Monday, January 31, 2011

On taxes, strong words from Speaker DeLeo / weasel words from Governor Patrick

House Speaker Bob DeLeo had some pretty strong things to say today about the prospect of any tax increases slipping into the Commonwealth's 2012 budget.

Talking with WBZ's Jon Keller about the Governor's proposal to raise big dollars by expanding the so-called bottle bill, DeLeo was unequivocal in his opposition to the proposal - and more broadly to any tax increase whatsoever.  As quoted by the State House News:
"That's just another form of taxation and as I stated before it's my feeling of what will happen in the House budget anyways is there's going to be no discussion about any new taxes, no new fees, anything that looks like a tax will not be in the House budget," DeLeo told host Jon Keller.
Now, there really can be no question about whether expansion of the bottle bill constitutes "anything that looks like a tax" increase.  If the Gov gets his way, we'll pay thirty cents more for a six pack of Gatorade, or water, or juice, or any number of other beverages not already covered by the bottle bill.  That money will go to the state coffers, unless we then collect up our empties and take them to a redemption center - something fewer and fewer people actually do with the ubiquity of curbside recycling.

So the bottle bill proposal is a tax increase proposal, giving lie (surprise!) to Governor Patrick's repeated assurances that he "has no plans" to increase taxes in the short term.  Oh and don't go thinking Governor Patrick does not realize what he is up to, or that the bottle bill is an isolated exception to an otherwise solid promise.  Again from the SHNS:
Asked whether the inclusion in his budget proposal of the bottle bill expansion as well as fees on auto insurance policies and a lifting of the telecommunication equipment property tax exemption violated his no-new-taxes pledge, Patrick called the initiatives necessary.

"We have a serious need to fund a cadet class in the state police and to do police training and the way we do that on the fire side is a modest assessment on property insurance," he said. "The way we're proposing to do that on the state police side is a modest assessment on auto insurance. It amounts to two bucks, $2.50 per policy."
Oh, well.  So long as the initiatives are "necessary," never mind about that silly old campaign promise thing.  At least he didn't say (yet) that the increases are the equivalent of a "cup of coffee" (you can bet if the debate continues, he will).  "Modest assessments" seems to be the Governor's new buzz phrase of choice.  Listen for it in the days ahead...

Of course nobody who pays even the tiniest amount of attention believes Governor Patrick's periodic assurances about new taxes.  When he says "I have no plans to raise taxes," there is always an unspoken clause: "... right now, at this precise moment in time."  Most willing to change his plans, that Governor of ours.  So it is not at all surprising that buried in a budget that Patrick assured us would contain no new taxes are at least three (and counting) tax hikes.

Even Patrick's comrades in the Beacon Hill Big Three understand that Patrick's "no plans" pledge is a laugh line. More SHNS:
Asked whether they thought there were provisions in Patrick’s budget that violated his no-new-taxes pledge, both DeLeo and Murray nervously looked at each other before erupting in laughter as they tried to decide who would field the question. “I’m not so sure of that,” DeLeo finally responded. “I think we’ll have an idea once we take a more thorough analysis of the whole budget. But again, I will say this. As far as the House is concerned anyway, the budget that will come out will not have any new taxes, no additional fees, or any other gimmicks in terms of raising additional revenue.”
Erupting in laughter.  High comedy, the notion of a Patrick budget without new taxes (he's never filed such a budget, by the way.  Never).  So nobody should be surprised that "no plans" morphed so quickly into "plans" (or maybe "modest plans"?)

The Speaker's words today are a different story.  "No discussion" about "any new taxes."  Or "new fees."  Or even "anything that looks like a tax."  Not even any "other gimmicks in terms of raising additional revenue"!  None of those things, the Speaker assures us, will "be in the House budget.

Make a note of it, and check back in a couple of months (probably April) when the House produces its cut at the 2012 budget.

Saturday, January 29, 2011

A difference of degree

Two headlines on the front page of the Globe today:

The first, "Furor forces Mubarak's hand," refers of course to the ongoing uprising in Egypt, and President Mubarak's efforts to contain an eruption of protest against his thirty years of autocratic rule.

The second, "DeLeo, facing fire, tightens grip on power," sits atop a story about our own House Speaker's mini-purge of his leadership ranks, as he tries to ride out the various scandals currently roiling Beacon Hill (at least one of which laps uncomfortably at his own loafers).

It's kind of amusing/mildly disturbing to note that one could swap the headlines (and the names) and each would still work perfectly well with its respective article.

Friday, January 28, 2011

... but other than that, Gov. Patrick is really really serious about this prison closing thing.

