CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

 

CLT UPDATE
Friday, April 25, 2003

Just say no to "kick me again" tax-hike signs


We thought we'd round out the week's worth of budget news by lending some of our editorial space to the perennial budget whiners, but forgive us if we feel the need to inject a dose of reality into the discussion.

A Boston Herald editorial
Friday, April 25, 2003
Whining about cuts won't trump reality


The House, in releasing its state budget plan Wednesday, began its carefully choreographed divide-and-conquer strategy designed to soften the public's resistance to tax hikes....

But those, and other, cuts have a purpose. They are designed to mobilize people at all levels to march to the Statehouse and demand that the governor do something, anything. Protests are planned for next week to do precisely that. Watch for all the "raise taxes" signs carried by the Massachusetts Teachers Association, Massachusetts Taxpayers Foundation and dozens of other special interest groups who have been spurred to action by this budget.

And know that House Speaker Thomas Finneran will be peeking from a Statehouse window, satisfied that his plan to keep the status quo is working exactly as planned.

A Brockton Enterprise editorial
Thursday, April 24, 2003
In the House, it's the same old business


Mr. Finneran cannily figures that once Bay Staters see what his budget will do to their schools, fire departments and, this is the key, property taxes, they'll be screaming too. At which point Mr. Finneran will heave a great sigh of resignation and bring out the tax increase he's had in his back pocket all along.

While it is breathtaking to watch such a master at work, the transparency of his tactics only increases voter cynicism in the long run. The state needs tax hikes, some cuts in spending and reform of the state bureaucracy. Let's cut the political games, be straightforward about it and do it.

A Berkshire Eagle editorial
Thursday, April 24, 2003
Political melodrama


Critics say leaders in the Massachusetts House are trying to scare the daylights out of us by producing a budget with cuts so severe it will put most cities and towns in the poor house....

Critics say Speaker Thomas M. Finneran and the authors of the House Ways and Means Committee budget are just trying to scare us to gain public support for a tax increase....

Any honest debate on a budget must include a discussion of a tax increase as one option toward alleviating the pain....

Here's the message from House leaders: If you don't want a tax increase, you're going to have to pay for it.

That should scare everyone. The House budget is a more accurate reflection of the state's financial mess, yet it makes no mention of the T-word - taxes.

A Springfield Republican editorial
Friday, April 25, 2003
Fright night in Boston: House releases budget


Mayors and town administrators see clear through the House budget that rejects new statewide taxes while reducing state aid to cities and towns by $226 million. It's a flimflam that leaves local officials little choice but to raise property taxes to protect basic services, a regressive and regrettable outcome. In Revere, Mayor Thomas Ambrosino is contemplating increases in property taxes of 10 percent or more....

"This is not a no-new-taxes budget," says Ambrosino. "This is a large-property-tax-increase budget." ...

Romney administration officials scorn needed hikes in the state income, sales, or gas tax. And House leaders say there is no appetite for even modest tax increases among legislators. At the end of the day, however, they all must descend Beacon Hill and return home -- a destination that appears all the more downhill.

A Boston Globe editorial
Friday, April 25, 2003
Tax swindle on Beacon Hill


"Most, if not all, cities and towns are probably going to raise property taxes some amount to try to account for these enormous cuts," Methuen Mayor Sharon Pollard said after the state House of Representatives unveiled its $22.5 billion budget yesterday....

Pollard's comments came following a press conference by the Massachusetts Municipal Association, at which the group called for a temporary hike of the income tax from 5.3 percent to 5.95 percent. The increase would generate $2.6 billion over the next two years, said Medford Mayor Michael McGlynn.

"The House budget is a taxation budget because taxes will be passed on at the local level," said McGlynn, flanked by a half-dozen mayors.

"When you lay off police officers, crime will increase in your community," he added. "And when you cut education, you are cheating children."

Several mayors said they also want the state to consider short-term borrowing to "get the state through the crisis" -- a measure both the House and governor have rejected.

The Lawrence Eagle-Tribune
Thursday, April 24, 2003
Fears of tax hikes mount


This is a tale of two Proposition 2 override votes for schools.

Although they took place elsewhere in Essex County -- one in Ipswich, one in Rockport -- they offer lessons to those locally who hope to win similar votes to support education in their communities....

What was the difference? ...

But the one, stark difference between the two communities is that during the week before the vote, the local Rockport teachers union agreed to go without a pay raise for the coming year. It is impossible to say exactly how much money that saved the system, but every raise of 1 percent costs the system about $50,000. That means forgoing a raise of 3 percent, which has been the typical settlement in the region, saved the community $150,000. There was no such offer in Ipswich....

The voters responded. If the teachers were willing to sacrifice, then they would too.

Contrast this to Andover, where the teachers union president refused even to ask his members if they would accept one- or two-day furloughs to help balance the budget.

Shared sacrifice sends a powerful message. Perhaps it is one that public employees in other communities ought to consider as well. It might make the difference in preserving not just the services they say are so essential, but their jobs as well.

An Eagle-Tribune editorial
Thursday, April 24, 2003
All should share in sacrifice


Enacted during the days of a budget surplus by then-Senate president Thomas F. Birmingham, signing bonuses were a response to dismal failure rates on the Massachusetts teacher test. About 59 percent of would-be teachers failed a basic-skills portion of the exam, prompting soul-searching about the best ways to attract qualified educators.

