State House News Service
Thursday, November 21, 2002
Finneran declares taxes "off the table" in 2003
By Michael C. Levenson
Joining Republican Governor-elect Mitt Romney, House Speaker Thomas Finneran said Thursday that new or higher taxes are "off the table" next year.
The speaker’s remarks to the Massachusetts Retailers Association in Boston were his boldest anti-tax pronouncements to date, and are sure to build pressure in the Legislature for other revenue-raising options, such as tolls, fees and expanded casino gambling.
Massachusetts is grappling with stagnant tax collections and a budget gap that could reach $2 billion by July 2003. Without increasing revenues, human services, aid to cities and towns, and other programs could be deeply slashed.
Finneran, who just two weeks ago refused to rule out tax hikes, shut the door in his address today.
"Taxes, I believe, are off the table," Finneran said. "For a variety of reasons, both important to me, the economy suggests that taxes should be taken off the table, and classic economic theory dictates that they be taken off the table. The worst thing to do in the midst of a serious recession would be to take money out of the pockets of individual taxpayers."
House lawmakers, who this year followed the speaker’s lead and voted to raise taxes by more than $1 billion, would not support tax hikes in the next budget cycle, Finneran said. "The members of the House are not contemplating taxes in any way, shape, or form," he said. "So I don’t think that is a real option for us to consider."
Public pressure against taxes has also mounted. A ballot question to eliminate the state income tax was narrowly defeated, 55-45, by voters last month. Without taxes, the Legislature enjoys few popular options to close the budget gap, said Michael Widmer, president of the Massachusetts Taxpayers Foundation, a budget research group.
"The state is in deep, deep trouble," Widmer said. "If taxes are off the table, then it seems in addition to major cuts in spending, we are going to see different kinds of fees, whether it’s tolls on Interstate 93, parking fees, fees in tuition at public colleges and universities, co-payments for those who receive state services ... All of these are going to be on the table."
Spending on government programs will likely take the hardest hit, Widmer said. "The brunt of this budget-balancing exercise is going to have to fall on cutting programs and services," he said.
On Nov.4, the day before Romney was elected, and voters nearly abolished the income tax, Finneran refused to rule out tax hikes. "I'm very, very reluctant to consider taxes again next year," Finneran told the News Service Nov. 4. "I think it’s unwise economically and I think it's unwise politically. That doesn't say it is absolutely off the table because the
situation might be so extreme that virtually any other choices are taken away."
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The Boston Herald
Tuesday, December 3, 2002
Menino wants $35M for homeless
by Steve Marantz
With winter baring its icy fangs at thousands of Bay State homeless, Mayor Thomas M. Menino yesterday called on Beacon Hill to fund emergency services and expanded shelters - saying there's "no price you can put on a person's life."
Despite a gaping federal, state and city budget hole, Menino said government can't abandon the neediest - urging lawmakers and Gov.-elect Mitt Romney to fund a $35 million "mini-bond" to boost homeless spending.
"This is about people's lives," Menino said. "Are we going to abandon the most vulnerable in our society?"
Sharon Terrell, who lived on Boston's streets for four years, hailed Menino's proposal - comparing the plight of the homeless to "a fight to save your sanity."
Menino's push comes as homelessness appears ready to hit another peak in the city, just days after the state announced direct cuts to shelter programs.
The mayor said he will file the bond request as legislation tomorrow ahead of the annual homeless census, scheduled for Monday - when he expects the number of Hub homeless to soar past the 6,000 counted a year ago.
Boston's Pine Street Inn bedded down 127 homeless persons on its floor last Friday night.
"Our treatment of homeless is a statement of our values - even in tough times you must help those in need," Menino said at a City Hall announcement.
Menino is calling for $25 million in bond authorizations for individual and family shelters statewide and $5 million in bonds for Boston's homeless services.
Another $5 million would be used for an undefined emergency fund for homelessness and to help the state reimburse communities for the cost of transporting homeless children to school, officials said.
The bill also calls for large rental developments to set aside 10 percent of their units for homeless families, and creates a 1 percent surcharge on building permits to fund homeless programs.
The proposal comes on the heels of last week's move by the state Department of Transitional Assistance to cut family shelter funds by 5 percent. Virtually all of the state's 4,100 shelter openings were full last month, forcing the state to put up 531 families at hotels and motels.
