I’m confused about the state’s budget. I’ve read the recent articles but it hasn’t quite cleared things up for me.
Admittedly, my brain today is decaf, which makes my thinking slower than its usual Commodore 64 speed….
Mitt is both claiming that we have a $1 billion surplus and that we needed $400 million in emergency cuts. Isn’t that contradictory? Let’s leave him out of the equation.
Deval is claiming $1 billion shortfall, hence need for department heads to propose 5% to 10% cuts.
Tax revenues are supposed to 3 to 4% higher in 2007 than in 2006. Our population isn’t rising — not like there’s more people to serve. And inflation in our area is 2%.
How do we have a shortfall?
If I understand the gist is that we’ve been lucky enough to have tax revenue grow at 7 to 8% in the last few years, so instead of socking money away, we simply spent all of it. Yes? No?
And spent it on 3 things — gov’t employee’s salaries rising much faster than inflation; health care for poor is growing much faster than inflation; health care for state employees is growing much faster and without private-sector like burden-sharing with employees?
And therefore nobody is arguing we have BETTER services, just more expensive versions of what we had a few years ago?
Straighten me out somebody. Gary? Charley? Bueller?
Bonus question:
So does that mean the Gov’s basic choices (assuming some new revenue like gambling but not huge amounts) are:
a. Pull a Clinton 92, do one really brutal budget (now), cutting lots of headcount, and then each future year be able to promote new (possibly better) initiatives with new spending?
b. Do the “least damage possible” budget that protects most current spending, but then face like budgets each year where he stays “boxed in” on “automatic” spending increases that far outpace both inflation and revenue growth?
c. Other?
Let’s bump the tax on gasoline by 20 cents to bring us more in line with our neighbors. According to the Conservation Law Foundation, “Every one-cent increase in the Massachusetts gas tax would generate about $34 million in added revenues.”
…if first the ass-kicking and tough love was done. for example, i agree on the need for new investment in mass transit. i don’t want to pay higher gas taxes so long as they subsidize subway drivers who retire in their 40s at full pension and $60,000 a year toll takers.
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anyway, i’m still just trying to understand the different numbers thrown around….you’re just adding more moving parts! đŸ™‚
There are two sets of figures used all the time, sometimes interchangeably and sometimes in the same sentance.
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Actual and Projected. we projected a surplus, and we had an $872 million shortfall in Actual revenue, which generated the cuts. Deval promptly took money out of the Rainy Day fund to restore those cuts, but the shortfall for the next fiscal year hasn’t gone anywhere – we just took money out of the Christmas Club to pay the utility bill. Christmas is still coming.
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One thing to keep in mind is that if there are fewer people, there are fewer people to pay taxes as well. A couple of years ago, Eric Kriss of A&F got into a WORLD of trouble by talking to the Boston Chamber of Commerce about the ratio of what he was naive enough to call ‘Givers’ and ‘Takers’ in the State. His point was that as we enacted ever more mandated benefits and social service programs, people in need of those programs would likely be drawn here, while at the same time, those who pay taxes and own busineses would find themselves increasingly regulated and might consider moving to a state (or country) with less regulation and taxes. You would have thought he was advocting wholesale euthenasia, but when you think about it it’s logical. So – who exactly ARE our Mass. residents? Do they use state services, or pay for them?
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The increase in revenue may ot meet the increase in demand. If you have a 4% grater payment, but a 5% greater rise in entitlement programs – you have a 1% shortfall. I’ve noticed that projections tend to be in actual dollars, while demand is usually a percentage of past years (the phenomenon where level funding is called a ‘cut’ because you didn’t get your expected 3% growth in program funding).
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IMHO – he SHOULD do A and will do B. C would mean meaningful cuts, and he’s finding out that the overall size of government actually HAS been shrunk in the last 16 years – with unfilled positions and people doing one and a half or two jobs for the price of one, mainly – and there’s not a lot of fat left.
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so you’re saying we change to Hanukkah?
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I find it interesting that you, a Republican (BMG’s only?), says “there’s not a lot of fat left.” I don’t have a good 16 year perspective: What fat was cut? And what’s left?
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I agree with the phenomenon you cite — where 4% increase is called a “cut,” even if inflation is just 2% or 3%, because someone made an agreement to increase salaries and benefits by 6% — is pervasive. I’m not surprised that agencies say that, but I am surprised that reporters buy it so frequently.
Fat and Waste are not the same thing either.
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Fat is inefficiency – a prime example is when Weld took over, he discovered that there was a fleet of WELL paid couriers, toll taker level salaries, driving around the state delivering lottery tickets and colllecting receipts. He turned the whole shebang over to UPS, with insurance in case of lost tickets, etc., and got rid of the drivers, their health insurance, their comp, their benefits, their cars and their gas. THAT was cutting fat.
