The Boston Globe
Saturday, October 26, 2002
Vote no to avoid fiscal chaos
By Paul Guzzi and Michael Widmer
On Nov. 5, Massachusetts voters will decide the fate of
Question 1, a proposal to eliminate the state personal income tax. As representatives of the business community and as
concerned citizens, we urge every voter to say no and reject Question 1.
Our organizations have joined the Associated Industries of
Massachusetts and the Massachusetts Business Roundtable in opposing Question 1. This proposal is the most
fiscally destructive question put before the voters in the 84-year history of the initiative
petition in Massachusetts. If adopted, this measure would throw the finances of state and
local governments into chaos and inevitably lead to huge increases in property and sales
taxes.
In a single stroke, Question 1 would wipe out the state's
principal revenue stream, which has financed a wide variety of state and local programs for more than half a century. It would
eliminate $8.5 billion of annual revenues and radically reduce funding for local schools, higher
education, health care, public safety, human services, infrastructure, and other
critical services.
The proponents of Question 1 would offset this huge loss of
revenues by virtually eliminating all state spending for education and health care. Under the Massachusetts Constitution
and state law, every child has the right to an adequate public education, and the legal and financial
responsibility for ensuring this ultimately rests with the state. If Question 1
were adopted, this constitutional obligation to provide aid to local schools would not disappear. But the state
would lose the revenues needed to meet that obligation, which in 2003 will
total $3.3 billion.
Without state aid to education, schools in poor urban
districts would have to close their doors, including 14 communities with more than one-fifth of the students in the
Commonwealth that rely on state aid for at least 75 percent of their school budgets. Schools
in virtually every other district would also face severe financial difficulties.
If state spending for health care were eliminated, almost
one million Massachusetts low-income, disabled and elderly residents, including more than 400,000 children, would
lose their prescription drug and other health coverage, and over 30,000 senior citizens would
lose their nursing home care.
Moreover, Question 1 would lead to increases in other taxes.
Making up the $6.3 billion required just to meet obligations to local schools and Medicaid would necessitate an almost
80 percent increase in local property taxes. Making up the same amount through the sales
tax would require at least a tripling of the current rate of 5 percent to 15 percent.
While proponents claim that 3 million working people in
Massachusetts will each get back $3,000 annually as a result of Question 1, the reality is far different. Almost half a million
tax filers have such low incomes that they owe no state income tax and would not benefit at all
from Question 1, and more than 250,000 - the so-called "working poor" - would actually
lose the state tax refunds they now receive as a result of the earned income tax credit. In
addition, more than a million tax filers - a third of the total - would get back only $175 on
average, the amount of taxes they now owe, not the $3,000 touted by proponents.
Despite the seductive claim of equal benefits for every
taxpayer, 45 percent of the total tax relief under Question 1 would go to the 6 percent of tax filers with annual incomes of
$150,000 or more. The proponents of Question 1 also fail to point out that residents of the
nine states that impose no income tax pay much higher property and sales taxes.
The closest of these states, New Hampshire, has the highest
property taxes in the nation as a percent of personal income and the second highest per capita. All of the other states with
no personal income tax, except oil-rich Alaska, have higher sales taxes than Massachusetts.
Five of these states are among the top 10 in sales tax per capita, while this state's sales
tax burden ranks near the bottom.
Question 1 would lead to dramatically higher property and
sales taxes and create fiscal and political chaos. This would include downgrades in state and local credit ratings, higher
borrowing costs, and more damage to a sluggish economic recovery. We urge a no vote.
Paul Guzzi is president and CEO of the Greater Boston Chamber
of Commerce. Michael Widmer is president of the Massachusetts Taxpayers Foundation.
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The Boston Globe
Saturday, October 26, 2002
Vote yes to get rid of waste
By Barbara Anderson
I don't know if "small government is beautiful." I wouldn't
know "small government" if I found it in my soup, never having seen it, so I cannot judge its pulchritude.
However, living in Massachusetts, I do know what "big
government" looks like, and it isn't pretty. We have high income and property taxes; the total per capita tax burden is
the fourth highest in the nation with correspondingly high per capita spending. Yet as soon as there is a
slight revenue shortfall, the first move by the Legislature is to cut services
for the handicapped, then start drafting a new tax package. Meanwhile, the "business as usual" of
pork, patronage, pension abuse, and peculiar priorities continues.
There are plans on Beacon Hill to raise the income tax
again, to hike the sales tax and gas tax, to change Proposition 2½ and allow higher property and auto excise taxes. There
is, however, still no plan to deal with the exploding Medicaid issue, which is the gorilla in the
living room of budget discussion.
As boomers age, we will be unable to afford rising Medicaid
costs and vital services while still allowing Beacon Hill's business as usual.