Romney spokeswoman Shawn Feddeman, said it is "inappropriate" for the incoming Republican governor to comment on specific spending proposals while his budget advisers are carrying out an ongoing budget review.
The day after Romney won the gubernatorial election, though, he said he wants to restore $5 million cut from the state's $35 million homeless fund.
But during the campaign, Romney disapproved of the state's highest-in-the-nation bonding debt, and criticized Treasurer Shannon P. O'Brien, his Democratic opponent, for not delivering on her promise to lower the debt.
Menino said he hoped there would be a "new mindset" in the Corner Office. "The governor (elect) has talked about helping the homeless," he said.
House Speaker Thomas M. Finneran and presumptive Senate President Robert E. Travaglini declined to comment.
But Terrell, the former homeless mother now living in Dorchester, said extra funding is critical since life on the street is so damaging.
"You're roaming the street till night, when it's snowing and raining," said Terrell, 46, who now lives with her 9-year-old son at a subsidized two-bedroom apartment run by the Pine Street Inn.
"It's pure desperation."
Homeless advocates lined up with Menino urging lawmakers to pass his bill.
"This will ensure families that shelters can be accessed," said Robyn Frost, executive director of the Massachusetts Coalition of the Homeless, "and it will stop people from having to access shelters by encouraging more affordable housing."
The state will max out at 5,000 beds for homeless this winter - 300 less than last winter - under current budget restrictions, said Mary Ellen Hombs of the Massachusetts Housing and Shelter Alliance.
"The situation is worse in towns outside Boston because they typically have just one shelter and no other resources," Hombs said.
State Rep. Marie St. Fleur (D-Dorchester), the bill's sponsor, said one of its provisions would limit placement of homeless families with school-age children to 10 miles from their home community.
Menino acknowledged the bill's difficult road at the State House, given the state's nearly $2 billion budget deficit.
But, he said, "We're asking the state to step forward - not backward."
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The Boston Globe
Tuesday, December 3, 2002
Tax revenue up $16m in state
Unexpected spurt lets Swift put off some budget cuts
By Stephanie Ebbert
Globe Staff
Buoyed by a better-than-expected response to the state's tax amnesty offer, November revenues climbed by $16 million, reducing the amount of cuts that Acting Governor Jane Swift will make before leaving office.
Swift's budget chief said yesterday that the acting governor has decided to use the unexpected revenue to maintain a $9 million program that provides home health visits for teenage mothers and their newborns, and to reduce the level of cuts in other programs.
But the small infusion of funds offers limited relief at a time when proceeds from the sales tax are stagnant and income tax receipts are declining. The state is still running behind last year's collections. After sprinkling the $16 million back to programs she had targeted for elimination, Swift still plans to cut state programs by $99 million this week.
Today, she will meet with Governor-elect Mitt Romney, to review the transition and the budget, including her proposed spending cuts. Those trim funding for elder home visits, smoking cessation, summer jobs, and literacy grants. If Romney agrees with her plans, her administration should move forward later this week, officials said.
Meanwhile, Romney plans today to announce the appointment of several senior staff and Cabinet members, and many expect him to name his budget adviser, Eric Kriss, as secretary of administration and finance.
The current secretary, Kevin Sullivan, said the Swift administration is trying to ensure that the budget is balanced for Romney's administration - even urging the Legislature to devote any further unexpected revenue to savings for next year's budget.
Last year, the state tapped most of its reserve funds, leaving just $340 million and little breathing room for the incoming administration. Swift is hoping to bolster the reserve account through other changes that require legislative approval, including a new early retirement incentive, lessening Lottery payouts, and requiring higher-paid state workers to contribute more to their health insurance plans. Those three measures could save the state more than $42 million, Sullivan said.
"We're trying to leave the Romney administration and the Legislature in pretty good shape here," said Sullivan. "We think that by Jan. 2, the Romney administration and the Legislature will have some options on the table that would further beef up the reserve fund."
