Thursday, November 19, 2009

Like sands through the hourglass

So are the hours of the Massachusetts Legislature.

I'm running this morning, and so will give short shrift to a topic that could easily consume my morning.

As I mentioned yesterday, Massachusetts' most recent legislative session - which saw massive tax hikes, cuts to basic services and a yawning budget gap born of irresponsible spending and even more irresponsible budget benchmarking - came to a close at midnight. Last night, as they do at the end of every legislative session, the House made a big show of being busy busy busy right up to the toll of midnight, and then proclaimed themselves "out of time" and unable to complete important business. Here's the State House News:
The Legislature capped formal sessions for the year with several major bills in motion but unfinished, including proposals to address a $600 million deficit in the fiscal 2010 budget caused by plunging tax revenues and overly optimistic spending projections.

The House, which held light sessions Monday and Tuesday, left the budget-balancing legislation until late Wednesday, passing the bill 132-21 at about 10:40 p.m. and leaving the Senate little time to consider it before formal sessions ended, under legislative rules, at midnight.
Darn the luck! They wanted to "address a $600 million deficit in the fiscal 2010 budget," but wouldn't you know it? They just ran out of time. They know that 99.7 out of every 100 voters out there do not have the time or patience to monitor their legislative activity, and so will not know that up until yesterday they moved with all of the alacrity of a snail on glue paper.

But they were there until midnight, hard workers that they are. So what, you ask, did they do with all that time? Let the State House News tell you:
An effort by House Republicans to repeal a tax on retail alcohol sales approved this summer was circumvented by House Democrats, who forced a study of the issue. The study amendment was adopted 99-54, precluding a vote on the tax rollback.
and
A Republican budget amendment in the House to roll the 6.25 percent sales tax rate back to 5 percent also was quickly hit with a further amendment from House Democrats calling for a study. Murphy's further amendment called for the Executive Office of Administration and Finance to furnish a study of the impact on the state economy and the cost to the Commonwealth, including an analysis showing the impact to the taxpayers, the practice of other states, and anticipated changes in employment. Republicans predicted the study amendment would not lead to a serious effort and accused Democrats of trying to avoid a vote on the rate reduction.
So they didn't have time to address the growing budget deficit. They did have time to knock back a couple of tax reduction proposals though! There is always time for that in the Massachusetts Legislature.

Speaking of things they do not time for, what about debate? Here's another fun vignette (again, from the SHNS):
Rep. Brad Hill (R-Ipswich) urged the House to take the opportunity to vote on the [alcohol] tax itself for the first time, since the vote to approve it was part of a much larger vote on budget issues. Hill said liquor store owners have told him the tax is hurting business, as consumers head to New Hampshire stores. Hill also took umbrage with being accused of slowing down the budget bill with amendments, saying the legislation only reached the floor of the House at 7 p.m.

[House Ways and Means Chair Charlie] Murphy retorted that the alcohol tax hike was agreed to by the House as part of the budget. "Did we debate it? No we didn't, but that's the process," Murphy said.
And of course Chairman Murphy is right! Who is this Rep. Hill to suggest that in a legislative body, the "process" ought to include "debate"!? Madness! Where does Hill thinks he lives?

I notice myself slipping more frequently into sarcasm lately.

Wednesday, November 18, 2009

Meanwhile, to our south

This little tid-bit from the State House News seems so far to have been missed by the major media. But it should be of interest to anyone pondering casinos as a means to budgetary salvation here in Massachusetts:
Foxwoods Resort Casino, the Connecticut facility eyed by Bay State policymakers as a cash vacuum from gambling residents here, defaulted on a debt payment Monday and saw its credit lowered to junk bond status, the Hartford Courant reported. The Pequot tribe that owns the casino reported paying $14.2 million of the $21.25 semi-annual interest on $500 million in debt, and does not plan to pay the remainder within 30 days, the paper said. That prompted Standard & Poor’s to downgrade the Foxwoods debt score.
Plenty of people here in the Bay State would have voters believe that a Foxwoods or two in our state, pumping a healthy portion of its revenues into state coffers, would solve all of our problems. Meanwhile, the real Foxwoods cannot even pay its bills.

Keep your stinkin' hands off our holidays!

Today is a big day - the last day of the current Massachusetts Legislative session. Bet you didn't know that, did you? Hardly anyone does.

Consistent with a long tradition of faithful procrastination in our legislature, a lot has been going on these last few days. Yesterday the Senate debated and passed an education "reform" bill full of meaningless half-measures - which is a good thing, since Governor Patrick's original "Readiness Project" proposal would have un-done many of the reforms that have made our public schools some of the best-performing in the nation. A non-bill is better than a bad bill, that's what I always say! The House is unlikely to act on the Senate bill today. There is a "criminal justice policy" bill kicking around. Lots going on, not much being done - again, in many ways a good thing. I'm not complaining!

Here's one thing that was done, though - the House again saved what Howie Carr likes to call the "High Hack Holidays" from the budget knife. You might remember that a few weeks back, in yet another too-late stab at getting the budget under control, Governor Patrick proposed a number of cuts, including elimination of the "Hack Holidays." You know about them, right? Bunker Hill Day and Evacuation Day: holidays "celebrated" only in Suffolk County (where Beacon Hill sits), with a blissful day off from work for government employees, who get to sit at home, presumably in solemn reflection on the historical import of the days, while the private sector and the rest of the state and the nation toil on. Every year the "Hack Holidays" are fodder for mild to moderate public outrage. Every year someone proposes their elimination. And every year, the Legislature brushes back those proposals. They already did that this year. How irritating it must have been for them to have to deal with it again!

With the state budget running on fumes and an election approaching that holds, for the first time in a long time, the distinct possibility of an anti-incumbent wave, some observers thought Patrick's latest proposal might be the end of the High Hack Holidays. But no. According to the State House News, the House simply ignored the proposal, declining to include it in the mini-budget bill the House budget panel considered last night. The elimination proposal (along with a much more substantive and controversial proposal to zero out funding for the Quinn Bill) went "unheeded" in the House, says the State House News.

In this economy, everyone is suffering. People are angry at the waste, profligate spending and corruption they see in their government. Beacon Hill understands that, and they are sharing the pain. Just ask your State Reps. They'll tell you.

But there are some traditions too important to cede to the Zeitgeist. Allowing Massachusetts State employees two days a year when they can stay home and munch Doritos in front of Oprah while the rest of us head off to work is apparently one of those traditions.

The next election is in less than a year. I'm just saying.

Tuesday, November 17, 2009

Another dopey "no cost" proposal

Recall about a month ago that Massachusetts House Speaker Bob DeLeo instructed his Members to bring to him proposals that 'don't cost anything,' so that the Legislature - which has spent every single available dollar and more - could continue to give at least the appearance of worthwhile activity. They started with nonsense like "canine devocalization."

Since then, it has been fun to watch the headlines for the fruits of the Legislature's 'no-cost' brainstorming. Here is today's installment.

Anyone who has experienced the frustration lately of searching in vain for an available parking spot at Logan will likely cringe at the bill proposed by Senators Jack Hart and Sonia Chang-Diaz to create hybrid-only parking spaces on our city streets. There are plenty of such spaces at Logan - placed in prime positions adjacent to the terminal entrances. The majority of them are nearly always empty, standing as infuriating rebukes to those who dare to approach the airport, perhaps on a tight time-frame, in a traditional gas-swilling vehicle.

These parking perks for people willing to shell out huge premiums for politically correct wheels are intended to discourage our collective preference for, well, big cars with powerful engines. They are also supposed to be 'eco-friendly.'