A $20,000 signing bonus for teachers was unheard of at the time - and five years later, no state has come close ...

The Boston Globe
Friday, April 25, 2003
Plan would cut teacher bonuses


The cuts have also caught the attention of religious leaders. An open letter signed by the leaders of the four Catholic dioceses in Massachusetts, including Bishop Richard G. Lennon, urged lawmakers to consider new taxes to "ensure that programs for the poor, the disabled and the ill are spared from extreme budget cuts."...

Associated Press
Thursday, April 24, 2003
Romney, Senate leaders leery of portions of House budget


Without a tax increase, we are going to see thousands of teachers, police, and firefighters laid off. Is this the Massachusetts we want? Of course not. But before we go totally over the edge, before we pull up the blankies and refuse to get out of bed, a little perspective from the real world is in order: What is happening to the public sector has been happening in a big way in the private sector for two years. Massachusetts is number one in the nation in job losses ...

By contrast, one of the safest jobs to have through this recession has been a government job. Just 0.7 percent of federal, state, and local jobs in Massachusetts -- 3,000 people in all -- have been cut in the same period, according to the US Bureau of Labor Statistics....

Some more perspective: Through two years of budget cuts, state spending continued to grow, though at a much slower pace. From fiscal year 2001 to 2003 we cut $1.9 billion from dozens of state programs, according to the Massachusetts Taxpayers Foundation. But we also increased spending $2.4 billion for dozens of other programs....

The world is not ending. Some people just want you to think it is.

The Boston Globe
Friday, April 25, 2003
A little perspective
By Steve Bailey


House Speaker Thomas Finneran isn't apologizing. Still, he admits, mistakes were made....

During the dot-com boom, state government ballooned. "It was gung-ho up there, from about `95 onward, and the money seemed," Finneran stresses the word, "to allow us to do all these things." He points in particular to Medicaid, the health care program for the poor, which dramatically expanded eligibility and coverage. "On reflection," Finneran says, "I would have been much, much more cautious and circumspect about the expansions that we did."

And that error was compounded by a second. As the recession began to hit, lawmakers started to dip greedily into the state's "rainy day fund." "We should have cut budgets back then more aggressively and relied upon the reserves less," Finneran says. But that didn't happen. Now the reserves, painstakingly built up by Finneran during the 1990s, are gone....

Still, the commonwealth has a reputation for hiding its head in the sand, for avoiding painful choices and for always looking to soak the taxpayer rather than ever deny a dime to anyone.

The Boston Herald
Friday, April 25, 2003
Romney, Finneran allies of necessity
By Thomas Keane Jr.


This is the whole story of the secret gas-tax hike - a revenue grab dressed up as environmental policy, but now unmasked for what it really is: a sham....

That little 2.5-cent hit we'll all be taking on every gallon is good for at least $60 million a year....

"Obviously the (assessments) will be passed on to motorists. It's a backdoor tax," says Arthur Kinsman, a spokesman and lobbyist for AAA Southern New England, the auto club. "We always felt that any tax or fee that affects motorists or highway users ought to be spent on transportation and not used for other purposes." ...

But Romney and his aides were still holding to their shopworn story line yesterday.

"There may be some fees that have the same effect in some people's minds" as taxes, Romney said.

Actually, the effect is on your wallet or purse. About $65 a year, if you fill up twice a week....

The bottom line, Massachusetts taxpayers, is that you've been had.

The Boston Herald
Friday, April 25, 2003
Despite pledge, the state is pumping us for a new tax
by Cosmo Macero Jr.


Chip Ford's CLT Commentary

It's another one of those "where do I start" news days.

It's become pretty clear now to most that the tax-hike strategy is in full gear, and also that it's not working this year like the tax-hikers expected. Even the Boston Globe editorial elite -- while still hoping that lightening can strike twice -- seem to be slumping into a depressed resignation that the game is up. The Springfield Republican (formerly the Union-News) is still on its "the sky is falling" track, but is losing enthusiasm.

The usual suspects are still plodding ahead, but today they're being seen as just that; the usual suspects with their hands out for more again, unable to grasp that there's no more to be had.

We witnessed the identical scare tactics last year and now, an additional $1.2 billion from last year's tax hikes later, the problems have only gotten worse? C'mon, what do they want us to do, wear "kick me again" signs on our backsides -- believe just another billion or two will finally solve all those "unmet needs"?

$22.5 billion in state taxes annually and billions more in local taxes, and we're supposed to believe our government can't afford public safety or education or "the most vulnerable among us"?

Then where are all those billions going?

Again we learn that Massachusetts holds another ridiculous First-in-the-Nation title, this time for paying $20,000 signing bonuses for new teachers. The Legislature just realized we can't afford it any more, unless the billion-dollar annual taxpayer overpayments start rolling in again. Why did the Legislature provide signing bonuses? Because about "59 percent of would-be teachers failed a basic-skills portion of the exam." 150 have already been signed-up from the $70 million "endowment" created by the Legislature -- $3,000,000 for 150 new teachers to just sign-up.

Even House Speaker Tom Finneran is admitting that he's blown his "fiscal conservative" cover, that he got the state into this latest "fiscal crisis" by overspending the taxpayers' surplus during the economic boom years, then blew through his much-touted "rainy day" fund in a big splurge of continued overspending.