Legislative leaders met with Swift yesterday and remained unmoved on some of the proposals, said Senator Mark Montigny, a New Bedford Democrat who chairs the Senate Ways and Means Committee. He noted that House leaders had balked at changing the Lottery payout, and he expressed skepticism that another early retirement incentive would yield the projected savings because of expensive pensions and costly replacement workers. He also was critical that Swift administration officials would want to use the retirement incentive to avoid more budget-cutting prior to enactment of the next budget.
"I do see a lot of risk in that," he said. "And we should not be in that business. We should be in the business solely of fixing this financial crisis. We didn't say no, but [outgoing Senate President] Tom Birmingham and I said to the governor, before we go down that road we want to see very significant detail, which includes very sophisticated time/value projections."
While Romney is still analyzing the budget and shaping his own projections, his budget adviser will offer a preliminary window into the next governor's plan when he speaks to budget leaders tomorrow morning. Romney spokesman Eric Fehrnstrom said Romney would not resist particular cuts proposed by Swift.
"She is still the governor and will be until Jan. 2," Fehrnstrom said. "Attempting to maintain balance in the budget is a fiscal necessity."
Last week, the Swift administration proposed up to $115 million in spending cuts to keep this year's budget in line. As of Nov. 30, the year's revenues show the state is still 1.6 percent down in collections compared with this time last year, but Swift has been revising projections and proposing budget cuts to keep pace.
Yesterday, Sullivan listed the programs, besides the one for mothers and newborns, that would benefit from the better-than-expected November revenues: home visits for the elderly, community policing, city and town solid waste programs, smoking cessation funds for local boards of health, workforce training programs, summer jobs, and literacy grants.
Larger cuts still planned include an acceleration of the removal of 50,000 people from the Medicaid rolls and reduction in water and sewer rate relief.
The amnesty program was expected to raise $43 million for the state, but it drew at least $55 million, and returns are still coming in, after yesterday's deadline. Additional revenue could be credited to December, and the program is now expected to raise $70 million, top administration officials said.
Still, officials warned, the money can only stem the gap, and the larger crisis looms in next year's budget, which Romney must prepare by February. Revenue projections show that the state could fall $2 billion short of its needs; budget writers relied on savings to get through the last two budget cycles.
"There's no further deterioration relative to a year ago, but there's also no recovery yet," said Robert Costrell, director of research and development for the Department of Administration and Finance.
"At this point, I think further cuts should be part of an 18-month strategy, because it's really the structural deficit," said Michael J. Widmer, president of the Massachusetts Taxpayers Foundation, a nonpartisan watchdog group. "I think if you take a longer-term look, you make other decisions rather than nickel-and-diming, cutting and recutting programs. The reality is, that's a small part of the $2 billion problem and it's really the $2 billion problem that needs addressing now."
Revenues aren't expected to pick up substantially until the April tax filing deadline, when the Legislature's $1.2 billion tax increase goes into effect. Even then, it remains unclear how much can be raised by the higher tax on capital gains, because gains have fallen off so dramatically.
Frank Phillips of the Globe Staff contributed to this report.
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The Boston Herald
Wednesday, December 4, 2002
Menino: Put tax on film, sports tickets
by Ellen J. Silberman and Steve Marantz
If you're planning to take in a movie, cheer on the Bruins or root for the Red Sox this summer, Mayor Thomas M. Menino wants a piece of the action.
Menino today plans to file legislation that would allow cities and towns across the Commonwealth to add a 50-cent tax to tickets for movies, concerts, plays, sporting events and other forms of entertainment.
Lois Frazier of Dorchester, who took in "8 Mile" at the Loews Cineplex on Tremont Street called the tax "ridiculous."
"It's overpriced as it is," said Frazier. "That would send a lot of people to video stores."
The ticket surcharge is one of eight tax hikes proposed by Menino to pump money into Boston's strained coffers. The mayor is also asking for a 10 percent tax at Hub parking lots, a more than five-fold hike in city tow fees from $12 to $75 and a 1 percent tax on all restaurant meals.
Howard Leibowitz, Menino's director of intergovernmental relations, said the new tax hikes are critical given the drastic cuts expected in state aid to cities.
"The House Ways and Means chairman (Rep. John Rogers) has talked about a 10 percent cut in local aid, which is $50 million to the city," Leibowitz said. "We're looking for ways for the city to be able to recoup some of that revenue so we can give people the services they deserve."
