E-Mail This Article to a Friend Thinking outside the budget Distracted by the dollar figures in the governor’s budget, few spot the big policy changes he’s trying to slip through BY DAVID S. BERNSTEIN

SINCE MITT ROMNEY submitted his fiscal-year (FY) ’05 budget proposal last Wednesday, the media, legislature, and interest groups have been talking about the numbers next to the dollar signs. But budget legislation is about more than where the money goes. Each year, the governor and legislature attach a number of "outside sections" — mini-bills — that change the laws of the Commonwealth without attracting the public scrutiny stand-alone bills receive.

Both this year and last, Romney has used these sections to propose reforms to state courts and agencies — and the legislature has used them to push back with its own ideas. Romney’s FY ’05 budget proposal has more than 400 outside sections attached to it. Last year, his budget included 325 such attachments; by the time the legislature passed it, there were 712. Romney vetoed 104 of those mini-bills, but the legislature overrode all but one. (Compare that with 243 passed in Jane Swift’s FY ’03 budget.)

Many of the changes are simple and administrative. The governor’s plan to change the name of the Department of Public Safety to the Department of Inspection and Regulation, for instance, requires more than a dozen outside sections to change the wording of every law that refers to that department. But others are more complex and would, if passed, enact real shifts in public policy. A few of these, such as Romney’s "Legacy of Learning" initiative, which includes a variety of programs aimed at boosting state MCAS scores, have received a lot of attention. (In Legacy of Learning’s case, that’s because Romney and his staff rolled out different aspects of the initiative each day leading up to the publication of the governor’s budget.) But most have received little, if any, public scrutiny. Following are five areas where Romney is trying to slip in big changes on the skirts of the budget. This certainly does not constitute a complete list. In all these cases, however, the administration has written new laws that radically change long-established policies and procedures — and so far, few people have noticed.

Committee for Public Counsel Services reform. The CPCS administers the public-defense system through which many people accused of crimes get legal representation. Since taking office, Romney has consistently tried to reduce what were already among the lowest fees paid to public defenders anywhere in the country. At one time, Romney even suggested that all public-defense work should be provided pro bono — that is, without any compensation.

Outside sections of the governor’s budget institute a brand-new system for reimbursing defense attorneys. This new payment system throws away the existing hourly rates, and replaces them with lump sums for categories of cases — what CPCS general counsel Anthony Benedetti calls "a managed-care approach to justice." Some examples: mental-health civil-commitment cases will earn $250; Child in Need of Services proceedings, $175; criminal appeals, $1800. These rates are supposed to reflect the average hours attorneys spend on those types of cases, Benedetti says, but CPCS has not been told where those averages came from, or what hourly rate was then used to compute the total.

With the lump-sum payments, public defenders will have less incentive to work hard on any case. They’ll also be likely to gravitate to types of cases where reimbursement rates are set high relative to average hours, and to shun those with rates set low. "That is a definite possibility," Benedetti says, pointing out that nobody at CPCS knows how the rates were set. "This is designed to save money, not improve services."

But Romney’s CPCS reform is about more than shortchanging attorneys. At heart, it’s about forcing the poor to pay. Or, as the outside sections refer to it, reducing "client fraud." Currently, those at or slightly above poverty level are deemed indigent; they pay $150 for their counsel, and the state picks up the rest. If the defendant claims to be unable to pay the $150, a judge considers the claim and can waive the fee.

Certainly plenty of folks falsely claim indigence, and the overly busy court system rarely checks. But rather than reform the court’s scattershot system for determining indigence, Romney wants to make the CPCS the indigence auditor — something that has never been part of its duties before. If the relevant outside sections become law, the CPCS will have to investigate cases that have already been concluded. If clients are discovered to have lied about their incomes, the CPCS will have to get a court to declare the indigence claims fraudulent, and then hire a collection agency to recover the money owed. This is so absurd that it would be easy to mock — except that $17 million of CPCS’s $92 million budget is supposed to come from funds recouped from the fraudulently indigent.

Union-influence reform. The executive summary of the budget describes state government as "a labor monopoly of rigid work rules; devoid of incentives or performance standards." A variety of outside sections seeks to reduce the number of union members working for the state, and punish those remaining.

One strategy is to accelerate the pace of privatization, which takes jobs away from government employees and outsources them to contractors. Currently, when a state agency wants to privatize a function — say, the MBTA’s real-property management, which was privatized in 1996 — a state auditor reviews the plan and performs a cost/benefit analysis. The auditor ensures that the winning bidder will provide at least the same quality of service, for no more than the same cost, as the state employees who are already doing the job. That auditor is eliminated by the outside sections.

Another section removes all supervisors from collective-bargaining eligibility. Romney’s office is unable to come up with an estimate of how many people this would yank from the union, but it would certainly lead to a massive reduction.

