Limited Taxation & Government
18 Tremont Street #608    Boston, Massachusetts   02108     (617) 248-0022
E-Mail:       Web-page:

CLT&G Update
Tuesday, July 21, 1998

Greetings activists and supporters:

Ah well, we tried our best. But as anticipated, there was another feeding frenzy on Beacon Hill the likes of which we haven't seen in these parts since the good old "Massachusetts Miracle" Mike Dukakis halcyon years.

We predicted over a year ago that this was inevitable unless we took that surplus away from the pols before it started burning a hole in their pockets. Pols know of only one thing to do with our money -- SPEND IT FAST. It's simply the nature of the Homo Politician species.

What happened to "fiscal prudence" and the "inevitable downturn of an overheated economy"? Oh yeah, that was yesterday's soundbite excuse for "The Largest Tax Cut in State History" being so minuscule and phony.

You know things are bad when even Michael Widmer of the ivory tower Massachusetts Taxpayers Foundation -- "the non-partisan conservative business community think tank" as it's so proudly known -- calls it "the most expansionary budget of the '90s."

Hey Mike, surprise, surprise! Your tank wasn't thinking too clearly all those months during which you've been praising the "fiscal conservatives" in the House and we've been trying to pull away the cash cow against your resistance, now was it?

But your tank's dismal track record for accuracy can remain untarnished, and now we know whose tank it is -- and who's in it! Too bad it cost us close to a billion dollars to find out.

The judges got theirs, Finneran's Favorites got theirs, retroactive for almost two years ago no less -- and of course the teachers got a healthy return too on their million dollar investment to kill our initiative, as expected: "Local school aid swelled by $253 million to $1.4 billion. . ."

We're even going to reward local schools that score poorly on the annual Massachusetts Comprehensive Assessment tests given to 4th-, 8th- and 10th-graders with another $20 million -- which means we'll now be paying twice for teacher incompetence!

The details follow at length. WARNING: Move all blunt instruments out-of-reach, send the dog and the children outside, then read on at your own peril, prepared for the grinding of teeth. YOU HAVE BEEN WARNED.

But first, let's go to Barbara's and my Boston Herald op-ed column in  response to Rachelle Cohen's attack op-ed column of Friday, "Tax cut politics can be a killer."

Chip Ford--

The Boston Herald
Tuesday, July 21, 1998

Money's no object as pols OK $19.6B budget
By Ellen J. Silberman

Flush with cash and in a big spending mood, state lawmakers yesterday approved a budget packed with new dollars for parks, schools -- and pay raises for judges, social workers and well-connected legislators.

The $19.6 billion budget -- a $1.3 billion increase over last year -- was called "the most expansive budget since the fiscal crisis" by Michael Widmer, president of the Massachusetts Taxpayers Foundation, a fiscal watchdog organization.

Charging that lawmakers were spending wildly to avoid further tax cuts, Citizens for Limited Taxation and Government's Barbara Anderson predicted: "Government will get bigger and bigger and there will be another fiscal crisis and another tax increase."

But legislative leaders defended their work.

"It's a budget that is in balance. It is a budget that contains all of the best initiatives of both branches," said Senate Ways and Means Chairman Stanley Rosenberg (D-Amherst) at a morning press conference with his House counterpart, Paul Haley (D-Weymouth).

The budget includes $185,000 to give House Speaker Thomas M. Finneran's 10 closest allies $7,500 raises retroactive to January 1997, when he deputized four division floor leaders to help him count votes and quiet dissent in the House. Finneran said they have earned their pay.

The budget also sets aside $28 million for raises for human service workers who make less than $30,000 a year. The same workers got $15 million for raises last year.

And judges will split $8.7 million next year, for the first installment of three pay hikes. Under the plan, the average trial court judge will go from making $95,710 this year to $112,777 in 2001.

"Human service providers provide services, judges judge. What do Finneran's top lieutenants do?" asked Anderson.

But the spending package appeared to have something for everyone, including:

  • A $55 million increase for the state's colleges
    and universities.

  • $22 million to improve the state's park system.

  • $20 million to tutor students who do badly on
    new standardized tests.

  • $18 million to pay for long-delayed maintenance
    of state-owned buildings.

  • $18 million for a new accounting system at the MBTA.

  • An extra $4 million for the Sex Offender Registry.

Also in the legislative pipeline, but still awaiting approval, is $50 million for road and bridge projects that have taken a backseat to the Big Dig.

Lawmakers plan to spend another $165 million for the tax cut acting Gov. Paul Cellucci plans to sign today.

The Legislature may have been even more spendthrift than its budget shows. The Cellucci administration revealed that the tax cut approved last week by the Legislature would cost the state $770 million -- not the $700 million predicted by lawmakers.

The tax cut -- which will begin shaving tax bills in April -- will eventually save every taxpayer in the state at least $131 off their 1999 income tax bill.

The budget's bottom-line figure didn't grow as the House and Senate developed a compromise document. But lawmakers plan to spend more than $200 million from the $1.3 billion 1998 surplus to fund initiatives not paid for in the 1999 budget.

On most items, said Widmer, the conferees charged with coming up with a compromise between House and Senate numbers went with the high side.

And in one instance, the House proposed sending an extra $4 million in education money to cities and town. The Senate proposed spending $10 million. The comprise budget included $13 million.

Widmer said the increased spending was "certainly affordable in 1999," but worried that the spate of pay raises and new programs would eventually send the state back to the fiscal crisis of the 1980s.