Buried a few paragraphs deep in a not-so-prominently-placed Globe article today on the, er, dubious nature of yet another of Governor Patrick's 2012 "cost cutting" proposals appears the purest distillation of Massachusetts political reality that you are likely to find:
Often times during budget season the governor and lawmakers propose far-reaching ideas to cut costs with little expectation that they will become law.
Who ever would have thunk it??  Surely the Globe can't be serious?

I am so disillusioned.

The article in question concerns the Governor's proposal, contained in his just-unveiled 2012 budget proposal, to save big bucks by shuttering two of the states eighteen prisons. 

Since, as the Globe notes, the prisons would have to be closed by the beginning of fiscal '12 (in July) for the associated savings to play the budget gap closing role the Governor envisions, surely his Administration  has laid the groundwork to start the transfer and closing process.  Or at least figured out which of the eighteen prisons we can do without.

Not so much.  More Globe [WARNING: Naive Idealism Spoilers]:

A day after Governor Deval Patrick proposed closing two state prisons, his aides could not provide any details about how they would achieve that goal yesterday, raising the possibility this is one of many dramatic cost-cutting proposals that never come to pass.
"...raising the possibility..."  I love it.  Like a blizzard raises the possibility of snow.  But it gets better.
Patrick has not identified which of the state’s 18 prisons would close, nor has he ordered state correction officials to draw up a list of facilities that could shut down. Perhaps most significantly, his administration could not explain how it would squeeze inmates from the closed prisons into a system that is already overcrowded, at 40 percent above capacity.

The vagueness of his proposal raises the question of whether Patrick is serious about it and whether he could implement it in time to help plug the state’s estimated $1.2 billion shortfall.
"The vagueness of his proposal" does not really "raise the question of whether Patrick is serious about it" so much as it answers that question.  But there's even more.  It seems just last year Patrick used the prospect of closing two prisons in quite a different way:
Patrick has threatened to close prisons before. He did so last fall when Republicans held up a $400 million spending bill, prompting the governor to argue that their blockade would force him to close two correctional facilities. Eventually, the bill passed, and no prisons closed.
So what was a political threat less than a year ago has now become a political promise.  No matter.  Both uses are equally disingenuous.

Anyhow, this isn't really about the merits of closing a prison or two at all.  It's just one more piece of evidence that Governor Patrick's latest budget proposal is not a serious one.

Thursday, January 27, 2011

A few quick observations about Governor Patrick's fantasy budget

Governor Patrick is getting some pretty favorable coverage of his 2012 state budget from a press corps that seems largely content to reprint the bullet points from his office's press release. The Globe's front page article, titled "Steep cuts in Patrick's budget plan," is typical.  One hopes (against hope) that when a modicum of analysis of the plan is conducted, these duped reporters will be angry/embarrassed enough to take a second, deeper look.

One of the many deficiencies in the loyal opposition here in MA is its lack of a substantive rapid-response operation.  The budget is a thick, dense, daunting document.  It takes a serious dedication of time and resources to parse through; both things - especially resources - that are lacking on the right side of the political spectrum here in the Commonwealth.  The Pioneer Institute is fantastic, no doubt.  They will do a substantive, in-depth analysis of Patrick's budget that will debunk the vast majority of the talking points currently passing for "news" and "analysis" in our mainstream newspapers and on the television.  But it will come out a couple of weeks from now, and barely anyone will notice.  [UPDATE: It seems I didn't give Pioneer enough credit!  Sorry/thanks guys!  UPDATE 2 (1/28): Okay, okay!  I take it back!]

In the meantime we will get coverage that parrots the Governor's line, heavily salted with words like "cut,"  "slash," and "strip," that somehow manages to miss the rather obvious fact that the Governor has (again) kicked off the annual budget-writing process with a work of pure fantasy.

Let's start with the Governor's headline.  In announcing the plan, the Governor and his minions told everyone in earshot that his budget "cuts" $570 million in spending, representing "the largest year-to-year cut in the state budget in 20 years."  Sounds impressive.  But wait just a second... the State House News told me that the Governor's plan represents the Commonwealth's "first $30 billion budget"(it's really a $30.5 billion budget, but what's $500 million among friends)?

Now how can that be?  How can a budget that starts out at a higher dollar figure than any budget in Massachusetts history also represent "the largest year-to-year cut... in 20 years"?

Here's how (again from the SHNS):
But to make that math work, Patrick plans to spend $1.7 billion more in this fiscal year – fiscal 2011 – than he agreed to last June when he signed a $29.4 billion annual budget.

Patrick administration officials confirmed Wednesday that they now estimate spending in fiscal 2011 will climb to $31.1 billion, and then fall by $570 million under Patrick’s budget blueprint for next fiscal year.