And there they go again, threatening property tax increases if we don't clamor for state tax hikes -- as if we're stupid enough to fall for that misdirection, unaware that Proposition 2 protects us from even this threat of property tax hikes.

We'd warned since 1997 that exactly this would happen if "the promise" wasn't kept when the last "fiscal crisis" bonds were paid off; if the "temporary" income tax rate wasn't rolled back when it was supposed to be; if our money was left on the table for Beacon Hill pols to spend. The evidence is now unmistakable.

So now they're going to take $700 million more from us in dubious "fees" and "assessments" -- even Governor Romney has gotten into this word game with, among other things, a 2.5 per gallon gas tax increase disguised as an environmental "assessment." But still that's not enough. Some are determined to push for yet another huge tax hike.

Just say no when the "kick me again" tax hike signs are passed out.

Chip Ford


The Boston Herald
Friday, April 25, 2003

A Boston Herald editorial
Whining about cuts won't trump reality


We thought we'd round out the week's worth of budget news by lending some of our editorial space to the perennial budget whiners, but forgive us if we feel the need to inject a dose of reality into the discussion.

"This is a life and death situation in many cases." - Medford Mayor Michael McGlynn, president, Mass. Municipal Association.

Reality check: Since 1992, total local aid has risen from $2.3 billion to $5.5 billion, or 140 percent. Noneducation local aid has grown from $919 million to $1.41 billion, up 54 percent. Tax revenues in cities and towns grew an average of 6.4 percent in fiscal year 2002, while state tax revenues declined precipitously.

"[Seniors] will have to start cutting out some of their food or maybe not pay their rent, or do what the Legislature and the governor want - to die younger. They've created a budget from hell." - Phil Mamber, president, Mass. Senior Action Council. Reality Check: The Prescription Advantage program is only two years old. The state program was ill-conceived, didn't work and was growing quickly into a budget buster. And how did seniors get along before Massachusetts became the only state in the nation to try to solve the prescription drug problem on its own?

"We will lose life."- AIDS Action Committee Executive Director Rebecca Haag.

Reality check: AIDS funding has dramatically grown from a low of $18.1 million in fiscal 1992 to a high of $51.8 million in fiscal 2000. Budget cuts over the past two years have cut funding to 1995 levels, about $35.8 million, and while both the Romney and House budgets propose modest cuts, AIDS funding is essentially stabilized in 2004.

We could go on. But let's give space to a rarity on Beacon Hill, a realist.

"The only hand I have to slap is the invisible hand of the economy. Everyone is upset because everyone is taking a hit but you can't get mad at the Legislature because the economy is in recession." - Glen Koocher, executive director of the Mass. Association of School Committees

Thanks, we needed that.

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The Brockton Enterprise
Thursday, April 24, 2003

Editorial
In the House, it's the same old business 


The House, in releasing its state budget plan Wednesday, began its carefully choreographed divide-and-conquer strategy designed to soften the public's resistance to tax hikes.

First, the good news. Legislators realized that before they demanded that taxpayers take another hit, they would have to produce at least a hint of reform. So the House went along with Gov. Mitt Romney's plan to eliminate the Metropolitan District Commission, decrease funding for such benefits as the Quinn Bill and state workers' insurance, loosen privatization restrictions from the Pacheco Bill, and a bit of tinkering here and there.

But these are barely half-measures when a major renovation is needed. These legislators still don't understand that they have to fundamentally change the way they do business, not just slash spending on schools and local aid and raise $700 million in state fees. All they have done is address the project budget shortfall for the coming fiscal year; they did precious little to stop the spending spiral that led to this economic crisis.

For example:

The House decided to fully fund the state pension liability, putting taxpayers whose private pensions and retirement savings are generally guaranteed by no one on the hook for any shortfall. State workers win; private-sector workers lose.

The House refused to combine the state Highway Department and Turnpike Authority. This will allow both departments to continue overlapping duties with little oversight, continuing to waste tens of millions of dollars each year, most of it to fund bureaucracies that are about as useful as the old Soviet Politburo.

The House gutted local aid and education funding by well over $200 million, leaving local officials in a state of shock. While there is no harm in forcing cities and towns to be more fiscally responsible and less dependent on the state, the magnitude of the cuts is breathtaking.

But those, and other, cuts have a purpose. They are designed to mobilize people at all levels to march to the Statehouse and demand that the governor do something, anything. Protests are planned for next week to do precisely that. Watch for all the "raise taxes" signs carried by the Massachusetts Teachers Association, Massachusetts Taxpayers Foundation and dozens of other special interest groups who have been spurred to action by this budget.

And know that House Speaker Thomas Finneran will be peeking from a Statehouse window, satisfied that his plan to keep the status quo is working exactly as planned.

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The Berkshire Eagle
Thursday, April 24, 2003

Editorial
Political melodrama


House Speaker Thomas M. Finneran's latest tactic is to out-Republican Governor Mitt Romney. Mr. Finneran gravely intones that Mr. Romney's bare-bones-no-tax-increase budget, heartless and cruel as it is to Medicaid recipients, elementary school children and bedridden grandmothers, is not balanced. We must have even deeper cuts, says Mr. Finneran, because it would grievously damage our prospects for economic growth to -- he can barely bring himself to utter the phrase -- raise taxes.

