Friday, January 29, 2010

Where is the recovery?

For months, Governor Patrick has been saying the Massachusetts economy is poised to recover quicker than other states in the country. However, according to a report from the University of Massachusetts, “Economic activity in Massachusetts is estimated to have declined at a 0.2 percent annualized rate in the fourth quarter of 2009.” Interestingly enough, “The U.S. Bureau of Economic Analysis reported that the national economy expanded markedly at an estimated annual rate of 5.7 percent during the same period.”

Associate Professor of Public Policy and Urban Affairs at Northeastern University Alan Clayton-Matthews says, “The disappointing fourth quarter performance was due to a poor holiday spending season reflected in December employment and state withholding sales tax revenues, and a sharp rise in the December unemployment rate. This shock was most likely a one-time event that does not indicate weakness going forward-the leading index is projecting growth in the first quarter of this year.”

While the decline may have been a fluke, we at The Capitol View are not comfortable banking just hoping things will improve. Yesterday, the House took up two pieces of legislation, neither of which would create jobs or stimulate the economy. Next week, the House is taking up a bill relative to safe driving. While these are good bills that help address important issues, the Legislature’s needs to focus on improving our economy and creating jobs too. At what point are the Governor and the Democratic-controlled legislation going to address the fact that Massachusetts is an extremely unfriendly place to do business with a poor economic environment for attracting new businesses?

Thursday, January 28, 2010

The Patrick Budget: Reckless and Irresponsible

Governor Patrick released his FY11 budget proposal yesterday and now that we’ve had a chance to digest it, there are only two words to describe it – reckless and irresponsible! Here are some highlights from the Governor’s budget.

• Governor’s budget actually expands government spending 4%; from last year’s $27.14 billion to $28.2 billion

• While the state’s revenue collection remains volatile, Governor Patrick’s budget has a 3.2% increase in revenue projection; up to $19.05 billion from last year’s $18.46 billion

• $100 million in new taxes including: candy tax, soft drink tax, cigars and smokeless tobacco tax, expansion of the bottle bill and the repeal of sales tax exemption on aircraft sales (these new taxes are in addition to the $1.5 billion in tax increases the Governor has facilitated since taking office)

• Medicaid increase of $600 million; paid for with Federal Stimulus extension that has not yet been approved by Congress

• Governor requests expanded 9C Authority in budget, a sign that the Administration knows this budget is out of balance

• $1.9 billion in one-time revenues (structural deficit)

• Relies on $30 million in cash from quasi-authorities

• No initiative to lower property taxes

• Plans to refinance $200 million in the FY10 supplemental budget - by refinancing the $200 million in principal we will have a smaller debt service payment for 2011 but will increase debt payments starting in 2014. This is a perfect example of stealing from Peter to pay Paul.

• Grows size of state workforce from 66,483 in 2007 to a project 66,702 in 2011.

This is Governor Patrick’s fourth budget – but hopefully it will be his last.

What is especially disheartening is the fact that there have been so many missed opportunities. While the Governor appears to be jumping on the Republican bandwagon offering ideas such as the expedited sale of surplus state land, Governor Patrick continues to reject solid, cost saving ideas.

For example, Republican lawmakers offered a whole host of budget amendments last year that would have saved the Commonwealth millions upon millions of dollars. Though Governor Patrick tries to paint us as the party of no, one could make the argument that he is the Governor of no as he says not to all of our ideas – that is until it’s political convenient for him to do otherwise.

Two ideas in particular that could save the state a lot of money are shifting all MassHealth members to managed care plans and raising or better yet eliminating the anti-privatization Pacheco Law. Those two ideas alone have the potential to save the Commonwealth $200-$300 million annually.

Hopefully, the Governor and the Beacon Hill Democrats wills adopt these ideas in the upcoming budget season because we will continue proposing these initiatives and others like them. Raising taxes and relying on federal aid is a quick fix, not a long term solution. Not only are our proposals good long term solutions, but they also offer relief sooner rather than later.

Wednesday, January 27, 2010

Jones: Initial Response to Governor’s FY11 Budget

House Minority Leader Bradley H. Jones, Jr. issued the following statement as an initial response to Governor Patrick’s FY11 budget.

