GOVERNOR PATRICK’S FY2014 BUDGET PROPOSAL: A Promising Start To Future Improvement

Politics is the art of the possible and getting things pass requires placating a broad variety of often competing interests.  All of which makes it hard to be bold or to even fully address complicated issues.  Small, incremental steps are the usual, and often appropriate, approach.  So it is rather remarkable when an elected executive comes out with a visionary, risky, and courageous proposal that could actually solve several long-standing problems while setting the stage for greater prosperity and increased equity.  Maybe the Governor’s decision to return to the more lucrative private sector has emboldened him, or maybe there is a real turning of the political tide, but even though there are many ways the FY2014 budget proposal and its revenue measures could be improved,  it’s overall thrust – including its focus on education, health, and transportation – is truly praiseworthy.

For transportation, as described in a ten-year plan titled “The Way Forward”, the Administration proposes to finally get us out of the black hole of Big Dig debt, begin paying operating costs out of revenue instead of bond money, and making targeting expansion investments including more transit (train, trolley, bus), bicycling, and walking facilities.  Through another multi-year plan, the Governor proposes to provide more (and better) schooling for our children and relevant skills-training for adults.  And he wants to finally stop the bludgeoning of public health systems, which will reap long-range dividends in family well-being and lower health care costs.

None of this, even in total, will fully restore the nearly $11 billion in cumulative budget cuts and savings over the past four years.  However, it is an increase from last year and will require raising the previous $33 billion dollar state budget by another $1.9 billion.  The cost of doing nothing, particularly for transportation, is much higher.  In addition, the proposed mix of taxes and fees, despite their overall 6.9% increase, will make our regressive tax system slightly less discriminatory against lower-income families — while the income tax will go up by 1%, the sales tax will go down by 1.75%, the personal income tax exemption will double, and a long list of income tax exemptions will be eliminated.  To reduce future shortfalls, turnpike tolls, gas tax rates, and MBTA fares will be indexed to inflation.  As a public health measure the tobacco tax will go up and be extended to all tobacco products and the current subsidy of candy/soda created by their being exempted from sales tax will end.  For environmental, health, and market-fair-play reasons, the bottle-return deposit will be extended to water and sport drinks.

Of course, the devil is always in the details.  Perhaps our escalating climate change crises should have taken a higher priority, with more energy conservation and local resiliency programs paid for with even higher gas taxes or even a carbon tax.  Perhaps some of the railroad extensions to gateway cities should have been shelved in favor of higher-usage initiatives such as the long-delayed Urban Ring or expanding rail along the Connecticut River.  But these are quibbles compared with what is being proposed.  And unless the general package is adopted, there won’t be any details to fight over.

The big question is whether the Legislature will have as much courage as the Governor.  He is not running for re-election, most of them are.  While Massachusetts’ unemployment rate is lower than the national average, there are still a lot of people out of work or in foreclosure.  Over the past years the Legislature has rejected several tax and fee increase proposals.  But times have changed. In the days after the Governor announced his Transportation and Education plans and then his FY2014 Budget with the needed tax and fee increases, top legislators only issued cautious statements.  While agreeing that many of the proposed improvements are needed, they seem to be waiting for the public response.  So far, there hasn’t been a revival of the anti-tax hysteria that killed previous revenue efforts.  Maybe people understand that doing nothing will cost even more – an estimated $11 billion in property damage, injury and loss of life as well as the loss of up to 15,600 jobs!

Six years ago, and then again two years ago, Deval Patrick ran as a progressive and Massachusetts voters elected him.  However, as with President Obama, the fiscal crises and the Tea Party juggernaut severely limited his options.  But maybe, now, we are finally seeing the Governor we thought we were originally electing.  He’s done his job – what happens with his proposals is now partly up to us, the public, and what we say to our legislative representatives.  You can learn more from Transportation for Massachusetts and the Mass Public Health Association.  And when you’ve made up your mind, let your legislative representative know — the state has created a website that allows you to find out your representative’s name, phone, address, and email by entering your own residential address or the representatives first/last name.  

