Liberal activists, organized labor and public health advocates are gearing up to push another
hefty round of tax hikes - setting up a collision course with business leaders who draw the
line at this year's biggest-ever $1.14 billion levy increase.
The ink's barely dry on this year's tax hikes, but the clamor to raise more money is already
rising as the state faces a $1.5 billion structural deficit - mostly plugged this year with "rainy
day" funds....
While smokers, investors and middle-income families
bore the brunt of this year's tax hikes, TEAM and its allies - the state's powerful teacher unions and
a new coalition of public health groups - are training their sights next year on the business
community....
The Boston Herald
Aug. 2, 2002
Interests gear for tax hikes as budget ink dries
The Legislature's spending priorities are so far out of line with common sense as to defy
belief....
So before they high-tailed it out of town, legislators managed to "restore" some $70 million in
vetoed items. Yes, that would have been more than enough to end this crisis at the drugstore
counter. But that wasn't what legislators had in mind. No, they clearly had other priorities and
those priorities included pandering to some of their favorite interest groups.
A Boston Herald editorial
Aug. 2, 2002
Pols leave a mess, warped priorities
Averting a crisis that could have left thousands of the state's poorest citizens without access
to prescription drugs, Acting Governor Jane Swift reached a temporary agreement yesterday
under which the state's three largest drugstore chains will continue to fill Medicaid
prescriptions.
The Boston Globe
Aug. 2, 2002
Swift sets accord with pharmacies on Medicaid rate
More than 200 years after citizens dumped tea in the harbor and took up arms in defense of
liberty, the cry of tyranny is being raised again in Boston - this time against the people's
elected representatives.
The state Legislature devoted much of the session that ended Wednesday to trying to quash
citizen initiatives, prompting the newspapers to caricature the House speaker as an autocrat
with a scepter and crown....
To many, voter initiatives are a foolish way to make
laws, and some legislators consider it their duty to serve as a check on the passions of the people....
"They've become so much out of touch with real people, and they despise us so much and
the process that lets us interfere," said Barbara Anderson, whose group
Citizens for Limited Taxation campaigned for a ballot measure to roll back the income tax in
stages from 5.95 percent to 5 percent.
Associated Press
Aug. 2, 2002
Voter initiatives die at the Statehouse door in Massachusetts,
the cradle of liberty
Following The Biggest Tax Hike in State History, here he is,
still grabbing for more. But isn't it almost delicious that now his primary target is Mike Widmer's Mass. Taxpayers Foundation
membership?
Bear in mind, this is only because Jimmy just accomplished
ravaging the average taxpayer -- he knows he can't get away with
financially raping us much more -- so the Gimme Lobby is going for the
remaining deep pockets, those who have something left to take. But he'll be
back after us again, trust me. 5.6 percent -- if not more -- is still on the
near horizon.
In the year ahead MTF will attempt to deflect Jimmy's Gimme Lobby attack
by again targeting average taxpayers, as usual. But MTF's Fat Cat membership has got
be wondering how they ever allowed Widmer to run cover for the phony "fiscal" crisis
-- lending it credibility -- and fail to reign in the real spending
crisis. Mike Widmer's tenure as MTF president surely is on thin ice, or ought to be by now.
And, unlike in the past, CLT won't be going out of its
way to defend Big Business from Gimme Lobby demands that it pay its "fair share." Certainly not until the Fat Cats get
out of the way of
the income tax rate's return to 5 percent for average taxpayers.
The next most critical issue to face us today is the death
of the initiative and referendum process. For decades, it has been all that has stood between us and one-party tyranny. It no
longer stands at the barricades. We have lost it ... until there are consequences,
real costs, for crushing underfoot the voting majority.
That is up to you, your friends, family and neighbors, and
us in the few months ahead before the primary and general elections. Some
legislator's heads must roll if we are ever to retake our government and restore
democracy, as many of the Beacon Hill bums as possible must be tossed out!
