Here is the link: http://www.thebostonchannel.co…
When do we collectively say “enough”, and protect the most vulnerable by raising revenue instead of cutting services to the vulnerable and letting our infrastructure degrade to third world status?
Here is an example of what I mean by cutting services to those with no voice or clout – and no way to recover, either, if you remember this post: http://bluemassgroup.com/s…
I assure you, if agency budgets are cut, it won’t be management that feels the heat, it will be programs for adolescents at risk, the dependent wards of the state, special education, mental health services [which are already being dangerously slashed when they had never recovered from the loss of the Community Mental Health System “privatized’ under Weld].
You think crime and incarceration are extreme now? Just wait. When the only way to get a roof over your head, if you are a legal orphan thrown on the street at 18 when you age out of foster care is to get arrested or go into prostitution, what do you THINK will happen??? Hello! Hello! Anyone listening out there? Does anyone care?
http://www.tbf.org/uploadedFil… Note the only “safe haven” for these kids is extended custody – which is now treated like a privilege for the few…but where do the rest of the 800 legal orphans who age out of foster care every year wind up?
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p>or this one: http://www.mit.edu/~jjdoyle/do… In fact, when a child, especially a teen is removed from a home that a social worker views as not good enough, they do worse, not better, according to this study then those left in that imperfect home [and better yet if there is therapy and other services available rather than throwing these kids in the dumpster to save money]
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p>or how about:
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p>http://papers.ssrn.com/sol3/pa…
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p>Again, doesn’t anybody care?
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p>2. The MBTA/Massport/tolls and gas tax Bermuda Triange
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p>3. Serious health care reform
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p>After all, as one canny Criminal Defense Lawyer once told me, “follow the money”. Administrative bloat wrapped into entitlements as opposed to actual funding for real services is rather a tradition here.
but it’s mostly third rail politics. It should by no means be stripped or seriously cut, maybe minorly tweaked. Needless to say, we’re not going to find a solution for this state through pension reform… probably not even if this “reform” is really busting, as I’m prone to suspect.
For example, the “Marzili” provision, where the legislature has provided doubling the pension of those among them who lose an election after 20 years of “service”
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p>And more importantly, the method of “bumping up” their salaries for 3 years after long term work in a lower-paying position, so they can combine the years of service with a high basis of pay, often achieved through an appointment due to their political connections.
Pension savings won’t eliminate the current f/y ’09 budget deficit.
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p>Already, in the first wave of 9C “cuts” the Governor borrowed from the pension by eliminating the current year contribution. Any change in pension rules will merely reduce the long term underfunding and won’t affect the current year deficit.
Just a quick point – the Governor did not eliminate the current year contribution to the pension fund in the first round of 9c cuts. He did extend the time in which the pension would be “fully funded” by a few years, but still kept it well within the original 2028 funding schedule.
and this comes from an actuary. Please define “fully funded”: are we talking about bringing current liabilities (i.e., present value of accrued benefits) in balance with assets, or projected liabilities (present value of projected benefits)? What I saw in the Globe article from a couple of weeks ago was incredibly frightening. You had 1 or 2 systems in the state at 100%, and that before the recent market downturn. Leading the pack was Everett at 36% funding!
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p>You know, the Pension Protection Act of 2006 mandated that private plans literally have to hard freeze accruals in plans when the AFTAP goes below 60%. As far as I can tell from the Globe spreadsheet, the vast majority of municipal plans will fall into that category this year.
how would you do it?
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p>i don’t understand doug’s correction to gary, or your comment to doug, b/c i am not smarter than a 5th grader…..
Kid: What happens when you stop working?
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p>State employee: Hey kid. When I’m old and stop working, the state’s going to send me a check every month if they have enough money.
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p>Kid: Do they have enough money?
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p>State employee: No. Not right now. Back in January they had $44 billion but owed $56 Billion.
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p>Kid: holy shit.
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p>State employee: Not a problem. There were some rules that said they had to put enough money aside by 2028 so the Government decided to put enough aside so they had enough by 2023.
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p>Kid: where will they get the money?
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p>State employee: From a couple of places. Taxes plus all the money that they’ll earn from stocks and bonds.
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p>Kid: And hedge funds and deriviatives?
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p>State employee: Well yeah, but they had a bad year, so the $44 billion they had in January is more like $25 billion. Yeah, I know, holy shit. But not to worry. It’ll come back. Someday.
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p>In the meantime, the Government has to keep running, so Governor Patrick decided to put enough money aside so based on January numbers, he’d make up the difference by 2025. That saved about $52 million this year! That guy, gary said they didn’t put any money aside this year, but he was mistaken. They put some aside, but not as much as they planned.
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p>Kid: So by not putting the money aside they saved it?
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p>State employee: Sure. When the government says saves, it really means spends.
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p>Kid: Saves it for who?
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p>State employees: Saves it so they can spend it on State employees.
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p>Kid: Wait. It saves money it has to pay in 2035 so it can spend it today, right? That’s like borrowing, right?
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p>State employee: Right.
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p>Kid: But you said it’s making up the difference between $44 Billion and $56 Billion but the $44 Billion doesn’t exist because some rat bastard on Wall Street took it.
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p>State employee: Right again, but we don’t know how much they took yet because the actuaries haven’t figured it out so they’re pretending that they still have $44 billion and pretending that they’ll have enough money by 2025, even though we know they won’t.
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p>Kid: is that called lying?
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p>State employee: nonsense. That’s call hope for change. I hope I’ll get more than change in my pension check at age 65.
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p>
11% of their salaries and the state still needs to contribute.
There’s some history there.
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p>Too much history: Reagan, Dukakis, 1983, 1987… but it all comes down to Star Trek.
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p>That episode where there’s a big rock heading toward a planet, and all the Enterprise has to do is give it a little shove and because the planet is so far away, the little bump will knock the rock off course.
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p>But Captain Kirk went to the planet for some reason or another with other priorities, and banged some chick, and then a few years later this rock is right on top of the planet and the Enterprise is broken and if it wasn’t for some cool machine they’d all be toast.
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p>Well in ’87, the rock was the retiring baby boomers who at the time were 39 years old and would never get old;
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p>And the planet was Massachusetts;
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p>And the enterprise is the State Government;
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p>And Kirk was every Governor we’ve ever had;
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p>And there is no chick or cool machine to fix things.
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p>Enter the first rule of Politicians: Our priority is to maximize benefits now, not ten years from now when we’ll be dead or out of office. i.e. it’s just a rock a million miles away and we have years to fix this thang.
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p>In 1988, the Leg set the date to fund the pensions as 2028. That’s because leading up to ’87 1) the underfunding was $11 billion (which was huge at the time) and 2) the pension was then “pay as you go” meaning any effort to cure the underfunding wrecked the current budget, and 3) State bond ratings were lower than dancers’ heads in the Combat Zone.
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p>2038 target date was set as 1988 +40 years to cure the $11 underfunding which is now probably closer to $20 billion, but nevermind. And as the rock approaches, there never seems to be a good time to fund the pension, and so the employee contribution rate inexerably creeps upwards. “We’re on target,” says
Mr. SpockMr. Rubin.<
p>The reason you pay 11% is simple: 1) you’re paying the price for government’s delay decades ago 2) you’re paying the price for government’s largess. That is, because of the multiple “groups” some employees pay less than 11% but receive the same benefits as those who pay 11%
“And there is no chick or cool machine to fix things. “
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p>Alas… the world could do with more hot ch…. ahem… er… cool machines.
Not to mention the varied selectmen turned legislators who can count a $300 annual stipend as a full year of service, and can collect based on top 3 years as if they had contributed 11% of a 37.5 hour week for those years.
