A Budget Fix That Dares Not Speak Its Name

There’s a hole in the state budget, and yesterday Governor Patrick announced his plan to plug it. He’s using authority he already has to order immediate cuts to Executive Branch agencies. These cuts will make up most of the $329 million shortfall. His proposal for the remainder of the problem, however, requires the approval of the Legislature, and to judge from the early returns, that approval is unlikely.

The Governor would like the Legislature to agree to cut the amount of money that goes from the state directly to cities and towns for municipal services like public safety, schools and libraries. That money, known as unrestricted local aid, is understandably popular with legislators. And among Republican lawmakers, it is safe to say, only tax cuts are a more popular policy idea than local aid spending.

As in: yesterday, Representative Brad Jones, the House minority leader, called Patrick’s plan to cut local aid a “non-starter,” and Governor-elect Charlie Baker said through a spokesperson that “Massachusetts cities and towns deserve a dependable source of funding for crucial projects. As the transition process continues, Gov.-elect Baker looks forward to developing a responsible budget that delivers the services the people of Massachusetts need and protects taxpayers.”

And then this morning, House Speaker Robert DeLeo announced that he, too, opposes any local aid cuts.

The Governor’s budget chief is defending the proposal as a “balanced and thoughtful approach,” and says the administration has no alternative solutions. So it looks like we are heading for a stalemate.

But wait. Part of the budget hole — about $70 million — is attributable to a very tiny reduction in the state income tax that will take effect next year under an automatic formula the legislature devised. The reduction of .05 percent (from 5.2 percent to 5.15 percent) will mean about $50 extra per year for a family with an income of $100,000 and much less for families of lesser means. A similar tiny cut (from 5.25 percent to 5.2 percent) happened last year — how many of us even noticed?

The Legislature could act to defer this income tax reduction, which would reduce the budget hole by $70 million and would preserve local aid funding — and more. And even though we are as far away from an election (and the possibility of voter retribution) as we will ever be, nobody appears even willing to mention this possibility. Not even the guy who once wanted to have an adult conversation about taxes.

Governor-elect Baker: Can You Use the Word “Transparency” in a Sentence?

Six weeks until Governor-elect Charlie Baker takes office and, according to his campaign promises, we say “hello” to transparency and “goodbye” to the entrenched interests of one-party rule.

Which reminds me of a story, one that might tell us more about what our new Governor means by transparency. As it happens, he might be as familiar as anybody with stealthy legislative maneuvers that nobody would describe as transparent. He might also be in a position to know that stealthy legislative maneuvers can come about with two-party rule as with one. Almost exactly twenty years ago, during the waning days of the 1994 legislative session, Baker had just been promoted to his new position as Governor Weld’s Secretary for Administration and Finance, and so may have been a witness to lawmaking of a very clandestine sort.

As the 1994 legislative session was drawing to a close, Governor Weld badly wanted legislation reducing state capital gains taxes. House Speaker Charles Flaherty and Senate President William Bulger badly wanted legislation increasing the base salary for legislators (that salary had remained at $30,000 for more than a decade). Despite the Governor’s prior opposition to the pay increase and the Legislature’s prior opposition to the capital gains tax cut, a conciliation was reached in the last days of the session.

The precise details of how this mutual back-scratching came about are not entirely clear, but we do know this much. First, the Legislature sent the Governor the pay raise bill, which increased the base salary for Legislators to $46,000. The Governor did not sign the bill right away, but instead allowed it to sit on his desk for a time. During that time, the Speaker and Senate President managed to pass the Governor’s tax cut without their members’ knowledge.

Late on a Wednesday afternoon in December, a bill entitled “Tax Relief for Low Income Families,” was quietly amended in the House to include the Governor’s capital gains tax cut. The amendment was offered by Republican Representative Edward Teague (who would soon be elected as the House minority leader), and was quickly adopted on a voice vote. Then the bill (its title was not changed, although its substance surely had been), was just as quickly passed by the Senate and sent to the Governor, who wasted little time signing both the pay raise bill and the capital gains tax cut bill into law.

When the swap came to light, nearly everyone in the Legislature was outraged, particularly the 105 House members who had earlier cast roll call votes against the capital gains tax cut. The Globe editorial page fumed and denounced the perpetrators as an “arrogant troika.”

