Cautious moves in uncertain times — the FY2009 budget

The House finished debating and amending its version of the state’s budget a
little after midnight last Saturday morning.  The budget action now moves to
the Senate.

For five long days and evenings, House members all worked to advance the
various causes that they felt were under-funded in the committee draft
budget.  The final budget does reflect the priorities of the Commonwealth as
filtered by the members.

It was a long week, but really one of the best times to get know one’s
colleagues in the building — a good deal of the time is spent waiting for
staff to complete documentation of agreed revisions.

I was struck by how little attention the major dailies paid to the actual
work of the week.  On reflection, I suppose there were two reasons.  First,
of course, some colorful conflicts distracted them, but second, the budget,
although well and thoughtfully assembled, was devoid of really big news.

The major spending decisions had been made earlier.  All of the state’s
leaders remain fully committed to the new health care law.  And all remain
committed to the five year plan for increasing education aid to cities and
towns.  Previously passed laws commit specific funding amounts to school
building and support of the MBTA.   State pension contributions are
determined by an administrative schedule.

One major decision, which was briefly debated, was to continue to use the
consensus revenue estimates developed in January.  This made sense — on the
one hand, the national economy has worsened; on the other hand,
Massachusetts seems to be outperforming the rest of the country and current
revenues seem solid.  And, as the budget heads through the Senate into
conference committee, better information will become available.

Together, increases in health care costs, local aid and the other fixed
commitments accounted for the bulk of the estimated revenue increase.  So,
in order to maintain basic programming in the face of rising energy, labor
and other costs, there will be a need for additional funds — the cigarette
tax increase, the corporate tax package, and a modest draw from reserves.

But there was no room for any major new initiatives.  Last week’s efforts by
House members served mostly to very marginally increase certain important
larger accounts — for example, an additional $2 million on top of the
$225.8 million for the special education circuit breaker.  Additionally,
House members fought for small dollar earmarks of importance to their
district — for example, in my case, $140,000 to continue developing plans
to improve the Amelia Earhart dam so as to better control flooding in
Arlington, Belmont, Cambridge and other communities low-lying near the
Mystic River.

So, from the perspective of a metropolitan journalist, there were many
little stories, but nothing of broad interest that could compete with the
personality-based stories for newsprint.

Looking beyond the immediate budget process, as I listen carefully, I hear a
pretty strong consensus among the state’s leaders on three major points:
First, the electorate will not take kindly to any broad-based new taxes, at
least not unless we decisively curb practices perceived as abusive —
unreasonable pension deals,  overuse of police details, etc.  Second, we
need to find a way to control health care costs because their rapid growth
is squeezing out other necessary spending.  Third, many legitimate state
needs are unmet, most notably maintenance of our infrastructure, especially
roads and bridges.

So far in this session, we have nibbled at the revenue question, increasing
cigarette taxes and adjusting corporate tax rules, but staying well back
from any tax increase that the general public would bear.  We have also
nibbled at some of the reform issues, passing a mild adjustment of police
detail practice and a modest change in retirement benefits for MBTA
employees.  Even these modest changes have generated considerable bitterness
among affected employees.  The Senate has initiated a package to control
health care costs, but this is a famously difficult challenge.  We declined
to bite on the casino proposal, in my view wisely, although it might have
offered some modest financial assistance.

Perhaps the boldest set of financial measures that we have undertaken is the
program of infrastructure bond bills proposed by the Governor.  The House
will take these up shortly.  These bills respond to a clear need and most of
us are eager to see the particular benefits they offer for our districts.
But Treasurer Cahill has raised a yellow flag about their affordability —
Massachusetts is already carrying a relatively high debt burden.  In turn,
the administration replies that the bond bills are multi-year authorizations
and if our revenue picture worsens we can slow the issuance of the debt.

In summary, I think the real story of the budget season so far is one of
cautious moves in the face of economic uncertainties and hard political
dilemmas. “There are bold pilots and there are old pilots, but there are no
old bold pilots.”

The real progress in this legislative session is coming in the economic
development and environmental areas.  In the next few months, conference
committees will complete work on a very far reaching energy and
environmental package as well as a life sciences package.  Negotiation of
these major packages consumes huge amounts of time for legislative leaders
and senior administration officials.  That may be as far as we get, although
I’m hopeful that we’ll get further.

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Will Brownsberger
State Senator
2d Suffolk and Middlesex District