The budget now goes to Cellucci, who has 10 days to sign it, veto it or veto selected pieces. The Legislature is expected to override any vetoes before they adjourn on July 31.

The Boston Globe
Tuesday, July 21, 1998
Metro | Region

$19.5b budget targets taxpayers, schools
By Tina Cassidy
Globe Staff

Awash in revenue, lawmakers yesterday passed the largest budget in state history, which includes a massive tax cut -- now recalculated at $770 million -- already awaiting the signature of Acting Governor Paul Cellucci.

The $19.5 billion budget, with a theme of investing for the future, substantially increases funding for education, child care, and worker training. The 523-page budget also cuts unemployment insurance rates and pays for capital projects out-of-pocket instead of borrowing money to fix roads and bridges.

But the staggering size of the budget -- more than $1 billion larger than last year's spending plan -- set fiscal watchdogs worrying about raising expectations that cannot be met in an economic downturn or in the face of rising expenditures for the MBTA, the Big Dig, and health care.

"It's the most expansionary budget of the '90s," said Michael Widmer, of the nonpartisan Massachusetts Taxpayers Foundation.

State Treasurer Joseph D. Malone, whose gubernatorial campaign centers on fiscal conservatism, railed against the 7 percent growth of the budget, compared to the 2.3 percent inflation rate.

"This idea of ratcheting up the size of government at three times the rate of inflation is nothing short of dangerous and for Paul Cellucci to be leading the band is an indication that his inclination is for more and more government the old liberal way," Malone said.

Yesterday's hastily called budget announcement was nearly one month past the deadline for completing a compromise spending plan.

"There was too much money around and everyone had three ways to spend it," Stanley C. Rosenberg, chairman of the Senate Ways and Means Committee, said in explaining the delay.

The final version of the budget was filed before midnight Sunday, and passed both the House and Senate yesterday. Cellucci, who was not available for comment yesterday, is expected to sign the measure into law.

Separately yesterday, the administration recalculated the cost of the tax cut and said the original $700 million cut, which was broken out of the budget and already before Cellucci to sign, was actually closer to $770 million.

Overall, education received much of the attention and resources in the fiscal 1999 budget, with a $42 million jump in spending for public colleges and universities, which is a 5.7 percent increase across the system - the third substantial hike in as many years.

Local school aid swelled by $253 million to $1.4 billion, and a new account will be established to protect cities and towns that stood to lose assistance under a change in the education-reform formula.

"That's a very, very significant increase," said House Ways and Means Chairman Paul R. Haley, a Weymouth Democrat and key negotiator. "There's no community out there that won't see a significant increase."

Another $20 million was appropriated for local schools that score poorly on the annual Massachusetts Comprehensive Assessment System, given to fourth-, eighth-, and 10th-graders, who will have to pass the test in order to graduate high school. Those districts will be allowed to: extend the school day or year; provide tutoring or mentoring; create programs for weekends, vacations, and summertime; offer work experience; and provide for teacher development.

The budget also provides $22 million for adult education, such as high school equivalency programs. Part of that funding will cap community college tuition at $500 a year.

Human-services agencies also struck gold.

The number of day-care slots for the working poor will be expanded with $16 million in extra funding. Community Partnerships, an early-childhood-education program, will get a $20 million boost, enough to serve another 3,600 youngsters. Summer meals and school breakfast programs were also expanded.

The budget addresses the transition from welfare to work, creating a $15 million reserve to help for such things as transportation to jobs, case management, and child care. Also, the spending plan increases by 10 percent funding for homeless shelters.

The Department of Social Services was given money to hire another 50 social workers, along with domestic-violence specialists. And people who provide residential support for the ill and substance abuse services, and earn less than $30,000 a year, will get double the raises approved last year.

Funding increases were also put through for the blind, deaf, hard of hearing, and the Department of Mental Retardation, which is expanding services to those turning 22.

The business community, which has arguably received a disproportionate amount of tax cuts compared to the general public over the last decade, fared well.

A proposal to increase the minimum wage in three steps, which the Senate attached to its budget, did not survive negotiations with the House. However, there is still a movement in the House to vote on the idea, despite Speaker Thomas M. Finneran's opposition to raise the base wage. And employers will get an $18 million overall reduction in jobless insurance rates and more than $30 million was set aside for worker training and development to help ease the employment crunch in the state.

Cities and towns also came out ahead. In addition to having school aid fully funded at $1.4 billion, municipalities will benefit from a lift in the Lottery cap. Nearly $600 million will be returned to local government -- a $58 million jump over last year -- due to growing revenues from scratch tickets and numbers games. Regional school transportation costs are being picked up by the state, and cities and towns are getting a 20 percent increase in payments in lieu of taxes.

The three main provisions of the House -- long-term initiatives that could save the state millions of dollars in interest -- survived.

Among them: giving the MBTA $16 million in advance so that the agency does not have to continually borrow money to operate; spending $18 million repairing and maintaining state buildings; and paying for roads and bridges with cash on hand.

The Senate also attached non-budget items to the document, such as imposing the death penalty and establishing an abortion clinic buffer zone that would keep demonstrators at least 25 feet from the entrance. Both proposals were removed.

NOTE:  In accordance with Title 17 U.S.C. section 107, this material is distributed without profit or payment to those who have expressed a prior interest in receiving this information for non-profit research and educational purposes only.

Return to Updates page