Tomorrow (Saturday) at noon Barbara and I will be at the
kick-off of Anthony Ranieri's campaign for state rep., at his campaign headquarters at 133A Main St., Everett, when we'll
give him our support. Campaign '02 is off and running, folks!
Save yourself; save your children's heritage; save
democracy; restore "The Cradle of Liberty": Throw the bums out!
 |
|
Chip Ford |
The Boston Herald
Friday, August 2, 2002
Interests gear for tax hikes as budget ink dries
by Elisabeth J. Beardsley
Liberal activists, organized labor and public health
advocates are gearing up to push another hefty round of tax hikes - setting up a collision course with business leaders who
draw the line at this year's biggest-ever $1.14 billion levy increase.
The ink's barely dry on this year's tax hikes, but the
clamor to raise more money is already rising as the state faces a $1.5 billion structural deficit - mostly plugged this year
with "rainy day" funds.
There's only $300 million left in savings, and the rest of
the deficit - which grows monthly as tax collections fall below projections - will have to be closed with either spending cuts
or new taxes.
Advocacy groups say they can't absorb any more program cuts
beyond the roughly $1.5 billion imposed on virtually every state government program over the past year.
Tax Equity Alliance for Massachusetts Director James St.
George pointed to acting Gov. Jane M. Swift's attempt to eviscerate $28 million for full-day kindergarten, and House
Speaker Thomas M. Finneran's push to save $70 million by tossing 50,000 poor people off
health care.
"That tells us you have, in fact, cut down into the bone,"
St. George said. "The solution next year needs to be a repeal of some of the unnecessary and unwise tax cuts of the 1990s."
While smokers, investors and middle-income families bore the
brunt of this year's tax hikes, TEAM and its allies - the state's powerful teacher unions and a new coalition of public
health groups - are training their sights next year on the business community.
Except for the new taxes on capital gains - which were
nonexistent this year - businesses escaped the first round of taxes.
St. George said activists would prevail on lawmakers to take
away the so-called "Raytheon" tax break for manufacturers and close accounting loopholes that allow some businesses to
skip income taxes.
Business groups balked at the tax-hike talk, after opening
this year's floodgates by giving their blessing - and therefore, political cover - for the first tax package.
Associated Industries of Massachusetts, the state's largest
trade group, protested that companies already anted up - agreeing to forgo a $60 million tax break in President Bush's
stimulus package.
Companies struggling from the recession are also girding for
a hike in unemployment insurance rates and bracing for double-digit health insurance premium increases, AIM's
president Richard Lord said.
Any return to the hostile business climate of a decade ago
could hamper the state's ability to pull out of recession, he said.
"I absolutely think it would send absolutely the wrong
message if they revisited additional taxes at this time," Lord said.
It's too early for a hard-and-fast tax plan to have
materialized on Beacon Hill, which resembled a ghost town yesterday after a two-day, end-of-session legislative marathon.
But the tax signs were percolating as the session ended,
with senators complaining they wanted a bigger tax-hike from the outset, and House leaders saying they're open to
considering every option.
Senate President Thomas F. Birmingham, a gubernatorial
candidate who has called for further taxes, was disappointed that lawmakers couldn't restore more than $70 million of
Swift's $355 million in vetoes.
Anxious to campaign full-time, Birmingham added he's
relieved to have a budget that's only a month late and that's balanced - for now.
"We will address any shortfalls that occur," Birmingham
said. "We're capable of doing that. We've done it again and again."
But the relief could be short-lived. With late news that
July revenues plunged $50 million, the newly minted budget already appears to be sinking in red ink - with few reserves
left as a buffer.
That raises the specter that lawmakers could be forced to
break from the campaign trail to make further program cuts, said Massachusetts Taxpayers Foundation senior analyst Cam
Huff.
"We're right on the edge," Huff said. "I don't think we're
out of the woods yet."