You following?  Patrick's 2011 budget number was $29.4 billion.  But after a whole bunch of the mid-year, "emergency" revisions that have become commonplace during the Patrick years, actual state spending in fiscal 2011 will round out at about $31.1 billion.  So Patrick was $1.7 billion off the mark the last time around.

This time, he's proposed a $30.5 billion budget for 2010 - $570 million less than actual spending in 2011, but $1.1 billion more than his proposal last year.

This is standard budgeting procedure, not only for Governor Patrick but also for the Democrats who control the legislature.  They did the same thing last year, and the year before.  The formula is simple: they take actual spending from the prior year, propose some facially-impressive amount to "cut," run their victory laps for the press, garner their headlines... and then proceed to spend whatever they want to spend over the ensuing twelve months.  Then they start over.

The point is this: when one considers that actual spending in each and every year of the Patrick era has exceeded the annual budget by at least a billion dollars, the Governor's claim of a historic $570 million "cut" looks a lot less impressive.  Reviewing that track record, an entirely impartial, apolitical observer would have to conclude that the Governor's show of austerity is worth about as much in real dollars as my copy of this morning's Globe.

And all of that barely scratches the surface.  The Governor is also proposing - again - to enact a whole series of cuts that he knows to a virtual certainty will not survive the budget negotiation process.  Cuts to services for the homeless, for the disabled, for the mentally ill, for the indigent.  Cuts, in other words, to state services to the relatively small slice of the population that actually depends, in real, life-and-death terms, on state services.  Proposals like these from a Republican Governor would trigger an outcry audible to the heavens.  The reaction to Patrick, however, is muted - likely because the targets of those "cuts" know full well that their money will be reinstated, if not during the budget negotiations than in one of the subsequent "supplemental" spending bills that Patrick uses habitually to incrementally reconcile his fantasy budgets with fiscal reality as the year progresses.  "Cynical" does not quite do it.

One final thing (this is an item that I hope/expect Pioneer will delve into more deeply than my meager brain capacity matter can manage): When all of Governor Patrick's proposed increases, cuts, reforms and manipulations are totaled up, he purports to account for roughly $1.5 billion of the $2.5 billion projected deficit that his previous heavy reliance on one-time revenues (like federal stimulus dollars) has blown in the operating budget.

The Governor proposes to fill that remaining $1 billion dollar gap, so far as I can tell, through "aggressive cost-controlling measures" in the state's health care contracting.  There is only one appropriate reaction:



This is the sort of thing that Governor Patrick (circa 2006-07) used to refer to as "finding efficiencies in government" before his first couple of budgets relegated the term to the parody lexicon.  But that is basically what he is proposing here - to "find" a BILLION dollars in the state's health care budget.  Minority Leader Brad Jones had an excellent quip in response to this, um, highly implausible proposition: "I guess I would raise the question, what’s been keeping you?"  By which Jones means: if there are a billion bucks just sitting around in the health care budget, why has the Governor neglected them for the past three recession-plagued budget cycles?

The answer, of course, is that the Governor fully understands just how ludicrous is the proposition that "aggressive cost-controlling measures" will yield a billion dollars.  Ludicrous, ridiculous, mildly insane... adjectives fail.

But that does not matter.  Governor Patrick does not have to fill that billion dollar gap in his budget, because his budget is a fantasy.

Monday, January 24, 2011

Sigh

Globe front page today:

SEC looks at Cahill, Goldman Sachs link
The US Securities and Exchange Commission has delivered subpoenas to the state treasurer’s office in a wide-ranging request for documents concerning dealings between investment banking giant Goldman Sachs and former treasurer Timothy P. Cahill, onetime top staff members, and former campaign aides, according to an official briefed on the document request...
It is not clear from the subpoenas alone what direction the federal investigation is taking. An official who has been briefed on the documents said that they refer specifically to Goldman Sachs and seek all communications between Cahill’s office and Morrison and the investment bank dating back to June 1, 2008. The SEC, the official said, also asked for documents from the state Lottery and School Building Assistance authority, both of which are under the treasurer’s control.
The breadth of the subpoenas suggests federal regulators could be looking at possible connections between Cahill’s work as treasurer and his gubernatorial campaign, which was the subject of a separate investigation launched last year by the state attorney general’s office.
Named in the subpoenas are Cahill; his former chief of staff, Scott Campbell, who left state government last year to help manage Cahill’s campaign; deputy treasurer Colin MacNaught, who oversaw bond issuances under Cahill; Amy Birmingham, a top aide on Cahill’s gubernatorial campaign; and political finance consultant Laurie Bosio, a major political fund-raiser for Cahill in his bid for governor.
Doesn't matter now.  I know.  November 2, 2010 has long since faded from the rear-view.