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p>And on and on and on…
In 1972 I made somewhere around 8K and change as a state employee. In 1976 or thereabouts I was also on food stamps to feed my family. Since I have been retired, inflation and the increasing cost of healthcare, insurance, withholding etc has taken approx 30%-40% of my pension’s buying power. (There is no COLA, so it has not gone up a dime since I retired) So—I guess it’s all relative. With the expected sjyrocketing inflation due to the federal government printing money 24/7—in five years my state pension will be essentially worthless. Thank god I have a profession to return to ( well that’s with the presumption that Daschle does not take a wrecking ball to healthcare)
As you say, they paid up at the going rate at the time. The stipend pensioners bug me more.
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p>I actually have a few modest proposals that would go a long way to at least coping with the underfunding.
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p>1 – Make it the top TEN years, not the top three. It takes ten to vest (unless you are a legislator, but that’s a whole other problem). It would filter out the stipend time and would do far less to penalize legitimate full timers. Because changes ARE coming.
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p>2 – Make Mass. a contributory state. Yesterday. It will eliminate offset problems with SS in time, and will take away some justification for enhancing the defined benefit system
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p>3 – Phase OUT the defined benefit system.
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p>4 – Require different groups to contribute at different rates commensurate with payout – Group 4 vs. Group 1, for example.
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p>And now, here’s the killer. Hide me.
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p>FIVE – 5 – Make state employees work to age 65 to have full benefits.
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p>WHY can you retire at 55 with full benefits? Health care for life and a pension? Even SS is now making people work to 66 and 67 for full benefits? And FORGET the MBTA where you can retire at 50!
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p>Happy New Year, MCRD – and thank you for your service. No snark.
the IRS has gone after this with final regulations issued in 2007 on what constitutes a reasonable Normal Retirement Age under a pension plan. MBTA with full retirement after 23 years of service as an example; driving a bus is equivalent to Navy SEAL territory? Think not. Basically, anything under age 62 has to be proven, with 55-61 on facts and circumstances, and anything under 55 is BS.
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p>You know, the funny thing is that everyone seems to focus on “abuses” under the private sector with overly large contributions leading to tax revenue losses. Well, if you have equally abusive crap going on in the public sector, then you have the equal problem of overly abusive use of taxpayers money. The end result is still the same.
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p>Ultimate problem with public sector plans is that literally noone is in charge. Even a “courageous” stand is just passing the buck to an administration 20 years down the road.
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p>As to the employee contribution example on the state side, us in the private sector are forking over 15.3% on FICA/Medicare taxes, with an incredibly “progressive” SS formula. Heck, I’d jump at the chance at 11% contribution in lieu of SS taxes with a benefit far greater than what you’d get from SS.
I guess it actually goes back to the aircraft carrier Enterprise. You forgot about the state pillaging retirement funds for operating expenses way back in the 60’s. It gets you in a hole, you promise to pay it back and it takes…well, if we’re now looking at 2026…about 60 years. But it’ll be more than that, I think everyone knows.
A system that, as of now, takes 11% of your salary for retirement…over a 30-40 year career that’s a lotta dough…should not be requiring state contributions, and wouldn’t be except as a make up.
The current actives pay 11% for a benefit that ranges (because of group classification + makeup of prior costs) from 12% to 22%.
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p>-You have different groups contributing less because of classification;
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p>-different groups contributing less because of employment date and an SJC 1970 court decision;
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p>-lamers who take jobs as moderators earning $300 per year and then seek out a State job in the $50K+ range for a few years of work in order to retire at full pension based on $50K.
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p>-Then to complicate it all, you have myriad pension plans littered across the state each with its own underfunded pot of gold and system of rules.
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p>Reform means taking on 1) teachers and teachers unions 2) unions and state employees 3) politicians content with the gameable plan 4) small plan administrators and investment advisors across the state. AND, even if successful reform means very little in short run savings because any amounts saved are realized over decades. Not an appetizing target for a politician bent on reform.
the 5 percenters (through 74), 7 percenters, 8 percenters and 9 percenter are all grandfathered in thanks to a 1970 SJC decision.
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p>Presumably, when the rate inevitably goes to 12% the 11 percenters will probably continue at 11%.
Current year contribution, not eliminated, but rather, reduced, essentially borrowing from the future for this year’s (FY ’09) savings, no?
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p>Along that line, how much will the State contribute in FY’09 excluding employee contributions? It appears approx $280M was originally anticipated.
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p>How can you claim it’s well within the 2028 funding schedule without considering the Oct, Nov…performance. Even with the GAS smoothing, the MA Teachers and State Pension funding must have significantly deteriorated.
Is a school teacher in a seaside community on the So Shore. he said she has been teaching ten years and makes over 65K a year. A music teacher makes over 65K a year? I went into the wrong profession.
I understand the point about the impact of recent performance on the funding schedule. Way back at the beginning of this loop, my intention was simply to say that the Governor did not eliminate the state’s payment to the pension fund, he reduced it by pushing out the “fully funded” date by a few years, keeping it within the original 2028 date. The issue of the recent performance and its impact on the fund is clearly relevant and important, and will have an impact on the budget as we move forward.
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p>None of these decisions is ideal. By extending the pension schedule, the Governor was able to spare some other worthy programs. Given the national economic situation and its impact on MA, we are forced to make these decisions and tradeoffs.
http://drwren.com/true/200812….
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p>By a “local aid floor” – I mean ensuring that no municipality will receive less local aid in FY 2010 then it received in FY 2002 [which, due to inflation, is still a tough burden for local governance]??
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p>I think Jamiesen Wren did great work with their two tab analysis in that chart.
the 3 year rule is one of them that needs tweaking, though I don’t think it should be the career average. A change to the 5 best years in a row would solve the very minor cases of abuse there.
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p>How should you fix the Marzilli problem? I’ve never heard that 20 years service gets a doubling of the pension, but even if it does, you’d just get more people looking for political appointments… 3 year rule or no 3 year rule (they’ll just leave earlier with the 3 year rule). State reps, in the grand scheme of things, really don’t make much money. Their pensions, even if they were doubled after 20 years of service, really aren’t going to be that huge minus one of those appointments.
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p>Bottom line: both of your examples are small change in the grand scheme of things. They are not going to make a big difference in the grand scheme of things. The problem with pensions in this state is that most local communities haven’t been contributing what they should have been for a very long time now. The vast majority of the pensions themselves – with some small, minor examples of abuse – are good things. If only we all had good pensions (the solution, of course, is not to strip the people lucky enough to have them, but to ensure the fact that we all get them, or at least better security in retirement).
those, and many others, cause a lot of angst for those paying the bills. Clean up the act, and the people will be more understanding.
Nobody will claim the residents of MA are awash with cash today of going into 2009 so how well will a tax increase be received? Many of the proposed spending cuts have been third rail politics for a ong time and I see nothing new to make me think things will change (pension reform, double dipping pensions, paying x-pols 2X pensions…). Cutting local aid and cutting spending will be the 2 targets and maybe rightly so.
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p>I would not like to be the person deciding on who will bear the brunt of the poor financial/economic planning by this administration and the legislature but at least those same people will have to now carry the burden of making their decisions.
We’re all mature adults. We realize that these cuts have been disastrous and can’t continue. And we’re smart enough to realize that something like .1% or .2% over the course of a year is small beans that we won’t even notice.
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p>BTW – while we’re not awash with cash, we’re the second best compensated state in the country. We can handle slightly higher taxes.
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p>BTW – it cracks me up to hear about ‘double dipping pensions’ which cost this state ZIPPO since no one can receive their state pension if they work for a state entity. They can only ‘double dip’ if they work for a private enterprise. Thus, we lose no money.
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p>Lastly, local aid is a third rail? We almost closed our second school in 3 years in my town – in large part because we don’t receive our fair share of Chapter 70 funds. You either don’t know what third rail politics means, or you have zero understanding of how badly funded and desperate cities and towns are right now. Either way, big time ignorance.
