Friday, February 5, 2010

Ignoring the fat

The Governor likes to say, when discussing state budget cuts, that the fat has been cut and "now we're into the bone." He's been using that imagery for the better part of two years now. It wasn't accurate the first time he pulled it out in 2008, and it is not accurate now.

The other day an earlier post about the stimulus bull triggered a response that pulled me into the classic spending cuts v. tax hikes with an acquaintance with whom I frequently disagree politically. I commended to his attention a truly excellent new study just released by the Beacon Hill Institute, titled: "'TELling' it like it is: How Massachusetts could eliminate its structural deficit and still spend generously on safety-net programs." In a nutshell, the non-partisan think tank's study comes to two primary conclusions: (1) Massachusetts spends approximately thirty percent more, per capita, on safety net programs than the national average; and (2) if ten years ago the state had limited annual spending growth to the rate of inflation plus population increase, then this year the state budget could have been fully funded without any of the recently enacted tax hikes. (By the way, If you've even once been accused of being a policy wonk, you should take an hour to read the whole thing.)

As he always does whenever conversation turns to the proposition of additional cuts in state spending, my friend trotted out the teachers and the first responders. "Who would you cut? Teachers? First responders?" This shtick always makes me want to respond: "Yes, then puppies, rainbows and chocolate iced cream," but one has to be careful with these folks. So deeply seated is their faith in the notion that we Republicans actually do want to squeeze all good things from the world that you never know what they will take literally.

Instead, I responded in the same way as I always do in this frequently re-run conversation: by arguing that waste is inherent in any large bureaucracy, that this condition is almost invariably worse when the bureaucracy in question is part of government, and that anyone who would deny that proposition clearly has no personal experience in government. To illustrate the point, I related the "three guys and a supervisor" anecdote from my own first day in state government.

Today's news brings some more good examples. Continuing his recent 'what the hell are they doing?'-themed series in the Globe, columnist Brian McGrory describes a recent crack down by Attorney General Martha Coakley's office on... the Commonwealth's garden clubs. This on the heels of his column last week that chronicled the Department of Environmental Protection's vendetta against a dying man's backyard gazebo.

Channel 5's investigative team, for its part, reports on some serious double-dipping going on in our state legislature. You may know that the state pays a per diem to legislators who commute from outside of Boston, to cover transportation costs. Those payments have raised eyebrows in the past, especially since they are routinely collected for time periods when no formal business is conducted in the state house. Most people, though, recognize that nobody gets rich off of a state legislator's salary, and so the periodic grumbling is limited.

You probably did not know (I didn't) that the federal government also allows state legislators to deduct transportation costs for federal income tax purposes. According to Channel 5:
Federal tax law allows them to legally deduct as much as $311 per day from their federal income tax. For some, it could mean deducting their entire state salary... The law, passed by Congress in 1981, only requires the Massachusetts House and Senate to be "in session" on the days claimed. WCVB discovered the last time the Massachusetts Legislature prorogued -- or was officially not in session -- was in 1988... WCVB contacted 54 Massachusetts legislators eligible for the lucrative tax deduction. The vast majority -- 45 legislators -- ignored the inquiry. Nine confirmed they took advantage of the federal perk. Two said that in some years, they paid no federal taxes.
It gets worse.
All of the legislators interviewed not only admitted they took the federal deduction, but that they also already accept large per diem reimbursements by the state for their transportation costs.In 2008, Sen. Rosenberg claimed $7,680 in per diems from Massachusetts taxpayers. Rep. D'Amico claimed $3,600. Rep. Guyer received $11,234. "Absolutely the effect of it is double-dipping," said Michael Widmer of the Massachusetts Taxpayers Foundation. "It's understandable there may be a per diem for travel from western Massachusetts into the State House that the state provides. But then there is this huge benefit that the federal government provides on top of it."
One could argue all day over whether state legislators ought to be reimbursed for their commuting expenses. Most workers in the private sector aren't. Most workers in the public sector aren't either (including teachers and first responders). Even if you agree that reimbursing a legislator for his or her gas money is a fair and appropriate thing to do, though, it's hard to argue that reimbursing them twice - essentially allowing them to pocket the overage - makes sense - especially during a recession when the state budget has supposedly been cut to the bone.

Federal law provides for the income tax exemption uncovered by Channel 5. It applies to legislators in all 50 states. We aren't going to see that repealed any time soon. Since our legislators already have that avenue available to them to cover their transportation costs, though, what exactly is the argument now against doing away with those state funded per diems? Human nature being what it is, so long as this double-dip opportunity exists, many or most of the folks to whom it is available are going to take advantage. In the squirm-inducing words of Rep. William Pignatelli, (D-Who Let This Reporter In Here?), "I abide by the laws that are on the books today."

Which brings me back around to the argument with my friend. Defenders of the way things are done in this state always want to go right to "the bone" - those teachers and first responders. Services for the homeless. Local aid. In the meantime, the state budget is paying someone to chase backyard gazebos. It is paying someone else to hector garden clubs. And hundreds of thousands of dollars are going to reimburse legislators for costs that are already covered by the federal government. There are hundreds, probably thousands of other, similar examples.

None of these things by themselves will solve the state's budget problems, and so they are easy to ignore. The larger point, though, is this: in going straight to "the bone" with their budget cuts, the Governor and his allies are deliberately bypassing a lot of politically uncomfortable fat.


  1. I hadn't known about the Federal Tax deduction for commuting expenses. That is even worse than my incumbent taking $2310 in per diems when she can walk to work.

    Brad Marston

  2. BTW are you on our media list? If not send an e-mail to


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