The Boston Herald
Monday, September 30, 2002
A Boston Herald editorial
Time for Legislature to hit sacred cows
The Legislature can prevent a great deal of further damage
to the hard-pressed social service programs of Massachusetts and the vulnerable people they serve if it will finally put a
few sacred cows out to pasture.
Sometime this week acting Gov. Jane Swift most likely will
decide what spending cuts to order to keep the state budget balanced for a fiscal year now one-quarter finished. She'll
have to find $200 million to $350 million, depending on September tax collections and the
revenue outlook.
Governors can hold back spending, but they can't change the
laws. That's where the Legislature could prove it understands the magnitude of the problem and attack some of its
sacred cows.
The first is Lottery prizes. We think it's terrific that
Massachusetts has had some of the most generous prizes in the nation. We don't think it's so terrific to throw Medicaid
recipients off the rolls to preserve a 71 percent Lottery payout ratio. This in effect is what happened earlier
this year when the Legislature rejected Swift's proposal to reduce the
ratio to 63 percent, the national average for state lotteries.
That would save $274 million for a full year, or about $205
million for nine months. It should be done because it is the least damaging policy choice available. Would it hurt the
gubernatorial campaign of the Lottery boss, state Treasurer Shannon O'Brien? Not if
O'Brien has the wit to cast prize reductions as the best way to save Medicaid, home care for
seniors, childhood immunizations or any constellation of programs of which she'd like to
appear the protector. Surely she wants to appear more than just the protector of
scratch-ticket buyers.
The second change is an increase in the share of health
insurance premiums paid by state employees from 15 percent to 25 percent, more typical of the private sector. This would
yield about $50 million a year or $37 million for nine months. The employee unions and their
allies in the Legislature have always been able to turn back this proposal in the past. But it
may not look so bad if the alternative is more layoffs, widespread
mandatory unpaid days off each month or pay cuts.
These two proposals would go a long way toward meeting the
immediate need. The middle of an election campaign is never a good time to talk about cutting budgets. Swift at least has
no re-election campaign to influence her decisions, and she may be glad of that.
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The Lowell Sun
Monday, September 30, 2002
A Lowell Sun editorial
Budget action needed
Three months into the state's fiscal year 2003, the
commonwealth is facing a $350 million budget gap.
A stagnant economy and declining tax revenues are the
culprits. Economists say they hope this is the end of the bad news, yet can't be sure. While other parts of the nation are
climbing out of the recession, New England and Massachusetts are stuck in a hole.
Acting Gov. Jane Swift said she'll soon be enacting
emergency spending cuts to meet the imbalance.
While job cuts may be unavoidable, we urge the governor to
make them as a last resort. Instead she should explore two other options.
Swift should reintroduce her plans to limit state Lottery
prizes and to borrow against future annual payments (the state gets $350 million each year) from the federal tobacco lawsuit
settlement.
Swift championed both proposals in January to the Democratic-controlled Legislature, saying
they'd raise up to $500 million for the 2003 budget. But lawmakers ignored Swift's
ideas.
Swift had hoped to head off lawmakers from freezing the
income tax rollback. Later, however, the income tax freeze became the foundation for the Legislature's $1.2 billion tax
increase. The Legislature also sent Swift an unbalanced budget, forcing the governor to finish
the lawmakers' job.
State Treasurer Shannon O'Brien also fought Swift's Lottery
plan. She said a reduction in the percentage of prize payouts would turn off players and adversely effect local aid payments
to cities and towns. While she might be right in the long run, there's no indication it will happen
here where the Lottery is a state monopoly. In fact, in 2002, Lottery receipts surged to
a seemingly recession-proof record of $4.2 billion.
We believe the Lottery can withstand a minor tweaking so
that essential government services can remain in force.
It's time for lawmakers to give the governor's proposals
serious thought. Another tax increase is out of the question.
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The Boston Herald
Tuesday, October 1, 2002
Gov plans $200M in cuts
by Elisabeth J. Beardsley
Acting Gov. Jane Swift is planning to slash nearly $200
million from state programs - mostly in human services - within the week, as the stagnant economy threatens to blow a new hole
in the red ink-soaked budget.
First quarter revenue data, released yesterday, showed an
anemic $47 million gain in tax collections - not nearly enough to head off a deficit that's snowballed to $350 million.