And an investigation is not a conviction - either with respect to this latest inquiry into the intersection of Tim Cahill's official, political and financial lives, or to the long list of other, similar investigations that preceded it

But there are approximately 184,000 voters out there who ought to be asking themselves how they could possibly have rationalized a vote for this guy.

Sunday, January 23, 2011

This article pretty much speaks for itself

The Sunday Globe has a front page feature article today on House Speaker DeLeo's improbable crusade against patronage in government. Titled The Speaker's words - and his ways, the article is lengthy.

Happily for readers who might be pressed for time, the sub-head encapsulates the full article with astounding efficiency: "DeLeo vows to battle patronage, but he sponsored many for probation jobs."

The whole thing is worth a read, but only for the color that the details lend to that obvious contradiction. The Speaker is the proverbial fox reforming the hen house. Hypocrisy on Beacon Hill! Breaking news indeed.

Faced with the reality of an ongoing scandal in which he is personally sunk up to his waist, the most ratonal course for the Speaker would have been to step back and designate a trusted - and un-soiled - underling to head up the House's anti-patronage reform efforts. By putting himself out front, DeLeo renders his stated goal - "restoring the public trust" - unachievable.

Thursday, January 20, 2011

On redistricting, a thumb in our eyes

And the hand attached to that thumb belongs to the Democratic caucus in the Massachusetts state senate, which this afternoon brusquely beat back the revolutionary notion of an independent redistricting commission, by a near-party-line vote of 34-5.  One Democrat, Jamie Eldridge (who despite being leftier than left is admirably principled) voted with all of the Republicans.

Am I getting ahead of myself?  I wrote about this issue at length almost two years ago.  Here's the nutshell:

Every ten years, following the census, every state has the opportunity to re-draw its political boundaries - to "re-district."  Here in Massachusetts, where the term "gerrymander" was born, the power to draw those political lines resides in the Great and General Court, a/k/a the legislature, a/k/a the Democratic State Committee, a/k/a the Speakah and whoever else he lets in the room.  As a result, our districts are about as rationally shaped as a puddle of dog puke.  Or an amoeba.  Or this thing.

Actually, though, that's not quite right.  While our districts could never be mistaken for symmetrical, they are profoundly rational - the rationale for their twists and turns being protection of Democratic incumbents and preservation of the hopelessly skewed imbalance of political power in the Commonwealth.  Here's the money paragraph from that piece I wrote in March 2009 (about a panel discussion on redistricting I'd just attended):
Asked about a proposal, supported by Governor Patrick and a long list of bipartisan political groups, including Common Cause, to take redistricting out of the hands of the legislature and give the task to an independent, bipartisan and transparent commission, [now-state Rep Dan] Winslow said he and the Republican Party are all for it but know it will not happen.  In fact, one of the GCMD's first acts this session was to shoot down that proposal, with a handful of Senators who had co-sponsored the measure in prior years flipping to vote against it.   [Longtime Dem operative Larry] DiCara acknowledged that an independent commission would lead to a much more open, fair and less political process, but answered frankly that he does not support an independent commission.  Pressed for reasons, he answered candidly: because his friends are in the legislature and "those people would not be elected."  Points to Larry for honesty (I should mention that Larry is a friend and a mentor, and a great guy who calls it like he sees it.  I do not agree with much of his politics, but this kind of answer is refreshing, if dispiriting in the macro sense).
Back to today.  This afternoon a proposal was offered in the Senate, by newly-minted Minority Leader Bruce Tarr (R-terra firma) to establish an independent redistricting commission - a proposition supported by 62 percent of the voters in a recent poll, by the way.  That proposal led not only to the lopsided rejection noted above, but also to some particularly galling and sanctimonious pontification by commission opponents.  Here's the State House News Service:
Sen. Stanley Rosenberg (D-Amherst), who has been tapped by Senate President Therese Murray to lead the Senate’s redistricting process, argued that political maps drawn by independent panels in other states have proven less reliable and more likely to face legal challenges than those drawn by Legislatures. In addition, he said, public polls showcase support for an “independent” commission, but don’t often account for the fact that members of such a commission would likely be appointed by elected leaders.

“They’re almost all appointed by elected officials in the state. You’re just removing it one step from elected folks. Instead of the elected folks, the elected folks are appointing people,” Rosenberg said. “This is inherently a political process. It would be hard to imagine that there was no consideration of political interest or political background in selecting these people.”

Sen. Sonia Chang-Diaz, who rejected the independent panel, joined Rosenberg, arguing that lawmakers would be more likely to uphold the public’s will in drawing political boundaries.

“Folks who understand the system and the genius of our Founding Fathers – we know as legislators that we are structurally much more inclined to be responsive to demands of transparency from our constituents than are appointed members of a commission,” she said.
That last bit from Senator Chang-Diaz is probably what put me in mind of puddles of puke...