Leibowitz said the ticket tax is minimal.
"It's 50 cents," he said. "Going to a movie is not an essential."
But for Harry Sirois, 53, a homeless man who said he lived at the Long Island Shelter annex on Boylston Street, 50 cents will make a difference.
"I come just to get out of the cold," said Sirois, who chose "Harry Potter" yesterday because of its three-hour running time. "I can't afford a more expensive ticket."
Menino has made homelessness a top priority, asking the state to create a new $35 million bond fund to build shelters on Monday.
Yesterday, Menino announced the reopening of 90 emergency beds at the Long Island and Woods-Mullen shelters. The Public Health Commission, which has complained of its $1 million state budget cut, found the money to pay for the cold-weather beds by prioritizing its resources, city officials said.
The bond fund for homelessness and the tax plans are part of a 76-bill wish list Menino will file with the state today.
The package includes eight tax hikes that together would pour some $85 million into Boston's depleted bank account.
Boston, already facing the $50 million cut in state aid, also must come up with at least $17.5 million over the next two years to host the 2004 Democratic National Convention.
Boston budget director Lisa Signori estimates that the ticket taxes will add $4 million to the city's coffers every year. That money, Signori said, would be earmarked for youth programs, including summer jobs, a favorite program of the mayor that has often felt the state budget ax.
Menino's plan, which must be approved by both the state Legislature and the City Council, would even add the surcharge to tickets for college games. Although universities don't have to pay taxes, Menino may be able to slap their patrons with the surcharge.
From Boston College's Alumni Field to the FleetCenter officials said they were unaware of the plan to balance the city's budget on the backs of their patrons.
"It would be premature to comment on the proposal given that there's been no discussion between the mayor's office and local universities," said Jack Dunn, BC's director of public affairs.
The other tax hikes include:
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The Boston Globe
Thursday, December 5, 2002
Menino defends plan for new taxes
Says city may get $50m less state aid
By Scott S. Greenberger
Globe Staff
Admitting he faces long odds on Beacon Hill, Boston Mayor Thomas M. Menino yesterday defended a slew of proposed tax increases as critical to making up what could be a $50 million cut in state help.
Menino said he doesn't expect the Legislature to give Boston and other cities the power to enact all of the measures he proposed this week, which include new taxes on restaurant meals, movie tickets, and parking garages. But if the Legislature doesn't approve at least one or two, the mayor said, ordinary Bostonians will feel the impact on vital city services.
"It's an uphill battle," Menino said. "We won't get them all. But I want to give them a menu of ideas and maybe one will get through this year, and another will make it next year."
Menino's $50 million prediction - which would be the largest local aid cut of his nine-year tenure - is based on the possibility of a 10 percent reduction in state money, according to his chief budget aide. State dollars make up almost 30 percent of Boston's roughly $1.8 billion budget.
State-budget writers warned cities and towns of a 10 percent cut for fiscal 2003, too, but mayors got a reprieve when the Legislature restored much of the money with a $1.1 billion tax increase. After Acting Governor Jane Swift's vetoes, however, Boston ended up losing about $30 million in state money.
A huge state tax increase doesn't seem to be in the cards for fiscal 2003: Governor-elect Mitt Romney ran on an antitax platform, and a ballot measure that would have scrapped the state's income tax did better than expected, further dampening the political prospects of a state tax increase. Menino hopes that even if the state rejects a tax increase, it will allow Boston and other cities to make up the difference with their own revenue-raisers.
As he tries to sell his tax increases to a wary public, the mayor has an interest in playing up the likelihood of a steep decline in state dollars. But with the state facing what could be a $2 billion budget gap, key legislators say he may not be far off the mark.
State Senator Mark Montigny, chairman of the Ways and Means Committee, said it's too early to say exactly what legislators might cut from local aid. But Montigny praised Menino for recognizing the grim prospects for cities and trying to find alternative sources of funding.
"I'm not advocating any of the specific items of the Menino administration," Montigny said. "I'm only saying that I think the mayor is being responsible by putting it on the table."
But state Representative George N. Peterson Jr., the minority whip, said Boston has ignored another strategy for raising revenue: property tax increases.
"Boston has never had a Proposition 2˝ override," the Grafton Republican said. "Why don't they put that to the voters, instead of looking to charge taxes on meals and all sorts of things that could be a detriment to business?"