But Governor Weld rejected criticism that he had participated in any sort of hoodwinking and refused to comment on the circumstances surrounding the passage of the two bills. “You have to address that to the Legislature,” he said.

In six weeks or so, we may begin to learn how broadly Governor-elect Baker, whom Governor Weld describes as “the soul” of his administration, defines “transparency.”

Hey, “Yes” Voters on Question 3. Something You Can Do.

Update: November 18: The Boston Globe is reporting that the state’s Gambling Commission is likely to require the state’s licensed casinos and its licensed slots parlor to assist gamblers who want to set limits on how much they gamble. Yay, us!

In our last episode we saw that, post-election, there are still many decisions to be made about about the gambling industry in Massachusetts, and there may be opportunities for the 840,000 or so of us who voted “yes” on Question 3 to influence those decisions.

Here comes an opportunity now.

As the Globe reported Monday, the state’s Gaming Commission is considering whether the casino industry ought to assist gamblers who want to set limits on how much they gamble. The assistance would work this way: before sitting down in front of a slot machine, a casino patron decides that setting, say, a $50 limit on gambling losses that day would be a prudent idea. This amount is entered into a “loyalty card,” which tracks that individual’s gambling activity throughout the casino. As the losses mount, the patron is informed, through the loyalty card, that the $50 limit is approaching. If the the player reaches the limit, he or she can still choose to override it and continue to play, but at least there’s been a reminder.

This assistance is known in the industry as a “play management system.” Considering that it’s voluntary for casino patrons in the first place, you might be wondering what possible reasons the gambling industry would have for opposing it. Here they are. First, borrowing from the strategy of climate science deniers, the industry contends that there is no scientific evidence showing that a play management system works and a whole lot more study is needed before it is instituted here. Second, the industry wonders whether gamblers might respond inappropriately to a play management system. They might, for example, set very, very high limits so that they never hit them and end up losing more money than if they had never set a limit in the first place. Isn’t it sweet of the casinos to care about us like this?

The industry will be exerting its considerable power to try to convince the state Gaming Commission to abandon this very modest proposal to counter gambling addiction. So what can you do?

The Gaming Commission is asking for your opinion. You can send an email (ideally before 5 PM tomorrow, November 13) to mgccomments@state.ma.us, with “Play Management System” as the subject line, asking the Commission to require the companies with gambling licenses here in the state to make a play management system available to casino and slot parlor customers. It is, almost literally, the least the industry can do.

We’ll keep you posted.

Licenses in Hand, Casinos Are Coming Back for More

The day after last week’s election, in which the pro-casino forces spent $14 million to defeat the casino law repeal effort, the state’s Gaming Commission officially awarded the casino licenses that beforehand had been only provisional, pending the outcome of the vote.

So you might well think that now that the licenses have been awarded and the i’s have been dotted and t’s crossed, everything is ready for takeoff. But that’s not how things work in the gambling world. As casino opponent Steven Abdow told the Globe yesterday, from the experience of other states we know what happens next: the casinos return to the Legislature with another wish list. Turns out that the law they lobbied so hard for is, well, not quite all of what they want.

For the past few months the casinos been working hard, and successfully, to get the state’s Gaming Commission on their side. The Commission, for example, now supports the notion that casinos should be exempt from the responsibility of checking to see if gambling winners are on the list of persons who are delinquent in paying child support or past due taxes before they make payouts. The state lottery isn’t exempt, but the Commission (which, incidentally is charged with protecting the lottery’s interests) appears to be of the view that casinos deserve an easier time.

And here’s another of the many changes the gambling industry wants. The law the Legislature passed three years ago requires casinos to file reports on the complimentary services — “comps” in the trade lingo — that they provide. Comps are things like a free drink, a free meal, a free room — whatever will keep the gambler on the premises. In one famous case, a very wealthy casino patron was treated to comps in the form of private jet flights to Las Vegas, which contributed to her racking up a staggering $1 billion in gambling losses. It’s hardly surprising that the Legislature regards the complimentary services a casino provides as worthy of the state’s regulatory attention.

