4th Plymouth District Serving the Towns of Marshfield and Scituate

Home Biography Meet with Rep. Hynes Happenings State House Reports Town of Scituate Town of Marshfield Contact

THE HYNES STATE HOUSE REPORT February 2002 DIRE REVENUE REALITIES:  The State's fiscal situation turned more bleak this week, as results of January tax revenue collections were announced.  Tax collections for the first month of the calendar year were down 20% making it the seventh consecutive month in which tax collections have fallen below the figure collected in the previous year. The consistent downturn in revenues also signaled the certitude of a recession, whose classical definition is two consecutive quarters (six months) of negative growth.  The rapid, precipitous freefall in state revenues has budget makers in a turmoil.TheGovernor's office remains optimistic, hoping that the expected economic turnaround will pump new cash into the state's treasury quickly.  House leaders are more pessimistic, noting that revenues this year are already 6% below the worst case predictions made just 3 months ago. They believe that the Governor's projected growth of 5% for the upcoming fiscal year is unsupportable but simply confirms that her figure reflects more a need to attain this higher revenue number in order to support her spending plan.  The independent watchdog agency, Massachusetts Taxpayers' Foundation, is supporting the House perspective stating that the Governor's budget faces a $2 billion deficit in FY 2003 and as much as a $500 million deficit in the current fiscal year. WHAT HAPPENED?  One of the more frequent questions is how could budget problems emerge so quickly and so deeply?  The answer is complex but rooted in two factors: the precipitous drop in revenues and cost inflation in certain fixed state programs.  The drop in revenues is a direct result of the collapse of the new economy, the settling in of a recessionary cycle, and the economic shock in the aftermath of the terrorists' attacks on September 11.  All the new wealth, which economists attribute to the high technology, dot.com expansion of the late 1990s (capital gains, stock options, bonuses, etc.), has completely evaporated, collapsing state revenue collections in every state in the nation.  The natural economic cycle entered a predictable recession a year ago after the longest economic expansion in the nation's history peaked.  Finally, the shock to America after September 11, sent waves of trepidation into an already weakened economy, particularly in tourism, business travel and retail industries where consumer paralysis caused deeper than expected downturns. FIXED COSTS:  At the program level, a reflection on just 4 state budget items signals the difficulties in managing escalating costs.  MEDICAID is the state federal health program for poor and disabled people.  It now numbers about 1 million enrollees, after health care expansion during the mid and late 90s added about 350,000 to the rolls.  It is the victim of national double digit healthcare inflation, rising at 12% last year.  This program is expected to cost nearly $6 Billion in the next fiscal year; about 75% of its costs for services are received by 36% of its beneficiaries elderly and disabled in hospitals and nursing homes.   LOCAL EDUCATION AID is direct state revenue sharing to local public school districts and now is at $3.2 billion, an increase of $2 billion in the last nine years.  It is the cornerstone of the education reform movement which establishes adequate educational funding in each school district and demands higher performance standards.  Local officials see continued increases in this program essential to maintaining the reform efforts, at a time when many districts are facing increasing costs for special education needs and capital improvements to school buildings.  DEBT SERVICE: The state's annual payment on its principal and interest for borrowing is $1.4 billion and reflects an aggressive rebuilding - reconstruction program of over $20 billion for buildings, roads and bridges during the last several years.  MENTAL RETARDATION:  The state pays nearly $1 billion annually to provide service, in residential and day program activities to 30,000 developmentally disabled adults and is under court agreement to add another 2400 recipients over the next five years at a cost of nearly $25 million annually - at a time when these folks are living longer with more complex health and social needs and the social workers attending to them are paid only modest wages. These four programs comprise about one half of state spending and are suggestive of the difficulty in reducing the budget by $2 billion without severe pain and deprivation to many vulnerable people.  Yet everything is on the table for reconsideration, both reductions in programs, elimination of some, and an examination of revenues.  In the end, the next few weeks and months will be a dialogue about our society and the role and function of each of us; our responsibility to ourselves and our families; our obligations to others.  I encourage and invite your participation in giving me counsel and advice. CLEAN ELECTIONS:  I remain a strong and firm supporter of this matter and am disappointed that the Legislature refuses to appropriate the money to implement it.  The law would allow public financing of campaigns and was passed overwhelmingly by voters in a 1998 referendum.  Most legislators, however, oppose the law believing it squanders taxpayers dollars on what traditionally has been and should remain a private contribution action, particularly at a time when there are scarce tax dollars to support essential state programs.  I reject this argument, however, on two points.  Firstly, I believe that special interests monies in politics have created the reality thats Q.cial interests gain access to powerful public leaders and that ordinary folks are not carefully attended to.  This perception, I believe, contributes to the lack of full participation by all voters in the electoral process.  Secondly, I believe that it is fundamental to our democracy that citizens have the right to direct their elected officials on matters concerning their own pocketbooks.  The voters have spoken and said they want to prioritize public financing of campaigns. STATE LOANS:  The Towns of Scituate and Marshfield will receive needed funding for sewer and wastewater construction projects.  This program created in 1989 with my support as a member of the Legislature's Joint Committee on Natural Resources provides interest free or low interest rate loans to municipalities for these badly needed wastewater improvement projects.  This program replaces the defunct federal grant program and results in the equivalent of a state grant of 25% and 50% over the borrowing period of the bonded project.  Last year the Town of Marshfield was approved by DEP to receive $8.8 million in loans to be used for its proposed sewer expansion program.  This year Scituate has qualified for over $10 million in low interest loans for a storm water management project and a Greenbush Area Collectors project.  The local Department of Public Works officials in Marshfield and Scituate deserve credit for their hard work and compelling written argumentation supporting these projects.  I was happy to play a small role in advocating for their financing. Today's Reflection:   "Democracy:  the people's government made for the people…. by  the people, and answerable to the people."  Daniel Webster Back to top of page