Budget Woes Lead Mass. Legislature to Propose Everything But Taxing the Rich

Well the fun is starting again on Beacon Hill. Massachusetts state budget season is upon us and it's time for another round of "cuts past the bone" to core social services and local governments from our pals in the Massachusetts General Court and Governor's Office. And as usual, we're checking out the latest numbers here at Open Media Boston HQ - thanks to timely analysis of the recent House Ways and Means budget proposal for the 2010 fiscal year by the Mass. Budget and Policy Center - and the state's financial outlook is very bad indeed.

So let's get the obvious stuff out of the way up front. As things go from worse to ... uh ... worserer .... in the down economy, the neoliberals that run state government are pursuing the single "ameliorative" strategy they are allowed to use by the corporate types that put them in office. At OMB, we call it the EBTR Strategy - short for the "Everything But Taxing the Rich" Strategy. Which, as you might expect, means that the legislature and the Governor are both in accord that we can try all kinds of stuff to help the state budget, as long as those that are able to pay more in taxes are not forced to do so in the public interest.

Naturally, this means that the single revenue generating strategy the state government is willing to pursue amounts to dreaming up ways to tax those least able to pay by increasingly ham-fisted use of sales taxes, meals taxes and any other flat taxes that disproportionately affect poor, working and middle class people. The numbers make this fairly clear. Let's say there's a 5% sales tax (which is the current Mass. rate), and a poor family making $20,000/year, working class family making $50,000/year and a middle class family making $100,000/year. And then let's say that each buy a doll for $20 and pay the sales tax - which in this case would be a $1. That dollar represents a higher percentage of the income of the poor family than the working family and in turn a higher percentage of the income of the working family than the middle class family. All of these families will obviously spend a higher percentage on their income on sales tax than a rich family making $1,000,000/year.

And of course the big news today was that state officials are debating raising the sales tax to 6%rather than mandating a progressive taxation system in Massachusetts - where the rich pay more in taxes because they can afford it and the poor pay less because they can't. Why are they doing this? And why are they proposing horrible budgets with a big list of program cuts and no other way to raise the needed cash to help get the state back on its financial feet?

Well the reason is simple. To go back to the kind of progressive taxation we used to have in Massachusetts (and on the federal level) would be to admit that capitalism can't do anything like good for working families in any way without significant government regulation and oversight.

Apparently going back to a system of progressive taxation would be, in the words of that great American revolutionary Rush Limbaugh, socialism. Actually progressive taxation is just part of a traditional welfare state or Keynesian democracy or social democracy - where the public good is considered at least as important as helping corporations make profits. But anything that's socially good is now automatically equated to socialism judging from the recent rhetoric of many beleaguered American capitalist politicians (or in the case of Limbaugh, proto-fascist blow-hards). So even though it's the most sensible and fair way to raise revenue under capitalism, and even though it's been done before in Massachusetts - it's not even being seriously discussed yet.

Progressive taxation, one hastens to add, is only the first of many needed reforms on the road to building the huge democratic expansion of the public sphere that could become real socialism - not the fantasy Fox News version that conflates Stalin and Hitler and blames the sins of both on a political economic system it doesn't care to explain properly. For to do so would be to turn its largely working-class audience forever against corporate shills like Bill O'Reilly. Which certainly wouldn't make their advertisers happy.

Progressive taxation can also simply be the short-term reform to which a desperate capitalist government like our Massachusetts state government will ultimately turn to level off a fiscal nosedive long enough to stabilize the budget until a return to business as usual.

Alternatively, perhaps American government is so brainwashed by decades of corporate ideological domination against doing the right thing that the state government will just stumble down into the abyss of fiscal collapse. And then all bets are off.

But at OMB we like to remain optimistic that progressive taxation for whatever reason will arrive sometime in the next few years - although perhaps too late to do as much good as it might if instituted immediately.

All that given, it's on to the cuts. We present them by budget section in the order they are found in the MBPC report - but have listed only the most salient information here.

Education

# Cuts to special education reimbursements ($45 million), regional school transportation reimbursements ($30 million), and MCAS remediation ($4 million).

# Cuts to direct aid to UMass, as well as every state and community college by 16.5 percent from FY 2009 GAA levels. These cuts mirror those proposed by Governor Patrick in his budget proposal. For UMass, this cut is approximately $80 million. The HWM budget does allow the Governor to spend $159 million in federal stimulus to provide additional aid to state higher education campuses.

# Cuts funding for child care by approximately $18 million from FY 2009 GAA levels. This cut, as well as the consolidation of child care line items, mirrors the Governor’s House 1 budget proposal.

Environment and Recreation

# Consolidates Department of Conservation and Recreation’s (DCR) state parks, urban parks and central artery parks into a single account and providing $48.2 million in funding. This is $9.3 million lower than the amount provided to DCR parks accounts in the FY 2009 budget. The HWM budget does not recommend funding over $4 million in earmarks that were included in the FY 2009 budget for state and urban parks.

# Merges the DCR seasonal employees and summer jobs programs into the beach preservation account. The HWM budget proposes providing $14.6 million for this account which is about $500,000 less than the amount appropriated for the beach preservation, seasonal hires and summer jobs programs in the FY 2009 GAA. All seasonal hires for DCR’s parks, beaches and pools must come from this account; the HWM proposal prohibits any funding from the newly-consolidated parks account (see above) be used to pay seasonal hires.

Health

# Provides $310.4 million for non-hospital based public health, and $162.3 million for hospital-based public health; once adjusting for the consolidations; this compares to $428.4 million in the FY 2009 GAA for non-hospital based programs, and $166.1 million for public health hospital funding.