Mr. Finneran cannily figures that once Bay Staters see what his budget will do to their schools, fire departments and, this is the key, property taxes, they'll be screaming too. At which point Mr. Finneran will heave a great sigh of resignation and bring out the tax increase he's had in his back pocket all along.

While it is breathtaking to watch such a master at work, the transparency of his tactics only increases voter cynicism in the long run. The state needs tax hikes, some cuts in spending and reform of the state bureaucracy. Let's cut the political games, be straightforward about it and do it.

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The Springfield Republican
Friday, April 25, 2003

Editorial
Fright night in Boston: House releases budget


Critics say leaders in the Massachusetts House are trying to scare the daylights out of us by producing a budget with cuts so severe it will put most cities and towns in the poor house.

The House budget, if approved, would also erase many of the gains made with education reform in the past decade; eliminate a popular prescription-drug program for the elderly and jeopardize many services that most people now take for granted.

Critics say Speaker Thomas M. Finneran and the authors of the House Ways and Means Committee budget are just trying to scare us to gain public support for a tax increase.

The budget proposed by Gov. W. Mitt Romney is not as severe because the governor believes most of the state's economic woes can be solved through government reforms and the elimination of waste.

The state faces an estimated budget deficit of $3 billion and, while Beacon Hill has made itself obese on patronage and waste for decades, the governor greatly exaggerates the amount that can be saved in his plan.

The House budget is a more accurate reflection of the state's financial mess, yet it makes no mention of the T-word - taxes. Any honest debate on a budget must include a discussion of a tax increase as one option toward alleviating the pain.

The public has no appetite for a tax increase, and lawmakers on Beacon Hill are as aware as anyone that much of Romney's political capital with voters was gained by his pledge not to raise taxes. Yet, while polls show most Massachusetts residents oppose any tax increases, polls also show that an equal number of people oppose severe cuts in education, local aid and human services.

Tax increases are favored by groups on the front lines of the economy - human service agencies, municipal associations, teacher organizations and public employees.

Sooner or later, the state's fiscal crisis will hit even closer to home. Communities will close libraries, turn off street lights in neighborhoods, charge parents to bus children to school, eliminate sports, music and art in schools and close fire stations.

Here's the message from House leaders: If you don't want a tax increase, you're going to have to pay for it.

That should scare everyone. The House budget is a more accurate reflection of the state's financial mess, yet it makes no mention of the T-word - taxes.

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The Boston Globe
Friday, April 25, 2003

A Boston Globe editorial
Tax swindle on Beacon Hill


Mayors and town administrators see clear through the House budget that rejects new statewide taxes while reducing state aid to cities and towns by $226 million. It's a flimflam that leaves local officials little choice but to raise property taxes to protect basic services, a regressive and regrettable outcome. In Revere, Mayor Thomas Ambrosino is contemplating increases in property taxes of 10 percent or more. Revere gets battered in the latest budget storm, absorbing a $2.5 million cut in local aid accounts used to support public safety and other basic city services. Ambrosino says the cuts would require him to reduce his police force to just 86 officers, down from 107 in 2002. And Revere, with its beach crowds and biker bars, is not exactly an outpost of tranquility. In February, local aid cuts compelled the city to close a fire station in the city's Beachmont section. In addition, the mayor says, he will be forced to lay off 50 teachers in July. 

"This is not a no-new-taxes budget," says Ambrosino. "This is a large-property-tax-increase budget."

Responsible residents in Framingham tried to defend themselves against reductions in basic services last June when they passed a $7 million operational override of the Proposition 2 1/2 cap on local property taxes. But the House budget, which would reduce local aid to Framingham by about $5 million, negates much of those gains. The town manager, George King, doubts officials could try the override route again, even with sharp cuts in public safety ahead.

"No one has the heart to do it," says King. "We did it last year and the state screwed us."

House budget writers would erase $150 million in direct aid for local school districts, which would result in fewer teachers and larger class sizes. But the budget is also a blow to the schoolhouse itself. Peabody officials expect students to arrive in September at a $15.5 million elementary school currently near completion. But they can no longer expect the first annual payment of $661,000 in school building assistance from the state. Similarly, officials in Saugus expect to be holding the bag next year for $767,000 for their new elementary school.

The building of new schools, in fact, would come to a years-long halt, according to an outside section of the House budget. It states that no new applications for school building assistance will be accepted until after July 1, 2007.

Romney administration officials scorn needed hikes in the state income, sales, or gas tax. And House leaders say there is no appetite for even modest tax increases among legislators. At the end of the day, however, they all must descend Beacon Hill and return home -- a destination that appears all the more downhill.

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The Lawrence Eagle-Tribune
Thursday, April 24, 2003

Fears of tax hikes mount
By Shawn Regan, Staff Writer


With the House budget making deep cuts in aid for cities and towns, local leaders fear they must raise taxes in their communities to maintain services for residents.

"Most, if not all, cities and towns are probably going to raise property taxes some amount to try to account for these enormous cuts," Methuen Mayor Sharon Pollard said after the state House of Representatives unveiled its $22.5 billion budget yesterday.

The package has many things in common with the one released by Gov. Mitt Romney in February: an unusual number of governmental reforms, deep cuts to local aid and no new state taxes.