Silly voters!  Who are we to demand open, rational and transparent Congressional and state legislative districts?  We don't even "understand the system and the genius of our Founding Fathers"!!  And of course when someone mentions the Massachusetts legislature, the first words that jump to mind are "responsive" and "transparent," right?  Right? 

Please.

The notion that the Democratic members of the Massachusetts legislature cannot bring themselves to cede authority to a commission is ludicrous on its face.  These people appoint a commission every other day, on issues large and small.  Healthcare, pension reform, transportation, job creation - the list is endless.  Most of them would happily appoint a commission to tie their shoes in the morning.  Now granted, some of the appointed commissions never meet.  Still others are created for the sole and express purpose of taking a controversial issue off the table for a year or two.  The point is, when it comes to ceding authority to appointed commissions our legislative Democrats are usually big fans.  But not now.

Not when a commission with even the tiniest measure of true political independence would inevitably produce districts that would in turn turn some Democratic legislators out of their jobs the next time around.  Not when such a commission would loosen - however slightly - the stranglehold that the Beacon Hill Democratic Machine has on political power in this state.  Heavens no.

They'd much rather stick their thumbs in our eyes and try to rationalize away yet another naked power grab with condescending declarations about "the genius of our Founding Fathers" (someone at NOW needs to get on Chang-Diaz for that offensive and sexist terminology, by the way).

We get the government we deserve. And if these people get their way, we'll continue to get that government for at least the next decade.

Tuesday, January 18, 2011

On pension reform look at what Governor Patrick does, not what he says

Governor, State House leaders would trim state pensions

That's the headline on Boston.com today, following a joint press conference held this afternoon by Governor Patrick, Speaker DeLeo, and Senate President Murray to announce the Governor's latest pension reform initiative.  I'll bet that is also the  headline of the press release that Patrick's people distributed to the media in advance of the event.  It would be hard for Team Patrick to write a friendlier take on their preferred news of the day.   

Sadly for the taxpayers of Massachusetts - current and especially future - what Governor Patrick did today on pensions was nothing like what he chose to talk about.  Here's how Boston.com summarized the talk:
Virtually all future state employees would work five years longer, contribute more to their pensions, and would no longer receive incentives to retire early under a bill Governor Deval Patrick and legislative leaders announced today.
Eighteen months after state leaders eliminated loopholes in the pension system, the latest proposal would further rein in abuses while also asking more of rank-and-file state workers, in an attempt to save $5 billion over the next 30 years.
True, the Governor's proposal would "ask more" of state workers - but not that much more.  Patrick would push the minimum retirement age from the ludicrous 55 that it is now to a merely ridiculous (and oh-so-French) 60.  To be fair, the proposal would also reduce benefits for those who do retire at the minimum age, and would close some of the more egregious loopholes in the current system (that were somehow missed in Patrick Pension Reform v.1 a couple of years back).  All of this is fine and good - and better than a stick in the eye if the proposal is actually enacted. 

Now the problem.  First, even according to Patrick, DeLeo and Murray the proposal thumped down on the table today merely "attempts" to "save $5 billion over the next 30 years.  Again, not a stick in the eye - but $5 billion is a relatively small fraction of the Commonwealth's estimated $20 billion in unfunded pension liability. 

Second, this initiative represents Patrick Pension Reform v.2 - and presumably will be this Governor's last bite at the pension apple.  I wrote about v.1 back in June 2009, at which time I quoted this observation from the Globe about v.1's obvious deficiencies:
State lawmakers characterized the pension legislation as a first step, one that largely addresses the symbolic abuses that resonate in the public, and they vowed to make further changes in the future that could save the state substantial money.
Well, the future is now, and the "further changes" being proposed in v.2 will - at best - fill in roughly twenty percent of the hole that Beacon Hill has dug for us. 

Ah, but it gets much worse.  Because while Governor Patrick was talking about filling in a bit of that hole today, behind the scenes he was taking an action that will dig the hole even deeper.  Here's the State House News Service this evening:
With the state pension system scheduled to cost taxpayers $1 billion more in the next fiscal year, the Patrick administration elected Tuesday to push off billions of dollars in pension costs to a future generation of taxpayers, even as state officials foresee continued tax revenue growth attributable to a recovering economy and higher tax rates.

Patrick's budget chief, Jay Gonzalez, announced plans to extend the deadline for fully funding the state pension system to 2040, 15 years later than currently planned, to relieve short-term pressure on the state budget. Under the current funding schedule, the state pension system - which provides benefits to tens of thousands of public retirees, survivors and beneficiaries - was due to be fully funded in 2025.
Gov. Patrick's pension strategy

That's right.  That clanking sound you hear is the pension can once again bouncing off down the road, propelled by the impact of Governor Patrick's shiny loafer. 