Taxes would become so high that productive citizens and
businesses would leave. A yes vote on Question 1 demands dramatic change.
It may appear that if voters say no to a ballot question,
this simply means that nothing new happens. But in fact, a no vote is a green light for politicians to misbehave more.
If we do not vote to repeal the income tax, the rate will
not remain at its present "frozen" 5.3 percent. The political mind - different from ours - will assume that voters are saying
they love the income tax and wish it were higher. If Question 1 doesn't do well, the Legislature will
interpret this as a signal that they should hike the rate to 5.6 percent, which
they could do retroactively to June or even January before they leave for the holidays. Then next year,
having still failed to address the structural deficit, they will raise it again; there
is no upper limit.
Two years ago, voters passed a reasonable three-year
rollback of the "temporary" income tax hike of 1989. If the tax rate had returned to 5 percent when bonds funded by the higher
rate were paid off, we could have avoided the "good times surplus" overspending that
doubled the state budget and created our current fiscal crisis.
But the most vocal opponent of Question 1, the Massachusetts
Taxpayers Foundation, also opposed that reasonable ballot question. The Taxpayers Foundation pontificates about the
danger of overspending, but plays the role of enabler by providing necessary cover to
legislators who want to raise taxes.
This year, the Taxpayers Foundation successfully urged the
Legislature to "freeze" the rollback, and now supports a higher tax rate on working people. Citizens could be deceived
into thinking that all this taxing is necessary to keep government functioning, and reject
Question 1.
But Massachusetts politicians look for the message behind
the vote, the message that provides them the easy way out: ignore the big picture, please powerful Beacon Hill special
interests and local officials, get through the fiscal years one tax hike at a time. They will avoid
responsibility for fiscal malfeasance as long as voters also keep returning them to
office.
Nine states do not have an income tax, yet they provide
essential services with an overall lower tax burden.
If Question 1 passes and survives legislative repeal
efforts, it will save taxpayers money that they can spend on their own priorities. You can determine your own tax savings by
checking last year's income tax return to determine how much you paid in state income taxes and
would not have to pay again if the income tax is repealed.
Granted, the income tax repeal could not be addressed by the
usual kind of legislative downsizing, with its emphasis on ignorance, panic, and self-interest. But of course Question 1
is not intended to cut $9 billion from the $22 billion state budget. Proponents mean to drop
that budget altogether and restructure it in the libertarian "small government is
beautiful" format.
We in Massachusetts know that "big government" is wasteful,
ineffective, and often quite ugly. A yes vote on Question 1 says we can't bear to look at it anymore.
Barbara Anderson is executive director of Citizens for Limited
Taxation.
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The Boston Herald
Thursday, October 24, 2002
Retired judges double-dip from state's pension fund
by Jack Meyers and Maggie Mulvihill
Months after taking office, Treasurer Shannon O'Brien
changed a state retirement board policy to allow some judges to collect two separate taxpayer-funded pensions.
The special perk, which O'Brien's predecessor Joseph Malone
blocked for years, opened the door for judges who had previously worked in state government to double-dip from state
retirement funds.
So far, a dozen retired jurists, including five former state
representatives, have taken advantage of the policy change adopted by the state retirement board in November 1999.
O'Brien's aides defended her actions, saying she made the
move based on her reading of the law.
"It's what the law requires," said first deputy treasurer
Michael Travaglini. The state's pension watchdog agency had advocated the change prior to O'Brien's move and the Division
of Administrative Law Appeals, in a 2001 decision, endorsed the granting of two state pensions
to judges, he said.
"Treasurer O'Brien did not believe it should be the law but
as chair of the retirement board she can only implement the law that exists," Travaglini said. O'Brien filed legislation in
late 2000 that would have limited judges to a single public pension based on their combined
judicial and non-judicial public employment, he said.
When judges began lobbying for the dual pensions in 1996,
Malone blasted the effort as "outrageous" and "greedy," pointing out that some jurists might get more from their two
pensions than they ever made as an annual salary. Virtually all other state employees'
pensions are capped at 80 percent of their highest salary.
As a result of Malone's opposition, no judges applied for
dual pensions while Malone controlled the retirement board. The first application for a dual pension came in 1999 after
O'Brien took over, according to Travaglini.
The 12 judges collecting double pensions are receiving
annual retirement benefits that range from $52,433 to $105,232 annually. The dozen second pensions will cost the state
retirement fund $197,430 this year.
The judge who led the charge for the controversial dual-pension deal was Paul C. Menton of
Watertown. Menton worked on Beacon Hill for 25 years, first as a state
representative in the 1970s and then as an assistant counsel in the House of Representatives. He was appointed a
district court judge in 1986 and retired in 1995.
