The postĖSeptember 11 economic malaise has created the defining issue for Massachusetts politics over the next 12 months: who will absorb the political fallout from the nosediving local economy and the corresponding state-budget woes?
There will be plenty of pain to go around. Massachusetts economists are finally uttering the R-word ó recession. Housing sales were down 32 percent in September. The Swift administration is already expecting a $1.1 billion budget shortfall; House Speaker Tom Finneran says it could be as high as $1.5 billion. Meanwhile, the state is expecting revenues for the last six months of 2001 to be down $400 million from the same period last year. All this is a nightmare for the local political class ó and unless they act wisely, the victims could include Swift, Finneran (despite his reputation for fiscal restraint), and Senate president Tom Birmingham.
No Massachusetts politician can erase the frightful memories of the last recession, which gripped the state in the late 1980s. Those hard times came at the end of a decade that, like the 1990s, had for the most part been a boom time in Massachusetts. Governor Michael Dukakis rode the "Massachusetts Miracle" all the way to the Democratic nomination for president in 1988. But when George H.W. Bush steamrolled Dukakis, the governor returned to Beacon Hill amid a worsening economy. The stateís fiscal situation was growing precarious, and news of the trouble had been kept from the public through accounting tricks, such as raiding the stateís stabilization fund, until after Dukakis lost his try for the presidency. Faced with massive budget shortfalls, state leaders scampered to cut the budget and raise the state income-tax rate from five to 5.75 percent. Dukakis didnít have to worry about the consequences of any of this; he didnít run again in 1990. But his lieutenant governor, Evelyn Murphy, lost the Democratic nomination to succeed him ó it went to Boston University president John Silber, a social conservative who was out of step with the partyís rank-and-file activists. House Speaker George Keverian, who was seen as responsible for the tax increase, sought the Democratic nomination for treasurer and was trounced by William Galvin, a state representative from Brighton. More Republicans ó including a state senator named Jane Swift ó won seats in the House and Senate that year than any time in a generation. And William Weld and Paul Cellucci took control of Beacon Hillís corner office, setting the stage for 11 years of Republican governorship in Massachusetts.
Since then, the general rule in Massachusetts has been that bad economic times benefit Republicans. But what if a downturn hits when the Republicans have been in control of the governorís office for more than a decade? A decade thatís seen the state budget grow from $12 billion to more than $22 billion? Not only that, but a decade thatís witnessed $1.4 billion in cost overruns for the Big Dig, $100 million in overruns for the convention center, and a $50 million deficit at Massport? The dismal economic news could turn state Republicans into victims of their own success ó namely, their control of the governorís office. "The only person voters know in this state is Jane Swift," says Mary Anne Marsh, a Democratic strategist. "They donít know Tom Birmingham. They donít know Tom Finneran."
Some Republicans agree. "If anything, itís usually the party that has the corner office that pays the price," says Senator Robert Hedlund of Weymouth. "I donít think the public distinguishes between the corner office and the legislature."