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A failure to ask hard questions Deval Patrick
That had me thinking.
Nothing like an election to fully vet a candidate, is there? Chances are both AG Tom Reilly and former Democratic Lt. Governor Nominee Chris Gabrieli have been through the ringer in past campaigns, so Im not as worried about something coming out if either one of them becomes the Democratic Gubernatorial Nominee.
So, Im assuming that a candidate that has concerns about a failure to ask hard questions in public life, doesnt mind having hard questions asked of him during his first run for public office.
So let me frame out one of these concerns I hear from average everyday people trying to make ends meet in Massachusetts. It has to do with the making mortgage payment and paying the property tax bill. Lets call it Home Financial Budgeting 101 But before we get to that, lets discuss the income side of the equation.
I doubt well be reading a similar headline around December 31, 2006, but heres what the headline was four years before that:
Romney passes up $135K governor salary .
$135,000 dollars a year to be Governor of Massachusetts. I suppose at one time that was an excellent salary.
So heres my concern: If you are making $135,000 a year, how can you afford to make $324,000 a year in mortgage payments? That is the figure Frank Phillips came up with, that is $27,000 a month in mortgage payments times 12 months in the year. Chump Change? Thats one nut I wouldnt want to try to crack. $6,000,000 in mortgage loans thats a lot to have hanging over your head when you are a Governor making only $135,000 a year.
OK, maybe you can moonlight. (Thats a lot of moonlighting.) OK, so we know from the financial filings that Devals wifes salary is between $500, 000 to $1,000,000. So, assuming my math is correct, that is a projected combined income of $635,000 to $1,135,000.
So how would a typical mortgage banker look at this couple for loan qualification purposes?
I think you would hear something like this: “You can pay between 25% to 33% of your gross income for housing expenses.”
So this had me thinking of just how much of a house that $135,000 salary could afford. Now days using a liberal mortgage banking set aside of 33% of your income for housing, that would allow annually for $44,550 to cover mortgage principle and interest and taxes (PIT), in order to qualify for the loan. That $44,500 covers a little over a month and a half of the current mortgage payments.
Thirty three percent of those income figures are $209,500 and $377,955 respectively. Drop the qualification percentage to a conservative 25% instead and you have $158,750 and $283,750 respectively. I think you see the problem, using the conservative scenario you are between $168,250 OVER and $40,250 OVER what you should be spending on housing.
Using the liberal scenario you are between a $114,500 income deficit and $53,955 surplus of what you should be allocating for housing. Keep in mind that Real Estate Taxes are supposed to be coming out of those percentages.
Briefly on the Real Estate Taxes, lets say you own $6,000,000 in real estate that has a tax rate of $10.00 per thousand, youre talking $60,000 in real estate taxes. So basically you are at the point where the candidate needs to have a combined income right at the top of the financial filing.
Patrick says that he and his wife can meet their loan obligations if he is elected governor, a post that pays $135,000 a year.
“We looked hard at the financial implications of dedicating ourselves full time to public service and planned accordingly,” Patrick said in a statement. ”Through hard work, great opportunities, and continued blessings, we are in a wonderful financial position today to make this leap.” Boston Globe, By Frank Phillips, Globe Staff | March 8, 2006
OK, so Deval is on the record as saying he can swing it. Looking at the numbers, it looks like its very tight in the best of circumstances.
So here are some of the hard questions that have failed to be asked as far as I know:
1) Are there any deferred corporate income payments similar to say, Dick Cheneys coming up in the four years of your potential term as Governor?
2) Do you plan to be a full time Governor, or will you be seeking additional remuneration for work outside your responsibilities as Governor?
3) If the answer to question #2 is yes, as to seeking additional income, what sole proprietorships, businesses or corporations have you identified for employment, or are they unidentified at this time?