The two packages also have another similarity: Both have evoked the specter of doom in local municipal leaders, and cries by some for a tax hike to lessen the blow to already cash-strapped cities and towns.

"We're going to look at raising fees and selling property first, but we're not ruling out raising property taxes," added Pollard, who said her city faces a local aid reduction of about $4.6 million. She planned to meet this morning with city finance officials to start planning for the cuts.

Romney budget chief Eric Kriss said the governor, who was in Washington, D.C., for the day, would continue to press for some of his proposals as the budget winds its way through the House and Senate.

Lawmakers have until 5 p.m. tomorrow to offer amendments to the budget. The House hopes to have its final budget on the governor's desk by June 23.

The House plan slashes overall spending by $360 million more than Romney's $22.9 billion budget and chops through state services. It is $300 million below the House budget approved for the current year, and includes about $2.3 billion in cuts and about $730 million in new revenues. The severity of the cuts by the House and the governor are in response to a looming $3 billion budget shortfall in the next fiscal year, which starts July 1.

The House budget reduces local aid from lottery money by 15 percent. State aid dedicated for school spending is reduced by $150 million, or 4.6 percent, but 170 communities -- more than half -- would suffer a 20 percent education cut.

Pollard's comments came following a press conference by the Massachusetts Municipal Association, at which the group called for a temporary hike of the income tax from 5.3 percent to 5.95 percent. The increase would generate $2.6 billion over the next two years, said Medford Mayor Michael McGlynn.

"The House budget is a taxation budget because taxes will be passed on at the local level," said McGlynn, flanked by a half-dozen mayors.

"When you lay off police officers, crime will increase in your community," he added. "And when you cut education, you are cheating children."

Several mayors said they also want the state to consider short-term borrowing to "get the state through the crisis" -- a measure both the House and governor have rejected.

Both Democratic and Republican lawmakers said they were pleased that the House plan embraced many of Romney's reforms and that the two budgets are similar in overall spending.

"It's a good-faith effort to share the pain without raising taxes," said House Minority leader Bradley H. Jones Jr., R-North Reading.

One area of concern for Jones, however, is the lack of any money in the School Building Assistance fund for communities due to receive their initial reimbursements next year....

Staff Writer Riley Yates contributed to this report.

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The Lawrence Eagle-Tribune
Thursday, April 24, 2003

Editorial
All should share in sacrifice 


This is a tale of two Proposition 2 override votes for schools.

Although they took place elsewhere in Essex County -- one in Ipswich, one in Rockport -- they offer lessons to those locally who hope to win similar votes to support education in their communities.

Going into the referendums on Monday, April 15, both situations looked pretty similar. While Ipswich has about twice the population of Rockport, they are both North Shore coastal communities that take pride in their local schools. Both were seeking in the neighborhood of $400,000 to stave off cuts in the operating budgets of their schools. Both overrides had been endorsed by considerable margins at earlier town meetings.

But when it came to the ballot, Ipswich voters turned the override down -- not by much, but a rejection just the same. Rockport voters approved theirs -- again not by much, but a victory for proponents all the same.

What was the difference?

Those who like to analyze such things say it might have been that override proponents in Rockport were more aggressive in getting out their vote. They also campaigned aggressively, getting lists of what services would be kept and what would be lost, depending on the vote.

There is also the possibility that the money in the proposed Ipswich override was too heavily weighted toward the high school, and therefore didn't have as much of a support base as Rockport's which was aimed more broadly at systemwide programs.

But the one, stark difference between the two communities is that during the week before the vote, the local Rockport teachers union agreed to go without a pay raise for the coming year. It is impossible to say exactly how much money that saved the system, but every raise of 1 percent costs the system about $50,000. That means forgoing a raise of 3 percent, which has been the typical settlement in the region, saved the community $150,000. There was no such offer in Ipswich.

This is not a case of union leaders rolling over and playing dead. This is not a case of "balancing the budget on the backs of the teachers." It is a case of teachers demonstrating, up front, that they are willing to sacrifice before asking local residents to come up with still more taxes in a time of great fiscal stress.

The voters responded. If the teachers were willing to sacrifice, then they would too.

Contrast this to Andover, where the teachers union president refused even to ask his members if they would accept one- or two-day furloughs to help balance the budget.

Shared sacrifice sends a powerful message. Perhaps it is one that public employees in other communities ought to consider as well. It might make the difference in preserving not just the services they say are so essential, but their jobs as well.

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The Boston Globe
Friday, April 25, 2003

Plan would cut teacher bonuses
By Anand Vaishnav, Globe Staff

Massachusetts' nationally hailed teacher bonus program, which for five years dangled $20,000 in front of noneducators to entice them into hard-to-staff public school classrooms, would be gutted under the House budget proposal.

Tucked away in the House Ways and Means Committee's proposed 2004 budget is a repeal of the law authorizing the signing bonuses and other professional development incentives for teachers and aspiring principals.

The House proposal caught state Department of Education officials off guard yesterday. They said the highly publicized signing bonus program did not cost the Commonwealth any money because it is paid for by interest from a $70 million endowment. Not only would the House proposal end the program for future ''bonus babies,'' it also would halt payments to 150 teachers who were awarded bonuses in the past and expected to be paid. The signing bonuses are paid over four years....