On that second point, though, here's a question: how much extra gas is "guzzled" every day at the airport by SUVs, station wagons and muscle cars forced to search level by level for an open space, while 'green-reserved' spaces stand mockingly vacant?

Monday, November 16, 2009

Monday Morning Miscellany

Massachusetts Lawmakers Working Second Jobs. Fox 25 Boston reports this morning on a number of Massachusetts legislators whose 'second jobs' might pose conflicts with their obligations as members of the Legislature with influence over the state budget. While I agree that several of the examples highlighted by Fox raise some serious questions about whether certain individuals are parlaying their legislative influence into state dollars for their outside employers, as a general matter, in my view 'second jobs' for legislators ought to be encouraged. We are one of only a handful of states that have a full-time legislature. To my mind, that fact leads directly to (a) too much spending; and (b) nonsense like this. A part-time legislature, on the other hand, requires that its members remain personally connected to the private sector, obligated to suffer the consequences of their legislative acts along with the rest of us.

The Globe 'hearts' Mike Capuano. Israel, not so much. This Globe headline today is a one-line love letter to Democratic U.S. Senate candidate Mike Capuano: Passionate sense of right and wrong drives Capuano. Jeez. What a smooch. The journalistic equivalent of embarassing P.D.A. Being driven by one's personal "sense of right and wrong," of course, in no way guarantees the "right" action in any given case. Here's a good example in Congressman Capuano's case. In 2008, as Hamas once again unleased a barrage of rockets targeted (if targeted at all) at civilian population centers in Israel, the House of Representatives voted overwhelmingly to condemn the act. As Senate rival Scott Brown pointed out yesterday at a candidates' forum at Framingham's Temple Beth Am, Capuano's "sense of right and wrong" in this case drove him to vote "present."

As a Mass. Republican, let me save the committee the trouble - we're treated BADLY. Legislative committee to review elephant treatment.

Wednesday, November 11, 2009

More Breaking News from the Land of Duh

From the front page of today's Boston Globe blares this banner headline: "Stimulus fund job boost in state exaggerated, review finds." It might as well read, "Stimulus fund job boost exaggerated, common sense says." Or, from another angle, "Bureaucrats and politicians exaggerate when big money on table, review finds."

Here are some of the lowlights:
While Massachusetts recipients of federal stimulus money collectively report 12,374 jobs saved or created, a Globe review shows that number is wildly exaggerated. Organizations that received stimulus money miscounted jobs, filed erroneous figures, or claimed jobs for work that has not yet started....
One of the largest reported jobs figures comes from Bridgewater State College, which is listed as using $77,181 in stimulus money for 160 full-time work-study jobs for students. But Bridgewater State spokesman Bryan Baldwin said the college made a mistake and the actual number of new jobs was “almost nothing.’’...
“There were no jobs created. It was just shuffling around of the funds,’’ said Susan Kelly, director of property management for Boston Land Co., which reported retaining 26 jobs with $2.7 million in rental subsidies for its affordable housing developments in Waltham. “It’s hard to figure out if you did the paperwork right. We never asked for this.’’...
Recipients said they found the reporting system confusing, leading them to submit information erroneously, and leaving them unable to correct mistakes in their reports. Additionally, the government files are massive and unwieldy. Reports do not distinguish between newly created positions and those that were “retained.’’...
The community action agency based in Greenfield reported 90 full-time jobs associated with the $245,000 it got for its preschool Head Start program. That averages out to just $2,700 per full-time job. The agency said it used the money to give roughly 150 staffers cost-of-living raises.
None of this is surprising in the least. I've railed for months against the ridiculous notion of trying to quantify "jobs retained." As the Globe's review makes clear, money is fungible. There is simply no way to determine if a dollar of federal money added to a larger pot of funds results in "retention" of a job that would otherwise have been lost. More to the point, applicants for stimulus dollars were required to claim from the outset that they would use the funds to "create or retain jobs." This created an obvious incentive for applicants to state that stimulus dollars were needed to stave off some number of pending job eliminations. That number, then, was rolled into subsequent reports as "retained jobs," whether or not the pending eliminations were real or illusory in the first instance.

In fact, as several of the examples above illustrate, many recipients of stimulus funds did the same thing that Massachusetts and other states did: they used it to back-fill existing gaps in their annual budgets (thereby often creating even larger gaps for next year... but never mind that for now).

Couple that perverse incentive to exaggerate explained above with the fact that government officials from the President to the Governor to the bureaucrat administering the funds were all pushing - hard - for big numbers in those "created or retained" reports, and the mish-mash of "mistakes," evasions and quite likely outright lies reported by the Globe was all but inevitable.

Bearing all of this in mind, and the fact that President Obama at the outset of this debacle promised "unprecedented accountability" and rigorous tracking of "every single dollar" allocated through the stimulus program, consider this sobering thought: this model of inefficiency and slippery accounting was brought to you by the same crew that is now pushing with all its might to seize control of the nation's health care industry, which comprises nearly twenty percent of our economy.

Monday, November 9, 2009

In case you missed it

Joan Vennochi's latest, passed along for your edification - no further comment necessary.

Sunday, November 8, 2009

"Fair share": the tax hike advocate's favorite non-argument

These days, with everyone feeling the pinch and political Independents (and even many Democrats) turning on the tax-and-spenders at all levels of government, it is easy to forget that there are smart, well-intentioned and civically engaged people out there who still argue explicitly and openly for higher taxes. I ran across such an argument last week in my local paper, put forth by John Hudson, a suburban pastor who is given to political as well as spiritual sermonizing. Give his column a read at this link before continuing below.

I respect Reverend Hudson's honesty and candor. Most pro-tax increase advocates in the Commonwealth are loathe to label themselves explicitly as such. Our Legislature is full of people who agree with the Reverend's point of view, but one rarely finds an elected official willing to admit it.

The Reverend's column, however, rests on a false foundation. Pointing out, correctly, that essential services like police, paramedics, aid to the disabled and schools are "paid for through taxes," the Reverend argues that higher taxes should be viewed as "a civic responsibility to be embraced." "We should raise our own taxes," he proclaims. The income tax specifically.

Reverend Hudson fails to notice all the other things that are "paid for through taxes." MBTA policies that allow workers to retire in middle age with enormous pensions and life long health insurance - "paid for through taxes." Earmarked legislative pork in every annual state budget, including the latest one - "paid for through taxes." Patronage hires, no-show jobs and redundant positions throughout government - all "paid for through taxes."

Beyond rampant waste and inefficiency, our state government year after year turns back reform proposals that would save hundreds of millions of dollars, refusing to repeal the Pacheco Law, which hampers the state's ability to outsource non-essential state functions to the private sector; adopting cosmetic pension reforms while leaving huge dollar but politically-difficult union issues on the table; and (as reported just this weekend) allowing transportation salaries to continue to escalate, despite consolidation in state transportation agencies and, by the way, a budget-crushing recession.

Adopting the preferred Beacon Hill vernacular, the Reverend states that "[t]here’s no doubt our state budget needs new revenue sources." Respectfully, he is incorrect. Our government does not need "new revenue sources." Our elected leaders need to learn to live within a budget, just like our families and our businesses do. For several years now, our budget writers have consistently underestimated annual spending and over-estimated tax revenues. This is an unsustainable model that leads directly to deficits and to cuts in essential services.

Tax hike advocates like Reverend Hudson always come back to the same core, moral-flavored argument: "It’s time for us to pay our fair share," they say, never explaining how "our fair share" is determined. If "our fair share" is a rate of taxation sufficient to sate Beacon Hill's hunger for spending, then truly there is no limit to how high our taxes will climb.