# Proposes $36.8 million for funding for HIV/AIDS services; the FY 2009 GAA total was $39.2 million.

# Includes $8.0 million for smoking prevention services, compared to the FY 2009 funding of $12.8 million

Human Services

# Proposes funding elder services at $214.4 million, compared to $238.6 million in the FY 2009 GAA. This total includes funding for home care purchased services at $181.0 million. Funding for elder home care totaled $202.3 million in the FY 2009 General Appropriation Act. Funding for elder housing programs totals just over $6.4 million in the House Ways and Means proposal. The FY 2009 GAA total was $7.4 million. Elder protective services are funded at $16.3 million by the HWM budget. The FY 2009 GAA total was $16.2 million, but this still represents a five percent cut from estimated maintenance levels.

# Allocates $524.4 million for four programs within the Department of Children and Families (formerly the Department of Social Services) that serve children and families, including family stabilization, group care, sexual abuse intervention and placement services for juvenile offenders. The HWM proposal is $20 million below the FY 2009 appropriation but $4.5 million above the House 1 proposal. The bulk of this reduction, relative to FY 2009, is due to a cut of $14.1 million in the family stabilization account and $5.5 million in the group care account. The HWM budget also does not adopt the Governor’s recommendation that these items be consolidated.

# Allocates $20.8 million for shelters and support services for people at risk of domestic violence. This appropriation is respectively $2.6 million and $2.7 million below the FY 2009 and House 1 allocations.

# Allocates $191.7 million for three line items within the Department of Developmental Services (formerly the Department of Mental Retardation), which provide respite services for family members, as well as day/employment services and transportation services. This appropriation is $7.7 million, or 3.9 percent, below the amount appropriated in the FY 2009 GAA, but is a considerable increase over the Governor’s recommendation. The HWM also does not adopt the Governor’s recommendation that these items be consolidated.

# Allocates $24.5 million for the Employment Services Program (ESP). This appropriation is $3.2 million, or 11.6 percent, below the FY 2009 GAA.

[and one increase, but guess why ...]
# Includes $310.5 million for grant payments for families that qualify for Transitional Aid to Families with Dependent Children (TAFDC). This appropriation is $12.3 million, or 2.6 percent, higher than the FY 2009 GAA. The increase is needed to meet growing caseloads.

Infrastructure, Housing and Economic Development

# Cuts funding to the state’s 16 Regional Transit Authorities by $11 million from its FY 2009 GAA level, to $46.8 million.

# Moves homelessness programs from the Department of Transitional Assistance to DHCD. It proposes funding the emergency shelter program for homeless families at $91.6 million which is about $4.4 million above the FY 2009 GAA but lower than the $113.4 million that the state expects to spend on this program in FY 2009. The HWM proposal provides level funding to the individual homelessness account at $36.3 million. The Home and Healthy for Good program, which reduces chronic homelessness is level-funded at $1.2 million.

[here's another increase ... probably one of those barely-functional 10-year old software systems the state loves to buy from corporate hucksters ...]
# Includes $3.1 million for a new information technology line item for the Department of Housing and Community Development (DHCD) that includes the homeless management information system.

# Provides $18 million for the Massachusetts Rental Voucher Program (MRVP) which is $15 million less than the FY 2009 budget.

# Funds the DHCD’s administrative account at $7.2 million, about $5 million less than the FY 2009 GAA. The HWM proposal does not include $4 million in earmarks that were in the FY 2009 GAA.

# Eliminates all earmarks within the Office of Travel and Tourism line item, reducing the office’s funding to $8.9 million a cut of $28 million for its FY 2009 GAA level.

# Cuts funding for workforce training grants by $6 million from its FY 2009 GAA level, to $15 million.

# Eliminates the state’s summer jobs program for at-risk youth. This program was funded at $8.1 million in the FY 2009 GAA.

Law and Public Safety

# Eliminates the line item that currently funds the Quinn Bill, which was enacted to encourage local police officers to earn additional college degrees by providing these officers with salary increases. This line item received approximately $50 million in FY 2009; the Governor’s FY 2010 budget included $42.2 million.

# Appears to eliminate the three line items that fund the Shannon Grant program, municipal police grants, and community policing grants. In FY 2009, funding for these grant programs totaled $38.4 million. The Governor’s FY 2010 budget included $13 million for the Shannon Grants program, but also eliminated the municipal police grants and community policing grants line items.

Local Aid

# Cuts Lottery Aid and Additional Assistance by $424 million. This represents an across the board cut of 32.3 percent from FY 2009 GAA levels in both Lottery Aid and Additional Asisstance for each city and town.

# Does not include the Governor’s proposed increase to the state meals and hotels tax. The Governor proposed using the $150 million raised from these taxes to reduce local aid cuts.

So clearly Local Aid - the money that keeps city and town governments afloat - is the taking biggest beating. Notice that the Governor's House 1 budget would have raised an extra $150 million for Local Aid ... by yet another regressive tax, but one that might hit the middle class harder than poor or working class people, meals and hotel taxes. But still a tax that the rich and corporations will barely notice. Compared to the levels of taxation on those worthies in the 1950s.

No matter what version of the budget passes this summer, it's going to be bad for most everyone in the Commonwealth.

Anyhow, no sense in beating a dying horse here. Go check out the full report yourself at the <a data-cke-saved-href="http://openmediaboston.org/node/%3Ca%20href=" href="http://openmediaboston.org/node/%3Ca%20href=" http:="" www.massbudget.org"="">Jason Pramas is Editor/Publisher of Open Media Boston