CITIZENS
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Limited Taxation & Government
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CLT&G Update
Wednesday, June 8, 1998

Greetings activists and supporters:

Okay, the budget "surplus" is finally starting to be seen by some for what it really is: EXCESS TAXATION.

But still the pols want to spend it away on pet projects, like Senate President Birmingham's latest brainstorm to squander of it on -- who else? -- teachers! (See below) We all know how much education has improved over the past decades by throwing more and more taxpayer-money at it, so why stop now, he must figure.

Is there no end to the gratitude of a pol, with our money, of course. (And we thought that million bucks of its members' money that the teachers union threw at us to kill the tax rollback promise was a strange expenditure?)

Some propose to "spend" some of it on small tax cuts ... though it still baffles me how you can "spend" money on a tax cut out of excess taxes the pols never should have gotten their greedy little fingers on!

Does it get any better than this in Taxachusetts?

Chip Ford --

The Boston Herald
Wednesday, July 8, 1998
Editorial: Give back the surplus

The taxpayers of Massachusetts handed over to the state $300 million more in June alone than anyone budgeted for and legislative leaders immediately started thinking of ways to spend it.

Such is the grip of old habits on Beacon Hill. They'll never run out of ways to spend.

Returning every dime of a surplus to the taxpayers, as Treasurer Joe Malone would like, ought to be automatic.

Political realities being what they are, acting Gov. Paul Cellucci, a little over a month ago when the fiscal year's surplus was estimated at $600 million, called for filling up the newly enlarged rainy-day fund and spending some on one-time capital projects, and giving the rest, $350 million, to the taxpayers through a one-time increase in the state personal income tax exemption.

Now Cellucci has filed a new bill to use the additional $300 million for a bigger exemption. That would reduce taxes by $353 on a joint return.

Without question, Cellucci's is the proper course. But Senate President Tom Birmingham is muttering about creating an endowment to make grants to new teachers, among other things. Down the hall House Speaker Tom Finneran is thinking about adding capital projects to the spending list. Both are talking about enlarging the rainy-day fund again!

That would approach absurdity. Massachusetts has the third-largest rainy-day fund in the country even though its budget ranks 10th.

A surplus is a sign that the state has overstated its needs, and it's a little like cheating for the state to keep it.

The Boston Globe
Wednesday, July 8, 1998

Lawmakers share views on $900m question
By Globe Staff

A day after Acting Governor Paul Cellucci called for a $650 million one-time tax refund, his Democratic rivals in the gubernatorial race, along with other critics, voiced how they thought the state's $900 million surplus should be spent.

Brian Donnelly wants to ratchet down the income tax from 5.9 percent to 5.7 percent over the next two years. "Election-year tax cuts always come back to haunt the taxpayer. Let's proceed with the $500 million tax-cut plan pending before the Legislature, but hold off on any across-the-board tax-refund proposal advocated by the acting governor," Donnelly said in a statement. "We need to step back from election-year gimmicks and think about how we can wisely invest this unprecedented budget surplus."

Patricia McGovern said some of the surplus should pay for a gradual reduction in the income tax from 5.95 percent to 5 percent, with the speed of the drop tied to the economy. She also would set aside money to pay for the Central Artery and other transportation projects, as well as use it on education. "Professional development for teachers and retraining. To me, that's a great investment. Also, full-day kindergarten. That's a huge state issue. Children are ready for it. Parents want it."

Attorney General Scott Harshbarger said the tax cut should focus on low- and middle-income families and senior citizens by doubling the personal exemption along with making the first $1,000 of unearned or investment income free of taxes. He would also contribute more to the state's rainy day fund and use some money for capital projects, particularly updating school buildings. "Our school buildings are 48th in the nation, and teachers and students are getting sick because of the air they breathe in our schools. If we can't tackle these challenges now -- in this economy -- when will we?"

Michael Widmer, president of the Massachusetts Taxpayers Foundation, said $300 million of the surplus should be set aside for the $500 million to $750 million funding shortfall in the massive Central Artery project. "We think that's a more fiscally balanced approach," said Widmer. "This is a dynamite combination, extra money in an election year. It's a politically combustible mixture. The important thing here is to take advantage of the surplus to help pay for our longer-term obligations like the Central Artery, and strengthen our fiscal base or our fiscal well being."

Barbara Anderson, co-executive director of Citizens for Limited Taxation & Government, said the state should revert back to a 5 percent income tax. "Rather than admitting that it is collecting more than it should, Beacon Hill debates a) whether or not the money should be spent on government, or 'spent' in a tax cut and, b) if a tax cut, how best to distribute the surplus money," Anderson said in a statement. "The Legislature should immediately cut the wage and salary income-tax rate to 5 percent, as it promised it would do in 1989, and then do its best to return this year's surplus to the people who overpaid it."