Romney has been adamant in his opposition to any state tax increase. But spokeswoman Shawn Feddeman said the governor-elect hasn't ruled out new taxes at the local level. "We have not yet addressed local-option taxes," Feddeman said yesterday. "Our focus has been on the state budget, and taxes are off the table where that's concerned."
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The Boston Herald
Thursday, December 5, 2002
Menino stands by proposal for new taxes
by Ellen J. Silberman
Mayor Thomas M. Menino yesterday defended his $85 million tax package, saying the cash-strapped city needed the money to make up for cuts in local aid.
"We face a financial problem," said Menino, noting that Boston has lost $30 million in state aid over the last two years and expects a $50 million cut next year.
Menino yesterday delivered a 76-bill wish list to the Legislature that featured eight tax hikes, including a 50-cent surcharge on tickets for movies, concerts, plays, sporting events and other forms of entertainment, a 10 percent tax at Hub parking lots, a more than five-fold hike in city tow fees from $12 to $75 and a 1 percent tax on all restaurant meals.
"We're not asking for a bailout. We're looking for a help-out," Menino said.
Gov.-elect Mitt Romney, who has ruled out state tax increases, left the door open to Menino's tax hikes.
"It's premature to talk about these local option taxes that the mayor wants," said Romney spokesman Eric
Fehrnstrom.
Menino's bills also include creating a $35 million bond fund to aid homeless shelters, but yesterday he derided Harry Sirois, a homeless man who told the Herald on Tuesday that he found shelter from the frigid weather at the Loews Cineplex.
"That's one person you found out there," said Menino, who has repeatedly called homelessness a crisis in the city. "If he was homeless, how did he have the money to pay for the ticket?"
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The Boston Globe
Thursday, December 5, 2002
Mass. woes called worst since '30s
Romney aide says shortfall may top $2b
By Yvonne Abraham
Globe Staff
Next year's budget crisis will be the worst since the Depression, incoming Administration and Finance Secretary Eric Kriss said yesterday, painting the bleakest picture yet of the state's finances in fiscal 2004.
Kriss said the state's budget deficit next year will probably be even larger than the $2 billion predicted by the most pessimistic assessments. He warned that state agencies will face cuts deeper than they have felt in years.
"We face the most difficult year in state fiscal history since the 1930s," said Kriss, who was an assistant administration and finance secretary under Governor William F. Weld. "I say this as someone who had to grapple with the last major crisis of 1991-1992. We are in worse shape, in my judgment, than a decade ago. In some areas, much worse."
Named by Governor-elect Mitt Romney on Tuesday, Kriss, speaking to members of the Greater Boston Chamber of Commerce, gave the incoming administration's first policy statement since Romney was elected Nov. 5.
Kriss was not specific about how much bigger the deficit would be than projected by the Swift administration. Nor was he specific about how the looming deficit would be plugged, but he appeared to be laying groundwork for the wholesale consolidation of government programs that Romney proposed on the campaign trail. He said Romney's administration would not consider tax increases to help solve the problem.
"We will now turn our energy toward closing the gap not through gimmicks, but by fundamentally reshaping state government," Kriss said. "The most serious fiscal crisis in 60 years deserves the most far-reaching reforms in 60 years."
Kriss's address sparked skepticism among budget analysts yesterday, however. One critic said Kriss depicted an overly bleak economic picture to lower public expectations of the administration as Romney prepares his first budget, due at the end of February.
"There is a standard technique when you're just getting ready to take office, to make the problem seem even worse than it is," said Jim St. George, executive director of the Massachusetts Budget and Policy Center, a group that has favored tax increases in the past to fund human services. "If you solve the problem, you look like Superman, and if you haven't quite been able to fix it in a year, you say, `Of course we couldn't. Look how big it is.' I don't want to suggest it's not a very big problem, but the notion it's the worst since the Great Depression is a little overstated."
Romney spokesman Eric Fehrnstrom scoffed at that criticism.
"If Jim St. George had access to the same data we've been looking at, it would make his hair stand on end," Fehrnstrom said. "This is not the time to be playing politics by downplaying the problems facing the Commonwealth."