And it gets even worse!  Even as the Governor tacks millions upon millions of additional dollars onto the state's ever-growing pension liability by deferring full payment of its obligations, he continues to plan for annual increases in pension spending.  Again from the SHNS:

Treasurer-elect Steve Grossman, who will be sworn in Wednesday, joined Patrick, Gonzalez and legislative leaders at a State House press conference to endorse the proposed extension, as well as Patrick's proposed changes to pension laws. As treasurer, Grossman will preside over the state's pension fund. He noted that the new pension funding schedule will include annual increases of "5 or 6 percent."
For folks playing at home, that means under the Governor's plan, pension spending - already wholly unaffordable - will continue to grow at double or even triple the rate of inflation on an annual basis, further sapping already depleted state and local resources.  That spending will be funded, in part, by the generational robbery represented by today's repayment deferral.

Happily for those of us who balk at such rank hypocrisy, today at least one member of the press was having none of it.  Patrick's response to a pointed question was priceless (more SHNS):
Asked how his often-stated commitment to "generational responsibility" jibed with pushing pension costs down the road, Patrick told reporters, "That's about balancing the budget. We've got to balance the budget in the interest of generational responsibility."
Got it?  Sure the Gov slaps us around a little, but it's for our own good.

Meanwhile, in related news:

The Beacon Hill Big Three finally came up with a consensus revenue figure, and - surprise! - they are again going with a wildly optimistic number.  Again from the SHNS:
[T]he Patrick administration and legislative leaders announced that the state is likely to see an uptick in tax revenue to $20.525 billion in fiscal 2012. That's 7.6 percent more than the state originally planned to collect in fiscal 2011, and 3.7 percent more than the administration's suddenly upwardly revised fiscal 2011 tax revenue collection estimate of $19.784 billion.
The perils of such an approach (budgeting for revenue growth that nobody else is predicting, much less planning for) is vividly illustrated in the very next paragraph:
Midway through the fiscal year, the state has already added about $750 million in spending to the fiscal 2011 budget signed last June, and since this year's budget spends $1.5 billion in one-time federal aid, state government faces a roughly $2 billion budget gap next fiscal year.
But hey!  Why focus on the negative?  Better to concentrate on all the spending that can be funded with those imaginary dollars... at least until the bill comes due, triggering yet another round of mid-cycle, "emergency" budget cuts.

Hang on.  I'm not done yet.  The SHNS has even more (and this is all in one article!):
In other budget announcements, [Administration and Finance Secretary] Gonzalez disclosed the administration is now "less confident" that it will receive $160 million the state says it is owed by the Social Security Administration and which was baked into this year's budget on the revenue side. Gonzalez had repeatedly expressed confidence that the Social Security funds would arrive, dismissing concerns raised by Republicans and fiscal observers.
That "confidence" was "expressed" in the context of a gubernatorial campaign, by the by.  And the main "Republican" raising those now-substantiated "concerns" was a fellow named Charlie.  But hey.  Water under the bridge and what-not.

The truly galling thing about this deluge of bad economic news is the deftness with which Governor Patrick dresses up his profound irresponsibility in a cloak of artificial fiscal prudence, and the readiness with which the press buys the ruse.  Return to that Boston.com headline:  "Governor, State House leaders would trim state pensions." 

A more accurate and fulsome account of today's pension-related news might read more like this: "Governor, State House leaders talk about trimming state pensions while driving up costs, increasing spending and robbing next generation." 

As is true of so many things, when it comes to the Commonwealth's runaway pension costs, pay attention to what Governor Patrick does, not what he says.

Tuesday, January 11, 2011

Grants and targeted incentives are no match for escalating costs (revisited)

Grants and targeted incentives are no match for escalating costs. That was the title of a post I wrote back in November 2009 when Evergreen Solar (which the Globe - now as then - calls the "poster child" for Governor Patrick's green initiatives) took the first step toward it's soon-to-be self extraction from Massachusetts. Now, as Darth Vader once said, "the cycle is complete." Having pocketed nearly $60 million in MA taxpayer dollars, Evergreen is packing up wholesale and moving its manufacturing operations to China.

Back in 2009, the Patrick Administration gamely argued that the unprecedented direct "investment" in a single trendy company was worth it, because despite the company's then-partial pullout, it had still "created" more jobs than initially projected. Too bad those jobs turned out to be temp work.

