Rep. Hynes State House Report February 3, 2003 Economy: The national and Massachusetts economy are running on empty: widespread weakness prevails; manufacturing, construction, retail and trade, continued rising unemployment are prevalent. Massachusetts lost 130,000 jobs in the last eighteen months - 12,000 in December alone. Continued economic weakness is the forecast for the next six months with little expected growth. Most economists suggest that the looming war with Iraq has exacerbated uncertainty and has added to the business community's reluctance to invest in capital programs. Fiscal State: The Commonwealth's imbalance between spending and revenues continues. Reports suggest that January tax revenues are $100 million below estimate. Health care inflation continues in double digit increases and the cold, wintry, weather has collapsed the state's snow and ice budget. Economists see little job growth in the next six months and a continued collapse of capital gains taxes. Governor Romney pegs the Fiscal Year '03 budget imbalance at $650 Million in deficit with as much as a $3 Billion deficit in Fiscal Year '04. The Governor gets high marks for being straightforward and direct with all, by fully laying out the magnitude of this problem. He requested unprecedented, emergency powers to reduce the current year's $650 Million shortfall. The Legislature wisely voted to convey such authority during the current fiscal year, recognizing the need to act decisively and swiftly. Shortly thereafter, the Governor reduced spending yet failed to accomplish the goal of balancing this year's deficit. His action closes the gap only halfway and leaves the rest to legislative action and usage of remaining reserves. These are hard times which will result in harsh reductions across all sectors of government. The burden will fall on all; local government, health care, education, public safety will all experience reductions in service. Indeed every line item requires scrutiny; core essential services must be identified and separated from necessary, worthwhile programs. There will be harsh consequences but the bleak financial outlook requires that we work together to rebuild our government in this manner. The soured economy does not allow us to avoid these severe and difficult budget reductions. Casino Gambling: The prospect of bringing casinos to Massachusetts grows closer. A Special Commission recently reported findings without the predictions of dire consequences. Some see casinos as an engine of economic development, pumping new monies and jobs into hard pressed areas of the state. Others decry casinos as a highly regressive way for a state to collect new revenue, with attendant negative social consequences. I have no fundamental moral qualms about bringing casinos to Massachusetts but am intuitively uneasy about negative foreseen and unforeseen consequences. I am looking for some guidance and counseling from you and welcome your thoughts on this matter. Email or write me in care of the State House. Unemployment Insurance: The Legislature has passed a measure freezing Unemployment Insurance rates for businesses at last year's level. Although unemployment continues to rise the present Trust Fund surplus suggests an increase in rates may be avoided. Overall stability of the Unemployment Insurance system, however will remain an issue, particularly if the economy remains moribund. Community Preservation Act (CPA) and other measures: Legislative Committees and Working Groups are examining any and all measures which may provide relief to local communities who experience state aid reductions now and in the coming fiscal year. State mandates on local governments, police career incentive costs, school transportation requirements, early retirement incentives for municipal employees, school building assistance financing, and the Community Preservation Act are all among items being discussed. In the later case, some people had considered expanding the functions for which Community Preservation property tax dollars can be used. Presently, these monies are limited to open space acquisition, historic preservation, and housing initiatives. Some have speculated that during the next five years of fiscal retrenchment and limitation, expanding these functions to include consideration of schools, police, and fire makes some sense. I am persuaded, however, from the discussions I have had with local residents who fought hard for enactment of this law, that far from providing municipalities with greater fiscal flexibility it would engender cynicism and mistrust just at the very time when one of the most important needs is a mutuality of trust and candor between government and its citizens. Incidentally, this process is instructive for me as we deliberate many critical matters of controversy in the coming months. I encourage you to give me feedback in general and specific terms. Let me know what you think. I will listen and reflect and try to make an informed and conscientious judgement. Reflection: "Far and away, the best prize that life has to offer is the chance to work hard at work worth doing." Theodore Roosevelt Back to top of page |