One can certainly receive a state pension and work for a state/municipal entity. For instance, a T employee may retire and then work for a state agency. A superintendent of schools may retire and then work as a “consultant” for his school system. It’s happening all over the place. School committees in the tank with their old “super” like to give the old boy a special kiss for his efforts. See Stoneham.
You propose raising taxes about a Billion Dollars right? So we have about 6.5 million people in MA which would equate to about $153/per person (all ages) in the state. I have 5 kids so it would be (7x$153) $1,076 of additional taxes for my family. Sounds like a lot to me not to mention the fact that I’m sure some percent of the population will not pay any of this increase.
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p>This attitude of another .1% or .2% over the course of the year amounting to “beans” is exactly the attitude I teach my kids NOT to have. It all adds up. I mean why don’t you and others start now by paying another extra .1% or .2% of their federal taxes to decrease he deficit. How about you increase every expense in your house, including mortgages that amount since it amounts to “beans”. The beans add up and leads to expressions like “death by a thousand pricks”.
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p>
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p>Call ’em what you want, but I don’t think there’s a thousand seats in the State Legislature.
Don’t see to much humor here. Happy New Year!
Can’t you make the argument that a 1% cut in “revenue” (i.e. take home pay) to a household is the same as the 1% reduction in state budgets that everyone thinks should be easy to swallow?
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p>Can we maybe move past the rhetoric and decide that neither raising taxes nor across-the-board budget cuts can be done without having an impact?
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p>Once we get past that, we have to figure out the best way to spread this out in a way that moves our state forward. I suppose the last point is debatable — some may want to spread this out to reduce government services, some may want to protect their own hides. That’s politics.
after they retire and work something like 180 days and they collect 100% of their pension plus XYZ dollars per hour for their nice part time job. Some state employees have retired from the state and go to work for a county that is in a different pension system and double dip.Go back and do your homework!
I’ve been explicitly told by several people who work for the state that that’s not true. For example, my father, who’s a teacher, cannot work as a teacher in another public school in Massachusetts after he retires in another few years, yet he will get another job (he couldn’t afford not to). It will just have to be in the private sector.
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p>If you say otherwise, find me the statute, link me the story. I’m sure my dad will be thrilled to hear that all he needs to take is a 180 day vacation and he can “double dip” as a public school teacher.
June 28, 2008 School system retirees ‘double dip’ with waiver – Collect full salaries plus their pensions
There’s a rule against doing it – and it took a special waiver, only given to 100 teachers in Massachusetts – in order to violate it. This is a really, really petty issue that has no relevance in saving the state’s fiscal situation. Third rail politics in the extreme. In fact, the waiver program is actually a good program.
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p>
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p>It takes years and years for a math or science teacher to become actually good at teaching math or science, if they ever do. There’s usually not enough of them out there, so schools are often given the choice of enticing someone out of retirement for a year or two, or taking someone right out of college who may not be ready to teach chemistry yet. Or maybe they want a few old hands to teach the young’n. Or maybe a teacher goes out for maternity leave in the middle of the year and the school wants to make sure his or her students don’t suffer because of it. Or there was a teacher who, quite unexpectedly, decided to retire after all – weeks before the year starts – and most of the best young talent has been scooped up.
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p>The very fact that there’s only around 100 teachers getting this waiver across the freaking state shows that this is not a problem. That’s significantly less than 1 teacher getting a waiver per town in Massachusetts.
You asked for a link for your Dad and I supplied. Happy New Year!
Go to the committee listing and click on Public Service – and look at the HUNDREDS of bills giving people exceptional treatment. Factor those into you waiver, and get back to me.
You’re not getting away with this…
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p>
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p>If you want to make the claim that the admin and legislature have made a series of poor financial/economic decisions, than you tell me what they are, and provide me some proof of how much rectifying such “poor decisions” would actually save in this budget.
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p>I would agree with several other comments here than the state may be forced to raise more revenue here, and its failure to do so (through tax hikes, fee increases, and so forth) is the true “poor” decision, if any. Somehow I doubt you’d agree with that, so I’d love to know specifics about where you would trim.
The first error was a magnanimous across the board, sweeping reversal with no due diligence of 100% of the Romney, December 9C cuts.
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p>Second, trying to double the gun permiting fees: to the woodshed Governor, we’re going to cut it in half no matter what you say.
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p>Third, the 2009 budget in total, proposed by the Governor’s office and juiced by the Legislators in the face of widely predicted falling tax revenues.
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p>Forth, cut wage increases across the board, no … wait!
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p>Fifth, everyone join the GIC. (Kidding. Only if you really want to)
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p>Sixth, all you little pension plans have to join the PRIT. (See GIC)
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p>Cas-i-nos, cas-i-nos, cas-i-nos. Yep, three of them.
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p>”Local option tax. I said, local option tax. Anyone out there? Sal? Anyone?
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p>”Tolls! Tolls! Wut? Gas tax? Ok, gas tax! gas tax! I am your leader, I will follow you.”
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p>But on a bright financial note, he signed a very good book deal.
but their job includes looking into the future and planning for things like a declining economy AND making adjustments. Companies did the same and this downturn was forecasted by many well in advance.
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p>Why do people have to be so partisan about things like this? People make mistakes… everyone does. I could go back a year and find numerous headlines forecasting a bad economy. Why couldn’t the Governor an the law makers?
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p>Trims… I like trimming local aid and would to eventually eliminate it. Towns have services and budgets to provide for those services. I’m tired of paying money to the state so they can take their large administrative cut and then allocate MY money out to some other town which can’t get their act together. To me Local Aid is another example of not letting towns survive by their actions. Second, completely overhaul the pension system. Third overhaul healthcare including the $8,000/month paid to care for elderly at Nursing homes. Fourth, repeal the prevailing wage law. Fifth, a 5% across the board budget cut at every state agency. Enough for now, I’m busy.
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p>However, I do think we should keep the $$$ for the DC office, the world tour junkets and all the administrative hires (the new Real Estate Services Dir. at $120K) in the State and the education system… those are so darn needed.
State should have a hiring freeze. Fire Amy Gorin. That will save 120K. I don’t believe there is any need for this position at this time.
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p>This is the type of stuff that drives the average voter crazy. This why there is no support for tax increases as the voters see these type of hires and lose all confidence in the ability of State Govt. to do the job right.
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p>Look how many local communities have instituted hiring freezes, why not the state?
I’ll give credit where credit is due — you and Gary have provided some specifics. I’m certainly not convinced these spending trims alone will make up the shortfall — particularly with pension reform, which means more longer-term savings than short-term, and I have many questions about your depiction of local aid — but fair enough. This at least provides a framework for debate about the wisdom of particular cuts.
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p>However, it seems pretty clear that if we want responsible fiscal policy here, that means increasing revenues to help make up the shortfall. Ideally, a return to a 5.95% statewide income tax would make the most sense, as that would generate greater (and more flexible) revenue than local option taxes and things like increased gun permitting fees. Failing to take care of the revenue side is at least a big a problem as failing to take care of the expenditure side.
If he’d just drop his I’m-writing-this-inspirational-book thing for now; drop the “this is hard work” and “these are difficult choices” bullshit; drop the “I feel your pain” angst, and just do it.
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p>Rule of cuts: 1) do it fast 2) make broad cuts. Because if everyone suffers equally no single wronged faction storms the Bastille.
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p>Prediction 09: Governor Patrick will ultimately channel his inner-Romney and do the same thing that Romney did in mid-year 2003 when facing a drop in revenues:
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p>1) raise the gas tax .02 per gallon
2) raise fees
3) cut local aid.
4) broad cuts in all State departments
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p>
The fraud, waste, and abuse in just the state physical structures is mind numbing. State employees with make believe jobs ( you could reduce the size of public safety by thirty percent) The governor hiring his neighbor to a make believe kob at 120K a year. Ad nauseum.
from the State House News Service
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p>
Only in this bizarro land where we’ve become a country that refuses to raise taxes in good times, bad, middle, anytime, anywhere, for any reason.