Because of proposed cuts to the school-financing formula, House budget-writers had to ensure that no school district fell below state spending requirements. To pay for that, they slashed initiatives such as the signing bonuses, [House Majority Whip Lida E. Harkins] said.

"A lot of worthwhile things are going to have to be cut," said Harkins, a Needham Democrat. "I don't think that this is in any way a statement about the need for the program." ...

Enacted during the days of a budget surplus by then-Senate president Thomas F. Birmingham, signing bonuses were a response to dismal failure rates on the Massachusetts teacher test. About 59 percent of would-be teachers failed a basic-skills portion of the exam, prompting soul-searching about the best ways to attract qualified educators.

A $20,000 signing bonus for teachers was unheard of at the time - and five years later, no state has come close, according to the Education Commission of the States, a Denver-based group that tracks education policy. Dozens of school districts, however, have offered bonuses to entice teachers.

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Associated Press
Thursday, April 24, 2003

Romney, Senate leaders leery of portions of House budget
By Steve Leblanc


Senate leaders are hoping to save a prescription drug program for seniors while liberal House lawmakers conceded Thursday they don't have enough votes to push through tax hikes to cushion some of the harshest budget cuts.

Gov. Mitt Romney first proposed ending the Prescription Advantage program, which provides drug coverage for 80,000 elderly and disabled residents. Its elimination was included in an austere $22.5 billion budget plan released Wednesday by the House Ways and Means Committee.

With the Senate's review of a fiscal 2004 spending plan still to come, most senators are leery of the cut, which would save the state about $127 million, Senate President Robert Travaglini, D-Boston, said Thursday.

"Historically the Senate has been willing to fully fund that program," Travaglini said. "The overwhelming consensus of my colleagues is that they've expressed a concern about that program. We are going to see if we can find those revenues to maintain that obligation."

Travaglini also expressed concerns about a House proposal to cut $150 million in state aid to local school districts, although Senate Ways and Means Chairwoman Therese Murray, D-Plymouth, said some school cuts may be inevitable.

"There's no way around it," said Murray, who said there would be no tax hikes in the Senate budget. But she added the Senate would likely agree with Romney and House leaders on a package of $390 million in higher fees.

She also said it's ultimately up to the members of the House and Senate to decide whether they want new taxes.

"What happens on the floor down there and the floor up here is a whole different story," she said.

Those pushing hardest for higher taxes say the chances are slim to none. They dismissed critics who said House Speaker Thomas Finneran, D-Boston, was deliberately slashing services to spark calls for higher taxes.

"Tom Finneran is not doing anything to bring us a tax package," said state Rep. James Marzilli, D-Arlington, who plans to file a budget amendment raising the state income tax. He readily acknowledged he isn't likely to rally the two-thirds majority needed to override an expected Romney veto.

He called some of the cuts to health services "truly scary" but said he also hasn't heard any momentum on calls for the state to borrow money.

"Our budget is out of balance because we cut $3.7 billion in taxes over the past decade," Marzilli said. "You can't solve that by waving a wand and saying 'abracadabra.'"

House leaders continued to defend their budget plan, which they said is needed to help close an anticipated $3 billion spending gap.

The plan, which relies on $2.3 billion in spending cuts and about $730 million in new revenues, chops a wide path through state services, including a $175 million cut to higher education, a reduction in support services for formerly homeless mentally ill people, and a $52 million cut in state school bus reimbursements.

The cuts have also caught the attention of religious leaders. An open letter signed by the leaders of the four Catholic dioceses in Massachusetts, including Bishop Richard G. Lennon, urged lawmakers to consider new taxes to "ensure that programs for the poor, the disabled and the ill are spared from extreme budget cuts."

Gov. Mitt Romney, weighing in on the budget plan for the first time, praised the House for resisting taxes, but called the cuts to local schools a "mistake" and said a series of budget line items requiring the state to spend $2.2 million on specific police patrols was a way to "take care of old friends."

"Business as usual has to change," Romney said. "We can't afford to protect old friends."

He also criticized a plan by Finneran to boost jobs and investment in technology companies. Romney said the plan, which includes an injection of $100 million of state money, is a bad idea.

"I don't believe the state has a real role to become venture capitalists," said Romney, a former venture capitalist. "Another $100 million from the state probably doesn't make a big difference to the future of our growth and technology here."

But Finneran said investment in business is the best way to boost tax dollars and save core state services.

"It's all about economic oomph. That's what I want to add, I want to add some economic oxygen so these budget debates can be carried out with a bit more promise and a bit more optimism," he said.

Finneran also held out little hope of saving the Prescription Advantage program.

"I hesitate to say that it's possible, but we're looking," he said.

The budget now heads to the floor of the House. Lawmakers have until the end of the day on Friday to file amendments. The budget debate is expected to begin next week.

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The Boston Globe
Friday, April 25, 2003

A little perspective
By Steve Bailey, Globe Columnist


We are deep into a recession that is giving no signs of abating. State and local governments are on the brink of huge cutbacks. Without a tax increase, we are going to see thousands of teachers, police, and firefighters laid off. Is this the Massachusetts we want? Of course not. But before we go totally over the edge, before we pull up the blankies and refuse to get out of bed, a little perspective from the real world is in order: What is happening to the public sector has been happening in a big way in the private sector for two years. Massachusetts is number one in the nation in job losses, shedding 4.7 percent of all jobs over the last two years. The state has lost 71,000 manufacturing jobs, or 17 percent; 69,000, or nearly 14 percent, of all jobs in the professional and business services sector; and nearly 18 percent of all jobs in the information industry.