I agree with Reverend Hudson on casino gambling. It is no budget panacea. He is wrong, however, to argue that yet another tax increase is the cure for our state's budget ills. Until our elected leaders do their "fair share" by finally addressing endemic waste and implementing real governing reforms, we taxpayers are already doing more than our "fair share."

POSTSCRIPT: I embedded a link in a parenthetical above to this weekend's front page Globe article about the escalation of transportation salaries under Gov. Deval Patrick. If you skipped over it, click into it now and read the whole thing. It is hard to conceive of a better way to illustrate exactly why the "raise our taxes" argument is so deeply misguided.

Thursday, November 5, 2009

Grants and targeted incentives are no match for escalating costs

The Globe has an important story tucked away in the "green living" portion of its Lifestyle section today.

"Evergreen shifts work to China," sub-titled "solar panels won't be assembled at Devens factory."

Yet another company moving operations (and jobs) out of Massachusetts. But this particular story is even worse news than usual, for reasons summed up at the front end of the article:
Little more than a year after cutting the ribbon at a new factory in Devens built with more than $58 million in state aid, Evergreen Solar said yesterday that it will shift its assembly of solar panels from there to China.

About half of the 577 full-time and 230 contract employees at the Devens factory are involved in putting the panels together. Evergreen declined to say how many of those jobs would disappear with the scheduled transfer next year to China, where it is expanding because of lower costs.
Bad news for Massachusetts is even worse news for our embattled Governor Patrick, as the Globe makes clear:
The company has been a poster child of the Patrick administration’s efforts to develop a “green energy’’ industry cluster in Massachusetts. But it has been struggling financially because of increased competition from overseas producers and rapidly falling prices for solar products. It recently persuaded the state to lend it another $5 million to cover equipment purchases, though the state has not yet released the funds.
So the relationship between Evergreen Solar and the Patrick Administration is roughly analogous to that between Kirstie Alley and Jenny Craig - 'poster child' turned embarrassment. The Patrick Administration spin on this will undoubtedly mirror its spin on virtually all of its economic problems. They will blame the national economy. But pay attention to what Evergreen's CEO has to say:
In explaining the move to China, Evergreen chief executive Richard M. Feldt said in the company’s filing that prices for assembled panels have fallen more than 30 percent in just the last year, making it “very difficult for manufacturers located in high-cost regions to remain price competitive.’’
Massachusetts typifies the "high-cost regions" he's talking about. Cash grants are all well and good, but they are short term. Over time, the relatively high (and rising!) cost of doing business in Massachusetts more than outweighs the value of a few million bucks tossed a company's way to attract an initial investment in the Commonwealth. As the Patrick Administration continued over the past two years to repeatedly hike taxes on our business community, it became all but inevitable that even our economic 'poster children' would begin to realize that - and to act accordingly, in their business interests.

This has implications beyond the limited context of this particular company. In addition to the millions of state dollars showered on 'green' companies like Evergreen, recall that the Patrick Administration gaudily devoted a billion dollars to create similar incentives for life science companies.

Watch for some of the recipients of that state largess to follow Evergreen out of the state - to other states that do not try and micromanage private sector investment in politically correct business sectors, but instead create long term incentives for business investment and expansion by keeping tax rates low and predictable.

In other words - to states that do the polar opposite of what we do here in Massachusetts.

Tuesday, November 3, 2009

What NOT to do.

For political aspirants, there are two, related lessons in this Globe article about the trials and tribulations of the Christy Mihos campaign:

(1) If you need to part ways with your campaign spokesman, best to do it in a friendly way, preferably yourself. Do not have someone else call him and then tell the press he's been working "pro bono" anyhow. Especially when he hasn't. And

(2) Don't ever, ever make a reporter look silly. Especially a veteran reporter. Especially Frank Phillips.

As a refresher on the background of today's Mihos meltdown article, read this post I put up a couple of months back about Christy's very brief U.S. Senate campaign. At the time, you may recall, Kevin Sowyrda (the now former Mihos spokesman who is the subject of today's article) told the Globe's Phillips and a number of other media outlets that a Mihos run for the Senate was pretty much a done deal.

A day later, Mihos was earnestly telling the world that he'd never planned to run. From the State House News at the time: "Asked if he’d given a Senate run serious consideration, Mihos said 'not really'..." This was blatantly, demonstrably false.

Flash forward to this morning, and some of the September's chickens are coming home to roost, as the two people most wronged by Christy's public Senatorial flirtation team up to make his campaign look silly:

Kevin Sowyrda, who has been Mihos’s spokesman and media director since the summer, said he was told yesterday that he has been terminated. Sowyrda said he has not heard directly from Mihos, but that he had heard he was fired from another consultant to the campaign, whom he would not identify.

Sowyrda said the first hint came when his campaign cellphone shut down yesterday.

“This is classic Christy,’’ Sowyrda said. “Apparently, he has told people on the campaign that I resigned a month ago and have been working pro bono since then, which of course was news to me. However, we all love Christy dearly for this type of eccentricity, because that’s what makes him the very special person that he is.’’

That has to be the back-handed compliment of the cycle thus far: "we all love Christy dearly for this type of eccentricity, because that's what makes him the very special person that he is." As a last favor to his former boss, Sowyrda is locking up the 'my crazy uncle for Governor' voters.

Further twisting the knife, Phillips (with the help of Sowyrda) notes that Mihos's fundraising is lagging well below expectations.
A fund-raising appearance last week by Dick Morris, a national Republican consultant who is advising Mihos, fell flat. Two events with Morris, one on Cape Cod and one in Boston, drew sparse crowds, according to Sowyrda.

The Mihos campaign hired national GOP fund-raiser Carolyn Machado more than a month ago to put together a financial plan. But Mihos’s committee has yet to show it can raise substantial sums beyond the candidate’s own bank account.

Of course "the candidate's own bank account" is exactly what the candidate is counting on. Sooner or later we'll see a roll-out of quirky Christy campaign ads, thematically and probably stylistically no different from the ones that for a time saturated the airwaves in 2005-2006 - and ultimately netted Mihos roughly six percent of the vote.

Meanwhile, in other gubernatorial campaign news...

Friday, October 30, 2009

The (fifth? sixth?) Cut is the Deepest

Much is written this morning about the latest round of budget cuts proposed by Governor Patrick yesterday.  The specifics seem, as usual, to be blurry.  The initial round of coverage reported 2,000 state jobs to be cut.  Then Patrick's chief budget adviser pegged the number at 1,000.  The Globe has 1,000 jobs to be "ended," whatever that means.

Beyond job eliminations, the picture gets even fuzzier.  As usual, the State House News Service has the most specifics, so I crib liberally from them here:
Gov. Deval Patrick announced a plan Thursday to cut $352 million in state spending four months into the fiscal year, and rely on up to 2,000 layoffs, $82 million in new “departmental revenues,” and $62 million in federal stimulus aid to close most of a $600 million budget shortfall.  The package also pulls $60 million in surplus funds from the fiscal year that ended June 30, begins a phase-out of a police education incentives program, and offers a tax amnesty program estimated to generate $20 million...
Using unilateral authority, Patrick sliced $277 million in executive branch spending, and asked the Legislature for power to trim another $75 million from the Legislature, constitutional offices, courts, sheriffs and district attorneys....
Subtracting from Beacon Hill aid to municipalities, Patrick pared $18 million from a $40.5 million account that reimburses regional school districts for busing students and asked the Legislature to cut $10.7 million from the state’s payment to cities and towns for tax-exempt property. Patrick also cut in half the appropriation for compulsive gambling treatment, from $1 million to $500,000...