Based on Kriss's revenue projections, Romney's 2004 budget is likely to call for spending between $21.5 billion and $22.5 billion. That's well short of the $25.3 billion requested by state agencies to continue doing business.
Not since the 1930s has the gap between resources and spending requests been so wide, Kriss said. He blamed the severity of the state's current fiscal crisis, driven by spiralling health care costs, partly on the fact that "no fundamental spending changes were made" when the economy began to show its first serious cracks in 2000, "so the structural imbalances from [2001] were pushed forward and are amplified today."
He said state government so far is "barreling ahead like the freight train in the crash scene from
'The Fugitive,' one of my favorite movies."
"Government costs are not fixed," Kriss said. "Fundamental changes can, and must, be made. If we do not stop this train-track mindset, the gap we face will be perpetual and ever-growing."
Kriss would not be specific about those changes yesterday. But Romney proposed some on the campaign trail, including merging the Massachusetts Highway Department and the Massachusetts Turnpike Authority, and consolidating agencies under the Department of Health and Human Services. During the campaign, Romney said he could cut $1 billion from the budget by eliminating waste, mismanagement, and inefficiencies.
Analysts lauded the incoming administration for its proposal to reorganize state government, but were doubtful that structural changes could make a dent in the state's fiscal problems.
"Having a reform agenda makes all the sense in the world, but it's not realistic to assume that will address the current fiscal crisis in a meaningful way," said Michael J. Widmer president of the Massachusetts Taxpayers Foundation, a nonpartisan watchdog group. "It would be a huge achievement to squeeze out $500 million over a full term from reorganization, but it will take a full term."
Widmer estimates that consolidating the Highway Department and the Turnpike Authority would save between $10 million and $20 million, and that reorganizing human services would yield $100 million at most over four years.
The Senate Ways and Means Committee chairman, Mark Montigny, applauded the Republicans' proposal to reorganize government but called their refusal to consider increasing taxes irresponsible.
"The most irresponsible thing one can do, besides deny the problem exists, is to begin - even before you have started your administration - to take the politically unpopular things off the table," said the New Bedford Democrat.
Kriss also said the state's immediate budget woes, which Acting Governor Jane Swift is trying to solve with emergency cuts of $99 million, may be much worse than expected come January, when revenues could fall even further short of projections for fiscal year 2003, which ends June 30.
"The risk of shortfall is substantial," he told the business leaders. "It could occur late in this fiscal year, and the magnitude could be hundreds of millions of dollars."
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The Boston Herald
Thursday, December 5, 2002
Romney budget boss urges reforms to handle 'crisis'
by Elisabeth J. Beardsley
Warning that the state is facing its worst fiscal straits since the Great Depression, Gov.-elect Mitt Romney's budget chief yesterday pledged a radical governmental overhaul - starting with the sprawling human services sector.
"The most serious fiscal crisis in 60 years deserves the most far-reaching reforms in 60 years," Administration and Finance Secretary-designee Eric Kriss said. "Clearly any budget without fundamental reform runs the commonwealth right off its fiscal track."
Delivering the transition team's first public report before business leaders at the Greater Boston Chamber of Commerce, Kriss said the state is on track to surpass previous worst-case estimates of a $2 billion deficit.
State spending will likely be reduced next year from its current $22.68 billion level, Kriss said - the first real reduction in a decade and a stark shift from past efforts to merely slow the rate of growth.
Kriss has been poring through the state's ledgers since Romney won election last month, getting a handle on the scope of the crisis as he prepares to help write Romney's first budget plan, due in February.
With tax hikes "off the table," Kriss said Romney would pursue "billions" in savings through restructuring complex state bureaucracies like the Executive Office of Health and Human Services.
While Romney backs acting Gov. Jane M. Swift's plans to impose $100 million in cuts before she leaves office, Kriss said restructuring could save enough to forestall more painful cuts.
"What we really need to talk about is the cost of the government handling itself," he said. "That does not necessarily equate to a reduction in the service that comes out."
But fiscal watchdogs and legislative leaders, while quick to praise the innovative approach, threw cold water on the idea that reforms alone can bail the state out of its immediate mess.
Massachusetts Taxpayers Foundation President Michael Widmer said restructuring can't drum up enough money fast enough to help with the immediate crisis.