Ever since the beginning of the Patrick Administration, the Governor's detractors (yours truly included) have been arguing that the government is ill suited to pick market winners and losers. Reacting to today's news, House Minority Leader Brad Jones reiterated the point (from the State House News Service):
This should serve as a lesson to Governor
Patrick that throwing money at companies in
industries he approves of won't necessarily
translate into success.  Instead of focusing on
stimulating one particular industry, Governor
Patrick and Lieutenant Governor Murray should
turn their attention to creating an economic
climate where all businesses can succeed and
thrive.
The Governor's apologists will react to Jones and others of like mind by accusing them of "rooting for failure," or of reveling in bad news for the state as a whole in service to an opportunity for shirt-term political gloating. That isn't right though. While there is undeniably some measure of bitter satisfaction at being proved right in such spectacularly unambiguous fashion, any petty satisfaction is far outweighed by frustration at the certain knowledge that the Governor and his people will resist and ultimately discard the clear lesson of this debacle.

After all, when it comes to taxpayer subsidies for the so-called "green economy" that enriches the Commonwealth of their collective fantasy world, they have already committed to a huge octupling down on their failed bet.

A humble suggestion to start the next budgeting cycle

According to the State House News Service, Beacon Hill's "Big Three," Governor Patrick, Speaker DeLeo and Senate President Murray, are having a hard time reaching consensus on the starting point for the looming budget cycle:
Five days before their deadline and just over two weeks before Gov. Deval Patrick files his fiscal 2012 budget, Democratic legislative leaders and the governor still have not reached agreement on a tax revenue collection estimate. The estimate is a key building block for budgets allocating state appropriations for the fiscal year that begins July 1.
Based on the trio's dismal success rate in accurately predicting state revenues over the past four budget cycles, their difficulty in coming up with a figure this time around is puzzling.  How long, one might ask, does it take to extract an arbitrary number from one's... never mind.

Here are two baseline truths about the "consensus revenue figure" in each of the years since the current economic downturn began: (1) it is always optimistic; and (2) it is always wrong.  In a nutshell, this is the process:

The Big Three get together and come up with a "consensus revenue figure" for the coming cycle.  This figure is nothing more and nothing less than an educated (??) guess at how many dollars the state will take in over the coming year.  Or how much money Beacon Hill will have to spend, to look at it from a pol's perspective.  Then they take that number, arbitrary though it may be, and use it as a baseline to build the state budget.

One needn't be an accountant to see how such a system lends itself to a degree of wishful thinking. Given the choice between setting the revenue projection conservatively and planning for prudent budget reductions on the front end, or setting the number optimistically and then scrambling to deal with the fallout later, the Big Three always (always always always) take the latter approach.  The old adage "hope for the best and plan for the worst" doesn't come into it.

What we get as a result is month after month of emergency budget cuts, as reality inevitably asserts itself against the fantasy "consensus" figure.   We get one-time revenues used to plug holes in the operating budget.  We get long-term debt obligations pushed even further into the future to drum up short-term cash.  We get more borrowing, and more "supplemental spending" at the end of the year.  Each of these direct consequences of overly-optimistic "consensus" budgeting makes the Commonwealth's macro budget situation worse.

So here is a humble suggestion for the Big Three.  They should come up with their consensus revenue figure.  Then they should take the average of the amounts by which their estimates were off the mark in each of the past four budget cycles and chop that figure right off the top.

Thursday, January 6, 2011

Inauguration Day Miscellany

Nothing to see here.  Move along. 
To pay for the inauguration festivities that will kick off his second term at the State House today, Governor Deval Patrick and his supporters have amassed a fund of more than $700,000, donated largely by insurance companies, large financial institutions, telecommunications firms, and labor unions.
 Congratulations on the swearing in!  Now about that parole board...
As Gov. Deval Patrick takes his second oath of office today, he’s under mounting pressure from law enforcement and families of slay victims to sack his Parole Board in the disastrous aftermath of a Woburn cop’s alleged murder by a vicious triple-lifer the panel set free.

“Make no mistake about it. This is a dereliction of duty and the buck stops with you,” Jerry Flynn, executive director of the Chelmsford-based New England Police Benevolent Association, bargaining agent of the Woburn Police Department’s patrolmen and superior officers unions, wrote to Patrick and the Parole Board.

In his scathing letters obtained by the Herald, Flynn, who decried Patrick as “arrogant,” recommends “this entire
board” be fired, adding the governor’s “protection” of the panel is “repulsive.”...
 -- Boston Herald
 The opposite of self-aware.
“The beauty of not being a career politician is that I can do the job without thinking about my career,” Patrick said. “I can think about and focus on what I think is best for the long-term interests of the people of the commonwealth. I’ve done that for four years, I’m going to do that for four more.”
Governor Deval Patrick said today he plans to travel a lot more, nationally and internationally, in his second term – venturing out of state for trade missions, policy research, and to promote his upcoming autobiography. Patrick’s travel is certain to renew speculation about his aspirations for higher office and to draw criticism that his trips amount to junketeering.