The reason, from a public policy perspective that these questions are critical, is that the citizens of Massachusetts deserve to know in advance if any candidate in such a tight financial situation, that it might affect their performance as Governor. Currently we have the word of a candidate and a financial filing that allows ranges of $500,000 to $1,000,000 to cover the bases. Maybe Im missing something, like maybe they plan to flip the vacation home and sell other properties. But I certainly dont expect any Deval supporters to be upset at my asking hard questions, when their campaign complains that hard questions have failed to be asked in the past
So the very last question for now is: Has there been A Failure to Ask Hard Questions or will there be a Failure to Answer Hard Questions?
How is Mitt Romney paying his bills without taking a salary?
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I expect you’ll be doing a detailled financial analysis of the other candidates too, right?
I think “NoPolitician” has it right. I mean, fair’s fair. How is Chris gonna pay his mortgage? Maybe Dick Cheney is gonna help him?
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Tom, as I understand it, doesn’t have a mortgage, but can he scrape by on $135K? Or is he gonna have to moonlight? (Is that allowed?)
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Now, I could be misreading this, but it almost sounds to me like RM is calling Deval a liar. Or that he doesn’t undertand finance. Or something like that.
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But I must have this wrong, because I just know that RM’s intention was to talk up his candidate, not to provide Republican talking points.
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I mean, we’re all in this together after the Primary, right?
should be able to answer tough questions, without complaining about it…
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I’m not asking if he can handle it, I’m asking how he intends to handle it. The primary is about vetting candidates.
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I think the electorate is entitled to know for instance if the next Governor intends to moonlight. Sounds like you think that’s an unfair question?
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Or for instance is the electorate allowed judge if there might be any potential conflicts of interest vis a vis potential payments from Coke or United or Ameriquest or Whatever?
and his math is spot on. Now, to you, these are just words on a page from me, but I actually do have some background in this sort of thing.
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And, it’s a point I’ve raised from time-to-time.
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But, complicate Mr. Patrick’s financial picture that RM has outlined and add the cost of two college age daughters. The orginal linked Globe article raised the point and it hasn’t gone any further in the press.
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But it will; just wait ’til after labor day.
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Spin-free. RM’s point is valid IMHO.
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First, Mr. Wilcox, in response to the comparison to Mr. Gabrieli’s living standards, or even Mr. Romney’s, there’s simply no comparison: apples to carrots. Mr. Patrick, while wealthy isn’t in the same dollarsphere (new word?) as Mr. Romney, Ms. Healey nor Mr. Gabrielli, and I’m sure Mr. Reilly trails them all.
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Were Mr. Reilly to publicly disclose a debt load exceeding 40% of income, eyes would rightfully roll and demand an accounting.
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I’m curious about Mr. Patrick’s ability to afford a Govenorship.
Please gentlemen..this (as are most in the commonwealth) is a two income family, and I am sure, that being as talented and intelligent as Diane Patrick is, she is also financially successful. Perhaps she makes more than Deval, and thats OK!
Why does wealth or success bother you so much?
We,as Democrats, should be proud of and welcome those of us that become wealthy through hard work, education or even good luck. You should not have to change parties based on income and we should work for wealth for all.
Did her success even occur to you? Or is that somthing reserved for men?
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I find it funny that this question is being posed by a Deval supporter, especially when many Deval supporters have been so critical of Gabrieli for investing the fruits of his tremendous success on his own campaign.
Having seen no shred of viable rebuttal in the comments thus far, I got to wondering: What is a Deval supporter supposed to say to this? Its a bit tricky; you’ve got a tough case against your candidate and you can’t possible come back with “the answer” since you don’t know and can’t speak for him anyway.
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One option would be to take the question to Deval, I guess.
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Another would be to brainstorm some ideas: How could Deval deal with this situation? He may be getting deferred payments, ok, but that base seems covered. Maybe he will be capable of getting enough loans to cover the term of governorship; after which his earning potential should be at least as high as it is now. Maybe he’ll sell a house or two?