Governor Patrick’s talking point du jour is that he and his administration have now delivered four budgets that are “balanced, responsible and on time.” Though I have not had the opportunity to read his latest budget in its entirety, I have read enough to know that while it may have been delivered on time, it is certainly not balanced or responsible.

It’s amazing that in a time of economic despair, Governor Patrick would think it is appropriate to actually increase the level of spending. This budget is up more than 3% from last year’s budget and not surprisingly includes yet another tax hike.

While Governor Patrick is trying to sell himself as the “local aid” candidate, anyone who’s been watching the Governor since he assumed office knows that this is just an election year ploy. He’s never been concerned about local aid in the past - one has to ask why the sudden interest.

Tuesday, January 26, 2010

Must be an Election Year!

In case you didn’t know, it’s an election year! And you know how we can tell? Governor Patrick is suddenly taken an interest in…wait for it…governing!

Governor Patrick put out a pension reform bill today and while there are many solid ideas - ideas in fact we in the Republican caucus have offered many times before, we wish he had maybe acted on these proposals sooner. But hey, better late than never! What’s especially interesting is the fact that just last fall Charlie Baker laid out a comprehensive pension overhaul plan. Guess the Governor felt like it was time to step up his game!

This calculated political strategy is the most transparency we’ve seen from the administration since Governor Patrick assumed office in 2007. Here’s how this pension reform effort will play out:

1) Governor Patrick files legislation

2) Democratic-controlled Legislature rejects plan

3) Governor Patrick points finger at said Legislature for being scared of “change”

4) Governor Patrick runs as Beacon Hill outsider saying Legislature rejected his efforts to bring more “change” to people of Massachusetts

Now, here’s what wrong with this picture. Governor Patrick epitomizes what it is to be a Beacon Hill insider. The people of Massachusetts want change…in the corner office that is – just read the polls!

This is nothing more than a lackluster attempt in an election year to convince the electorate that he (Governor Patrick) has actually been governing all these years. This attempt, like his poor excuse for a State of the Commonwealth address, is nothing more than empty campaign rhetoric. What the people of Massachusetts want is a strong leader who is capable of delivering on his campaign promises, not an oratorical super star who makes promises he can’t keep.

Monday, January 25, 2010

Disappointing Milestone for Massachusetts

An article in today’s Boston Globe paints the gloomy economic forecast of the Bay State saying that “In the decade from 1999 through 2009, average employment in the state fell by 55,000 jobs, or nearly 2 percent.” Andrew Sum, director of Northeastern University’s Center for Labor Market Studies sums it up pretty well, telling the Boston Globe “This was the lost decade. No job growth, no wage growth. It was a total wipeout.’’

While a certain level of national ripple effect from the last two recessions was expected, it’s frustrating that more has not been done on a state level to stimulate the economy and generate job growth. Later this week, the House will be taking up a bill geared towards having better nutrition in our schools, an admirable piece of legislation but certainly not the issue we should be focusing on at this junction. Last month, 8,400 more jobs were lost, bringing the state’s unemployment rate back up to 9.4%. The many problems facing our economy, specifically the lack of good paying jobs, is not going to disappear overnight. It’s going to take the hard work of the Legislature and the Patrick Administration to return Massachusetts to a prosperous state. Unfortunately, Governor Patrick has been consistently several steps behind where he should be all along the way during this economic crisis. In fact, it was ironic that the Globe pointed out that the recession we’re in began in March of 20008 because the way Governor Patrick and the other Democrats on Beacon Hill were spending, you would have thought the Bay State had just hit the Mega Millions or should we say billions!

As the Legislature was passing the FY09 budget and the Governor was signing it into law, we in the Republican Caucus were warning that it was an irresponsible and unsustainable budget. Sure enough, only a few short months later, Governor Patrick was taking out the 9C pen at the expense of cities and towns all across the state.

The other night while delivering his State of the Commonwealth Address, Governor Patrick said all three budgets during his tenure have been responsible, balanced and on time. Well, on time is true – not that it matters when they’re irresponsible and out of balance! Later this week, Governor Patrick will deliver his fourth and hopefully last budget. We can only hope that since it’s an election year, he’ll try to deliver not just an on time budget, but one that is actually responsible and balanced!