By contrast, one of the safest jobs to have through this recession has been a government job. Just 0.7 percent of federal, state, and local jobs in Massachusetts -- 3,000 people in all -- have been cut in the same period, according to the US Bureau of Labor Statistics. Massachusetts technology giant EMC Corp. alone has cut more than twice that many jobs worldwide over the last two years.

Now, with all those rainy day piggy banks empty, government is being forced to catch up. It is hard to see how it cannot. As the economy shrinks, so does the revenue base. Employment is down; so are average wages. Those capital gains bonanzas that fatten state revenues are a memory. "It is the triple shrink," says Paul Harrington, an economist at Northeastern University's Center for Labor Market Studies.

Some more perspective: Through two years of budget cuts, state spending continued to grow, though at a much slower pace. From fiscal year 2001 to 2003 we cut $1.9 billion from dozens of state programs, according to the Massachusetts Taxpayers Foundation. But we also increased spending $2.4 billion for dozens of other programs.

Much of the new spending went to pay for the rising cost of healthcare, the budget buster of all budget busters. But human services and the combo of education and local aid, the other two big responsibilities of state government, have also held up reasonably well until now. Overall, spending on human services rose 1 percent over the last two years; education and local aid was cut a modest 3 percent.

We trimmed here and added there. For instance, we cut $370 million from education programs such as early childhood learning and bus transportation and spent it on local aid to education and building schools. We cut $290 million from dozens of human services programs such as transportation for the mentally retarded and smoking prevention. But we added $330 million for such things as family shelters and mental retardation community services. The days when every program could grow every year are done.

Times are tough; times will get better. We will need to manage our way through the hard times, and that is why we hired Mitt Romney, a manager, not a politician. The rookie governor has made his mistakes -- his foolish boast of finding $2 billion in fraud, waste, and abuse was a whopper for which he is still paying -- but he has stayed true to his mandate: reform, not taxes.

There will be no quick fixes: It will take several years to dig out. This is why it is critical that Romney get the management tools he needs to do the job. Overhauling the state's civil service system, reforming the onerous "Pacheco" restrictions on competitive bidding, and increasing the share of health insurance premiums paid by state workers will not necessarily produce big savings immediately, but will matter over time. The information technology and productivity revolution that has whistled through most sectors of the economy over the past decade has still barely gotten into government.

The world is not ending. Some people just want you to think it is.

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The Boston Herald
Friday, April 25, 2003

Romney, Finneran allies of necessity
by Thomas Keane Jr.


House Speaker Thomas Finneran isn't apologizing. Still, he admits, mistakes were made.

And now they must be fixed.

During the dot-com boom, state government ballooned. "It was gung-ho up there, from about `95 onward, and the money seemed," Finneran stresses the word, "to allow us to do all these things." He points in particular to Medicaid, the health care program for the poor, which dramatically expanded eligibility and coverage. "On reflection," Finneran says, "I would have been much, much more cautious and circumspect about the expansions that we did."

And that error was compounded by a second. As the recession began to hit, lawmakers started to dip greedily into the state's "rainy day fund." "We should have cut budgets back then more aggressively and relied upon the reserves less," Finneran says. But that didn't happen. Now the reserves, painstakingly built up by Finneran during the 1990s, are gone.

It's probably small comfort that almost every other state is in the same position. On the day House Ways and Means Chairman John Rogers unveiled his fiscal 2004 budget, the National Conference of State Legislatures released its budgetary roundup for the country.

It doesn't make for a pretty picture. Virtually every state faces shortfalls. For next year, state deficits are $53.5 billion (Massachusetts is $2.7 billion of that amount). Across the country, states are wrestling with the same issues: cutting education and Medicaid, reforming their bureaucracies, boosting fees and contemplating tax increases.

Massachusetts, it turns out, wasn't the only glutton in the 1990s.

Still, the commonwealth has a reputation for hiding its head in the sand, for avoiding painful choices and for always looking to soak the taxpayer rather than ever deny a dime to anyone.

Gov. Mitt Romney's budget, for the most part, didn't do that. It acknowledged the deficit head-on and proposed severe cuts and dramatic reforms. Although there were a host of new fees, it balanced the budget without any new taxes.

And the House? To the credit of Finneran and Rogers, they too seem willing to confront the deficit directly. Much of the political chatter over the last few months dissed Romney and budget chief Eric Kriss, taunting them as ignorant outsiders. Yet to a remarkable degree, the House budget builds on Romney's submission. For the governor, this is a big win.

For example, the House adopts almost wholesale a series of reforms and cuts the administration proposed for health and human services. Given that this area consumes 48 percent of state spending, it alone amounts to a remarkable change in the way the state does business. The House also accepted (to varying degrees) other Romney reforms: The Metropolitan District Commission will be eliminated, state employees will pay more for health insurance and the court system will change its managerial structure (not in the way that Romney originally proposed, but a good first step nevertheless).