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p>Cutting local aid, after it hasn’t even caught up to the last time we cut local aid, is unacceptable.
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p>The “only” solution , you know, something that fixes things, is to raise taxes. .2% would raise over 5.4 BILLION dollars, more than enough to not only cover the gap but also provide economic stimulus… building the T extensions or providing new funding for local communities.
from the debate over question 1 that the MA personal income tax raises about $12.5 billion each year at the current rate of 5.3%. If a 5.3% rate raises $12.5 billion, then how do you figure that a 5.5% rate would raise about $17.9 billion? I see your math from your link here:
I think you missed a decimal place there. (6,400,000) * (42,000) = (268,800,000,000). (268,800,000,000) * 0.002 = 537,600,000. So it would only raise about half a billion dollars, nowhere near enough to fix the current projected deficit. Plus due to deductions, credits, exclusions, etc., not everyone will pay the new marginal rate of 5.5% on all $280,000,000,000 of income.
you’re right, I did miss a decimal.
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p>But my general point remains valid. We could raise it by .3, still reasonable, and get close to a billion. Combined with some minor cuts, that would get us by long enough to think of a long term solution. My long term solution would be a progressive income tax combined with tackling the cost of health care.
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p>But the bottom line is we can’t keep cutting and cutting without raising at least some new revenue. That’s neither a balanced nor intelligent approach.
People think the private economy can always absorb another burden. Global warming tax, healthcare tax etc.
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p>Revenues are too low because the economy didn’t grow enough… the solution is to raise taxes?
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p>I voted Dem over the war, but the rest of the party platform is babyish. You’re learning now.
I would agree that the feds shouldn’t be raising taxes in this economy — after all, the feds can borrow at far greater capacity than can the states.
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p>But Mass. and other states do not have the same options to borrow. So that means possible budget cuts, yes…but also modest tax increases. You balance a budget by cutting expenditures but also raising additional revenues.
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p>That seems obvious to me, but I glean from your comment that you seem to prefer the modern right-wing approach of tax cuts always being the solution, not matter what the problem.
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p>If that’s not “babyish”, I don’t know what is.
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p>2. I could maybe see your point if I was talking about sales taxes, but I’m not. Raising taxes would increase spending – instead of seeing thousands of layoffs across the state, which would not only hurt the economy big time, but would lead to a generation of kids getting a subpar education, which has very long term implications.
The solution is to get the private economy going again. Anything else is a waste of time. We cannot get to Obama himself so we have to get to Deval Patrick. I can’t get to Patrick, unfortunately all I can get to is you.
So all I can do is bother you in hopes that when the stimulus fails, and the tax increases fail to raise what you expected, and the Dems get blown out in 2010, you will have learned. I hope we’re all still here two years from now.
and those tax cuts for the rich worked so well the past 8 years…
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p>When someone has no job, they spend nothing and lose everything and drag this economy down steeply, even though it’s just one person. If the state contributed to this mess by laying off tens of thousands of people, that’s tens of thousands of people that are contributing very little to the economy and thus forcing more job losses, because they’re not getting “the private economy going again.” Meanwhile, their kids aren’t learning because their town’s school was shut down and the best teachers were laid off… and that kid gets worse jobs and makes less money for the rest of his or her life because of it, thus ensuring the circle is complete and the economy only continues to decline.
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p>There’s a reason why each one of these recessions has been worse and worse – and why we’re suddenly teetering on the brink of a full scale, Great Depression Part 2. And yet you urge the same economics that got us here to begin with. Thanks.
that for many conservatives there is never a good time for a tax increase. Good economy – don’t ruin it by increasing taxes. Bad economy – don’t make it worse by increasing taxes. But I think the flip is true for many liberals. There is never a good time for a tax decrease. Bad economy – budget is down, can’t afford to cut taxes. Good economy – we have a surplus, now we can increase spending on both current and new programs. I think a little flexibility from both sides would be nice. I’d support a slight increase in taxes to close the current budget deficit if I were confident that there would be a corresponding slight decrease in taxes when the economy improves and the coffers fill up again.
I think many liberals, including those in the Obama Administration, favor a tax cut in this economy, and I think we’re quite likely to actually see it happen (esp. given that it was a major part of Obama’s campaign platform). So the notion that liberals will never support a tax cut will likely be be contradicted by the incoming Administration’s actions.
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p>The difference is whether the state should lower taxes now, and the answer to that is clearly no. When the economy is good again, I would guess that there will be more pressure to lower taxes, as we saw several years ago when the rates decreased from 5.95% to 5.3%.
But legislated social goals have costs that are not factored in.
we had budget surpluses under Clinton. What happened? We got a rebate at the end of the year.
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p>To me, that’s a sensible solution. Tax what we know will cover government’s expenses, even in a bad year. If there’s a surplus, keep a small portion for rainy days, give the vast majority of it back to the taxpayers.
…Finneran INVENTED the Rainy Day Fund rather than return surplus to taxpayers. At that, during the same period in the 1990’s, he didn’t make the fund big enough, so rainy day, unemployment, etc., were all full up. They actually had to increase the size of the personal deduction on income tax one year because the state couldn’t spend the money fast enough! Next year, Finneral doubled the cap of rainy day so THAT wouldn’t happen again.
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p>THAT WAS WHEN the Lege should have rolled back to 5 percent – when they had the money, and the 5.95 ’emergency’ era was obviously over. HAD THEY DONE SO, when the economy tanked afer 9/11, they could ahve gone BACK to the voters and said – we raised taxes, but we lowered them like we said we would, and now there’s a new emergency. People would have responded to honesty. But because they didn’t, the rollback movement started, and now tax hikes are mistrusted even when necessary.
we had it! We’ve needed the rainy day fund these past few years and have used it heavily. If only taxes weren’t cut to the point where we’ll never be contributing much to it ever again. You picked a bad time to complain about having a rainy day fund. LOL.
So if the situation were to arise a few years from now where there is a surplus at the end of the year and good economic projections into the future, we can expect both Hoyapaul and yourself to resist calls for increased spending on social/progressive causes in favor of a tax cut?
I said tax rebate, not tax cut. If there’s money at the end of the year left over, then there should be a rebate. That doesn’t mean I don’t favor more spending, though. I just think we should be taxing a hair more than we think we’ll need, so we don’t have to go through years like this one where we cut over $2 billion midyear with absolutely disastrous consequences. The hope would be to give back most of it in the form a rebate at the end of the year, a la Clinton did back in the 90s.
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p>None of that is to say that I don’t support more spending, but that’s an entirely different issue. I don’t think the spending should be tacked on at the end of the year; it should be done up front and not in hiding, with as much public dialogue and insight as possible. But none of that changes the fact that it doesn’t make fiscal sense to try to balance a budget with nothing left over when you’re dealing with billions of dollars, and praying projections hold out when things can change rapidly. Just as any household tries to have at least a little left over than just their bare minimum to pay each bill on time, so should we try to bring in slightly more revenue than we actually think we need to pay all our bills for the year. When those bills are paid, the bulk of the money not spent should be given back (with some going into a rainy day fund when the years are good). This is how I would run my household and this is how I would run government.
that if taxes were raised to fix the current budget deficits, that in future good economic times when the current taxes result in more revenue for the state that liberal/progressive individuals will want to use the additional money for liberal/progressive causes. So when there is a deficit, if liberals/progressives urge a slight tax increase then really they’re just urging a permanent increase in tax rates that will be spent to keep current government spending until revenues increase, and then the additional taxes and additional revenues will be used to fund new government spending. So government spending will always stay the same in bad economic times, and increase during good economic times, leading to a need for more tax increases during the next economic downturn to maintain the new level of government spending. Thats why the common sense solution of slightly raising taxes is rejected by many conservatives and moderates, because the tax increase is never just temporary.