Aides said the new revenues Patrick laid out included roughly $50 million in anticipated Department of Revenue tax case settlements, $27 million in reduced transfers to the Mass. School Building Authority and settlements and $6 million in unspecified Department of Transportation revenues.
So far as I can tell, Patrick attempts to close a $600M (estimated) budget gap with approximately $277M in actual cuts.  The rest of the hole he hopes to fill with additional cuts to be authorized by the Legislature, yet another backfill of federal stimulus dollars, a bunch of revenue from a tax amnesty program that has not yet even been formulated, and then a bunch of accounting changes.

So he's cutting.  But what is missing?  As Senate Minoity Leader Richard Tisei puts it,
What jumps out at me about Governor Patrick’s proposal is that he is resorting to budget cuts that will harm the state’s most vulnerable residents, but he is still not doing anything to change the way the state does business. There were no calls for a state hiring freeze, no calls for a wage freeze, and no attempt to do away with the anti-privatization Pacheco Law that is costing taxpayers hundreds of millions of dollars a year.
Despite his party's recent mantra, "never let a crisis go to waste," Patrick is again nibbling around the edges of state government to very temporarily plug an existing gap, instead of making the fundamental and long overdue changes necessary to both fill the gap and prevent it from opening again next year.

I have noticed in press coverage and in the blogosphere a troubling tendency amongst some Republicans to instinctively celebrate "cuts" - any cuts - without giving much thought to their substance.  It is apparently the case that 1,000 state employees are receiving real live pink slips next week as a result of Governor Patrick's actions this week.  Some of those people might be "hacks."  Some of them might not do all that much.  It is certainly the case, however, that many of them are hard-working and dedicated public employees who depend on their paychecks.  Likewise, some of the programs getting the axe are worthwhile.  They help people who will now be without help.  It is wrong, in my view, to celebrate that. 

Instead, we should press the point made by Senator Tisei:  The Governor "is resorting to budget cuts that will harm the state’s most vulnerable residents, but he is still not doing anything to change the way the state does business."  Again.

Thursday, October 29, 2009

Check out this new site

Take a moment to check out American Maggie, a new political website "for conservative and Republican women to share their views online about politics and public policy."  (The name is a clever reference to Margaret Thatcher, by the way).

In a very early stage, there is already quite a lot of good, substantive thinking going on there, including a feature piece on energy independence as a Republican rallying cry by my good friend former Lt. Governor Kerry Healey.

Take a look.

Wednesday, October 28, 2009

Grab your wallet - here they come again.

You've probably heard or read somewhere relatively recently that, having hiked the state sales tax by 25% earlier this year, the Beacon Hill Democrats were laying off the tax hikes for a while. Well, according to a dispatch from the State House News Service this evening, you heard wrong:
As policymakers scrape every nook for dollars to help plug persistent budget deficits and revenue shortfalls, a panel of lawmakers on Wednesday opened a thick booklet of tax exemptions and credits – some decades-old – to decide whether they still serve a purpose.

Tax exemptions on everything from the small and obscure – cement mixers and flag purchases – to the broad and all-encompassing -- services – are in legislators’ sights and were the subject of a hearing of a special subcommittee combing through the hundreds of tax breaks, deductions and credits.

The long list of exemptions, known as the “tax expenditure budget,” is valued at $18.97 billion this fiscal year, according to an analysis accompanying the Patrick administration’s fiscal 2010 budget. Lawmakers hope to weed through the exemptions to determine which still have value and which are outdated.
Let's make one thing crystal clear from the outset: elimination of a tax exemption or a tax credit is a tax hike. The result is that consumers pay more tax than they did before. These efforts will be called "closing loopholes" or some-such nonsense, but the end result will be another tax increase. The only open questions are how large and how broad it will be.

And of course these money-grubbers are not trying to find exemptions that are "outdated" or no longer "have value." To the contrary, the only ones they will be interested in are those that do "have value" - value that they can redirect from the private sector to the state's depleted coffers.

The really scary thing about this quiet, pre-Halloween development is its potential scope. Sure, the Democrats could repeal a few minor credits - on "cement mixers and flag purchases," perhaps - that would impact a tiny sliver of the population and have a negligible fiscal impact (unless you happen to be a flag wholesaler). But the exemption that apparently got the most attention at the subcommittee hearing this week was the one on services. And that is ginormous. From the State House News:
Experts invited to speak by the subcommittee questioned the value of a sales tax exemption on services, which officials estimate saves consumers more than $6 billion a year on everything from haircuts to accounting work.

“I think it’s crazy,” said Karl Case, a Wellesley College economics professor. “What’s the difference between a good and service today? I never quite understood why it’s there.”

Randy Albelda, a University of Massachusetts economist, said a policy exempting the sales tax on services emerged in the 1930s, when service taxes were considered “a direct tax on labor.”

“That doesn’t hold anymore. That doesn’t serve its purpose anymore,” she said. “Certainly, some services you don’t want to tax. That’s one that really could use some looking at.”
Again, let's be clear. These "experts" are pushing for repeal of the state law that exempts services from the state sales tax - a move that would constitute approximately a six billion dollar tax increase on Massachusetts consumers. Every service that we pay for, from hair cuts to lawn mowing to a shoe shine, would immediately increase in price by 6.25 percent.

Unsurprisingly, the Massachusetts Teachers Union sent a lobbyist to the hearing, who dutifully argued for changes to what Democrats call the "tax expenditure budget" (and you and I might call "the dwindling percentage of our pay checks that we're allowed to keep") in order to "open up some additional revenue." Yeah. Six billion worth of "additional revenue" - an amount that would make the 25 percent sales tax hike look like chump change.

Yeah yeah yeah, I realize it was just a subcommittee hearing. And yeah yeah yeah, I know we're going into an election year and conventional wisdom says even Beacon Hill's ruling cabal is not stupid or arrogant enough to try and get away with yet another mongo tax increase in the current political climate. But then again, barely anyone thought they would be stupid or arrogant enough to increase the sales tax by 25 percent during a recession, and they did that...

The larger point is this: while the Governor (again) makes a lot of noise about cuts, layoffs and hard-nosed negotiations with public employee unions, his compatriots on Beacon Hill are quietly noodling over another massive tax increase.

Just another week in the Commonwealth of Massachusetts.

Tuesday, October 27, 2009

Sure, but what about immmigration?

Plenty has been written about last night's Democratic Senatorial debate. Many have observed that the candidates were virtually indistinguishable on the issues, and demonstrated equal skill at avoiding the questions they were asked. That tendency struck me, of course. But what I found most amusing in an otherwise hum-drum hour was the runaway train quality of Attorney General Coakley's closing statement.

To be sure, Coakley feels considerably more pressure in these debates than does, say, Steve Pagliuca. She is comfortably ahead in the polls, and so must approach every engagement defensively. She does not need to make up ground - she just has to hold it. Still, as her closing statement picked up pace one could sense a barely-suppressed bit of panic just below the surface. Had she missed any must-hit hot buttons? As her mind ticked through the bullet list that her media team had obviously beat into her head, the words spilling from her mouth became less and less coherent. Think Tom Menino without the mouth full of marbles.

