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Budgeting irresponsibly
It’s time for Democrats and Republicans to get serious about the state’s fiscal crisis. Plus, Bush has to be kidding.

LET'S SEE IF we understand this correctly. Governor Mitt Romney believes Massachusetts is in its worst fiscal crisis since the Great Depression. That’s what his secretary of administration and finance, Eric Kriss, said shortly after Romney won the November 5 election. House Speaker Tom Finneran, who is, presumably, more intimately familiar with the state’s finances than Romney or anyone else on his team, agrees. At least, that’s what he said in his televised " response " to Romney’s January 29 live address to state residents on the state of the budget.

So why are both state leaders playing politics-as-usual? Despite plummeting revenues, Romney steadfastly refuses to consider raising income taxes to maintain state services. Finneran, meanwhile, was caught trying to sneak a bill through the legislature that would have lavished $7500 bonuses on favored members of his leadership team. Finneran’s lame defense? The move would not have actually cost the state money because he and his minions had cut expenses in other areas. What are we missing here? Isn’t the crisis about reducing overall spending given that the state is, in his words, experiencing its worst fiscal crisis since the Great Depression?

Not that Romney is any less cynical. He’s more than willing to allow cities and towns to increase fees to raise money to make up for cuts in local aid. Even though, as he said during his televised address, " Raising taxes would not be fair to our working families. So many families are so close to the edge that a tax increase could push them over. " What impact does he think these fees, which are more of a burden on " working families " than those with upper-middle-class to upper-class incomes, are going to have?

All that said, we don’t buy the hysterical yelps from Romney and Co. that the state is in a Great Depression–like crisis. We do, however, believe that money is tighter than it’s been in a decade and that it’s causing pain. Medicaid recipients aren’t getting basic dental care, much less dentures. Those who need prosthetics aren’t getting them. Money for care of the mentally ill, never a priority in this state to begin with, has been cut. In other words, budget cutters are taking aim at those who are too sick to care for themselves.

Romney recently took the unusual step of asking the state legislature to grant him special authority to cut local aid to cities and towns — and the legislature took the even more unusual step of granting it to him. During his January 29 address, Romney characterized the cuts in local aid as mere " pennies on the dollar. " He also predicted: " Over the next few weeks, we’ll hear complaints from the special interests that their world is coming to an end and, actually, for many of them, it may seem like it. " When politicians rail against special interests, the public, for the most part, assumes that fat-cat lobbyists are in the cross hairs. But Romney’s cuts to local aid mean that public schools will be laying off art, music, and health teachers, and that police and fire departments — under unprecedented strain to keep the public safe since 9/11 — will be leaving jobs unfilled or even laying off workers. Are we to believe that these people are the special interests Romney’s referring to? Or is he talking about the housing activists who descended on the State House Monday to protest Romney’s $10 million cut to housing-aid funds and his proposed additional $7.5 million cut to the state’s affordable-housing fund?

After getting power to make cuts in local aid so that all the budget cuts did not fall on human services run by the state, Romney backed away from completely balancing the budget with such cuts. It was, most likely, a practical political move. The overwhelming majority of middle-class voters to whom politicians pander might sympathize when they hear that Medicaid is being cut back; but for the most part, it doesn’t really affect them — yet. But they do notice when firefighters, police officers, and teachers are laid off in their towns. Romney, quite frankly, couldn’t afford the political capital it would have cost him to balance the budget entirely on the backs of our cities and towns.

So this week he put forth a legislative proposal to make up the remaining $143 million deficit by cutting Medicaid even further. He also proposed that $7.5 million cut to the state’s affordable-housing fund.

Times are tough. We know that. We applaud moves to clean out the state’s fetid corners of patronage — like the Metropolitan District Commission. But enough with claiming that government’s core mission hasn’t been compromised when homeless families receiving emergency shelter via programs either run or partially funded by the state will be left out in the cold. Enough with the no-new-taxes rhetoric when the poorest of our poor are going without medical care. And enough with legislative shenanigans such as Finneran’s attempted $7500-bonus bonanza.

EVEN AS Bay State politicians’ approach to the state’s budget crisis has left us scratching our heads, President George W. Bush’s budget proposal has left us speechless. His $2.23 trillion budget plan will run up an estimated $307 billion budget deficit — which would set a record for fiscal irresponsibility.

We’ll confine our comments (at least for now) to one aspect of his plan that would totally revamp tax laws related to retirement-savings accounts. Currently, annual contributions to Individual Retirement Accounts (IRAs) are capped at $3000. Taxpayers have a choice: they can pay their taxes now by putting after-tax money into Roth IRAs and then ultimately withdraw the earnings tax-free. Or they can pay later by making pre-tax contributions to IRAs and paying taxes on gains when making withdrawals. Bush has proposed eliminating IRAs in favor of Lifetime Savings Accounts and Retirement Savings Accounts that would allow for tax-sheltered savings of up to $29,000 per year per person. Think about it: squirreling away $29,000 per year without having to worry about paying capital-gains tax. It sounds great, doesn’t it? But how many people making $30,000, $40,000, $50,000, or as much as $60,000 are able to make even the currently allowed $3000 maximum IRA contribution after paying housing, car, school-loan, day-care, and other monthly expenses? Almost none! And folks who can afford to squirrel away $29,000 annually just don’t need government assistance in the form of targeted tax breaks.

In the meantime, federal programs dealing with housing and education will go underfunded if Bush’s plan is enacted, as members of the Massachusetts congressional delegation charged Monday.

As much as the president talks about compassionate conservatism, there is no such thing. Indeed, his budget proposal shows his actual priorities to be quite the opposite.

What do you think? Send an e-mail to letters[a]

Issue Date: February 6 - 13, 2003
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