Predictably, Charlie Baker jumped all over the news of a revenue shortfall that apparently could be as high as $295 million or as low as $195 million. Clearly, says Baker, the shortfall proves the “fundamental incompetence” of both Tim Cahill and Deval Patrick, as both were caught “off guard” by the news.
What’s funny is that revenue shortfalls have been happening for years. Let’s see if I can remember … [cue harp music as the screen goes all wavy ...]
Mar 31, 1995 … Weld’s top budget aide, Charles Baker Jr., and the top Democratic budget writers in the Legislature agreed yesterday that the state will collect $112 million less in tax revenue during the 12 months beginning July 1 than Weld projected when he submitted the budget in January.
So in the first three months of 1995, things changed to the point that a proposed budget supposedly in balance in January was $112 million out of balance by March. Even though there were no obvious financial calamities in that time (the Dow closed at 3,834 at the end of December, 1994, and at 4,158 at the end of March, 1995, a respectable increase of about 8.5%). Yet, somehow, the Weld budget team blew it, “caught off guard” by, well, something.
Also of note is Charlie Baker’s apparent view that a $100 million shortfall was not “material.”
Apr 25, 1995 … Charles Baker, the secretary of administration and finance, gave some general suggestions, but stopped short of a specific prescription to close a $112 million gap that has opened since Weld submitted his $16.7 billion spending plan. “We are now in a position where you have the ball,” said Baker, who stuck by $40 million in tax cuts Weld has recommended but said Senate Ways and Means Chairman Thomas Birmingham could reduce the gap by slicing $25 million to $30 million in supplemental spending and halving $110 million in new spending the administration has recommended….
Birmingham said a 1991 law required detailed “corrective amendments” from the Weld administration on how to pare the budget back to balance.
“With all due respect, it is a bit cavalier to say the ball is in your court,” said Birmingham in a polite but pointed tone. “There is legislation that requires your administration to do much more.”
When Baker doubted that a $100 million shortfall — which represents less than 1 percent of the budget — was a “material” decrease of the sort that triggered that law, Birmingham replied: “I take it you would have no trouble with an immaterial $100 million tax increase.”
So, let’s see. A $112 million gap in a $16.7 billion budget (0.7%) was not even “material” enough to make it worth proposing a fix, but a $195-295 million gap in a $27 billion budget (0.7% – 1.1%) reveals “fundamental incompetence.” You’ll forgive my confusion.
Now, let’s be clear. The new shortfall is bad news, and may entail another round of difficult cuts (though, according to A&F Secretary Gonzalez, the gap could be less than $200 million, and no decisions have been made about how to close it). But Baker’s statement is neither helpful nor, in light of his own record, credible.