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Waste is programs and earmarks that are a bad, but politically popular, use of taxpayer funds. The infamous Braintree Gazebo or the $500,000 to the City of boston to ‘dialog’ about race is an example of waste.
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Admittedly, waste is more in the eye of the beholder than fat, but the old lottery drivers probably didn’t think so.
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Fat is vastly reduced. Waste is rampant. THAT is Deval’s biggest challange.
I think there is both, agreed that waste is rampant. Who doesn’t believe that Deval is going there next.
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Someone should write Howie Carr and let him know that there’s no fat in our local government so he should pack it up and go home.
any other thoughts in terms of raisins and bananas?
…YOU however, are now a Porcupine Post!
Your statements contradict what the Globe printed.
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From what I’ve gathered, the legislature used $550 million from the stabilization fund to balance the budget. They did this because they felt comfortable that revenues would exceed projections — and indeed, they are. Just as Romney did the previous year.
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I’m not sure how Romney slid this veto in — he originally vetoed the budget but was overridden because the budget passed 33-0 in the Senate and had only 3 votes against it in the House. There must have been some technical thing that required the transfer of money to take place so long after the budget had been passed.
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Once the veto was overridden, Romney said “oops, the budget is out of balance, I can now use my 9C power to make cuts that the legislature can’t override”.
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The big question I have is, why didn’t the legislature even try to override the veto? The transfer was related to the budget passed — with overrides — in July.
…there was a Supp budgt, some $455 million, that was voted on JUST before the elections – a porkorific surprise. Nobody wanted to override the veto and be a taxaholic just before the electon.
The supplemental budget was voted on well before the Legislature recessed in July of 2006, because the Legislature actually overrode the Gov’s vetoes of that supp budget + all his vetoes of the regular annual budget.
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That bill and those earmarks were debated, voted upon, passed, vetoed, sent back and debated again and overriden.
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Let me also remind everyone that there was plenty of bi-partisan pork in that suppplemental and looking over news clippings at the time it was designed to be a supp for capital projects.
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The Governor abused his 9C powers by when there was no budget shortfall and the current fiscal year is remaining slightly ahead of budget.
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It was Romney’s usual brand of showboat politics!
State agencies are told to cut 5-10% out of their budget. it is amazing how the cuts often seem to come from the lowest paid front line workers. A boss is not going to cut his/her six assistants. I believe the only way that the fat/waste will ever be cut out of state agencies is to have external audits by people who actually know something about the service that is being delivered and are not just led around by the nose by the head of the agency. People who head agencies have agendas that are often at odds with the reality of the services that are being delivered. It is not that there isn’t waste in state spending, it’s that when cuts are made they are generally made in the area of service delivery rather than administrative bloat.
rhonda, i’m sympathetic to your “service cut versus admin cut” concern, but why have the head of an agency at all if you don’t want him/her to lead, to make the key, tough strategic decisions?
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why not just hire “external auditors” and nix Deval’s whole cabinet?
I am not suggesting that heads of agencies be figureheads. On the other hand, heads of agencies need monitoring so as not to create their own fiefdoms. As a state emploee for more than twenty years, I have seen the constant loss of direct service providers and the incredible growth in administration.
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Priorties for state gvernment need to be set by the Governor. Based upon those priorities, cuts should be made. If no one is looking at the structural bloat in state departments, then we have a problem. Cuts should come with the priviso that the structure of the department needs to be examined and that the planned cuts should be directed toward decreasing administration and maintaining and/or growing direct care personnel. I believe that companies at times hire consultants to come in and review personnel, etc to make decisions about where cuts and reorganization can be made. Some people who run state agencies are not necessarily knowledgeable or skilled in the area of reorganizing a massive beauracracy.
c. Benefit and pension reform on the state level are necessary. The disparity between state, municipal and private sector plans is mind boggling. There are towns that have realigned their co-pays and % of health insurance to keep the budgets and services balanced and level and still have outrageously terrific packages. Combine the pension plans and eliminate the admin. costs.
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d. Allow municipalities into the state health care system.
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e. How about the Lege taking a freeze on salaries? I’m not talking about the aides and staff…the Reps. and Senators. Thousands of people lost jobs over the past 6 years or went 2-3 years with level pay, and I haven’t seen any belt tightening on the part of the elected folks. Except of course for the multi-millionaires X-Gov. and X-Lt.Gov. who magnanimously forfeited their salaries – for the good of the Commonwealth and mankind…Fanfare please! Cecil where were you when the red carpet was graced by His Absence!?!![http://en.wikipedia….]
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What does make sense is that Gov. Patrick is going to the Agency Heads and directing them to do their jobs and manage their budgets and departments. That is a far more preferable strategy than arbitrary and capricious 9c cuts.