Working hours past their midnight deadline Wednesday,
lawmakers reinstated funds for kindergarten, retired state workers' health insurance, community health centers and a few
other select programs.
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The Boston Herald
Friday, August 2, 2002
A Boston Herald editorial
Pols leave a mess, warped priorities
The Legislature's spending priorities are so far out of line
with common sense as to defy belief.
Case in point: Despite repeated warnings that drastic cuts
in Medicaid reimbursements to pharmacies would cause many to leave the program, thus precipitating a crisis in the system,
legislators barreled ahead with their plan. No negotiations, no debate, no nothin'. The
governor - faced with finding the estimated $60 million in "savings" elsewhere - acquiesced
and did not veto the new and far lower reimbursement rates.
But acting Gov. Jane Swift obviously didn't know you can't
strike a deal with the devil and still end up on the winning side.
So before they high-tailed it out of town, legislators
managed to "restore" some $70 million in vetoed items. Yes, that would have been more than enough to end this crisis at the
drugstore counter. But that wasn't what legislators had in mind. No, they clearly had other priorities and
those priorities included pandering to some of their favorite interest groups.
State workers and retirees, for instance. Heaven forbid that
higher paid state workers (those making over $35,000) should pay more than 15 percent of their health insurance premiums.
And for years retirees have benefitted from a bonus originally intended to help them pay for
supplemental health plans (Medicare part B). Today they get the health plans and the
bonus - all courtesy of us taxpayers. The two items restored to the budget Wednesday night added
$38 million.
Earmarks for special state police patrols at beaches and
shopping malls - a favorite bit of pork doled out by legislators - added another $2.3 million.
Then legislators restored $27.9 million for full-day
kindergarten programs.
All of this would not, of course, be so appalling if it
weren't for the fact that legislators had opted to balance the budget on the backs of Medicaid recipients and the pharmacies
that serve them.
So while lawmakers have left Beacon Hill, they have left
behind a huge - and needless - mess. The governor's office has urged the chain pharmacies to behave like "good corporate
citizens" and at least give them a chance to hold hearings and sort through options. They
should. To do otherwise is to risk a public relations nightmare.
But it then behooves legislators to help sort out what is
the proper reimbursement level - was it too high before? Is it too low now? Is the middle ground proposed by gubernatorial
candidate and minister-without-portfolio Robert Reich a workable figure? This, of course, is
a discussion that should have taken place months ago - not after the fact.
And if it takes a special legislative session to clean up
the mess, then so be it.
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The Boston Globe
Friday, August 2, 2002
Swift sets accord with pharmacies on Medicaid rate
By Chris Reidy, Globe Staff and Chris Tangney, Globe Correspondent
Averting a crisis that could have left thousands of the
state's poorest citizens without access to prescription drugs, Acting Governor Jane Swift reached a temporary agreement
yesterday under which the state's three largest drugstore chains will continue to fill Medicaid
prescriptions.
The chains and some independents pharmacies were preparing
to exit the Medicaid business in Massachusetts after Swift signed into law on Monday a measure to slash the
reimbursement rates they receive for Medicaid prescriptions. According to
many pharmacists, the new rate was insufficient to help cover the costs of doing business.
Under the agreement, the state will continue to reimburse
pharmacies for Medicaid prescriptions at a current, higher rate until Oct. 2. CVS Corp. and Walgreen Co.
immediately said they would continue filling Medicaid prescriptions. The third chain,
Brooks Pharmacy, had no comment yesterday but was also expected to continue filling Medicaid
orders.
Meanwhile, the state has scheduled a Sept. 5 public hearing
that will re-examine the reimbursement issue. Swift said a new rate will be announced Oct. 2 and applied
retroactively to cover prescriptions filled in the interim.
The state also will require pharmacies to give 30 days
notice before withdrawing from the Medicaid program.
Brooks, CVS, and Walgreen fill about 60 percent of the
prescriptions for the state's 900,000 Medicaid recipients.