"We're doubtful that structural reforms can come close to addressing the mammoth budget shortfall," Widmer said.
Kriss said some of the reforms under consideration could be done within "weeks or months," but others would take years.
"A thousand-mile journey starts with a single step," Kriss said.
House leaders, who have been warning the deficit could balloon to $3 billion, signaled approval of Kriss' dire assessment - but said a bureaucratic retooling isn't at the top of their priority list.
House Ways and Means Chairman John Rogers (D-Norwood) said he has an "open mind" on restructuring but stressed that the only immediate fix, in the absence of tax hikes, is a drastic reduction in state spending.
Local officials should expect a 10-to-20 percent cut in local aid and education funding next year, Rogers said. "It's going to be ugly," he said.
But before Romney turns to next year's woes, his budget team is grappling to bring the current year under control - after Swift and lawmakers relied on over-optimistic revenue forecasts, Kriss said.
Likening the current forecasts to a "hockey stick" - with tax collections flat until January, then climbing sharply under an assumed economic recovery - Kriss said there's "no evidence" of a turnaround.
If capital gains tax receipts drop significantly in April, as Kriss said he fears, the state could be facing a year-end deficit of "hundreds of millions of dollars," with few avenues of recourse since most of the $1.7 billion reserve fund is gone.
While Romney deplored the MassHealth cuts by Swift during the campaign, Kriss said his "principal concern" is skyrocketing health care costs.
"Health care expenses are out of control, far exceeding revenue growth and thus squeezing out everything else," Kriss said.
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The Boston Herald
Thursday, December 5, 2002
A Boston Herald editorial
The newest Tommy Taxes
What could Mayor Tom Menino be thinking, proposing to tax everything but the air we breathe!
Surely this is simply a bad joke, a way of letting the Legislature know that the city has bills to pay too. The annual legislative package filed by the mayor's office this week includes eight - count 'em eight - tax hikes that would wrest another $85 million out of the pockets of already burdened taxpayers.
The bills would, of course, permit all cities and towns to levy the same new taxes, but that's a fairly meaningless gesture for many communities. The proposed taxes include a 50 cent surcharge on tickets to movies, concerts, the theater and sporting events; a 10 percent tax on what are already exorbitant parking fees, an additional 1 percent meals tax and a personal property tax on the equipment of
telecommunications companies.
If all of this sounds familiar it's because the mayor has been attempting this assault on taxpayers for years. The city's revenue options are obviously far more limited than those of other major American cities. But that also might account for the fact that despite a depressed economy, building in Boston (offices, hotels, condos, retail space) has proceeded apace.
Boston is also geographically compact, a fact Menino seems not to grasp as being relevant. We're not Philadelphia or L.A. or Chicago. Why spend 50 cents more to see a movie here, when Newton or Somerville is just down the road (and probably has free parking too)?
A fiscally conservative House speaker and governor can be expected to give these proposals the swift boot they deserve. The unfortunate part is that the mayor persists in this foolishness.
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The Worcester Telegram & Gazette
Thursday, December 5, 2002
Editorial
Another rip-off
The Legislature is giving lip service, at least, to the necessity of reforming the $6 billion Medicaid-MassHealth program, but to date the “reforms” consist largely of unwise backdoor taxes.
Although Medicaid is a state/federal poverty program, it currently pays billions for nursing home care for middle-class and even affluent residents who have adopted strategies to hide or spend down their assets. Yet, the Legislature has levied a $3,321 annual surcharge on nursing home residents who are paying their own way, a move that will only drive more residents to look for ways to cheat the system.
Now, the state is seeking federal approval of another perverse Legislative Medicaid “reform”: a $1.30 fee to be levied on every non-Medicaid prescription.
The onus of collecting the backdoor tax is on the pharmacies. Since their contracts with HMOs typically forbid them to pass on extra charges to either the insurer or consumers, customers who pay for prescriptions out of pocket may bear the brunt of the fee.
State Sen. Richard T. Moore, D-Uxbridge, co-chair of the Joint Health Care Committee, has filed legislation seeking delay of the $1.30 prescription fee pending a study of the issue. That's fine as far as it goes. What really is needed, though, is outright repeal of this unfair backdoor tax.
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