Friday, January 22, 2010

Republican Leaders Hold Media Availability

Governor Deval Patrick delivered the State of the Commonwealth address last night. His remarks, which were brief and lacking substance, were followed with a media availability held by Republican leaders Representative Brad Jones and Senator Richard Tisei.

Click here to hear what Jones and Tisei had to say about the Governor's speech.

Thursday, January 21, 2010

Three Years Later

Three years ago, Deval Patrick assumed the title of Governor and as we await his delivery of tonight’s State of the Commonwealth address, we thought it would be appropriate to take a little trip down memory lane.

Let’s start with some of the many promises he made during the campaign and since his inauguration:

> Reduce property taxes
> Put 1,000 more police officers on the streets in local communities
> Create 250,000 jobs by passing the Life Sciences Bill
> Find $735 million in cost savings in state government
> Extend commuter rail service to Fall River and New Bedford
> Implement a full-day kindergarten program
> Did we mention reduce property taxes???
> Reduce the cost of living to keep young talent and jobs in Massachusetts
> Create a simpler, faster regulatory process, a stable and simplified corporate tax structure and a more cooperative relationship between labor and business

Now, let’s see where we’re at three years later:

> Average single family property tax bill has increased by 18%; from $3,962 in FY07 to the current $4,671
> State’s Rainy Day Fund has lost 75% of its value
> 105,000 jobs have been lost since Governor Patrick took office
> Business and residential bankruptcies have increased by 112%; from 2,652 in 2006 to 5,618 in 2010
> Over $1.5 billion in tax increases
> Inadequate spending cuts – only 1% of FY09 spending was cut to deal with fiscal crisis

Any person reviewing this information would come to the same conclusion – Governor Patrick has been a walking, talking disaster as the state’s Chief Executive Officer.

Just when you thought it couldn’t get worse!

We have said it before many times here on The Capitol View, but just when you thought it couldn’t get any worse - it does! Several media outlets are reporting that the unemployment rate here in Massachusetts dramatically increased to 9.4% in December as the Bay State shed 8,400 jobs. This number comes as a bit of a surprise after the state’s unemployment rate dipped down to 8.7% in November.

State House News Service broke the numbers down by industry:

> The trade, transportation and utilities sector cut 5,000 jobs in Massachusetts
> The leisure and hospitality industries lost 3,400 jobs
> Construction jobs were down by 1,800
> Professional, scientific and business services jobs were off by 1,400
> The information sector shrunk by 300 jobs

SHNS is also reporting Massachusetts has lost 2 percent of its jobs over the past year, or 66,200 jobs. Though many in the Patrick Administration including the Governor himself would like the general public to believe things are looking up, these numbers suggest otherwise. Until people are back to work times will remain tough for the average family trying to make ends meet. Governor Patrick and the Democrats on Beacon Hill need to make generating jobs number one on the agenda immediately. Unfortunately, they’ve been so focused on raising your taxes and spending well outside the state’s means that economic growth seems to have slipped their minds!

Wednesday, January 20, 2010

Congratulations U.S. Senator Scott Brown

All of us here at The Capitol View hope you will all join us in congratulating the Bay State's newest U.S. Senator Scott Brown. Senator Brown worked tirelessly to earn every vote he received and the Republican Caucus is proud to have supported such a great candidate. Though we will miss working with him here on Beacon Hill we know he'll work hard on behalf of all of us on Capitol Hill.

Congratulations U.S. Senator Scott Brown!

Tuesday, January 19, 2010

Get Out and Vote!

Massachusetts voters are heading to the polls today to elect the next U.S. Senator from Massachusetts. As you all know, the Republican Caucus endorsed State Senator Scott Brown early on and would like nothing more than to see him win tonight. But in order to do that, we must get out the vote. Every vote matters! Regardless of your political affiliation today, please exercise your civic duty and get to your polling place. Encourage your friends and neighbors to do the same!