"We are avoiding the real possibility, that was becoming a
reality, that tens of thousands of our neediest citizens would be denied access to necessary drugs," Swift said of the
agreement with the drugstore companies.
The Swift administration's stance on whether it could freeze
Medicaid pharmacy reimbursement rates has changed over the course of this week. On Tuesday, Robert Gittens,
Swift's secretary of health and human services, said the reimbursement
rate contained in the state budget took effect Monday and could not be postponed. The administration
subsequently backed away from its statement that the rate took effect on Monday and
yesterday Swift froze the rate temporarily.
Facing a revenue shortfall, the state was desperate to cut
costs, and one of many reductions in its new budget was the measure to trim Medicaid reimbursement rates. That rate cut,
which would have saved the state an estmated $60 million a year, was approved without a
public hearing.
According to Carmelo Cinqueonce, executive vice president of
the Massachusetts Pharmacists Association, pharmacists are confident that they can demonstrate that the
proposed lower rate would mean that many drugstores could no longer afford to
be in the Medicaid business.
"We are certainly pleased with the governor's action,"
Cinqueonce said. He added that a public hearing "is what we have wanted all along. It was unfortunate the governor's
earlier failure to act placed such anxiety on Medicaid patients."
The lower reimbursment rate, Cinqueonce said, would have
been especially harmful to independent drugstores, which lack the size of a large chain to absorb smaller fees. "Many
independents would have been driven out of business," he said.
But House Speaker Thomas M. Finneran has argued that under
the current Medicaid reimbursement rates, some drugstores have profited at taxpayer expense.
In a statement released after the agreement was reached
yesterday, Finneran did not comment directly on the temporary resolution, saying only that, "As the largest customer of
prescription drugs in the state, spending more than $1 billion annually, our goal remains to
maximize value to the taxpayer."
Under the current rate, pharmacists are reimbursed for
Medicaid prescriptions at a rate that is 10 percent above the so-called wholesale acquisition cost of a drug. Under the lower
rate that has been temporarily frozen, pharmacists would have been reimbursed at 2 percent
below that amount.
One source of controversy is how wholesale acquisition cost
is calculated. Critics charge that some pharmacists actually pay less than the wholesale acquisition cost when they buy
drugs, with the result that under the current reimbursement rate they are making a large profit.
In addition to the reimbursement rate, pharmacists receive a
$3 dispensing fee for each Medicaid prescription that they fill. Pharmacists contend they need such fees to help cover
their costs of doing business - paying rent, utility bills, and salaries.
Pharmacists both large and small expressed relief over the
agreement reached yesterday with the Swift administration.
CVS, the drugstore chain based in Woonsocket, R.I., which
operates 299 pharmacies in Massachusetts, said in a statement: "We are pleased that Governor Swift has decided to
freeze Medicaid rate cuts until this issue has been fully examined in a public hearing. In
response to the governor's welcome action, CVS will continue to serve Massachusetts
Medicaid customers pending the final resolution of this matter. The governor's
announcement means that CVS has suspended its decision to stop serving Medicaid customers on Aug.
19."
Illinois-based Walgreen, which operates 90 pharmacies in
Massachusetts, also will abide by the agreement, spokesman Michael Polzin said. Brooks did not respond to several
telephone calls seeking comment.
Just over a thousand drugstores operate in Massachusetts;
about 220 of them are independently owned, according to the Massachusetts Pharmacists Association.
Mike Reppucci, owner of Inman Pharmacy in Cambridge, said he
gets about a third of his business from Medicaid prescriptions. He said he and other independent pharmacists were
"happy" that the reimbursement issue will be reviewed in a public hearing
process.
A hearing, he said, will give government officials "a chance
to consider the issue and think about it before taking action."
