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.
What info is the low information voter getting? Since we can’t count on TV news to do and discuss basic fact-checking like David did here, how does Joe and Jane Public get the information that Baker is an empty suit?
… but Charlie Baker may be the worst Gubernatorial Candidate in recent MA history.
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p>With all due respect to Gov. Patrick, a solid Republican would have a real chance of winning the seat this year given all the elements at play. However, Mr. Baker is, so far, demonstrating that he is an absolute putz.
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p>I think I will go see what InTrade is saying…
though Baker is closing in on him.
Those of us who ere there at the State House witnessing the carnage of the era of Charles Baker in charge of Human Services and later Administration and Finance can hardly believe he is a candidate for Governor.
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p>He is the face of inefficiency, waste, and mismanagement of all that went wrong during the era of succeeding Republican Governors.
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p>There is so much that Baker did and did not do to make sure State Government did not work.
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p>In the coming weeks, I look forward for much intensive research to be revealed by those who campaign against him.
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p>I reserve further comment as I have already made several comments about the self annoted all knowing GURU.
…and lately I can’t distinguish between you and Eabo when it come to distorting the true context of a situation. There is a BIG difference between a first time budget deficit during a boom-time and yet another gaping fiscal hole during this 3 year budget struggle.
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p>Congratulations, you’ve scored political points juxtaposing the two short falls and which allows you to frame a narrative that Charlie is a hypocrite. Just as rightwingers distort the actions of anti-war heros from the 60’s and 70’s, like John Kerry, as pro-terrorist today–you seem to to be equally unabashed in manipulating the context of historical events to suit your short-term political ends.
It is far far worse to come up $100 million short during a boom than to do so when the international economy has collapsed. The juxtaposition isn’t fair at all.
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p>For shame, David. You give Baker too much credit.
First, please carefully explain the difference between two three-month periods in which expected revenue numbers don’t pan out, taking careful account of the fact that nothing in particular happened between January and March of 1995 (in fact, the Dow went up over 8%).
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p>Second, surely even you can appreciate the difference between budget numbers and war records. If you can’t, I feel sorry for you.
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p>Cheers.
Don’t you see the economic benefit of a rising stock market after the fact? If the market went up 8% in calendar Q1 1995 then how does that increase state revenue in the same period? Unless you are a seller there is no tax to be paid and your 1995 estimated tax payments are based on 1994 tax filing. It seems to me that the tax revenue from such a gain occurs later on when investors sell or more likely when they file their tax returns which would have occurred in April 1996.
as I’m sure you’re aware but are ignoring, is that there was no economic calamity in Q1 1995 that would result in revenue forecasts being thrown way off-kilter. The fact is, Weld and Baker blew the forecast, and there’s no obvious excuse (like an unanticipated economic event) for them doing so. They just blew it. “Fundamental incompetence,” to quote Baker, right?
I’m not ignoring anything. I am stating that your comment relative to 8% market growth had little or nothing to do with revenue collections in the first qtr 1995. This is your blog so forge ahead and do what you wish. Perhaps once in awhile you are wrong. In fact, your “Spare me your piety, Pogo” comment is a bit harsh given how wrong you are on the Q1 1995 revenue issue.
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p>Enjoy the day. Big victory for democrats today.