… pet causes. It is often pointed out how expensive ‘liberal’ programs are and therefore how deserving of cutting they are in times of crisis. Social security was robbed in favor of other causes, not because of it’s expense, but because of the expense of other programs… particularly the military. From what I can recall, defense is the most expensive group of items on the budget, and has been for quite some time. But since defense is a cause near and dear to the conservative’s heart, we don’t often hear advocates of defense cuts from the right (excepting some isolationist libertarians,… and even then they don’t shout too loudly), although I suppose the military could certainly be accused of being a liberal institution, what with it’s strict wage controls, socialist health care, communist social ethic, and effectively being a conduit for corporate welfare (although the state department helps in that area too… at least sometimes).
The federal government can just run a deficit, we’re talking about how a state responds to the need to balance it’s budget during hard times. And, while it may be a generalization, I think it’s fair to say that more liberal/progressive individuals both within and outside government in MA tend to support more spending by the MA state government. I’m simply trying to explain why there is resistance to the idea that ‘we can’t cut our way out of this, we need to raise some taxes to fix this current budget problem.’ The resistance comes from the knowledge that the increased taxes won’t be temporary but will instead lead to bigger government when the economy recovers.
… pet causes. It is often pointed out how expensive ‘liberal’ programs are and therefore how deserving of cutting they are in times of crisis. Social security was robbed in favor of other causes, not because of it’s expense, but because of the expense of other programs… particularly the military. From what I can recall, defense is the most expensive group of items on the budget, and has been for quite some time. But since defense is a cause near and dear to the conservative’s heart, we don’t often hear advocates of defense cuts from the right (excepting some isolationist libertarians,… and even then they don’t shout too loudly), although I suppose the military could certainly be accused of being a liberal institution, what with it’s strict wage controls, socialist health care, communist social ethic, and effectively being a conduit for corporate welfare (although the state department helps in that area too… at least sometimes).
What are our military costs, exactly? How does SS factor into our budget?
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p>Why do liberals in Mass. drag the Feds into the discussion whenever MA looks bad?
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p>And Ryan outlined the actions of the Lege in the 1990’s – create new programs in good times, and in bad times like NOW, talk about the ‘cuts’ to newly formed programs as they are long standing tradition. Not to pick on one program, but how long has ‘Turning 22’ been on the books?
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p>Charge a skosh over and then rebate? Rebate time never comes.
… owing to the fact that it’s a state budget, and PW’s response above is salient to that end.
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p>I was commenting on the knee-jerk reaction that in times of belt tightening it’s the ‘librul’ stuff that gets the bulls eye put on it first. I don’t object to finding waste and dealing with it appropriately, but because of the conservative noise machine, the Pavlovian association is that the programs that need cutting are the progressive ones. I’d be happy to examine particulars and improve them, but to automatically start the process with ‘entitlement’ programs is to have made decisions about waste before the examination.
What “government spending” do you support, and what “government spending” do you oppose? Do you oppose housing for the legal orphans created by DCF and the Juvenile Court? Do you oppose regular repair and maintenance of bridges and dams?
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p>Just wondering.
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p>I oppose paying tax dollars to ensure that the CEOs of nonprofits earn the same level of compensation as the CEOs of private, for profit, manufacturing and financial concerns.
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p>By the way, I could not navigate the Operational Services Division Website the link is: http://www.mass.gov/?pageID=os… to find the reports that show what the top five earners in each “nonprofit” vendor that gets state money earned the last few years. Anyone help me out with that?
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p>And for you, power wheels, just what “government spending” do YOU value. Just curious.
but I place the burden on those who do the spending to justify it. I cannot give you an exhaustive line by line break down of the entire state budget and tell you exactly where money can be saved. Nor do I think it’s my responsibility to do that. If the powers that be in MA believe that a cause is important enough that taxes should be collected from the politic to pay for that cause then I place the burden on those same powers to openly and honestly explain why and how that money is being spent, and to frequently review whether the spending was effective or necessary. But this is all beside my original point.
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p>Again, I’m just trying to explain why the seemingly easy solution of ‘just raise taxes a little to balance this budget’ is not such an obvious solution for everyone to agree with. I already stated above that I would support a slight increase in taxes to maintain the current level of spending if I were convinced that there would be a corresponding slight decrease in taxes when the economy recovers.
PW. We have a democratic process to decide where and how this state is going to spend money. The people understand that there are costs we must attend to (primarily the infrastructure) and priorities we aren’t fulfilling (mainly education and health care – some of which represents cost savings).
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p>I do not know, but guess, we will have to spend some more in the future – just because we aren’t meeting the obligations of today. Meeting those obligations may very well raise the revenue this state raises through taxes; that’s why they’re called investments. If that happens, who knows, maybe we will be able to cut taxes again in the future? But it’ll take some time to get there.
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p>But I do not ever support spending money we don’t have, relying on projections that may or may not turn out to be true. We’ve been burned by this many times before. If we over project and have left over spending, it should be given back to taxpayers and not spent for extra, pet projects. If we under project, that’s why we should be taking in more money than we actually think we need, in case we find out that we suddenly need to make big changes. But we must be willing to spend money – even if that means raising taxes – to fund the projects that need funding in this state, including infrastructure and educational investments.
you mean “virtual inevitability” then I agree. You just made my point for me. You think the current level of spending on education and health care is inadequate. If the personal income tax were raised to 5.6 percent to solve the current budget deficit, then after the inevitable economic recovery when an income tax of 5.6 percent brings in more than enough money to fund the current level of spending, you would use the surplus to put more funds into education and health care. But then after several years of good economic times, an inevitable economic downturn would occur. At that point you would need to decide between cuts in the new funding or raising taxes again. And you would make the same ‘we have to raise taxes just a little to maintain the current level of spending’ that you’re making now.
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p>And all spending in MA relies on projections. The Governor and legislature will spend the next several months putting together a fiscal year ’09 budget based on projected revenue in fiscal year ’09. That’s just how it’s done. And they’ll rely on good economists to do it. Unfortunately, there are no reliable clairvoyants or soothsayers available, so the projections might be off. But that’s how it works.
You’re missing the point. You’re talking about “what-ifs.” I’m talking about our freaking structural deficit, yearly cuts… and massive cuts every few years because rely on our frequently rosy projections. We can’t sustain our current tax rate – and we can’t leave ourselves to be blindsided by bad economic years. Doing so only makes those years worse and extended.
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p>IF our revenues go up in a big way and IF we get control over our rapidly increasing (beyond the rate of inflation) costs, THEN absolutely, we should discuss going back to previous tax rates, should we expand beyond what we have today (because that does not currently fund our basic needs). But those are all very massive ifs that are never going to happen without serious government investment in education, transportation and in ways to control the cost of health care, as well as promote the growth of small business and industry.
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p>
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p>How many times do I have to explain myself? Are you just not reading? We should always take in a healthy enough margin that we’ll have enough to fund our government in good years and bad, whether our projections are right or wrong. The good years, the leftovers should be given back to taxpayers in the form of rebates. Heck, even in some of the bad, there may be enough for rebates, should we take in enough to compensate for when projections go wrong. That’s some fiscal conservatism I can support! If we find we can eventually cut taxes, great. I just think you’re dreaming at this current tax rate, given the fact that we have a structural deficit that forces cuts in even the best of years, while avoiding paying for billions in costs that this state has to spend no matter what (transportation).
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p>This fiscal mess – a second round of mid-year cuts (which are the worst kind of cuts) – was in large part caused because we have an over reliance on projections without making sure there’s enough left over at the end of the year in case our projections are off. If we took in .2-.3% every year that we didn’t plan to spend, just there for emergencies and to be given back at year’s end as rebates if all goes well, we wouldn’t have had to make nearly as many cuts.