Bruce Mohl of the Globe Staff contributed to this report
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Associated Press
Friday, August 2, 2002
Voter initiatives die at the Statehouse door in Massachusetts,
the cradle of liberty
By Justin Pope
BOSTON - More than 200 years after citizens dumped tea in the
harbor and took up arms in defense of liberty, the cry of tyranny is being raised again in Boston - this time against the
people's elected representatives.
The state Legislature devoted much of the session that ended
Wednesday to trying to quash citizen initiatives, prompting the newspapers to caricature the House speaker as an autocrat
with a scepter and crown.
Lawmakers in the cradle of democracy ignored voter mandates
to roll back the income tax [and implement charitable deductions], balked at funding a Clean Elections law, and
refused to vote on whether to put a measure banning gay marriage on the 2004 ballot, even though
supporters had collected 130,000 voter signatures.
Massachusetts voters can pass ballot initiatives, but only
the Legislature can put up the money needed to carry them out.
To many, voter initiatives are a foolish way to make laws,
and some legislators consider it their duty to serve as a check on the passions of the people.
"While we have a responsibility to the voters who voted for
the referenda, we also have a responsibility to the voters who want a good education system and good roads and want
government to run," said Rep. Dan Bosley, a Democrat from North Adams. "Do
we do the popular thing, or do we do what we think is right based on the knowledge that we have,
which may indeed be a little more sophisticated than what the general public has?"
This year, more than any other in recent memory, legislators
trusted their own judgment, saying a $600 million revenue shortfall made voter-approved initiatives like tax cuts
impossible. The budget passed by lawmakers could cut health insurance for 50,000
unemployed and homeless people.
But critics say the Legislature went overboard, taking
advantage of a weak governor and undermining a citizen initiative process adopted in 1918 to check the power of a
Legislature once dominated by a tight circle of Yankee elites.
"They've become so much out of touch with real people, and
they despise us so much and the process that lets us interfere," said Barbara
Anderson, whose group Citizens for Limited Taxation campaigned for a ballot measure to roll back
the income tax in stages from 5.95 percent to 5 percent.
Voters approved the measure in 2000, but the Legislature
essentially refused to put the final cut into effect this year and froze the rate at 5.3 percent.
The most controversial standoff came over the Clean
Elections law, passed by voters in 1998, that makes taxpayer money available to candidates who agree to limits on their
spending and fund-raising. The Legislature refused to release the necessary money.
Lawmakers claimed that the law diverted money from worthier
causes and that taxpayers should not have to help candidates they do not like. Clean election supporters countered by
saying incumbents are just afraid of competition.
The dispute provoked a constitutional crisis - and much
ridicule - when the state's highest court ordered Statehouse office furniture, vehicles and land auctioned off to pay for
the law. The Legislature eventually agreed to fund it for a year.
Then the Legislature refused to put the gay marriage ban on
the ballot.
Few thought the measure would pass. But "whether one agrees
with these propositions or not, if people go out and get the signatures, it seems to me they ought to be entitled to a
vote," said former Gov. Michael Dukakis, now a politics professor at Northeastern
University.
Dukakis recalled a different era, when legislators actually
trimmed their own ranks at the voters' behest, cutting the Legislature from 240 members to 160 in 1979.
"That was not an easy vote, if you're looking at one's
colleagues and one-third of them aren't going to be there," he said.
Such a thing seems unimaginable today. There are various
theories about what has changed.
There are now veto-proof Democratic majorities in both
houses, opposed only by Republican acting Gov. Jane Swift. The state is in a budget crisis. And there is also House
Speaker Thomas Finneran, who led the charge to derail Clean Elections.
He has been drawn on editorial pages as a monarch and has been accused by some of ruling the House with an
iron fist.
The Boston Democrat did not return calls seeking comment.
Massachusetts is one of the few Eastern states to have
ballot initiatives; the others are mostly out West.
Pamela Wilmot, acting director of the group Common Cause,
acknowledged voter initiatives do not always produce good laws. But she said: "It's their government, their right to make
mistakes."
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