Of course, Romney didn't get all he wanted. Most notably, the House flat-out rejected his remaking of higher education. And many of the managerial reforms Romney asked for - changing seniority, taking managers out of the union, eliminating "bumping" rights - were denied. That's a big disappointment to the administration, which sees those as critical to longer-term improvements in the bureaucracy.

In other, important ways, the House budget is significantly better than Romney's. The governor's biggest error had been projecting new sources of revenue that seemed unlikely to materialize (gambling payments, one-time sales of property, an expanded bottle bill and some dubious court fees). Rogers insisted that the House budget not make the same blunder. As a consequence, with less new revenue, he had to make bigger cuts, especially in Medicaid.

On the other hand, local aid cuts are surprisingly not as severe as Rogers had originally projected. Boston, for example, expected cuts of $102 million; the city's budget, released just two weeks ago, was based on that figure. The actual House cut is not nearly so drastic. Boston pols are breaking out the champagne.

Finally, and most importantly to the Romney administration, the House stuck with the governor's demand that the new budget not raise taxes. It's important to remember, however, that for Finneran this is a position grounded in tactics, not philosophy. He followed Romney's lead only because he figures legislators won't support a tax increase.

But that could change. Finneran's and Romney's cuts exact very real costs on very many people. Pressure will mount over the next few weeks for a tax increase to soften the pain. If the politics is right for it, there's little doubt that the leadership of the House and the Senate would be happy to restore some of the funds they've chopped.

But for now, no. Romney came into office vowing to change the way business is done on Beacon Hill. Judging by the House's budget, he has found an ally in Finneran.

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The Boston Herald
Friday, April 25, 2003

Despite pledge, the state is pumping us for a new tax
by Cosmo Macero Jr.


There's a ray of hope in the insistence of Gov. Mitt Romney and House Speaker Thomas M. Finneran that Massachusetts will ride out a $3 billion budget crisis without raising a single tax.

It's a recognition that voters are willing to absorb significant program cuts in exchange for the revenue rangers keeping hands off their wallets.

"There are places where we agree with the House and there are places where we don't," Romney said yesterday. "We agree that we shouldn't raise taxes."

But how much hope, really, are we expected to have when Romney and Finneran so easily subvert their pledge?

This is the whole story of the secret gas-tax hike - a revenue grab dressed up as environmental policy, but now unmasked for what it really is: a sham.

For a time, it looked like a stunning 400 percent increase in assessments for the obscure Underground Storage Tank program was designed to alleviate a running deficit in a decade-old petroleum cleanup fund.

Gas wholesalers pay an assessment to the fund on every 10,000 gallons they deliver. And owners of Bay State filling stations tap the fund to pay for cleanup of oil and gas spills - events that generally aren't covered by insurance.

As of April 1, the assessment quietly rocketed from a half-cent a gallon to 2.5 cents. Industry insiders immediately began fingerprinting for Douglas Foy - Romney's chief of Commonwealth Development and the Bay State's most prominent environmentalist. It was an odd time - in the midst of a budget crisis - to be juicing up a little-known environmental program.

But then, gas retailers simply pass the added cost right along to consumers. Just like wholesalers who pass it on to them.

If it looks like a tax and smells like a tax ... well, you know the rest.

And it gets worse.

The UST Fund, in both the Romney and House budgets, has been completely eliminated.

But the revenue stream, of course, lives on.

That little 2.5-cent hit we'll all be taking on every gallon is good for at least $60 million a year.

"Romney dumped (the money) into a stabilization fund which they could pretty much use at their disposal," says one observer.

The House, meanwhile, suggests lumping the windfall in with other revenues that may be used to bolster the state's free-health-care pool.

"Obviously the (assessments) will be passed on to motorists. It's a backdoor tax," says Arthur Kinsman, a spokesman and lobbyist for AAA Southern New England, the auto club. "We always felt that any tax or fee that affects motorists or highway users ought to be spent on transportation and not used for other purposes."

But Romney and his aides were still holding to their shopworn story line yesterday.

"There may be some fees that have the same effect in some people's minds" as taxes, Romney said.

Actually, the effect is on your wallet or purse. About $65 a year, if you fill up twice a week.

Romney press secretary Shawn Feddeman insists the petroleum cleanup program will still be funded every year - even though the revenue stream, now 400 percent more robust, is being funneled elsewhere.

The smoking gun in all this was when the Romney administration, after boosting the assessment on wholesalers, made no increase in the appropriation for oil spills.

Another red flag was when Kinsman started getting calls from AAA members asking why their local pump jockeys were saying the "gas tax just went up by 2 cents."

"This ought to be done more or less in the light of day. And it ought to be clear to motorists why they're paying more money," says Kinsman. "If it's going to be for deficit reduction, then call it the deficit reduction fee."

There is blame enough to go around on Beacon Hill.

Though it's hard not to place at least 51 percent on Romney and his budget genius, Eric Kriss.

Beacon Hill insiders say House budget writers got a real kick when they saw the poorly disguised tax hike in Romney's budget.

But Speaker Finneran shouldn't skate away unscathed. After all, he's been beating the no-tax-hike drum, too.

Still, from the House perspective, this one looks like a freebie.

Sort of like whacking a mob thug with another guy's gun.

The bottom line, Massachusetts taxpayers, is that you've been had.

Disrespected, in the parlance of the street.

The question is: What are you going to do about it?

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