But don't take my word for it. WBZ-TV has the whole thing linked here (the AG starts her opening statement at 54:29). And here's a self-generated transcript (going by ear, so excuse any minor discrepancy with what you might hear):
I'm asking for your vote on November 8th because I believe that we need to get out of this economic recession grow more jobs here in Massachusetts and hold Wall Street accountable so this never happens again. I think we need health care with a strong public option that'll make sure that we get everybody insured and that we provide for the safety and the welfare of our health insurance so that we can afford the care that we want. I believe and I want to go to Washington because we need an energy policy that makes sense and that will, uh, challenge, uh, what we've seen so far with global warming and climate change. I wanna go to Washington because I think that we need to keep our kids and our seniors safe here and we need to keep those of our armed services safe over overseas. Finally, I want to go to Washington cause I think we need to continue to protect our civil rights and the challenge of Senator Kennedy I've challenged the defense against marriage act, I've done civil rights here, I believe I'll be a new leader, a new kind of leader in Washington so I'm asking for your vote on December 8th.
See what I mean? She starts off steadily enough. Recession? Check. Jobs? Check. Whack Wall Street? Check (nice one!). Health care, public option, universal coverage. Check, check, check. But what about safety and welfare? People like safety and welfare. So she'll "provide for the safety and the welfare of our health insurance so that we can afford the care that we want." What? Never mind, move down the list. The environment... She's going to challenge what we've seen with global warming. Check. What else...? SENIORS! She hasn't mentioned SENIORS. And, oh God, she almost missed KIDS. So wrap them both up in "safety." Check check. And so long as we're on safety, she'd better hit our servicemembers overseas, who people naturally think about in exactly the same way as they think about seniors and kids. They get safety too. Check. Long exhale. Miss anything? CIVIL RIGHTS! That's what they call a point of distinction, and she almost forgot to mention it! Senator Ted Kennedy 'did civil rights.' Martha has "done civil rights." How? By challenging the "defense against marriage act." Phew - good catch. Now the capper, which is also the slogan: "A new kind of leader." In what way? Sorry - your 45 seconds are up. Long exhale. Over to you, Mike.

Still, as the aforementioned Mayor Menino illustrates better than anyone, the voters do not necessarily require coherence of their preferred candidates. AG Coakley's verbal avalanche of a closing statement will not dent her lead in the polls. But it did provide cause for a rare chuckle last night.

Unions say "jump!" Dems say, "how high?"

This article from the Springfield Republican out in Western Mass provides a hilarious-yet-troubling example of the lengths to which some Massachusetts Democratic state legislators will go to appease the Commonwealth's powerful union bosses. Here's the meat of it:
A pledge to site a casino in Western Massachusetts, taken by 10 local legislators, is unlikely to carry much weight on Beacon Hill, critics say.

The pledge, developed by local construction unions, attempts to tell legislators how to vote on casinos. But even several signers are downplaying the significance of the effort.

“I don’t think any of us read the pledge,” said state Sen. Stephen J. Buoniconti, D-West Springfield.

Buoniconti and nine other legislators from Western Massachusetts signed a pledge saying they will not support expanded gambling unless a bill includes a casino for the four counties in the region...

The 10 legislators who took the vow did so during a meeting on Oct. 2 with leaders of the Pioneer Valley’s construction unions. They were the only legislators who attended the meeting, and they didn’t know ahead of time they would be signing the pledge, Buoniconti said...

Besides Buoniconti and Kocot, the pledge was signed by Reps. Cheryl A. Coakley-Rivera, Sean F. Curran, Angelo J. Puppolo and Benjamin Swan, all Springfield Democrats.

The other signers included Reps. John W. Scibak, D-South Hadley, James T. Welch, D-West Springfield, Rosemary Sandlin, D-Agawam, and Aaron Saunders, chief of staff for Sen. Gale D. Candaras, D-Wilbraham.
Senator Buoniconti (D-Malleable) gets points for honesty, if not for integrity. "I don't think any of us read the pledge"!!! And why would they? All they were asked to do, after all, was step to the front of the room to commit, in writing, to vote in a specific way on a yet-undrafted piece of future legislation. Why should they be bothered with the particulars when presented with such a great opportunity to curry favor with a big union?

As the article describes the scene, "Daniel D’Alma, president of the Pioneer Valley Building Trades, offered the pledge, and legislators walked up to an easel and signed it on a piece of paper." Of nine legislators in the room, nine queued up to put pen to paper (plus Sen. Canderas's Chief of Staff, whose vicarious obesiance was undoubtedly appreciated by his boss), despite not knowing about the pledge ahead of time and - according to Senator Buoniconti - not having bothered to read the text.

Sure, the article also quotes a number of Democrats who claim that they will not sign the pledge. And others are crying foul:
Rep. Daniel E. Bosley, D-North Adams, said signers of the pledge were put on the spot by the union leaders.

“I do think it’s unfair for them to go to a meeting ... and then get held up for this one issue,” said Bosley, who opposes casinos.
But Bosley has it backwards. The fault here is not with the union bosses who "held up" those ten Democrats "for this one issue." The unions have an interest in the gaming issue, and they have every right to press representatives of their government to adopt their preferred position. The fault is with the Legislators who, when "put on the spot by the union leaders," lacked the modicum of intestinal fortitude necessary to oppose (or even to examine!) the bosses' entreaty.

The pledge in question was comprised of a mere sixteen words: "We will not support any casino gaming legislation unless it includes a site in Western Massachusetts." Senator Buoniconti and crew could not be troubled to read it.

The state budget, by the way, runs into the thousands of pages.

Monday, October 26, 2009

Charlie Baker: a refreshing contrast

I was at a Charlie Baker event a couple of weeks back. Following Charlie's long, detailed, no-notes speech and a Q&A session that lasted over 20 minutes and featured not a single ducked question, most of the comments I heard coming out of the event focused on the substance of the speech and the (amazing!) fact that Charlie seems to actually enjoy providing straight answers to the questions he is asked.

With the left-hand column of my blog being what it is, I do not suppose I need to offer an affirmative disclaimer: clearly I am in the bag for Charlie. But I am in that bag for exactly the reason I'm getting at here. Charlie is, in many ways, the anti-Patrick. Where now-Governor Patrick managed to stiff-arm his way through an entire campaign on the strength of aspirational rhetoric and ephemeral promises, Charlie likes to get into the policy weeds. Thankfully, he manages to remain intelligible - even informative - while providing a whole lot of substance and detail.

There were a lot of Independents - and even Democrats - in the room with me earlier this month who came out of the event aware of and impressed by that contrast. Being in that bag I mentioned, clearly I cannot expect anyone to just take me at my word on all of this. Ideally, every voter in the Commonwealth could have the chance to see Charlie speak in person. Obviously that cannot happen, no matter how grueling a schedule he keeps for the next year. The marvels of modern technology allow him to reach a whole lot more people that was plausible just a few years back, though. Take a few moments to watch the two videos below. Read his responses to 10 policy questions at his website. And ponder whether you have ever seen anything remotely similar from the current Governor (and if you have, please point me to it).





My view might well be distorted from the bottom of this bag. And yes, I realize - more than most - that Kerry Healey was also the substantive 'anti-Patrick' in much the same way. But it strikes me that with a high degree of public awareness of the mess this state is in, substance has a good shot at prevailing over atmospherics this time around.

And speaking of contrasts... this gimmick puts me in mind of a classic Christian Slater flick.

Friday, October 23, 2009

Hitting close to home now

It is easy to look down one's nose at the liberal on the Cape who drives a Prius but opposes Cape Wind, or the guy in New Bedford who gripes about the high cost of home heating, but would tie his body to a piling before allowing a new LNG terminal near his neighborhood. "NIMBYism," we sneer. "Not-In-My-Back-Yard."