Menton also paved the way for another controversial pension
deal. In 1995, he advised the Middlesex County Retirement Board to award a pension to ex-sheriff John P. McGonigle
despite a federal racketeering conviction. A state law bars public employees guilty of
on-the-job crimes from receiving state retirement benefits.
Menton was a personal friend of Middlesex County Retirement
Board Chairman James E. Fahey Jr. Menton and Fahey have also both practiced law at the same Watertown office,
according to published registries.
Fahey denied he ever shared office space with Menton in
Watertown, where Fahey said he used to have a law office.
"He was a retired district court judge and well thought of.
I certainly knew him to be an extremely effective lawyer and an erudite man," Fahey said, acknowledging that he and
Menton have been personal friends for years.
The other former state lawmakers collecting two pensions are
retired judges Paul F. Moriarty, Antone Aguiar Jr., Thomas Fallon and Paul Cavanaugh, according to records at
the Governor's Council.
Shortly before he retired in March 2002, Cavanaugh was
suspended by court officials who suspected he had interfered in a secret Judicial Conduct Commission probe of a friend and
fellow judge. Cavanaugh admitted leaking a JCC report on the probe to his friend.
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The Boston Herald
Wednesday, October 23, 2002
AG calls pension checks for cons 'inexcusable'
by Maggie Mulvihill
State Attorney General Tom Reilly said yesterday he will go
to court to revoke the pensions of convicted public employees if state and local retirement boards refuse to act.
"What happened here is inexcusable," Reilly said in response
to a Herald two-part series this week detailing dozens of Massachusetts state and municipal employees convicted of
on-the-job crimes who are collecting pension checks.
Some of those monthly payments are being made in what appear
to be a direct violation of the state's pension forfeiture statute. That law bars public employees convicted of crimes
connected to their jobs from collecting retirement benefits.
"This is not a gray area. The law is very clear," Reilly
said.
Reilly said he is particularly incensed that former
Middlesex County Sheriff John P. McGonigle and former state police Lt. John J. Mace are drawing pensions.
Mace spent more than nine years in state prison after being
convicted of assault with intent to kill in an Oct. 23, 1989, attack against former Hampden County prosecutor Joseph A.
Quinlan.
Mace stabbed Quinlan repeatedly after the prosecutor
happened in on Mace as he was preparing to set fire to the district attorney's office to destroy evidence showing he had
stolen $96,000 from the county.
"He almost died that night," Reilly said of Quinlan, who
worked for Reilly in the Middlesex DA's office after the attack. "For (Mace) to get a pension is an outrage."
Reilly said if the state Retirement Board doesn't act
swiftly to revoke Mace's $2,960.77 per month pension, his office will.
"Either they take it or we'll take it. He shouldn't be
getting a dollar," Reilly said.
Reilly was equally adamant that McGonigle's pension should
be stripped. "What he did was an offense to all of us in law enforcement," Reilly said.
McGonigle spent 57 months in federal prison after admitting
in 1994 to extorting cash from his underlings while he was sheriff and pleaded guilty to a federal racketeering charge.
The Middlesex County Retirement Board decided to award him a
$4,237.31 monthly pension in 1995 - while he sat in prison - on the advice of a retired district court judge who
was a personal friend of board Chairman James E. Fahey.
Former Cambridge District Court Judge Paul C. Menton told
the board that the state's pension forfeiture statute violated the "contracts clause" of the U.S. Constitution and was
invalid.
But Reilly pointed out Menton's argument was rejected by the
state's highest court in a landmark 2000 pension forfeiture case. Reilly said the board has no legal basis to continue to
give McGonigle a pension.
"They should make an effort to take it away," Reilly said.
"The ballgame's over."
Fahey said yesterday that the board had no "desire to
revisit that case."
Of Reilly's remarks, Fahey said: "He's the attorney general
of the commonwealth and he needs to do what he feels is appropriate in this instance. I'm chairman of the board and
I'll have to apply the law as I see fit."
At the same time, the head of the Public Employee Retirement
Administration Commission, a state watchdog agency, said he planned to communicate to all 106 public retirement boards
about the issue.
"I intend to send a directive to all the boards reminding
them of their duties" regarding the state's pension forfeiture law, said PERAC Executive Director Joseph E.
Connarton.
Jack Meyers contributed to this report.
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The Boston Herald
Saturday, October 26, 2002
A Boston Herald editorial
Pension scandal worsens
The state pension scandal unearthed by the Herald's
investigative team went from the offensive to the truly horrifying with the revelation that state Treasurer Shannon
O'Brien approved a change in policy that allowed some judges to collect not one, but two
taxpayer-funded pensions.
Among the dozen or so judges who took advantage of the
benefit, approved by the State Retirement Board just months after O'Brien took office, were five former state
representatives. What a surprise!