But perhaps the chief fallacy in this tired line of argument is the “25 to 35% of your income” rule of thumb for mortgage indebtedness. That works pretty well if your annual household income is in the $50-150 thousand range, as it probably is for most readers of BMG. At that level of income, you need to keep mortgage payments to 25-35% so you can use the other 65-75% to pay for food, clothes, utilities, insurance, household items, leisure, etc.
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But if your household’s annual income is in the million dollars a year range, you can choose to have your mortgage payments be above 25-35% of your income. Why? ‘Cause you have a @#%&load of income left over after you pay the mortgage(s). You won’t starve, or not be able to pay the electric bill, or whatever, because you, unlike most of us, will have several hundred grand left over after you’re done paying the mortgage. (BTW, you also get a nifty tax break from Uncle Sam for your mortgage interest.)
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There’s lots of reasons to be for candidates other than Patrick. If you disagree with him on some issues, fine. If you think someone else has a higher likelihood of beating Healey, OK. Hell, if his having worked for Fortune 500 corporations bothers you, that’s your call.
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But if you worry about Governor Patrick not being able to make ends meet, don’t. That’s just spin being peddled by the innuendo and insinuation patrol. And it’s bull@#%&.
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That’s a big “IF” when the reported income of his wife is $500,000 to $1,000,000. I don’t see where it is declared to be $1,000,000 for sure.
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Add the Governor’s salary of $135,000 ($11,250/month) you get to $635,000 on the lower end and yes over a million plus $135,000 on the upper end.
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$27,000 per month mortgage payments and an estimated $6,000 a month in Real Estate taxes that’s $33,000 a month. $396,000 a year. Run that against the lower and upper reported income and you get 62.3% to 34.9% spent on housing.
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I don’t know about you, but there is enough of a question to ask “how he can afford such a cut in pay?” and/or “how does he plans to alter his lifestyle to do so?”
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Does Massachusetts deserve a Governor that is totally focused on the business of Massachusetts? Or someone that is possibly focused, due to unexpected circumstances, on how he’s going to make the $33,000 a month nut on their mortgage and taxes?
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If we buy your argument that she’s at the top, then, he’s making 12% of the family income and she’s making 88%. That’s great, I’m sure there are families doing that. Just what happens if he needs to step in at some point to increase his share?
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Sorry to be so tiresome, but inquiring minds deserve to know how focused the next Governor is going to be on the people’s business… and right now there just is no clear answer, beyond “because I said so.”
Actually, I know you’re not. You’re just doing your innuendo thing. It’s pretty familiar to BMG readers.
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But, just in case, stay with me now, there’s some arithmetic coming. Even on your “worst case” assumption about family income ($635,000 per year) — and this assumes zero investment income on top of the two salaries — they’d have about $240,000 per year AFTER paying the mortgages and real estate taxes. People do manage to live on that without moonlighting, although we know that your chosen candidate doesn’t have to.
“I really don’t think you’re stupid…”
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One-Let’s face it there are some real double standards here. It seems Deval Patrick supporters really RESENT tough questions about their candidate, especially one’s they can’t seem to answer period. Especially ironic coming from a campaign that complains the “tough questions aren’t getting asked…”
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Two-So far after a couple of days, I’m seeing NO substantial responses or answers to a “tough question.” Gee, do you think if this “tough question” was about Chris Gabrieli or Tom Reilly it might have been “front paged” by now? Like in maybe about under a couple of hours?
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Three- If there is substantial investment income, where is it on the “complete financial filing?” To get a couple of hundred thousand a year into the mix, let’s say at 5% earnings you are talking about $4,000,000 in investments.
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Four- You left out federal and state taxes, etc. so I find it difficult to buy that ANYONE could go to a bank and get those types of loans with a RATIO of 62.3% on housing expenses, that is unless AMERIQUEST has NEW LOAN program that I don’t know about. Even if you could why would you want to???
Can’t be the first time it’s come up in statewide elections, where the nut is kinda tight. What’s happened elsewhere?
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Your question “Would he take a second job” – what do you have in mind? Speaking fees? Can’t do that while in office, can you?