The Boston Globe
Wednesday, July 8, 1998

$20,000 lures for teachers proposed;
Birmingham seeks signing bonuses
By Kate Zernike
Globe Staff

Senate President Thomas F. Birmingham yesterday proposed using part of the newly realized budget surplus to entice new teachers with whopping $20,000 signing bonuses, by far the largest of any school system in the country.

The proposal would be the state's most dramatic step toward raising teaching, which some consider a virtual vow of poverty, to the ranks of a respectable - and remunerative - profession.

"We're never going to pay teachers what corporate lawyers get, but that doesn't mean you can't do something to attract better people," Birmingham said. "The convergence of the teacher training debate and the budget surplus is a convenient one."

In recent years, a small number of school districts across the country have offered small signing bonuses as a way of luring prospective teachers. Dallas enticed 200 teachers this spring with $1,500 bonuses. Baltimore offers new teachers $5,000 toward a new house.

But Birmingham's proposal would set up the fattest rewards. The $20,000 carrot would rival the signing bonuses high-powered financial companies are paying out to new recruits; at Cornell University, the average signing bonus for an MBA this spring was $17,500.

While more money isn't the only way to better teachers, Birmingham says, it would go a long way toward doing what many say is necessary: make smart college graduates see teaching as an esteemed profession.

"Twenty-thousand dollars is a big hunk of money, and it's going to get people's attention," said Elizabeth Fideler, vice president for policy and research for the Belmont-based Recruiting New Teachers, a national nonprofit group. "States aren't competing just with one another, they're competing with other fields. This is the kind of thing that can tip the career decision for someone who's weighing teaching against another field."

Still, she said, "I'd hate to think this is going to be $20,000 for a warm body to sign up. I'd like to think there would be some qualifications involved."

The nation's schools are fighting for quality as well as quantity as they face the replacement of 2 million of their 2.7 million teachers over the next eight years.

The results of Massachusetts' first teacher test - in which 59 percent of prospective teachers could not pass a basic skills portion - raised concerns about low qualifications of teachers in Massachusetts, but a range of studies before that had chronicled the same dismal news nationwide: Prospective teachers have poorer grades in high school, lower SAT scores going into college, and lower grade-point averages than students entering other professions.

The field has suffered in quality as more lucrative careers have become available for women, the traditional backbone of the profession.

The average starting teacher salary in Massachusetts is $26,000, compared with an average of at least $35,000 in all other professions, according to the state department of education. Salaries rise to about $60,000, but studies show that in recruiting better teachers, it's more important to have high salaries at the entry level to the profession.

In a study of 15,000 teachers documented in his book, "Who Will Teach," Harvard economist and education professor Richard Murnane found that as teachers stayed longer in the profession, they cared less about how much money they earned. Yet low salaries often deterred talented graduates from going into teaching in the first place.

The state already has a program to forgive a portion of the student loans of top college graduates who go into teaching. But candidates can get only $7,200 in loan forgiveness, and state officials widely admit the program has not been as successful as they hoped when it was set up by the 1993 Education Reform Act. About 1,000 people have entered through the program, but last year the state spent only about half the money the Legislature had set aside.

Birmingham, a co-author of the reform act, said that the loan forgiveness appealed to people already interested in teaching. He hoped the signing bonuses would attract college students who would go into other professions.

"That's why the signing bonus has to be reasonably generous," he said. "If it's only $1,000, it's not going to significantly change the behavior of a significant number of people. Some people will not have a lifetime career, others will have a rewarding experience and stay. In any event, we'll have some talented people, who otherwise would not go into teaching, for at least some time."

Those who study teacher recruitment and training say the way to a better teaching force is to improve training. States need to convince people from other professions to bring their expertise to the classroom. And they note that teachers, if they can't expect high salaries, often report higher intrinsic rewards than more lucrative fields.

But still, they agree, states won't get better teachers without offering them more money.

"It's not a function of whether the work is worth it, it's a function of being able to compete in the labor market," said Richard Elmore, professor of education at Harvard. "The part of the labor market which was willing to supply high-quality work for less money isn't there. Entering salaries in particular need to reflect the competition for talent."

While Birmingham's proposal would require the approval of the Legislature and the governor, several observers yesterday said it would do well in the current climate. The teacher-testing debacle has set off a frenzy of attacks and calls to action: Birmingham's counterpart in the House, Speaker Thomas M. Finneran, condemned those who flunked the teacher tests as "idiots," and Acting Governor Paul Cellucci demanded that teachers take the test and be fired if they fail.

While Birmingham said the details were yet to be worked out, he proposed setting up a trust fund with $100 million of the budget surplus. Even with a modest yield, he said, that fund would earn $5 million in interest the first year, or enough to pay for 250 teachers.

Where such programs exist, they have seen teachers of a broader and better range.

"We've gotten inquiries from all over the country," said Phillip Peregrine, human resources head for the Fort Worth Independent School District, which lured 200 teachers with bonuses of $500 to $2,000. "It's been attractive to people, and we've absolutely gotten a better pool."

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