An aide to O'Brien insists the treasurer only did what she
had to under the law and even filed legislation to change the law - after opening that barn door in the first place.
O'Brien's predecessor, Joe Malone, had announced early on that he simply wasn't going to approve
the double-dipping and so no judges applied for the special privilege.
The difference in attitude may be subtle, but it is one the
taxpayers can surely understand.
Then to compound this offense, the judge (and former state
legislator) who led the charge for those dual pensions, Paul C. Menton, was the same legal genius who after his own retirement
from the bench advised the Middlesex County Retirement Board to award a pension to
ex-Sheriff John McGonigle following his federal racketeering conviction.
State law couldn't be more clear on this issue. Public
employees found guilty of on-the-job crimes are barred from collecting state pensions. That apparently is clear to everyone
but ex-Judge Menton, who must be working from a very different set of law books. Menton
advised Middlesex Retirement Board Chairman James E. Fahey, with whom he once shared
law office space, that the McGonigle pension was just fine.
But that's the way the system has been operating - by pols
and for pols, and the taxpayers be damned.
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The Gloucester Daily Times
Friday, October 25, 2002
Finneran: Problem not him, it's the press
By Richard Gaines
Staff Writer
Massachusetts House Speaker Thomas Finneran (D-Boston)
unleashed a withering attack on the Fourth Estate yesterday, claiming it would cost him "$10 million" to undo the damage
to his reputation caused by newspaper reports.
He blamed the press for driving up the cost of elections --
through the high price of political advertising -- and charged that the "hunting for skeletons" has become so become "so
invasive and so intrusive" that citizens are loathe to stand for public office.
These factors, the House speaker said, help explain why less
than one third of the incumbents in the 160-member Massachusetts House of Representatives are facing
reelection challenges this year.
At the Elk's Club on Bass Rocks, Finneran spoke, mixing
humor with passion, for about an hour to the Cape Ann Breakfast Club, a periodic event sponsored by the Cape Ann
Chamber of Commerce.
Finneran's appearance came less than two weeks before the
general election. He is unopposed in his home district, but in many communities across the state, including
Gloucester, anti-Finneran partisans have placed a non-binding referendum
question: It asks whether voters should direct their state representatives to vote against him for speaker when
the House next January.
Along with the press, Finneran had harsh words for the
candidates for governor, Democratic Shannon O'Brien and Republican Mitt Romney. He accused them of scape-goating the
Legislature in their critiques of governance in Massachusetts.
"There is no mess on Beacon Hill," said Finneran.
Finneran, who entered the House in 1979 and has been its
speaker since 1996, made his opinion of the press plain by recounting a recent conversation with William M.
Bulger. The president of the University of Massachusetts and the former
president of the state Senate had conducted a verbal war with the press during his more than a decade atop the Beacon Hill
power structure.
Finneran told the gathering that he'd described the Fourth
Estate to Bulger as "a necessary evil," but was corrected: "You've got that only half right," said Bulger, who'd been the
guest speaker at the previous meeting of the Breakfast Club.
Finneran expressed empathy for citizens who were deterred
from entering electoral politics for fear of becoming targets of a vicious press corps. "It would cost me $10 million to
overcome what the (Boston) Globe has accused me of," he said.
In a brief interview after the event, Finneran claimed "the
Globe was incorrect" in reporting in its Sunday editions that he was orchestrating a campaign financed by large corporations
against publicly funded elections.
The story reported that Finneran had been soliciting funds
with phone calls to major corporations to raise a war chest for a media blitz in support of a non-binding referendum
question on the November ballot on whether the so-called Clean Elections
Law should be repealed.
The Coalition Against Taxpayer Funded Political Campaigns
was reported to have raised $215,500 in the first two weeks of October, including $50,000 each from John Hancock
Financial Services and State Street Bank, and $25,000 each from the Gillette Co. and the
Flatley Co. the real estate giant. Finneran was reported to have helped with the fund-raising.
Finneran denied making any fund-raising calls. He added that
he had been out of state over the weekend, and hadn't read the article.
But he didn't flinch at the chance to lambaste the voter-created Clean Elections Law, giving
public funds to candidates who take no corporate nor political action committee
contributions, but prove their viability with sufficient signatures on nomination papers.
Finneran became a whipping boy in the gubernatorial campaign
when he used the power of his office to block funding of the law.
Former Senator Warren Tolman (D-Watertown), running a Clean
Elections campaign and dependent on public funding, sued and won release of nearly $4 million for his campaign. He
finished last in the September Democratic gubernatorial primary.
Finneran described the Clean Elections Law as serving fringe
candidates incapable of financing by supporters.
"This is a law for political radical and fringe groups,"
Finneran said. "We could be giving money to the American Nazi Party or the Klu Klux Clan. We gave $4 million to Warren
Tolman's campaign."
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