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p>Unfortunately, because we can’t borrow like the federal government, taking in more than we need and giving the extra back at the end of the year is probably the best way to go about things. By not taking in enough to be prepared for bad projections, we’re leaving ourselves open to disaster. We’re ‘balancing’ the budget only thinking about the mortgage and health care, without thinking about if our car breaks down or gas goes up. The government is essentially deciding to work less hours because it thinks it has enough money, without being fully prepared should things end up costing more than we thought. If you have a better idea on how to deal with when projections aren’t met, other than slashing the hell out of the budget, feel free to write it down. In the mean time, I’m going to consider your posts evidence that you don’t even want to listen.
you wanted to know why some people reject what you see as the obvious solution of just raising tax rates a bit to maintain the current level of spending. It’s because people like you use terms like “structural deficit” and “serious government investment.” Those are subjective viewpoints that you hold. You want to increase government spending. It’s disingenuous of you to ask people to pay more in taxes under the guise of maintaining current spending when you really want a permanent tax increase going forward to get to the level of spending you want, I.e. fixing what you see as a “structural deficit” through “serious government investment.”
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p>I don’t necessarily disagree with your “fiscal conservatism” while putting together a budget, but that’s ancillary to the point I am making about why reasonable people could reject your calls for increased taxes. I think to some extent we are just talking past each other, to understand the point I’m making you need to put yourself in the position of a moderate middle class person who grudgingly accepts the current level of both taxes and spending. That’s the person who should be, and will be wary of your calls for increased taxes.
You really don’t understand a structural deficit. The fact that you’d conflate that with “serious government investment” sadly shows your ignorance on the issue. A structural deficit is a deficit with costs rising beyond our revenues on a yearly basis. “Serious government investment” would be new spending, whereas offsetting a structural deficit would be merely maintaining the status quo.
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p>But by not dealing with some of that “serious government investment” we’re almost putting our transportation system in a nonmonetary structural deficit. We can’t fix our roads, bridges and trains fast enough to deal with their rates of decline, never mind build more of them. That’s why we have some of the nation’s worst roads and bridges.
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p>I don’t “want” anything. There’s simply things we need to spend money on, whether we like it or not. I’d love to go to the Grocery market and get free food, but unfortunately I have to pay for it, just like everyone else.
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p>So, too, does the government. We have little control over those costs, only on what we eat, so to speak. Some corners can be cut – we’ve been cutting them for a decade or more now – but at some point if you cut corners, your health declines, you don’t get enough nourishment and you get fat, sick and die. The same goes with our roads, our health care and our schools. I don’t want these things to continue to be neglected, because we’re going to pay for it one way or the other in the end. If we pay for it now, we save billions as well as lives, mainly maintaining what we already have. If we pay for it later, we watch bridges collapse, people die and have to build things from scratch. You can not want to pay for those things as much as you want, but you’re only delaying the day in which we have no choice. Now, maybe you’re old enough that you think you’ll never have to pay for them, but you’re probably not – and if you are, well, shame on you for placing your burdens on the next generation.
from ‘we need to slightly raise taxes to get through a rough economic period’ to ‘shame on all those warped people who don’t support permanent income tax increases right now.’ That’ll be sure to win over all those moderates who wonder why they should pay higher taxes for transportation spending when the new guy in charge of transportation is the same guy who played a prominent role in the financial disaster known as the Big Dig . And now your attractive and reasonable sounding rhetoric that could have actually convinced people is gone in favor of hard line and combative rhetoric that will put off those who may have been convinced.
A good follow up question would be why do you focus on the absurdly hypothetical when in reality that hypothetical is about as likely as lightning striking me now, this very second, where I stand. Just today we read about Obama creating $150 billion/year in new tax cuts!
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p>Consider my questions rhetorical. I already know the answer. Some crazy rant about how I only support raising taxes or how ebil librals like me only want to spend more and more, blah, blah, blah.
The MA rainy day fund was created in 2004. It currently stand at over $2 billion. Broad based taxes have not been substantially altered since 2004. So in a fairly good 4 year economic period, the current tax rates created a $2 billion surplus. Based on that information, I posit that increasing the personal income tax rate to 5.5 percent, maintaining the rest of the current tax rates, and maintaining current spending will result in a surplus when the economy turns around. You argue that a “structural deficit” will prevent these surpluses from ever occuring. I think it’s reasonable for someone to conclude that you’re wrong and that I’m right. I don’t think there’s anything evil about your argument, I just don’t think it’s supported by facts. I don’t think there’s anything extreme about my argument, and I think it’s supported by facts. I would be interested in hearing more about this “structural deficit” that did not prevent surpluses, with the current tax rates, from 2004-2008.
If every progressive in Massachusetts tithed 30% of their net to Mass Tax—all our problems will go away. As DP has said “Everything will be just fine.” Change you can count on—YES WE CAN!
Let’s compare a mid-year local aid cut to a cut at the start of the fiscal year.
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p>If the schools lose $200,000, you can cut two teachers (at $70,000 each including benefits) and possibly cut back $60,000 in the textbook and supplies budget. If you are really lucky, and there’s a few extra bucks in this year’s budget, you can buy a bunch of stuff before July 1 with this year’s money. Usually, you can cut a couple of positions through normal attrition, so you don’t need to pay unemployment benefits.
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p>A midyear cut: First, schools spend most of the supply budget between July 1 and the opening of school, and you can’t cut money that’s already spent. Again, if you’re lucky, you have a few extra bucks rattling around because some line items came in under budget, congratulations.
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p>If you need to make savings by reducing staff, you don’t have much attrition in February, so you will also need to factor in the cost of unemployment insurance payments. Employees have already received half of their annual pay, so the $140,000 cut that costs you two teachers in June would require dismissing four teachers to meet the initial budget figure, and another two teachers to cover the unemployment costs. This also means disrupting existing classes as you dismiss the teachers.
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p>That’s why mid-year local aid cuts are much more devastating than cuts that are anticipated at the start of the budget year.
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Have already cut positions, eliminated supplies (like teaching materials) and increased class sizes. Mid-year cuts once in a decade is tough…twice within a few years, while mandatory costs (pensions, contractual matters, health care) and energy have increased exponentially, is cutting bone on the local level.
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p>There still has not been a review/report of the Administration’s prioritization of services and rationale for the multitude of six figure “public service” salaries to my knowledge. The Administration and Legislature have known this maelstrom was developing, did anyone anywhere think to create a needs analysis? Time for triage.
Pablo, you are correct. A mid year cut would be very difficult for local school budgets. As usual regular education gets screwed in this situation as you will not be able to cut SPED. Regular kids will suffer the most in this situation. Larger class sizes and marginal students falling thru the cracks.
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p>Our Town’s school comm is really adverse to fees, so that won’t happen. Prop 2 1/2 overide, you have got to be kidding! Why waste time and effort for a vote that is doomed. Why doesn’t the Governor propose a tax hike?
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p>Only tax that has a prayer of being increased is the gas tax, but that should not go to local aid. Roads and bridges and green power is where that revenue should go.
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p>No one, except Ryan, is saying to tax our way out of this situation. Average folks are hurting as it is. Many I know are taking a unpaid vacation this week. Look at the consumer confidence figures, lowest in 40 years. Home values down 18% in just October. Average voters see abuses in pensions and are incensed at the abuse. Want action and reform. Private sector pensions are vanishing and yet public sector pension reform remains elusive. Why do we allow teachers to retire at 55? Why are certain State employees are allowed to collect pensions and health care while still in their 40s. Why is a law on the books to allow Sen. Marzilli to DOUBLE his pension?
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p>I’ll give the Gov. credit he is trying to handle the hot button issues with avg. voters (police details). Why not pension reform?
