Limited Taxation
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CLT Update
Monday, November 29, 1999


"They would be an enormous shock to the system ... If the two initiative petitions pass, there's going to be a three-year or longer period in which the state could not afford any increases at all."

Cam Huff, analyst
Massachusetts Taxpayers Foundation
Nov. 29, 1999

The ballot question campaign has already begun, and we haven't even turned in our signatures to the Secretary of State yet! And look who's leading the charge ...

The so-called Massachusetts Taxpayers Foundation!

How long before we hear the dire wails that the elderly will be tossed out into the gutters of the commonwealth, there will be wholesale starvation of the children, blood will be running in the streets, and civilization will collapse back into the Dark Ages?

It's coming, count on it.

Even though "sustained budget surpluses have allowed political leaders to put money in budget stockings where for years they left coal," the Gimme lobby's caterwaul will be that it's "mean-spirited cutting to the bone."

Get ready!

They'll be talking Orwellian "cuts," but as usual, the reality will be a reduction of the increases!

Remember this Boston Globe report when the inevitable barrage is launched.

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Chip Ford

The Boston Globe
Monday, November 29, 1999

Human services spending swells
But real estate costs leave shelters crowded

By Michael Crowley
Globe Staff

After several years of meager funding increases for programs to help children, the elderly, the sick, and the poor, human services has become one of the fastest-growing areas of state spending.

After lagging behind for much of the '90s, aid for the state's most vulnerable residents has nearly caught up with the overall growth of the state budget, according to an analysis by the Massachusetts Taxpayers Foundation.

The increased spending seems to defy both political and economic trends. It comes during an unprecedented economic boom that has slowly reduced poverty and created thousands of jobs in Massachusetts. And it has happened under the stewardship of a fiscally conservative governor, Paul Cellucci, and state House speaker, Thomas M. Finneran.

At the same time, however, the state is spending millions to support thousands of people forced off the welfare rolls since 1995. And while the economy has benefitted millions of people, deep pockets of poverty remain in the state, and soaring real estate costs have left homeless shelters overflowing at record rates.

Meanwhile, sustained budget surpluses have allowed political leaders to put money in budget stockings where for years they left coal.

"We have been able to be aggressive in addressing a number of folks that are awaiting services, and that's good news," said House Ways and Means Chairman Paul Haley, a budget architect who is famously conservative with taxpayer dollars.

"I think the public does want to see us help those who have not been able to take advantage of this economic surge."

"The question is," Haley warns, "can we sustain this during the next economic downturn?"

The foundation's budget analysis shows that spending on programs like beds for the homeless, affordable housing, and aid for the mentally ill has been growing over the past three years at a rate of 5.2 percent.

That rate includes a 6.5 percent growth in the state Medicaid program for low-income people and senior citizens, which was identified during the budget crisis of the late-1980s as a fiscally dangerous "budget buster."

Human services programs grew more than twice as fast in the late 1980s, before a crippling recession forced deep budget cuts. But the current growth is almost twice the average rate of increase from fiscal year 1993 to fiscal year 1997, which was 2.8 percent -- or less than half the growth of overall state spending during that period.

If a massive influx of billions of dollars pumped into public schools as part of the 1993 Education Reform Act is subtracted, the rise of human-services as a budget priority is even clearer. Minus local education dollars, state spending has grown by just 3.8 percent since fiscal year 1997, compared to the 5.2 percent growth in human-services programs.

The $20.8 billion spending plan passed by the Legislature this month is a case study in Beacon Hill's recent willingness to spend generously on aid for the needy.

In addition to high-profile spending, like $52 million to help seniors pay for prescription drug costs, the budget boosts hundreds of smaller programs.

For example, the budget includes $900,000 for a Sexual Assault Nurse Examiner program, which will put up to 75 specially trained nurses in emergency rooms to care for victims of rape and sexual assault. Last year the program totaled just $200,000.

The budget provides an extra $6.5 million to address the vexing problem of working families who are homeless -- often because they cannot save enough money for down payments or security deposits -- but earn too much money to qualify for public shelter. The new funding will expand shelters for homeless working families, and raises the amount of income a family can earn and still be eligible for shelter by almost 50 percent, or up to $18,000 for a family of three.

Following a winter last year in which 16 homeless people died on the streets of Boston and Cambridge, the state's Department of Public Health will kick off a pilot program intended to track and watch over homeless substance abusers.

The budget includes $2.2 million to create 150 shelter spaces for the homeless who are mentally ill.

Next year, Massachusetts will become the first state in the nation to extend Medicaid coverage for people diagnosed with HIV, but who do not have full-blown AIDS. And a program that sends counselors into the homes of young mothers to guide them through parenting will more than double, from $7.8 million to $16.1 million.

Some of the growth in human-services spending comes from the huge state Medicaid program, which accounts for $4.3 billion of $9 billion in human-services spending in this year's budget.

But other categories are growing quickly, according to the analysis. Spending on mental retardation programs, for instance, has grown by almost 10 percent over the past two years, to $855 million. And the budget for children's programs, run largely from the Department of Social Services and the Department of Youth Services, has grown by more than 12 percent since 1998, to $629 million.

The rise in total human-services spending comes despite a dropoff of nearly $500 million spent per year in cash benefits since the state's 1995 welfare reform law cut the welfare rolls by more than half.

While even budget hawks say the growth in such programs is affordable for now, they warn that a soured economy could force cutbacks.

Haley says he has tried to encourage partnerships between the state and private groups, to better insulate programs in the event of a recession.

"I think that's one lesson we've learned from the late-'80s is that we cannot be the sole provider," Haley said. "We cannot build into our budget base a huge programmatic expansion that can't be sustained when there's an economic slowdown."

Cam Huff, a foundation analyst, added that the future of such programs also depends on the fate of two major tax cuts that appear headed for the statewide ballot next year. One proposal, backed by Cellucci, would cut the state income tax by $1.4 billion. Another, backed by an independent group, would rebate $550 million in toll and auto excise tax costs to drivers.

"They would be an enormous shock to the system," Huff said. "If the two initiative petitions pass, there's going to be a three-year or longer period in which the state could not afford any increases at all."

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