“Bad politicians are sent to Washington by good people who don't vote.”
-William E. Simon, former Treasury Secretary

Monday, January 18, 2010

Honoring a True American Hero

In a speech delivered in Detroit, Michigan on June 23, 1963, the Reverend Doctor Martin Luther King, Jr. said, “If a man hasn't discovered something that he will die for, he isn't fit to live.” It’s amazing that one sentence can capture everything it is that the great civil rights leader stood for. Today, we observe the birthday of a true American hero. King dedicated his whole life to fighting for civil rights. In fact, he worked so tirelessly that in 1964 King was awarded the Nobel Peace Prize.

Today, let us all pause for a moment to express our gratitude to a man who contributed so much to our society. Though his life was tragically cut short, his dream lives on in all of us. We must never forget what Dr. King said in his most famous speech, “I have a dream that one day this nation will rise up and live out the true meaning of its creed: We hold these truths to be self-evident, that all men are created equal."

Thursday, January 14, 2010

Better late than never!

The voters of the Commonwealth of Massachusetts will head to the polls in less than ten months to elect a Governor and since Governor Patrick doesn’t have much of a record to stand on, he’s relying on election year legislative action to get him re-elected. Today, the Legislature took up an education bill that would help Massachusetts tap into millions of dollars to help our state’s schools. Unfortunately, it has taken Governor Patrick more than three years to tackle the many problems facing our state’s educational system. The question today is – why did it take so long for Governor Patrick to address this issue? Obviously, the federal dollars are an incentive – but what if President Obama hadn’t made education, specifically charter schools, a priority? Governor Patrick has never been supportive of charter schools, but wave $250 million in front of him, and the wind changes.

Former Governor Bill Weld tackled education reform back in the early 90’s and his efforts made Massachusetts’ schools among the best in the nation. Governor Patrick and his campaign staff should either check their facts or better yet, lay off the toothpaste – it’s making them a bit loopy!

Not Out of the Woods, Concern for Double Dip Recession

New economic numbers today indicate that our country’s economy is not out of the woods just yet. In fact, there is growing concern that we are actually headed into a double dip recession - which is basically when a recession is followed by a short-lived recovery, followed by another recession.

According to the Associated Press, “Retail sales unexpectedly fell in December, leaving 2009 with the biggest yearly drop on record and highlighting the formidable hurdles facing the economy as it struggles to recover from the deepest recession in seven decades.”

That article goes onto say, “In another disappointing economic report, the number of newly laid-off workers requesting unemployment benefits rose more than expected last week as jobs remain scarce.”

There are very few signs of improvement in the economy. And although, there is the occasional glimmer of hope, we fear that economic policies in our country and especially in the Commonwealth are actually hampering recovery efforts. The Patrick Administration needs to focus on creating jobs and enticing businesses to set up shop in the Bay State. New life needs to be injected into the Massachusetts economy in order to get people back to work and to keep residents from fleeing the state. Increasing taxes and failing to streamline bureaucracy for companies are moves that are driving away businesses, not inviting them.

Wednesday, January 13, 2010

Victims in Haiti Need our Help

As you have all heard by now, yesterday, the country of Haiti was struck by a 7.0 magnitude earthquake. According to many media outlets, yesterday’s quake was the most powerful to hit the Caribbean nation in 200 years. Thousands of Haitians are feared dead and millions of lives have been affected by this tragedy. The earthquake victims need our help and that’s why we are asking you to contribute in any way you can.

The International Committee of the Red Cross has joined the effort to help those devastated by this earthquake. To make a contribution, please click here.

Additionally, State House News Service is reporting that “Aid organizations, government officials and Haitian Americans will be gathering Wednesday evening to organize a local recovery effort. The meeting is scheduled for 7 p.m. at Holy Cross Cathedral in Boston’s South End neighborhood.” Anyone interested in volunteering should plan on attending this meeting tonight.

Tuesday, January 12, 2010

Spin’s Expensive!

Governor Patrick has had a tough tenure as the Bay State’s top lawmaker and because of all of his public relations missteps his administration requires a massive spin machine. And according to an article in yesterday’s Boston Herald, apparently spin’s expensive!