But the industry has complained that these reporting requirements are administratively burdensome and wants them to be eliminated, and again, the Gaming Commission has taken the casinos’ side. The reports on complimentary services are unnecessary, the Commission agrees, not only because they would burden the casinos but also because the Commission itself cannot even “envision a compelling use for this data.” Well, here’s an idea — maybe a compelling use for the data is to see if complimentary services are playing any role in increasing compulsive gambling — like the casino law contemplated?

The Legislature will not return to formal sessions until January, so one might expect that bills to tilt the gambling law further in the industry’s favor will not emerge until then. But don’t count on it. You, like most of the members of the House of Representatives, were probably unaware that this past summer House Speaker Robert DeLeo quietly (very quietly) added a pro-casino provision to an otherwise uncontroversial bill on state-chartered banks. The House passed the bill without comment on the gambling law change (which reads opaquely as follows: “the second paragraph of section 3 of said chapter 167B, as so appearing, is hereby amended by striking out the last sentence”) discreetly tucked inside. If the bill is enacted during the remaining months of 2014, the casino industry will have defeated a law now on the books that prevents ATM’s from being placed inside casinos. If it’s not enacted, it will undoubtedly be back again in 2015, along with who knows what other requests.

So the lesson from other states is that now that the Massachusetts licenses have been issued, it’s time for us to really be on our toes. Eternal vigilance is the price of the “responsible gaming” the Legislature promised us. Assuming that one can even envision such a thing.

Mass. Fiscal Post-Election Scorecard

As you may recall, our friends at the Massachusetts Fiscal Alliance sent out some controversial campaign literature as part of their voter education efforts to influence the composition of the Massachusetts Legislature.

Here’s the post-election day report. Of the 1 Senate race and 19 House races listed below, the Mass. Fiscal candidate — I mean the candidate adhering most closely to Mass. Fiscal’s principles — has prevailed in two (2nd Franklin and 5th Plymouth districts). The Democratic candidate is listed first and the candidate who won is in bold.

Senate: Worcester, Hampden, Hampshire & Middlesex District
Anne Gobi
Michael Valanzola

House: 2nd Barnstable
Brian Mannal
Adam Chaprales

House: 2nd Bristol
Paul Heroux
Bert Buckley

House: 5th Essex
Ann-Margaret Ferrante
Michael Boucher

House: 13th Essex
Theodore Speliotis
Thomas Lyons

House: 2nd Franklin
Denise Andrews
Susannah Whipps Lee

House: 6th Hampden
Michael Finn
Nathan Bech

House: 12th Hampden
Angelo Puppolo
Robert Russell

House: 2nd Middlesex
Jim Arciero
Dennis Galvin

House: 3rd Middlesex
Kate Hogan
Paddy Dolan

House: 4th Middlesex
Danielle Gregoire
Matthew Elder

House: 8th Middlesex
Carolyn Dykema
Patricia Vanaria

House: 36th Middlesex
Colleen Garry
Cathy Richardson

House: 4th Plymouth
James Cantwell
James Pavlik

House: 5th Plymouth
Rhonda Nyman
David DeCoste

House: 6th Plymouth
Josh Cutler
Joseph Sheehan

House: 2nd Worcester
Jonathan Zlotnick
Garret Shetrawski

House: 4th Worcester
Dennis Rosa
Jacques Perrault

House: 10th Worcester
John Fernandes
Mark Reil

House: 12th Worcester
Harold Naughton
Brad Wyatt

Shaunna O’Connell, Welfare Queen, Goes for her Third Term

It’s been a while since we checked in on the race for State Representative in the Third Bristol District (Taunton and Easton), where Republican Shaunna O’Connell is seeking re-election to her third term.

As you may know, Representative O’Connell has made a big name for herself by raising at every opportunity the spectre that public benefits, like welfare, are going to people who don’t deserve them, like immigrants. She’s a regular on the pages of the Boston Herald, and lately, as her website informs us, she’s taking her signature issue national on Fox News. Her Fox hosts are as uninterested as she is in mentioning the fact that the entire welfare program in Massachusetts accounts for less than one percent of the state budget, or in exploring whether other issues affecting her constituents may also be deserving of attention.

This year her electoral opponent is Taunton native and Gold Star brother Keavin Duffy, Jr., who won the Democratic nomination as a write-in candidate and who believes that the growing income inequality in Massachusetts is an issue that the residents of Taunton and Easton may also be interested in.