Through the wax and wane of the semi-annual casino gambling debate that has taken place in Massachusetts in the years since I became politically involved in the state, I have professed detached opposition. On a gut level, I've said, I do not like casinos. I have been in enough of them, in Vegas, in Atlantic City, in Connecticut, to know from experience that for every casual gambler like me, well off and visiting for a short amount of time and with a pre-budgeted (and mentally already lost), small pile of cash to blow off some steam with friends, there are countless seniors feeding their social security into the slots a quarter at a time, and who knows how many desperate souls hoping for a big score to solve all of their financial problems.

More to the point for purposes of the present (and recent) debate in Massachusetts, I just do not buy the proposition that a bunch of 'destination resort casinos' across the state will solve, or even partially solve, our state budget problems. Other states have tried that gambit, none successfully. To the contrary, states (and cities) that have bet big on casinos uniformly provide a powerful cautionary tale, if anyone cares to pay attention.

Still, for all of that, a part of me clings to the libertarian argument. It's a free country. If consumers want to spend their money in casinos, who am I to argue with that choice? If developers have the land and the resources to build gambling meccas, and can convince a majority of the voters in the area in question to support their efforts, so be it. I think casinos, on balance, wreck more lives than they better by providing the jobs that are always central to any pro-casino argument. If I were in the legislature I'd vote against allowing casinos. But if Palmer wants a casino and pro-gaming forces win out on Beacon Hill this time around? I wouldn't lose sleep. I'd probably even visit eventually.

Ah, but all of that prevarication was before one of those casino developers started talking up a proposed casino in Milford, on land adjacent to my home town. In my proverbial back yard. Now I am a full-scale NIMBYite. Now all of those social ills that invariably come along with casinos threaten my bucolic little 'burg, the town of my birth, and my dad's, and my grandfather's. Suddenly a region where a new neon sign on a pizza joint might well cause a public uproar is flirting with multiple high-rise hotels, thousands of blinking, beeping slot machines, over a dozen restaurants. 'Economic development,' sure. But at a high price. Governor Patrick's initial gaming proposal a couple of years back came with tens of millions of dollars budgeted for gambling treatment programs - tens of millions of dollars to paper over the inevitable damage that organized gambling wreaks on individuals and families. In my back yard.

Realtors in the area tell the Milford Daily News that they've already seen an uptick in activity by people taking formal steps to sell their homes in the event that a casino actually comes to Milford. That is undoubtedly an overreaction. Were these particular developers proposing a trans-Atlantic swim they would barely have a toe yet in the water. There are many, many hurdles to be cleared before any casino breaks ground in Massachusetts, anywhere, never mind in Milford specifically. But the reaction of these gun-jumping homesellers speaks to the nature of the opposition to these things, wherever in Massachusetts they may spring up. Las Vegas was built from nothing, in a vast desert wasteland. A casino in Milford, on the land in question, would rise in close proximity to dozens of suburban neighborhoods. It would loom in marked, unsightly contrast to its surrounding communities, all of which maintain a distinctly old New England character. Stately colonial homes. Old church steeples rising from pedestrian-friendly town centers where the coffee shops are still run by local families. Sure we have an interstate passing close by and the requisite contingent of Dunkin' Donuts shops. But the towns surrounding Milford are much closer to Rockwell than to Vegas.

I may well be in the minority. It could be that, on balance, times are tough enough that people who might otherwise be skeptical of a local casino complex will be swayed by the promise of 'thousands of jobs, with benefits.' I do not think so, though. People who chose to live in communities like Holliston, Hopkinton, Milford and Bellingham do so, by and large, for well-considered reasons. The character of the communities has something to do with that. Whatever number of jobs a casino might bring, such a complex would undeniably and irrevocably change that character. Three high-rise hotels? Blegh. NIMBY.

Next week, the Legislature's Joint Committee on Economic Development will hold an initial hearing on a number of casino bills. Co-chairing that committee will be Senator Karen Spilka, who happens to represent a number of towns adjacent to Milford (including mine). Senator Spilka has a tightrope to walk here. Her close ally and mentor, Senate President Murray, is four-square for casinos, are are the Governor and the Speaker of the House. On the other hand, if I'm right, a majority of her district is likely to oppose them - especially with the NIMBY factor so recently injected into what was heretofore a relatively abstract debate in the region she represents.

This seems as good a time as any to note that Senator Spilka will have a credible opponent next year in Ed McGrath, a good guy who has been politically active for years and understands the issues. I do not in truth know where he stands on casinos. In a recent interview, Spilka said (as she must) that the fact of a contested election bid next year will not 'change her game plan.' Like virtually everyone else on Beacon Hill, including a majority of Democrats who dutifully followed the lead of now-indicted former Speaker Sal DiMasi and voted against gaming the last time around, Spilka claims to be keeping an open mind and studying the issue.

With the question of legalized gambling likely to be fought out in an election year, the prospect of a casino smack in the middle of her district, and a credible opponent, though, Senator Spilka will not have the option of dancing around the issue behind closed doors. Nor will her colleagues.

Thursday, October 22, 2009

Cynicism Watch!

Coakley: E-mail probe will not be completed before mayoral election.

Go figure!

Of course it does not really matter that the Attorney General (who by the way is running for US Senate) waited until the 11th hour to get involved in the Boston email investigation, thereby guaranteeing that there will be no findings before Mayor Menino is safely reelected to his fifth (!!!) consecutive term. Coakley could wrap up the investigation tomorrow, determine that the Mayor himself helped his aide delete those emails and then cover it up, and post her findings on billboards all over the city - and still Mayor Menino would win a comfortable reelection. Such is his inexplicable, unfathomable popularity.

Still, it is hard not to shake one's head sadly at the entirely predictable way the whole thing is playing out.

Not the strongest argument she's ever made

In an address yesterday to the Massachusetts Bar Association, Massachusetts Supreme Judicial Court Chief Justice Margaret Marshall urged attorneys to contact the governor and their legislators to argue against further cuts to the state judiciary's budget. In so doing she made an argument that might strike more than a few voters as somewhat less than convincing. From the State House News Service:
Marshall said the court system was at a “moment of peril,” adding, “Justice is not a public policy choice. Justice, delivered in our courts, is a constitutional imperative. The residents of Massachusetts could no sooner make do with a functionally disabled Judiciary than they could with a functionally disabled Governor's office or a functionally disabled Legislature.”
I realize I spend a lot of my time in a Republican bubble. But based on poll results and the tenor of a lot of news coverage of Beacon Hill lately, I'd guess that plenty of Massachusetts citizens would be more than willing to see how the state might fare "with a functionally disabled Governor's office or a functionally disabled Legislature." Especially the latter.

There are plenty of good arguments for maintaining a baseline level of funding for the court system. These days, in Massachusetts especially, "we're just as useful as the Legislature" is not one of them.

Tuesday, October 20, 2009

Bluffing and bloviating

The Worcester Telegram & Gazette has an excellent editorial this morning, entitled Who's Bluffing?, about Governor Patrick's latest pledge to make the cuts necessary to get the state budget under control.

The reference to "bluffing" in the title refers to Governor Patrick's threat to cut up to 2,000 state employees if unions do not give him cost-saving concessions. Those talks are on-going. Skeptics might be forgiven the assumption that Patrick is indeed 'bluffing,' since despite all of his talk of painful cuts since the beginning of the current recession, it remains the case that the executive branch of state government has added thousands of employees since Patrick took the reins.