Yesterday, the Boston Herald reported that the state’s Department of Transportation has more than ten “spin doctors” on the payroll. The eleven people who make up the communications department garner salaries from $65,000 to $119,000 a year with their salaries totaling more than $800,000. Talk about frivolous! Beacon Hill Institute director David Tuerk told the Herald “he finds the flack payroll disturbing considering agencies like the Pike have long been rife with patronage and bloated budges.” Tuerk went on to say, “What’s taking so long? Why don’t we see more evidence of cutbacks in personnel – especially where there’s so much obvious duplication?”

There were no cutbacks in this department - in fact, there was growth. According to the Herald, MassDOT has actually added one staffer after all of the transportation agencies merged last fall.

The transportation overhaul the Legislature passed last year provided a real opportunity for cost savings and efficiency. However, Governor Patrick and his administration have yet to capitalize on those possibilities and instead we’re seeing more waste and inefficiency.

Monday, January 11, 2010

More Grim Economic News

Massachusetts' economy is still on the wrong track, despite repeated attempts by the Patrick Administration to prove otherwise. There is more grim economic news being reported in the media today. Two stories caught our eyes today including the surge in gas prices here in the Commonwealth and the dismal holiday sales recently announced by the Retailers Association of Massachusetts.

According to separate reports in today’s Boston Herald, gas prices have jumped 8 cents while Massachusetts retailers report holiday sales were down by more than two and a half percent. So why lump these two stories together? The reason is simple – because these are the harsh realities that the Patrick Administration would like people to forget about come November 2nd, 2010. The Democratic controlled Legislature, led by Governor Patrick, has made Massachusetts an even more expensive state to live in and one that is not business friendly in any shape or form. Governor Patrick and the tax and spend Democrats need to be held accountable for the effect their poor decision making has had on Commonwealth residents and businesses.

While the gas prices may be beyond the Governor’s control, the retail sales numbers fall squarely on his shoulders. Governor Patrick signed a reckless sales tax hike into law driving more consumers to the tax free internet and places like New Hampshire this holiday season. Other states are reporting improved or flat sales, while Massachusetts reports a decline.

Some Good News but No Cause for Celebration

Governor Patrick's recent decision to restore $41 million of the October 9C cuts due to the recent spate of good news on the revenue front may prove to be a rush to judgment. Presently, year to date tax revenue collections are $230 million over the revised FY10 benchmark of $18.279 billion. But more than half of these funds are attributed to one-time corporate settlement money ($120 million). The receipt of $110 million over projections halfway through the fiscal year – following the worst economic downturn since the Great Depression – is nothing to get excited over. Furthermore, had we not revised the FY10 benchmark in October, the state would currently be $85 million below projected year to date tax revenues.

Fiscal year 2009, which recently ended only six months ago, was one of the worst time periods for tax revenue collections. Income tax collections declined 15.2%, corporate and business taxes went down 17.6%, financial institution tax intake declined 55.7%, and capital gains spiraled downward by an incredible 75%. Over $3 billion in tax revenue was lost. When combined with exposures, the total amount of solutions (i.e. Stabilization Fund draws, Federal Stimulus, and cuts) needed to close the gap for FY09 was nearly $4 billion. Despite the Governor’s recent claim that the “economy is recovering,” it is far too early to be reversing recently implemented fiscal solutions in light of a few decent months for revenues. What’s more, the strength of the income tax relies largely on the amount of people employed – the more people working, the more people paying income tax. As of November, the state’s unemployment rate is stubbornly lingering at 8.8%. Unsurprisingly, the unemployment rate is expected to average 9.1% to 10% for FY11.

More importantly, Governor Patrick's decision is based on a small rise over projections. When collected revenues are compared to actual collections from the previous fiscal year, the current collections fall below the already-weakened revenues from the prior period. For instance, even though year to date revenues are $230 million above projections, they are actually $348M below the same period in
FY09. Keep in mind the state lost over $3 billion in tax revenue in FY09. When observed from this perspective, the economy is hardly in a recovery phase.

Prudence dictates we should not increase the FY10 revenue benchmark by any increment, nor should we reverse any solutions to fill the projected $600 million revenue gap that was just recognized only three months ago. Continuing to abide by the revised benchmark seems to be the best course of action for now. Besides, since the Stabilization Fund lost over 70% of its contents in just one fiscal year (2009), the state has much to make up for when the economy slowly makes its way back – very slowly.