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p>I don’t envy the locals. They will be laying off teachers, firefighters, police. As one who has put together local budgets I am sick over what may happen to the FY10 budget, especially schools. If we need to cut FY09 budget, odds are revenues won’t be there for FY10. I can see 30+ students in elem. grade classes. Yikes!
The Governor announced a few months ago that he would work with Treasurer Cahill, the Legislature, and others on a pension reform initiative. We have an internal team that is reviewing various reforms and proposals, and hope to put out a pension reform proposal sometime in the the spring.
but the reality is that public sector plans for the most part are far more underfunded than private sector plans. And I’d also ask you to consider the ramifications of the PPA on private sector (basically you have 7 years to bring to full funding on an accrual basis) instead of this pie in the sky 2028 “target” (how many administrations in the future is that exactly?). I remember Dukakis back in the 80s in the midst of my actuarial exams proudly proclaiming that the state plan would be brought into funding using a 40 year amortization of unfunded liability (using an absurd interest rate to boot). Folks, that is about the same as crowing that your credit card problems are licked because for the most part you make 9 out of 12 monthly minimum payments. At some point, you’re dangerously close in your amortization payment to putting P (principal) to zero.
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p>I really don’t care to dwell on the fairness or unfairness of the public sector plans, but one pertinent observation would be that whatever the employee contribution rate is, it clearly isn’t covering the actual cost of the promised pension. There are too many shenanigans going on (looking at MBTA pensions that are in absolute clear violation of IRC 415 limits, given the absurdly low retirement ages), or court cases for extra compensation (witness Bulger, wherein we’re talking moot point in the private sector since the dollar amounts are well beyond what can be considered under IRC 417), or these absurd “buyback/buyin” provisions where you can throw extra monies in to get additional service by contributing what you would have put in before, completely ignoring any impact on funding. Would I go to Rico the loanshark for $30k at absurd rates if it moved the PV of my pension by tenfold?
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p>Good luck, and I hope you bring some actuaries to the table in this pension review.
Again, I’d like to point out that an “across the board” cut to each city/town does not have the same impact because local aid makes up a greater part of some municipal budgets than other.
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p>If local aid represents 10% of your budget, a 10% cut amounts to a 1% revenue reduction.
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p>If local aid represents 65% of your budget, a 10% cut amounts to a 6.5% revenue reduction.
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p>Now couple that with the mid-year effect that pablo describes.
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p>Now look at the communities which rely on local aid — typically poorer, with fewer “gravy” services and more “core” services. People will not pass an override there, and do not have much private money to pick up the slack.
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p>Local aid cuts are devastating to the people in this state that can least afford to be devastated.
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p>The main problem, as I see it, is that a lot of our revenue comes from variable sources — capital gains, sales tax, etc. We spend right up to the amount we collect for two reasons — first, there are genuine needs for the money, and second, if we put 10% of the tax collections into a “lock box” somewhere people would be screaming to “give it back, it isn’t being used!”
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p>If we’re going to avoid this the next time around, we need to figure out how much the fluctuations are and build a budget around that. Overcollect in the good years, and undercollect in the bad years.
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p>To be fair, this is a financial mess that most people have never experienced.
The state needs to cut its top heavy bureaucracy and not cut actual services to people.
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p>My pet peve is The Trial Court bureaucracy, but the bloat goes across state government.
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p>Tightening the belt is painful, but in this environment it is demanded by the taxpayers. There can be no sacred cows!
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Hey dems… This absolute control of government thing is not working out. Change can be bad also. You guys are shining examples of that. Question 1 failed. Somehow I think passing Q1 might have been cheaper, my opinion only.
The governor makes huge slashes in mental health. That’s fine, they don’t vote, no biggie. And what does the governor do to address this issue? He appoints a 13 member panel to “study” it. Screw the stupid electorate, we’re taking care of our friends and relatives.
I must say… this change thing looks like same old, same old.
I’m sure Deval lost sleep when he hired his neighbor recently for Director of the State Real Estate Services for $120,000/year. I’m sure we really “need” this person right now and I’m also sure there was a nationwide search before his “friend” got hired who also happens to be a big contributor to Dems. I’m sure supporters will do a great job defending the hire but this is exactly the kind of hire, in the face of so many cuts and layoffs which smells!
Also, some people have dismissed some budget cut suggestions as “not adding up to much”… well that’s fine but let’s make those cuts and then look for more. The idea that workers (like my own deceased Father) can get a pension equal to their highest 3 years of service is absurd. Pay them for their contributions and stop raping the system. Double dipping with pensions from Fed agencies, state agencies, State Authorities… is wrong. I don’t blame people for doing it but I do blame the system for allowing it to be done. At the very least fix these smaller things just to shut up people like me.
(And if you’d made that a normal comment, I could reply to you directly.)
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p>Local aid cuts still force vulnerable populations – namely the poor – to bear most of the consequences of the economic downturn.
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p>If my town gets a significant cut in local aid, one of two things will happen. We’ll pass an override, or there will be significant cuts in our budget.
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p>If we pass an override, that boosts property taxes, which have a disproportionate effect on our fixed-income seniors especially, and other poor people as well.
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p>If the override fails and we cut the town and school budget, then the people who don’t need the town’s services don’t care, but the people who do – again, the poor and the fixed-income seniors – will bear a disproportionate burden.
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p>And when the school system budget gets cut, then lots of programs get cut or get funded by fees. Fees disproportionately burden the poor, and if programs are cut then the parents effectively have to replace them out of pocket (if they’re wealthy) or do without (if they’re poor).
Who pays taxes and who does not. Fifty percent of Americans pay no taxes at all. 10% of the American population pay a grossly disproportionate amount of taxes. Not because they make use of a grossly disproportionate amount of municipal services, no—they do so simply because they make more money. The people who are taxed the least, consume more of the taxpayers dollars. Our system of taxation is crazy. There is zero incentive for persons paying no taxes to curb whatever behavior which leads them
to be such high consumers—-and I am not referring to the aged, handicapped, or those physically incapable of caring for themselves.
Who are these free-loaders who get off not paying any sales tax, meals tax, Social Security, gas tax, Medicare, utility taxes or excise taxes? Who are these scoundrels? Half the population? That’s outrageous!
AmberPaw is partially correct about who is and who is not feeling the heat in the current 9c cuts. As we speak, hundreds of state workers and private contracted human service workers are being laid off. State managers are being laid off and furloughed in most state agencies. However, executives at the human service vendors, some of whom make $200K-400K/yr are still protected from the cuts. There are hundreds of these vendors, as so-called “non profits.” They must report the salaries of the top five highest paid employees to the state. So, this is all public information. For example, the May Institute, a large dmr funded vendor, has a ceo who makes over $300,00K per year. The same with Seven Hills in Worcester.
Good point about the human services vendors. Case in point: Mass Veterans Inc. (link is to Guidestar and you’ll need a registration). In a nutshell, the organization takes in $1.9 million of revenue and pays out $290K in officers’ comp. That’s officer only, not rank-and-file. It takes $290K in officer to administer a $1.9M organization?! How many more of these vendors are out there is anyone’s guess.
Copied from my post here:
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Below are a few examples from the Operational Services Division website from the state. Just two vendors below show over $1.6 million paid to just four employees. Are Jordan, Tosches, Christiansan and Milczarek being furloughed, and giving money back to the state? I doubt it. They are paid primarily with state tax dollars. Their employees make $11-13hrs an hour. Compare all this to the dmr commissioner who oversees a budget of about $1 billion, yet his/her salary is only around $100,000. These vendor managers oversee a fraction of that amount. There are approximately 300 human service vendor companies, each with their executive management teams. Do the math. there are 10 tens of millions, if not 100 million dollars of executive compensation that should be looked as a source of savings during these difficult times.
