State leaders had better paddle harder

Sunday, May 4, 2003 - by Peter Golden

With the recent news from the Massachusetts legislature that House leaders have offered a budget of their own devising that meets or exceeds the governor's proposals for spending cuts, those who dismiss our legislators as fiscally irresponsible may have to rethink their position.

This is especially so in light of the growing perception that the House proposal is no slash and burn initiative. On the table are a series of disciplined budget options, including debt refinancing and "pothole" funds, the later proposed for discretionary disbursement to meet the special needs of cities and towns.

For those who go sleepless over the prospect of increases in the state income tax, restful nights also appear to be in store. Leadership within both the House and Senate acknowledges the widespread distaste for higher taxes among the electorate and sees little chance of any bill promoting such passing. Senator Cynthia Creem of Newton, whose recent queries into the impact of marginal raises in the state income tax gained wide notoriety, acknowledges no taste for increases among her fellow senators.

Optimists who believe in the redemptive power of new technology and the widely accepted notion that Massachusetts-based research and development done today translates into jobs and economic growth tomorrow also have something to cheer about. The legislature's budget contains earmarked grants for the private sector to spur promising new forays into such esoteric fields as microphotonics, nanotechnology and proteogenomics. Organizations like Mass Insight have long advocated such programs as an offset to the growing influence of aggressive competitors for R&D dollars like New York and California.

Is it possible our leaders have found a sustainable position and begun to chart a sure path to a more promising future? Perhaps, but malaise in the economic sector and a fragmented global marketplace will continue to challenge all of us, enlightened budgeting on Beacon Hill notwithstanding.

Over 140,000 workers are on the street in Massachusetts, more than half of them from high-paying jobs in the technology sector. Elsewhere in the Commonwealth a rising sea of vacant offices still threatens to sink the real estate boom, with growing vacancy rates in rental housing and dozens of untenanted speculative building projects casting further doom and gloom across the sector. And health care costs -- well, let's not go there.

Most daunting of all is the challenge facing Massachusetts's municipal governments. Sharp state income tax cuts in the 1990s followed by plummeting tax collections in the 2000s have led to sharply reduced local aid in fiscal 2004, which begins July 1. Municipal stabilization, enterprise and other "rainy day" funds have been tapped to ease the pain, but fiscal 2005 promises to be an utter disaster, once all the money is gone. While state and federal leaders note a widespread distaste for higher taxes, the cities and towns will be left largely on their own. With predicted cuts in state aid to municipalities running in the range of 15-20 percent or more, the anxiety levels of selectmen, mayors and other municipal officials in MetroWest is going through the roof.

Confronting local administrations are a host of challenges, beginning with the almost unavoidable injunction to downsize teacher and public safety payrolls. While devotees of "smaller is better" and "reinventing government" may view such cuts as progressive, parents of school-age children and at-risk elders, the two groups who stand to loose the most in such a scenario, are already becoming increasingly vocal.

So are the Mass Federation of Teachers and the Mass Municipal Association. The former represents teachers in big city school systems, the later the over 340 towns and cities in the state. Their success is hardly assured.

The result may well be a series of local tax override referenda, the result of which is sure to be painful and divisive. Another strategy calls for "local revenue enhancement options." Translation: town-by-town variations in meal and hotel taxes, permitting fees and special charges for trash collection, school buses and more. Result: short term gain; long term disaster.

The result will be a balkanized local tax and permitting environment that plays havoc with deeply-held notions of uniformity promoted by economic planners and progressive business interests. If Massachusetts is to maintain itself as a knowledge-based economy in the global marketplace its municipalities cannot afford feudal tax policies.

The conundrum posed by such opposing views will test the mettle of all of us and challenge our leaders as never before in this generation's memory.

Looking at the big picture, modernity -- the process that defines the universe of human behavior in our time -- is characterized by ever-growing complexity and the need to create systematic solutions to manage it. Our leaders, no matter how enlightened, are only riding the wave. Sink or swim options confronting all of us suggest it's definitely the time to start paddling harder.

 
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