviable situation: Swift's vetoes will leave her as the public face of cuts, as opposed to
last year, when House and Senate leaders enacted cuts virtually without
Swift's participation.
"She is ready to veto whatever amount she has to veto in
order to give the residents of the Commonwealth a balanced budget," said James Borghesani, Swift's press secretary. "I
don't know how good it looks for the Legislature to send a budget that's not balanced, obviously,
but to us it doesn't really matter."
House and Senate leaders have also agreed to hike $1.2
billion in taxes and fees. The package includes a freeze of the voter-approved income tax cut, increased taxes on capital
gains and cigarettes, a reduction in the amount of income that is not subject to state taxation,
and new fees at courthouses and the Registry of Motor Vehicles.
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The Boston Herald
Tuesday, July 16, 2002
Pols plot to send Swift unbalanced budget
by Elisabeth J. Beardsley
State lawmakers are moving to foist responsibility for $300
million in deficit-closing budget cuts onto acting Gov. Jane M. Swift, as they rush to pass a spending plan by the end of the
week.
After a month of negotiations, House and Senate budget
writers have been unable to piece together roughly $630 million in cuts to fill a new hole that's gaped open since May.
Legislative leaders said yesterday they've come up with
about $300 million in cuts - less than half the cuts needed - and maintain Swift will have to do the rest.
"You can be sure if the Legislature doesn't balance the
budget, the governor will," said Swift spokesman James Borghesani.
House Speaker Thomas M. Finneran acknowledged yesterday
lawmakers are moving to deliberately overspend, "with the expectation" Swift will clean up the mess.
The budget is suddenly on a fast track after Swift, Finneran
and Senate President Thomas F. Birmingham hunkered down last week for a secret summit on Cape Cod.
The budget is expected to hit the House and Senate floors
for debate late this week. Lawmakers are pushing to beat a Saturday deadline so there is enough time to override any
gubernatorial vetoes before formal legislative sessions end July 31.
One source involved in the emerging deal said the budget
will look balanced on paper - at the insistence of Birmingham, a candidate for governor.
Lawmakers are planning to plug the remaining $330 million
hole with rapidly dwindling "rainy day" savings funds - knowing Swift will veto it and make it up in program cuts, the source
said.
The push to settle for an out-of-balance budget outraged
Republicans. They said Democrats are trying to force Swift to play the "heavy" because she's not running for re-election.
"Evidently it's an election year and we don't want to make
tough choices," said Rep. George Peterson (R-Grafton).
But others argued it's responsible for leaders to agree on
taxes and some cuts without further delay. "They are behaving like adults and not engaging in brinkmanship," said Rep. James
Marzilli (D-Arlington).
Also as part of the deal between Swift and legislative
leaders, a $1.14 billion tax-hike package will be extracted from the budget and fast-tracked through the Legislature
tomorrow, leaders said.
Swift plans to veto the tax package and lawmakers plan to
quickly override her veto, officials said.
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Associated Press
Tuesday, July 16, 2002
Finneran: State must prep for more "painful" cuts
By Steve Leblanc
BOSTON (AP) Lawmakers facing a $600 million deficit are
preparing for another round of "dramatic and painful" cuts to state services, House Speaker Thomas Finneran said Monday.
The cuts could force additional layoffs and threaten some
programs that have so far been spared, Finneran said.
"Hundreds of employees have already been laid off. I expect
hundreds more will need to be in the months to come," said Finneran, D-Boston. "It will cut across the board. There's no
question about it."
As part of the budget-setting process agreed to by legislative leaders, negotiators are
combing through the House and Senate versions of the budget line by line and agreeing to
the version that proposes to spend the least on each budget item.
That process could cut about $300 million, but still leaves
the budget about $300 million out of balance.
Under the same plan, the budget would then be shipped to
acting Gov. Jane Swift, who would make the remaining $300 million in cuts, according to House Ways and Mean
Chairman John Rogers, D-Norwood, who said he would like to see the budget in
Swift's hands by week's end.
If Swift fails to make enough cuts, the Legislature could
dip into reserve accounts to balance the budget.
One of the biggest differences between the House and Senate
budget plans is education spending.
The House maintains school aid funding for cities and towns,
cuts $18 million for class size reduction and $30 million for MCAS tutoring. The Senate boosts school aid by $62 million
and restores class size and MCAS funds.
There are also differences on everything from health care
spending to proposals for methadone clinics, tolls, zoos and Clean Elections.
Senate president Thomas Birmingham, a Democratic candidate
for governor, said he is willing to negotiate, but doesn't want to abandon what he said has been the Senate's
commitment to education and health care.
"There's a difference between compromise and capitulation,"
Birmingham said Monday. "I don't ask for capitulation and it shouldn't be asked of me."
Finneran downplayed talk about deep cuts to education, but
refused to rule it out.
A spokesman for Swift, who spent Monday at a national
governor's conference in Idaho, said she is ready to make the cuts needed to balance the budget.