The Telegram & Gazette correctly points out that good ideas for true cost-saving reforms - not just cuts - have been on the table for quite some time, many of them regularly offered by the invaluable Pioneer Institute. In addition to repealing the Pacheco Law, a legislative abomination that hamstrings any and all efforts to outsource non-essential government work to the private sector, which in other states saves millions, the T&G lists these common-sense Pioneer gems:
•Establish a sliding scale for public employees’ eligibility for retiree health-care benefits, in place of the current system that grants such benefits after just 10 years of service.

•Retain the approximately 1,100 state workers added to Health and Human Services budgets since 2004, but trim other levels of state employment back to 2004 levels.

•Cap annual spending increases and segregate capital gains revenues in annual budgets.

•Halt the practice of spending rainy-day funds in years with budget surpluses.
Isn't that last one a beaut? We are told that the state budget is currently over $600 million in the red, and that this state of affairs is a direct result of the national recession. We are trusted to forget that, consistent with 'the practice of spending rainy-day funds in years with budget surpluses,' Beacon Hill sucked considerably more than $600 million out of the so-called 'stabilization fund' in the first two years of the Patrick Administration, when the state budget was more than 'stable.' And still, presented with undeniable proof of their folly, lawmakers have been unwilling to pass a law prohibiting such rank irresponsibility in the future. That unwillingness to address true, relatively simple reforms demonstrates that when it comes to their supposed efforts to control the budget, the rhetoric coming from Beacon Hill is as much bloviation as bluffing.

And by the way, about those negotiations Governor Patrick is having with public employee unions? Take another look at the article I liked above, and pay attention to the specific language used by AFL-CIO President Robert Haynes. He recognizes the need for "concessions," but:
“If sacrifices are made now there has to be some opportunity later, when things improve, to restore the kinds of contributions the unions made to solve the problem,” Haynes said.
The ever-present union credo: 'you give something to get something.' In this case, you can bet the "something" Haynes intends to get goes well beyond an agreement from the Governor not to lay off his members. He says as much, referring to "some opportunity later." So even if the Governor gets the unions to agree to furloughs to save some money now, you can bet the state will pay double for them down the line.

Sunday, October 18, 2009

A tiny minority within the Supermajority

Yvonne Abraham's piece in the Globe this morning is worth reading, for two reasons: (1) it gives belated and well-deserved kudos to seven (seven!) "brave souls" - Massachusetts House Democrats who, at great professional risk, stood on principle last January and voted against Sal DiMasi for Speaker. And (2), it provides (by stark contrast) another reminder of the fact that fully 135 of their colleagues voted for Sal, despite his very well-known ethical 'issues.' Writes Abraham,

Say you’re one of the 135 Democratic legislators who voted to keep Sal DiMasi as House speaker back in January. Right now, you’ve got to be feeling even chumpier than usual, which hardly seemed possible until a few days ago.

After all, how much dumber could you look? On Jan. 7, you reelected DiMasi, even though you knew about his shady connections to a software firm that won millions in state contracts. You did it because he brought you back from legislative Siberia, or because he shared your priorities, or because you didn’t want to risk his wrath.

Whatever the reason, you stuck out your neck for him. And three weeks later, he stuck it to you by resigning. Then he got indicted on federal corruption charges, which made you look like even bigger dopes. The whole thing was fading from voters’ memories until Tuesday, when the feds added extortion charges to the mess. When it comes to other shoes dropping, this guy is Imelda Marcos.

Man, that must hurt.
The seven who bucked the tide, Reps. Atkins, Callahan, Calter, Canessa, Quinn, Stanley and Torrisi, were gutsy beyond even the credit that Abraham gives them this morning. Because theirs was not simply a bet that Sal would, as he did, ultimately fall from grace and resign his recently-renewed Speakership. Just because DiMasi is gone does not mean all is forgiven and forgotten within the Democratic caucus. Those seven marked themselves with their votes as the rare Beacon Hill legislative Democrat who will not automatically fall into line with leadership in response to promises or to threats. Rep. Quinn tells the Globe, “I’ve had more pats on the back or whispers in my ear saying ‘John, you were right, you had the backbone to stand up there and I wish I had done that.’ ’’

Sadly, there's a reason that his colleagues are still whispering their praise. It's the same reason none of the 'brave seven' is in leadership, and only one (Torrisi, co-chair of the joint committee on higher ed) has a committee chairmanship. Sure, DiMasi is gone. But he was replaced by Bob DeLeo, his hand-picked successor. There's been no suggestion whatsoever that DeLeo shares in DiMasi's ethical shortcomings. But it is indisputably the case that while the king changed, the regime remained more or less intact. And so the ramifications of the votes cast by those seven Democrats linger.

Soapbox time: the only way to fundamentally change the paradigm in the Massachusetts legislature - the one that resulted in an overwhelming majority vote to reelect a guy who was about to be indicted based on facts that had been plastered all over the newspapers for weeks - is to restore some semblance of partisan balance in the Legislature.

Vote Republican.

Thursday, October 15, 2009

Sal is not just about Sal - and he's not old news

Yesterday during my commute I listened to WBZ radio's report on the new indictment of former Speaker Sal DiMasi, this time for extortion, as well as related new charges concerning a secret financial interest he had in a building management company that sought and received state contracts. As it often does, WBZ included very brief commentary by Republican 'strategist' Charlie Manning and Democratic 'strategist' Mary Anne Marsh. Manning's comment was a prediction that this latest DiMasi development will reverberate across the state and cause problems for Democrats next year at the polls. If his was a predictable and perhaps optimistic analysis, Marsh's was even more so. "This is about Sal DiMasi and only Sal DiMasi," she declared before opining that voters can distinguish between a deposed Speaker and the rest of the Democratic machine on Beacon Hill. The new indictment "will have no impact" on Democrats' prospects in Massachusetts, according to Marsh.

Ludicrous as that might sound, if past is prologue then Marsh could well be right. After all, DiMasi is only the latest in a string of three Democratic Speakers of the Massachusetts House to be put out of office by corruption investigations. Her hopeful claim that the ongoing investigation into Sal's doings is "about Sal DiMasi and only Sal DiMasi" is belied, however, by rampant buzz on Beacon Hill. As Rep. James Miceli told the Herald, “In the building they keep saying this investigation is going to involve more people.”

And of course when it comes to corruption and other bad doings by Massachusetts Democrats of late, Sal is hardly the only game in town. Joan Vennochi's column in today's Globe calls out not only Senator Galluccio for his most recent auto-related transgressions, but also his colleagues for their enabling of his bad behavior. She sums up the last two years nicely:

Until elected officials stop thinking of themselves as something other than ordinary citizens, bound by the same laws and consequences as everyone else, Beacon Hill’s shield of arrogance remains unscathed. Can anything pierce it?

After all, this Senate is filled with lawmakers who watched two members, who are now former members, stand accused of serious criminal charges over the past year. Dianne Wilkerson, a Roxbury Democrat, is facing corruption charges after federal agents photographed her allegedly stuffing bribe money into her bra. James Marzilli, an Arlington Democrat, was indicted on charges of accosting four women in Lowell. Both resigned last year, under pressure from a public that held their elected officials to a higher standard than their colleagues did.

The speaker of the House also resigned this year, and is under indictment on corruption charges involving the awarding of state software contracts.

The year of scandals forced lawmakers to tighten ethics regulations. But no law can legislate humility. No law can zap arrogance. No law can supplant fear of getting caught with conscience, or replace the basic instinct for self-preservation with the higher principle of personal responsibility.