TRANSPORTATION

About $269 million of the Governor’s FY2014 budget would be the first installment of a proposed 10 year, $1 billion dollar transportation program.  Between 70% to 80% of the money would be used to reduce debt and cover required operating/maintenance costs, which even the small-government Pioneer Institute agrees needs to happen.  According to Stephanie Pollack of Northeastern University’s Dukakis Center for Urban and Regional Policy (and a LivableStreets Alliance Board member), these include (1) paying off old debt, including MBTA’s Big Dig assessment, to end the interest payments that are already eating up a dangerously high 30% of current revenue; (2) fixing and upgrading existing transportation infrastructure, both transit and roadway; and (3) allowing the state to pay for future operating and maintenance costs out of current revenues rather than having to borrow money and re-dig a debt-interest hole.  The remaining 20% to 30% of the 10 year program costs will expand rail to several gateway cities, pay for the legally-mandated Green Line extension, finish several long-promised highway improvement projects, build more bicycle infrastructure, and other smaller but strategic projects.  Some of this is needed to fulfill the state’s legally required reduction of transportation-created greenhouse gas emissions.  Other projects are primarily about economic development:  the proposed $850 million expansion of Boston’s South Station, for example, will trigger many times that much in private investment.  Details about The Way Forward are on the MassDOT website.

EDUCATION

The proposed FY2014 budget dedicates nearly twice as much money to education ($550 million) as to transportation.  Picking up an idea first prompted by gubernatorial candidate John Silber during the 1990 campaign, the new money will be used to provide enough educational and nurturing pre-kindergarten programs to eliminate the growing waitlist, increasing several types of education-related local aid for special education and other purposes, creating extended-day programs in high-need middle schools serving low-income families, and providing increased support for public community and four-year colleges.   The budget includes a $226 million increase in education funding that would boost how much each school district receives per child by $25.  (Overall, about $5.6 billion – nearly 15% of all state spending – is reserved for direct local aid.)   Details of the proposed spending are on the web.

PUBLIC HEALTH

After half-a-decade of disproportionate cuts, the FY2014 Budget proposal will restore a small amount to the state’s Public Health system, mostly in key regulatory activities whose previous reductions have left the public at risk.  Additional inspectors will be hired to check on drug producers, medical and radiation facilities, food services, and indoor air quality problems.  Some of the money will be used to implement the state’s new health care cost containment law (Chapter 224) which will (hopefully) result in future medical system affordability!  (The Mass Public Health Association has posted a more detailed budget analysis.)  In conjunction with the innovative Prevention and Wellness Trust created last year to jumpstart community-based efforts to lower the incidence of the state’s most costly preventable health conditions, reduce health disparities, and promote workplace wellness programs, Massachusetts will continue to be a national leader.

In addition, the portion of the state budget directed to expanded transit and “active transportation” (walking and bicycling) will also lead to improved public health, as illustrated in the “infographic”from the Robert Wood Johnson Foundation.  (For more see How Does Transportation Impact Health?” or sign up for the American Public Health Association Transportation And Public Health eNewsletter.)   And an increase of $8.6 million in the Department of Conservation and Recreation budget will reopen several recreational facilities and urban youth programs.

“IT ALL HANGS TOGETHER….”

There are, no doubt, a million ways that House 1, the Administration’s budget proposal, could be improved – shifting spending from one Human Services or economic development project to another, raising certain fees rather than others, changing various organizational structures or procedures.   But the general outlines – putting money in the key investments that nearly everyone has agreed need to be dealt with for nearly the past 5 years, and raising funds in ways that protect the lowest income families without really hurting the more well-to-do – are worthy of support.  And, as the Governor pointed out, it all sort of hangs together.  We can’t get the spending unless we have the revenue.  And we won’t get private sector investment unless the public sector creates the conditions that facilitate it, despite Tea Party free-market fantasies.

Yes, government operations (like private sector activity) could be more efficient, and it is always appropriate to push for it.  But “reform before revenue” only works on the margins – what we’re dealing with here is core infrastructure and workforce development.  It’s time to make it happen.

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Thanks to Lizzi Weyant (T4Mass) and Maddie Ribble (MPHA) for their feedback on an earlier draft.

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