"(Swift) has said all along that she is going to give the
citizens of Massachusetts a balanced budget," said James Borghesani. "If it means vetoing $300 or $400 million ...
that's what she'll do."
Borghesani criticized lawmakers for failing to approve some
of Swift's revenue ideas, such as tapping lottery funds by lowering prize payouts.
Senate negotiators have said the Legislature should consider
the lottery proposal, but Finneran has rejected it. State Treasurer Shannon O'Brien, also a Democratic candidate for
governor, said lowering the prize payout could jeopardize the success of the lottery.
On Wednesday, lawmakers plan to pass a compromise $1 billion
package of higher taxes that the House and Senate have already initially approved.
Borghesani said Swift will veto the package, which lawmakers
then plan to override.
Even with the extra $1 billion, lawmakers still need to cut
the $600 million another indication of just how deeply the state's revenues have collapsed, according to
Finneran.
The state took in $2.5 billion less than expected in the
fiscal year that ended June 30.
"It is a full-blown crisis. I do not want it to become a
catastrophe," Finneran said. "I think everything is at risk at this moment."
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The Boston Globe
Tuesday, July 16, 2002
A Boston Globe editorial
Unbalanced budget
House and Senate negotiators are working on a plan that
would deliver an unbalanced state budget to Acting Governor Jane Swift by the end of the month, forcing her to make $300
million worth of vetoes. This plan substitutes revenge for sound public policy. It would pay
Swift back for supporting a tax cut ballot question two years ago that is partly
responsible for the state's dismal fiscal condition. But it would also mandate cuts in programs that affect the
neediest people in the state.
The plan would allow the Legislature to finish its work by
July 31 - the standing date for the end of formal sessions in an election year. There would be no repetition of the drawn-out
budget deadlock of last year. And the plan would generate $1.2 billion in needed new tax
revenue if the House and Senate override an expected veto from Swift. This could all happen
by Friday.
The plan calls for the House and Senate to approve the lower
of each branch's figures for the hundreds of items in the state budget. Under this plan, the Senate would agree to drop
thousands of people from Medicaid to go along with the House plan. It is unclear how the
House and Senate would resolve differences on aid to education. The House would spend a
bit more on special education, while the Senate favors a slight increase in aid to poorer
communities. Both are worthy objectives, but the Senate's ought to take priority.
Whatever happens, the budget would still be $300 million out
of balance. Swift would be expected to impose the cuts that the House and Senate refuse to make, with both branches
having an opportunity to override them before the Legislature adjourns.
It would have been better for the House and Senate conferees
to agree on $300 million in additional revenue. A return to a 5.6 percent income tax rate, as opposed to the 5.3 percent
figure favored by the House and Senate in earlier votes, would be preferable but will
probably not even be considered on the floor given the conferees' tight schedule.
Raising taxes is a difficult task under any circumstances -
more so when the stock market is in retreat. The House and Senate deserve credit for expeditious approval of the $1.2
billion package earlier in the year.
However, this new revenue is not sufficient to provide for
the day-to-day needs of state government. The 5.6 percent rate would be far lower than the levy during the 1990s boom
and a shadow of the 6.25 percent rate imposed to cope with the 1989-1990 recession.
Approval of this budget plan would get the Legislature out
of the State House by the end of the month, but the pain from the budget will be felt throughout the fiscal year.
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The Telegram & Gazette
Saturday, July 13, 2002
A Telegram & Gazette editorial
Last call
The Cape Cod get-together of Gov. Jane M. Swift, Senate
President Thomas F. Birmingham and House Speaker Thomas M. Finneran evidently failed to produce the final
revenue estimate the House-Senate budget committee needs before it can wrap up
the fiscal 2003 state budget, now nearly two weeks late.
Before state leaders impose more taxes and fees to make up
for a hefty revenue shortfall in fiscal 2003, they should start looking at ways wasteful programs and spending can be cut.
When the budget debate began earlier this year, the
estimated revenue figure for the year that began July 1 was $16.7 billion. Since then the estimate has dropped a half-dozen
times, and is now about $14 billion. If that's correct, the state budget would be $600 million to $650
million out of balance.
The House and Senate already have approved more than $1
billion in higher taxes and fees, including halving the $6,600 personal income tax deduction; freezing the income tax rate at
5.3 percent; taxing capital gains the same as income, and erasing the deduction for charitable
giving.
Cutting deadwood and perks has not been a priority of budget
writers in either the House or Senate.
Untouched is legislative booty such as per diems and office
expense reimbursements, both of which doubled last year. Also sacrosanct are items such as the Quinn Bill, the notorious
system of raises for police officers who earn college degrees; political patronage in the court
system, expected to cost $20 million in 2003, and dubious early retirement incentives that
are producing a bumper crop of youthful public pensioners.
The current revenue crunch is an opportunity to trim some of
the fat that has accumulated on the state budget over the years. Unfortunately, the powers that be on Beacon Hill seem to
have little interest in seizing it.
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