"It's time to take some castor oil here," said Swift's
Administration and Finance Secretary Kevin Sullivan.
By late this week, Swift plans to use "9C" emergency powers
to roll out a package of ledger-balancing measures that Sullivan said would fall heavily on human services and
state-funded health care.
Swift cannot use her emergency powers to cut big-ticket
items like local aid, Chapter 70 education funding or the judiciary.
Sullivan would not confirm details, but the Massachusetts
Human Services Coalition released lists it said it received from the executive offices of Health and Human Services and
Elder Affairs.
The lists detail $96 million in cuts, which would slice $12
million from the Office of Child Care Services and at least $4 million from the Department of Public Health.
Most of the child care cuts would fall on blue-collar,
working-class families who receive day care vouchers through a program that already has a waiting list of 18,000 kids, said
Massachusetts Human Services Coalition Director Stephen Collins.
And Swift is seeking to slash $3.3 million from the new
Prescription Advantage program, which provides cheaper drugs to seniors, according to the list from Elder Affairs.
"These are our grandmothers, our children," Collins said.
"We are taking the very concept of the safety net and tearing it apart."
The elderly would also bear the brunt of Swift's planned
$6.5 million cut to the home care program, which would yank service slots for 5,454 homebound seniors.
Home care has been a hot topic on the campaign trail, where
Republican Mitt Romney and Democrat Shannon O'Brien routinely talk about how it's 10 times cheaper to care for elders
at home - where most would rather be - than in a nursing home.
"This is sort of like getting hit with a door - it's going
to ache for quite a while," said Mass. Home Care Director Al Norman.
The latest round of cuts is a continuation of last year's
crisis, when lawmakers slashed $900 million from programs, hiked taxes by $1.2 billion, and blew through $1.8 billion in
"rainy day" reserve funds - a one-time cushion that's now virtually tapped out.
Swift plans to ask lawmakers to reconsider revenue-raising
options they rejected last year, like curtailing Lottery payouts and making state workers pay more for their health
insurance.
State budget-writers had been banking on a quick economic
turnaround this fall, and built a budget on economic indicators that predicted the creation of 75,000 jobs this year.
Instead, the state has lost 66,000 jobs since spring, and
business leaders from all sectors - high-tech, retail, financial services and utilities - told Swift last week not to
expect a miraculous recovery.
Yesterday, the Massachusetts-based Fidelity Investments
announced plans to lay off 5 percent of its work force, or 1,700 workers - with roughly half in the Bay State.
"We've basically come to the conclusion that the economy is
not getting any better in Massachusetts," Sullivan said.
And state workers will not escape the downsizing. Sullivan
said the state has saved as much money as it could by offering early retirements to over 4,000 employees and holding the
number of layoffs down in the hundreds.
"There's more layoffs on the horizon," Sullivan said.
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The Boston Herald
Tuesday, October 1, 2002
A Boston Herald editorial
N.H. reaps tax rewards
They ought to be writing thank-you notes to the Massachusetts Legislature up there in New
Hampshire's Department of Revenue. Commissioner Stanley Arnold now estimates the
Granite State will take in $3 million to $6 million more this year from tobacco sales because
of the hike in the Massachusetts tax on cigarettes.
When the Massachusetts tax rose from 76 cents a pack to
$1.51, the highest state tax in the nation that sent the cost of a pack to about $5.80, it increased the incentive for
major-league smokers to head north to stock up. But there's significant anecdotal evidence that as long as
folks are making the trip, they'll take orders from co-workers or neighbors. And
since the savings can amount to $15 to $20 a carton, it doesn't take a giant leap to imagine someone
deciding to load up the trunk and make a few bucks himself on the deal.
So far, Massachusetts Department of Revenue officials are
still counting on the tax hike bringing in $200 million extra this year to help make ends meet. August cigarette tax revenues
were up $18 million over the previous August. But then that was before smokers really had
an opportunity to make whatever adjustments they decide to make - giving up smoking,
buying in New Hampshire or buying over the Internet.
Meanwhile, convenience stores on the Massachusetts side of
the border are already feeling the pinch.
Linking the state's economic future to a usurious tax on an
admittedly bad habit will surely turn out to be a poor alternative to fiscal restraint.
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