Yet another provision unceremoniously takes away civil-service protections from all state and local employees except firefighters, police, and certain public-safety workers. These rules cover step raises, firing rules, and much more. Again, there’s no estimate of the numbers affected, but consider this: in the state executive branch alone, 62 percent of its 46,000 positions fall under civil-service protection.

Construction-project reform. This is all about giving general-contracting companies more control over state projects. Trust them, they’ll do what’s best for us.

Currently, when it’s time to start building, the state solicits separate bids for each piece of the project, from the general contractor to the myriad subcontractors (for masonry, electrical work, heating, etc.) that the general contractor will oversee. This is called a filed-subcontractor-bidding process. It allows the state to ensure that every company in every field gets an equal chance to bid on every project.

No more, if the outside sections pass. "They would like the public sector to operate exactly like the private sector, which they think is perfect," says Monica Lawton, executive director of Associated Subcontractors of Massachusetts.

Under the new scheme, the state would hire a general contractor, and let that company choose the subcontractors by whatever methods it wants. "In the system we have now, you have a fair and open process," Lawton says. In the Romney plan, "you’re leaving it up to general contractors to have total and absolute control over who gets contracts for public work. They can give it to friends. There’s no guarantee of open competition."

The reason given for the change is that when general contractors are forced to work with preselected subcontractors, the result is "needless adversarial relationships, with change orders, claims, and delays." So says the governor’s executive budget summary, although Lawton says that it has not backed that claim up with any statistical evidence.

Perhaps the current system does need some reform; but why do it through the budget? Shouldn’t a commission look into it? In fact, one is. Lawton serves on it. It’s headed by State Senator Dianne Wilkerson, and includes representatives from a variety of construction and state-government backgrounds. Its report, in fact, was due three days after Romney released his budget; now that they have been pre-empted by the governor, the commissioners are going to take a little more time to rework their recommendations in response, Lawton says.

Expediting the sale of Hynes Convention Center. Last year, for financial reasons, the state transferred ownership of the Hynes Convention Center to the Pension Reserves Investment Management (PRIM) board, under state treasurer Tim Cahill. That legislation specified, however, that the PRIM board had to continue running the Hynes as a convention center until at least January 2007. If the PRIM board decided to sell the building after that date, the plans had to be reviewed by the legislature.

An outside section of Romney’s budget removes those restrictions, allowing the PRIM board to do whatever it wants with the Hynes, whenever it wants, for any reason it wants. The pension fund currently eats some $10 million a year in Hynes operating costs, which was previously reimbursed by the state but is not under the new budget proposal. And the pension sees none of the estimated $20 million in transportation fees and taxes (according to the Back Bay Association, which is made up of neighborhood businesses) that the state earns back from conventions. Presumably, then, the PRIM board has a clear-cut fiduciary duty to close the Hynes’s doors immediately, and to sell the building ASAP to the highest bidder, regardless of the intended use.

"The treasurer is in a conundrum, because he is in a position to look after the welfare of the pensioners of the state, but he has the dual role to look after the best interests of the taxpayer," says Meg Mainzer-Cohen, president of the Back Bay Association. (Cahill recently told the State House News Service that he is amenable to the lifting of restrictions on what he can do with the Hynes.)

By loosening these rules, Mainzer-Cohen says, the governor is making it possible for PRIM to sell the Hynes — an event that would certainly disrupt the plans of the many groups that are booked into the Hynes over the next 10 years, beginning right after the start of the fiscal year with the Association of Trial Lawyers of America meeting on July 3. The many Copley Square–area businesses that thrive on those conventions would also suffer.

Technology-procurement consolidation. As reported last week (see "Agent of Change," News and Features, January 30), the Romney administration is trying to ram through a shift to open-source information-technology purchases; Eric Kriss, secretary of the Executive Office of Administration and Finance, issued new policies on the initiative on January 13. State Senator Marc Pacheco, chairman of the Senate Post Audit and Oversight Committee, which reviews the state’s compliance with its own legislation and regulations, raised two objections. First, does the secretary have the authority to issue this policy? And second, doesn’t this policy run afoul of current procurement law against preferences? He now has his answers in an outside section of the budget: Kriss does not have the authority, and the policy does indeed run afoul of current law. The Romney administration would like to change that.

That’s why the governor has proposed a section that would give the state’s chief information officer — who works for Kriss — the authority to review all technology purchases made for any state agency, and to make any policies and rules he wants for that purpose.

"The language in [the proposed budget] clearly confirms what I suspected — the administration has no legal authority to act on its proposed IT policy," Pacheco said in a prepared statement.

That didn’t stop this administration from acting, of course. As all these budget items make clear, Romney has no problem trying to change the law when he thinks he knows a better way to do things.

Still, all these outside budget sections must get past the upcoming lengthy budget debates. Let’s hope the numbers next to the dollar signs don’t distract everyone from debating the deeper changes as well.

David S. Bernstein can be reached at dbernstein[a]phx.com