Candidate Duffy has challenged Candidate O’Connell to debates and has gotten under her skin recently by pointing out that she has sponsored legislation that would replace the state government employee retirement system with a voluntary 401K style plan. This observation provoked an angry response from her campaign manager, who stated unequivocally that during her time as a State Representative “she has not filed any legislation or amendments regarding changing pensions.”

Hmm. Except that she has. Here it is in black and white (and you can find link to this amendment on the State Legislature’s website here):

Representatives Webster of Pembroke, Adams of Andover, Levy of Marlborough, Lyons of Andover and O’Connell of Taunton move to amend the bill by adding the following section…

The provisions of [the state employee retirement law] relating to defined benefit plans shall not apply to any employee hired after July 1, 2011. They shall be covered by 401 (K) coverage with the state, county, city or town providing a 7 per cent match….

Obvious and categorical misstatements like this one are the kind of thing that prompt additional scrutiny of a candidate’s positions. Further on his letter, for example, the campaign manager says this: “O’Connell has been a fighter for the workers of the district. She crossed party lines to vote for the minimum wage increase.”

Well, that’s true enough, so far as it goes. But it does omit the fact that Representative O’Connell also voted in favor of an amendment that would have increased the minimum wage by a much smaller amount. A fully accurate statement of Representative O’Connell’s view on the minimum wage issue would disclose that she favored an increase from $8 per hour over three years to only $9.50 per hour, rather than the $11 per hour that was enacted into law. In other words, Representative O’Connell thinks that when the minimum wage is fully phased in 2017, workers making that amount — including those who are her constituents — really ought to be earning $3000 less per year.

Not surprising that one side is eager to debate the issues of importance to the citizens of the Third Bristol district and the other side is eager to go national on Fox News.

Charlie Baker’s Housing Agenda: Tough Love and Evictions

Republican candidate for governor Charlie Baker has a plan to help people living in public housing. He would evict them after seven years.

Baker says this seven-year time limit is a good idea because “no one should be made to feel that permanent dependency is the best they can expect for themselves and their family. Public housing should be transitional and help individuals and families transition to independent living.”

As it happens, the Worcester Housing Authority has already instituted a voluntary program along these lines, called “A Better Life.”  Families choosing to participate in the program get a Family Life Coach, who helps them create a plan for self-sufficiency that involves budgeting and saving.  At least one of the adults in the family works or enrolls in school.  If the family’s income goes up, they are allowed to keep the money that would otherwise be paid as a rent increase.  There are life skills courses and financial literacy workshops. At the end of the program, the Housing Authority says, participants have reached “economic independence and self-sufficiency through hard work and consistent support.”

Very few people have volunteered for the program, however. So Baker, who says he never met anybody who’s been in public housing who wanted to be there, would like to make the program mandatory in order to demonstrate its many advantages. People who enter the program, even if under duress, he believes, will end up appreciating it. “Tough love,” his running mate Karyn Polito calls it.

Because rental costs are lower in Worcester than in some areas, notably Boston, Baker thinks that city would be a good testing ground for his plan. So let’s run some numbers for Worcester.

We’ll start with a parent who has two school age children and a minimum wage job working 40 hours a week. (There are about 600,000 minimum wage earners in the state — one in five of us.) We’ll use the $9 per hour minimum wage that takes effect in January. In 2015, that family will earn $18,000. With the additional minimum wage increases that go into effect in 2016 and 2017, the family will earn $20,000 and $22,000 in those years.

Now let’s look at what it takes for the family to achieve economic independence. According to the calculator that the Crittenton Women’s Union has developed, $55,068 would be necessary for this family to live in Worcester. With three of the seven years available to the family prior to eviction having been used up (and with a raise in each of those three years, which can’t be counted on in the future) the family still has not attained even half of the resources required.

Worcester

All the life skills courses in the world are not going to scale that $55,000 mountain soon. And only four years remain before this family faces eviction.

Charlie Baker’s public housing agenda reflects his party’s world view in pretty stark relief. Here it is: what’s missing from the lives of the poor is hard work. Hard work can magically create economic independence, and tough love and evictions are necessary to prove the point. Tick-tock.