…they changed the law a few years ago, to take Legislators’ compensation out of their hands – after the infamous Haloween pay raise. So, to prevent them from giving themselves raises, they prevented them from relinquishing them too.
First: Almost all legislators refused to take their COLA/raise during the fiscal crisis of 2001 – 2002 and froze their salaries.
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Second: Romney did refuse his salary BUT he did not give it back to the treasury he dolled it out to his staff including Eric Fernstrom who made 150K+ when he was press secretary!
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Sometimes I ask why should elected officials give up their salaries, they have families to support and expenses just like everyone else. And by reading your comments, they obviously do not get credit when they do take a salary freeze!
…39 – 1. The record was a lot closer to 60 – 40 in the House; I’ve been trying to find a list on line, but old archives aren’t there. The favorite scam in the House was to take the raise and announce that you were giving it to charity, secure in the knowledge that it would still increase your pension base.
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Some of them even did so. But, I remember one Rep., who announced that he was going to give his raise away by reimbursing constituents one at a time for the $1.30 surcharge on prescriptions that was enacted that same year. A couple of months later, the surcharge was repealed, and in fact, drug stores had to refund the money to their customers. Nothing further was heard on the subject of charitable givng from the Rep. And hint: it doesn’t count if it comes from the campaign account to offset the raise….
06 inflow from taxes was $18.8 Billion. Add to that the Federal grants of about $4.9 Billion plus some departmental stuff and the rough budget for 2006 was $25.1 billion. 2006 produced a surplus of $1.9 billion, increasing the rainy day fund from $261K to $2.154 Billion. that’s all here
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07 budget by comparison is at $27.7 billion with a benchmark tax collection of $19.5 billion. Summary, the budgeted expenses are up by $2.6 billion and the tax revenues are up by only .7 Billion, effectively spending any surplus. All that’s at the Mass dor website …somewhere.
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08 budget. What’d ya think? 28.7 Billion with level revenues? Doesn’t matter what you think. It’s what the new Governor thinks. There’s the 1 billion shortfall everyone is writing about.
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Now, look closer (or as close as one can publicly look) at the components: K-12 is increasing at 7.2 %–a function of collective bargaining as to salary increase and medical coverage. Local aid is increasing at 5.0%.
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All other components just increase at 3-3.5 %.
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So, what to do, Governor? Your choices:
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a) Do a Clinton. Well, Clinton didn’t cut the budget. Clinton increased taxes, then the dot com boom hit and showered Washington pirates with more booty than political pirates could quickly figure out how to spend. Hence, the surplus. So if “do a clinton” means hope for a miracle, then yeah, try that.
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b) work within the box. That’s what will probably happen. Nickle and dime with the fees, and the tolls, and the other fees, and the extra fees….zzzzzzz.
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c) other. Here’s the other. Pray for a disaster, real estate busting, job crushing recession, les miserable. Look deep into the camera, and cut the crap out of the departments. Blame the recession on the failed politics of [——-insert scapegoat here—–], weather the recession, and come out of it as the golden boy with some of the ugly collective bargaining cut out of the budget.
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c) other. Accuse the taxpayers of being a bunch of pussies and rally around a 6% flat rate.
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c) other. Run for Senate in 08.
b. Mitt’s play……zzzzzzz
c1. Mitt’s play
c2. Mitt’s wet dream – “pussies” rallying around a 6% flat income tax rate.
c3. other. Run for President in 08. Mitt’s play.
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Gary get a life.
Your suggestions?
Yes, my response was vulgar and contrary to the spirit of this blog, so I am sending my apology to the readership and the authors.
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My suggestions were posted Thursday under the title
b. and c. Other = Benefit and pension reform[http://www.bluemassg…]
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Reminder to self: Don’t post when pissed.
Benefit and pension, together referred to as post-retirement benefits. Under Healey’s plan that would have yielded about $200m savings. Something like that will take at least a year or 2 to impliment. Then her plan envisioned a self directed portion for future hires, thereby taking pressure off futures for the deferred benefit system.
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Optimistically, for 2008 FY, that leaves Patrick with a $800 million shortfall, assuming even, that Patrick takes the page from teh Healey playbook. Where’s the 800M? Subtract say, $5 million for the
tax on speeders“safety fee” and it’s $795M.<
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My options, were and are:
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a: Pray for miracle, like a drug laying hen that will only thrive in Massachusetts.
b: hope for recession because tough times demand tough
and needed cost cutschoicesc: fees! Suck the life outta those rich college kids. Teach them about life early.
d: taxes-income, gas, head tax, meals tax. If you’re a liberal, act like one.
e: cost cut. (remember though that Patrick already rejected the Romney $400M of cuts)
f: other (be creative for extra points)
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I guess I’d do a & b regardless. Doesn’t take government action, only faiery dust.