"Whateva!  I do what I want!"
-- Cartman
A hole of our own  digging.
ANALYSIS: FISCAL '12 BUDGET GAP NEARLY $1.8 BILLION | The gap between projected state spending needed to maintain state services and available revenues next fiscal year is just shy of $1.8 billion, according to a preliminary analysis released Tuesday morning by the Massachusetts Budget and Policy Center. The estimate, according to MassBudget, accounts for the phasing in of tax cuts and legally mandated spending increases. The center's analysis assumes state revenue growth next fiscal year of $1 billion and cost growth of $970 million and factors in non-recurring federal government revenues of $1.56 billion and other temporary revenues sources totaling $328 million. Of the non-recurring federal revenue, $1.24 billion was provided this year to pay for Medicaid, a program with surging enrollment and costs that is crowding out funding for other government services. The state also received $296 million from the federal government this fiscal year for education, funds that also won't be delivered again in fiscal 2012.
When state budgeteers take one-time revenues like the federal stimulus dollars and use them to plug gaps in the state's operating budget, they trade short term (political) relief for larger gaps and larger problems later. And not too much later. Next year, when the federal billions are not available, the gap re-opens - usually wider. 

Tuesday, January 4, 2011

Sometimes cool equanimity is exactly the wrong reaction, Governor

Google Deval Patrick and any number of words used to describe extreme consternation (furious, angry, frustrated, exasperated, etc.) and what you will find is that in the ordinary course of things - like most people - our Governor does not hesitate either to get hot under the collar or to let people know about it.   Last year's MBTA crash caused by a texting trolley driver; the infamous arrest in Cambridge of Harvard Professor Henry Louis Gates, Jr.; the 2007 ICE raid in New Bedford - these are but a few of the events of the past four years that have raised the Governor's very public ire.  How strange it is, then, to read in various news outlets this morning of Governor Patrick's very conspicuous reluctance to emote when it comes to the murder of Woburn police officer Jack Maguire by a man, Dominic Cinelli, who would/should have spent the rest of his life in jail, but for the decision by a parole board dominated by Patrick appointees to let him walk free in 2008.

While other politicians across the political spectrum are loudly and angrily demanding an explanation for the parole board's action, according to the Globe this morning the Governor is "plead[ing] for patience." 
The governor said he was “obviously upset’’ about the case, but would not comment at length until his administration finishes its review of the Parole Board’s 2008 decision to free Cinelli, who was serving three concurrent life terms for a series of armed robberies.
Bearing in mind that the murder at issue took place over a week ago now, and the intervening days have been dominated by the story, it is particularly striking that the Governor has not seen fit to personally look into the matter on even the most superficial level.  Again from the Globe:
Patrick said he had not watched a video of Cinelli’s 2008 parole hearing or delved deeply into his criminal history.
The video in question is available on Boston.com.  Half the state has likely watched it by now. But not the Governor.  

I understand that Deval Patrick's nearly preternatural calm, what some have termed his cool equanimity, is one of the characteristics that endear many of the Governor's supporters to him.  It has served him well at various points of his governorship, from the campaigns that twice saw him elected to the natural disaster response exercises that bolstered his approval ratings.  It is inappropriate, even offensive, here.
“I want to wait for the review and then review what they show me thoroughly and then take whatever action is necessary,’’ the governor said. “The thing that, for me, gets lost in this — and I was thinking about this at the funeral last week — is that we jump immediately to the recriminations, and we forget there’s a human tragedy there, a family that’s been upended.’’
Exactly wrong.  Exactly wrong.   It is precisely because of the "human tragedy there," the "family that's been upended" that so many people both in and out of government are demanding accountability from the parole board members who opened the jailhouse door and let a "lifer" with a history of violent criminal behavior go free. Officer Maguire's family's suffering fuels the outrage.

Governor Patrick wishes to delay reaction so that he can "review" a "review" that he expects will tell him... what? This wasn't a construction accident.  There will be no explanation to justify the decision to release from prison a man who was serving three consecutive life terms.  Nothing in the Cinelli file can possibly exonerate from blame the people who by their votes loosed that man upon the world. They made a decision. That decision led in an unbreakable line to a tragic, disastrous, ultimate consequence.

In government as in the private sector, people make bad decisions all the time.  Often, when those decisions cause bad things to happen, those responsible lose their jobs.  The members of the parole board have only one job.  In the context of that job, Officer Maguire's murder was the worst of all possible "bad things" that could happen.

We should all be angry, including the Governor.   Angry is the very least we should be.