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p>Seven Hills
Name & Title Salary Other
David A. Jordan 392,648 $91,824
Joseph L. Tosches $250,940 $32,211
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p>May Institute
Name&Title Salary Other Salary
Walter P. Christian,$393,440 $134,743 $61,549
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p>Michael Milczarek, $231,176 $57,925
This is just plain wrong. The dirty secret about THESE nonprofits is that management takes care of itself, and the actual intended beneficiaries do not come first.
I agree that many managers of non profit human service agencies make too much money. The surprise comes because we imagine non-profits to be agencies devoted to good works run by people who are sacrificing themselves for the cause.
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p>In fact many non-profits are simply taking care of ongoing predictable human needs. They are doing the work of the liberal state; the state having outsourced this work following the general business pattern of the last 30 years. So managers view themselves as corporation executives and pay themselves accordingly, as best they can.
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p>Similarly, most of them pay their employees as little as they can get away with and aggressively fight unionization despite mission statements preaching empowerment of people, etc.
Just goes to show you who is scamming the system. Politicians are pretty despicable—-in a one party state they are indictable.
See the great link, today: http://www.boston.com/news/loc…
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p>What got cut? Home health care for elders who may now require nursing homes, instead.
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p>Discretionary funds for the Department of Children and Families – which kept all of its consultants [the so called lead agencies] but made it a “privilege” for kids aging out of foster care to get housing. This is immoral.
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p>Hello out there – yes state workers should have to work until the same age as those who get social security before getting pensions.
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p>The real crime is that this state has the second highest per capita income in our country, but our elected officials are terrified to revamp how much revenue comes in, and the “cuts” are mostly being taken against the weakest, most vulnerable, most truly deserving of assistance – because agencies were given “discretion” where to cut and – surprise – stakeholders with lobbists don’t get cut – kids and elders get cut.
The CEO of the May institute is NOT worth 10 teachers to ME!
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p>Why should the CEO or CFO of a nonprofit be paid more than the Governor, the Chief Justice of the Supreme Judicial Court and the Attorney General – combined?
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p>That is just plain morally wrong and goes to what I said at the beginning – the cuts are being taken out of the flesh and down to the bone from:
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p>1. Children in foster care.
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p>2. The frail elderly receiving [or who once could receive] home health care.
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p>3. Mentally ill receiving SSI who have no where to go and are losing the day programs that kept them off the streets and that reintegrated them into society.
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p>4. Homeless shelders.
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p>This is immoral, short sighted, and will ultimately cost more than is being saved. Want links?
If someone sues the State and wins $100 million, the lawyer could receive $33 million. Is a lawyer worth 4-5,000 teachers?
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p>How much was the lawyer used by Martha Coakley paid while investigating the Big Dig, $700/hour billing us for $1 million in 1 year. How many teachers could that have paid for?
First, John, there are maybe 3 or so awards in that level in a two or three year period – this is not common.
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p>Second, most lawyers do not do contingent work. I do not. At all. Ever.
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p>I happen to agree that no one person is worth 4-5000 teachers. But then again, the CEO of Lehman Brothers Investment Bank – who tanked the place, was paid $842,000,000 [that is right – eight hundred and forty two MILLION] -way more than any attorney.
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p>If you look at the annual survey of attorneys in Massachusetts, the average attorney nets about $50k – not the “straw man” you set up, at all. I am quite close to that “average attorney” as a solo practitioner primarily working in field of family law and child welfare law.
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p>That all being said, should the CEO of a nonprofit funded 100% with taxpayer money and donations earn $500,000 or more in a year, while laying off clinicians and shuttering programs? My answer is a resounding NO.
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p>Should the CEO of a nonprofit funded 100% by taxpayer dollars and donations earn more than twice what an average worker in the state earns? My answser is no – and certainly the CEO, CFO, etc. of such a nonprofit should not be paid more than the Governor or the Speaker – and should turn back any salary over $100,000 before shutting a single shelter, laying off a single clinician, etc.
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p>But, again, your hypothetical tort lawyer is a rare bird compared to Joe Lawyer in the District Court defending an indigent accused – or Jane Lawyer in Juvenile Court standing next to her client who is accused of crimes like not getting to school on time.
I am with you too. Don’t misinterpret my remarks as defending non-profit management’s salaries. I think they are obscene. I donate quite a bit of money hut only on local level and only places where it is being used directly by people. Unfortunately, I would never donate to large organizations like United Way since I knew a fund raiser for them who earned hundreds of thousands every year. The examples you cited are absurd and demand actions by the AG’s office. I don’t understand why nothing ever happens. I am on 2 NPO boards and we are “anal” about the smallest possible infraction of NPO rules such as endorsing political candidates and yet I see so many flagrant violations of NPO rules with no action by the state. The same is true with Mike from Norwell pointing out flagrant violations of pension rules/laws and yet nothing is being done to address them. WHY???
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p>As for lawyers making $50K, why again. Why would anyone go through the hassle of law school and the costs (my daughter is a 2L) and graduate to make less than a teacher wiping first graders noses (no insult meant)? WHat are the starting salaries for Choate, Minz, Sullivan and Worcester… all 6 figures I’m sure hell even interns get paid $3,000/week.
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p>CEO salaries being questioned is good but let’s examine the salaries of sports figures, movie stars, rock bands and the next thing you know we have a socialist country. I think we need to be careful.
there should be a cap if we’re going to provide funds to these ‘nonprofits.’ 85-100k should be tops. Enough that they’re making a good paycheck, but not enough that it’s tying our hands and clearly more than they’re worth.
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p>Heck, all the nonprofit laws need looking into. Partners is a “nonprofit.” Enough said.
There already exists a state law capping the exec pay of vendors for the state. The problem is that law only applies to the use of state tax dollars. I believe the law limits pay to that of the highest paid state manager. (somewhere around 150K) CEOs get around the law by using state tax dollars for their first 150K, and then supplementing that with a combination of: medicaid dollars, grants, and most troubling by charitable donations. So for example, the ceo of Vinfen, Advocates, May Institute, (take your pick)puts out a fund raising appeal to help persons with mental illness, homelessness etc. then uses a disproportionate share of those donations to pad his/her salary. So you thought you were just helping the homeless, but you unknowingly were assisting the ceos and their executive teams help themselves to obscene pay packages. Weld/Baker/Romney promoted this model as the most efficient way to deliver services; What a joke!
As a self-emprloyed professional, I AM outraged. I did not know this “game” was being played – bet a lot of you didn’t, either.
Legal Assistance Corporation, Exec director earns $115K
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p>Horizons for Homeless Children: Dir earns $135K, 2nd officer (CFAO?) earns $120K.
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p>Boston Health Care for the Homeless, Inc.: each of the top five execs earn from $120K up to $200K.
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p>Vietnam veterans workshop inc.: two top execs each earn over $120K.
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p>…and the list goes on.
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p>This is looking like a great racket. I’ll form a 501(c)(3), maybe called Homelessness is Really Bad, Inc.
ScamObtain state or federal grant money, pay myself 10% to 20% of the grant money as salaray and cha ching! Change! Hope! Suddenly, I’m feeling all democratic and stuff.<
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Boston Rescue Mission, video pans in towards Governor Patrick and Mayor Minino serving up turkey on Thanksgiving.
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p>You think you can’t buy publicity like that. But literally, we did. Government grants of $1.2 million in 2006 (no more recent data), and the President, John Samaan, made a cool $200K in 2006.
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p>The person in charge of spiritual developement is Lynn Samaan, earns $68K. Related to the President? Nah, gotta be a coincidence.
Can you provide a citation for this law?
I can’t find the law, but I know it passed a few years ago.
The regulation that applies the law is:
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p>808 CMR 1.05 (24)
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p>(24) Salaries of Officers and Managers. Salaries of officers and managers to the extent they exceed the rate paid to state managers in job group M-XII, step seven.
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p>The regulations, and maybe the legal cite, can be found at the Operational Services Division Website: http://www.mass.gov/?pageID=os…