Well put. And additionally notable for the fact that over a year since Senator Marzilli's grope-a-thon and nearly as long since Senator Wilkerson's undergarment deposit, those transgressions are still very much in the forefront of the public consciousness. Many a House Democrat - especially the brand new ones, who were forced to cast their very first votes for the soon-to-be-indicted DiMasi - desperately cling to the notion that time heals all wounds. A year is an "eternity" in politics, they surely say to themselves.

Still, a year after Senator Wilkerson's bra-stuff, nobody has to root around in the memory bank for her name. Ten months on from that ill-advised vote to reelect Sal, a fresh indictment puts the whole mess right back on the front pages. And, if all of that weren't enough, helpful folks like Senator Galluccio pitch in with fresh ways for Beacon Hill Democrats to demonstrate anew just how cloistered and arrogant they are, sitting comfortably in public offices that too many of them have come to believe are theirs by right.

The Sal DiMasi scandal is not just about Sal DiMasi, any more than the Marzilli, Wilkerson, or Galluccio imbroglios are "just about" their protagonists. All are illustrations of what happens, inevitably, when total control is vested in an insular and entitled group of like-minded people.

As time marches on, as more examples pile up and the old examples keep reappearing, I get more and more optimistic about the possibility that next year, finally, the voters will do something about all of this.

Tuesday, October 13, 2009

Why don't we just put up signs at the borders? "Business: KEEP OUT!"

A common convention in Western movies is the sign post at the edge of town, warning ruffians, rustlers, road crews and other ne'er-do-wells to keep out.

The front page of today's Globe is the modern day equivalent of those sign post, telling employers, entrepreneurs, small businesses and other engines of economic development that they are not welcomed here in Massachusetts. Warning them away. Telling them to KEEP OUT. The Democrats who run our Legislature could save themselves a lot of time and effort by just erecting signs.

Here's the headline (above-the-fold): Business Tax Deal May Cost $535M. Sounds bad, right? You should take the time to click that link and read the whole article, but here's the relevant background (from the Globe):

Since taking office in 2007, Governor Deval Patrick had been moving to close so-called tax loopholes that he said were allowing certain companies to unfairly benefit and causing the state to lose money. He was initially rebuffed by House lawmakers, who said tax increases would damage the business community. But ultimately, House and Senate lawmakers approved the change, while also lowering the state’s corporate tax rate.

Most of the changes involved implementing what is called combined reporting, which is designed to prevent large multistate corporations from shifting certain profits to other states that have lower tax rates. The new law requires all companies in Massachusetts to combine all income and apportion the Massachusetts share.

But in making that change, lawmakers included the provision that allows corporations to temporarily sidestep certain tax liabilities.

The amendment had the backing of the business community - Associated Industries of Massachusetts, the largest state business organization, strongly advocated for the changes - and was pushed by state Representative Daniel E. Bosley, a North Adams Democrat.

Administration officials fought the amendment at the time, pointing out in a letter to legislative leaders that it “would likely negate significant amounts of income that would otherwise be taxed.’’ Lawmakers say the provision was included to give corporations time to readjust their projected profits while the state began assessing taxes they had not previously been required to pay.

Once the legislation was approved with the provision included, the administration was afraid that vetoing it or amending it would have caused the entire bill, which was deeply controversial, to collapse, administration officials say.

So far, so politics-as usual. To tamp down opposition to a controversial tax hike on the state's employers, the Legislature negotiated a deal with the measure's critics that allowed it to pass. Our business community suffered a tax increase at the beginning of a deep recession - but not so large an increase as they otherwise would have suffered. As Representative Jay Kaufman, the House's top tax-writer, puts it to the Globe, "At the time, the argument was this was a reasonable and necessary accommodation for the business community to keep business growing in Massachusetts even while we’re closing corporate tax loopholes.’’ An "accommodation." A deal, in other words, with a laudable goal: "To keep business growing in Massachusetts" by sticking it to them less than the Democrats really wanted to stick it to them.

Ah, but now... now with state tax revenues in the toilet, hundreds of millions below projections... with things so bad that the Legislature has run out of money to spend... now Legislative Democrats are "re-thinking" that deal. Again from the Globe:
A corporate tax deduction, created last year as a sweetener for businesses in a tax-tightening measure, will cost the state at least $535 million over seven years, according to a new estimate by the Massachusetts Department of Revenue...

“The number certainly raises eyebrows,’’ said state Senator Benjamin B. Downing, a Pittsfield Democrat and Senate chairman of the Committee on Revenue. “And I think it would be disingenuous to say that people don’t want to revisit some of the decisions we made in that debate.’’

Said state Representative Jay R. Kaufman, a Lexington Democrat and House chairman of the Committee on Revenue: “We did this before the bottom fell out of the economy. If we were to debate this now, anything that would cost us [this much] would have absolutely gotten our attention more than it did at the time.’’

What's the problem there, you ask? A bad deal that has "cost us" over half a billion dollars? What self-respecting steward of the public trust would not want to "revisit" that deal?

But here's the thing. When Chairman Kaufman says the deal has "cost us," he means that in the same way as my decision not to rob you of your wallet "costs me" whatever cash you happen to be carrying - as the Globe makes subtly clear:
The tax changes, to be implemented over the next several years, will still bring in additional revenues. But the benefit will be significantly lower than originally projected, and the hit will come at a time when the Bay State will be trying to recover from budget cycles that have gutted state services and caused pain for cities and towns.
So the corporate tax hike is still bringing in more tax revenue than would have come in had the deal in question not been struck and the measure defeated as a result. Just 'less more.' And Rep. Kaufman and Senator Downing, you see, they want 'more more.' And they have allies in the think-tank world:

The Massachusetts Budget and Policy Center, which analyzes the state budget and tax policies, is suggesting that state officials investigate whether the law should be altered.

“At a time when the state faces severe budget problems, having to pay $75 million a year for a particular new deduction for what appears to be a handful of corporations may not be the best use of our state’s resources,’’ said Noah Berger, the group’s executive director.

Get that? In this perverse worldview, by not collecting $75 million in taxes, by leaving that $75 million in the hands of the businesses that create and sustain our jobs and drive our economy, the state is "having to pay." More, according to Mr. Berger (and Messrs. Kaufman and Downing, no doubt) those dollars - never (yet) in the state's grubbing hands - are "our state's resources."

The Globe is on board. By limiting the size of last year's corporate tax increase, last year's legislation has (according to the Globe) "cost" the state $535 million. Of course, by that way of thinking the Legislature's refusal to accede to Governor Patrick's call for a gas tax increase "cost" the state hundreds of millions more. And the T's failure to double fares this year? Hundreds of millions more. And the Democrats' heroic forbearance in deciding not to hike the income tax along with the sales tax? More. There is no end to that logic, once one buys into Mr. Berger's core assumption: that every dollar generated by the private sector in this state from conception represents "our state's resources."

But never fear. As the Globe notes, "Pending legislation would make further changes to corporate tax laws, making it easier to revisit the deduction issue." So Kaufman, Downing and their allies will have their chance to "revisit" the deal they struck just last year. You know, the one intended "to keep business growing in Massachusetts"?

And our business community - and employers who might, for God knows what reason, still be thinking about expansion in or into Massachusetts - will get a valuable object lesson: Not only is Massachusetts ready, willing and able to repeatedly raise taxes on business. Worse, our government is not an honest broker. It does not honor its bargains. We're a Commonwealth of welshers.

In the old west, welshing on a bet could earn you a smoking hole in the forehead (in the movies, anyhow). In 21st century Massachusetts, our Legislature's welshing will just accelerate the exodus of employers from our state.