Hill Disappointed in Handling of Recession

House Minority Whip Brad Hill recently released this statement in response to the disappointing manner in which the Majority Party in the Commonwealth has handled the current recession.

I am writing to bring to attention to the citizens of the Commonwealth the irresponsible manner in which its state government is responding to this recession. As you may know the Commonwealth’s budget is currently over $2 billion short of revenues that were expected as early as last July 1st. It was said by many financial analysts and think-tanks that the budget passed for fiscal year ’09 was unsustainable. Despite those warnings, the Majority Party’s leadership went ahead and passed a budget that ultimately was out of balance to the tune of $2.4 billion.

It was clear within three months of the budget being signed into law that the Governor needed to take further action to bring the bloated budget into balance as mandated by the Constitution. Therefore, Governor Deval Patrick had to make mid-year cuts totaling $624 million. In addition, amongst other monies found in minor accounts, the Governor had to take $200 million from the state’s stabilization fund, further jeopardizing our bond rating.

Three months later it was clear that the economic storm experienced throughout the country was going to continue to ravage our state budget. Toward that end some other proposals to close an additional $1.1 billion shortfall were proposed by the Governor. These ideas should be troubling to those many citizens who are finding it impossible to make ends meet. Instead of additional cuts to state government, the Governor has instead suggested that we fill the financial gap with increased taxation, increased fees, cuts to local aid, additional raiding of the stabilization fund and taking monies from the anticipated federal stimulus package. At no point was there consideration to cut government spending.

Let me explain in detail some of the proposals that have been sent to the Legislature by the Governor. First, the Governor has cut both the Lottery and additional assistance accounts which go to our cities and towns by a total of $128 million for this current year. Furthermore, the Governor will cut Local Aid by a total of $375 million for next fiscal year, in essence crippling many cities and towns across the Commonwealth who have seen similar drops in their own revenues. Local Aid is the primary area where most people see their tax money come back to them in services they actually use, and should only be cut as a last resort. While these cuts add to the Commonwealth’s bottom line, it won’t add to taxpayers’ bottom line. We will end up paying for the shortfall at the local level and experience devastating cuts in the services we all utilize in our daily lives.

Second, the Governor proposes a host of additional taxes and fees that he hopes will cover a structural deficit that has been created by government spending at an unsustainable rate.

For example, he proposes a sales tax on candy, soda and alcohol for which he hopes will generate $25 million for the current fiscal year and as much as $150 million for next fiscal year. Especially for those of us who represent communities within close proximity to other states, all we will see is decreased tax revenues and small businesses closing. We have already seen this year that tax increases for retail products have been insufficient in covering the budget deficit. With so many companies and retail operations struggling, raising retail taxes to cover any shortfalls is the last thing we should be thinking about. The only ones making out are the businesses in surrounding states.

In addition to these proposed taxes, the Governor wants to increase Registry of Motor Vehicle fees. If past history is any indication, these increased taxes and fees won’t go away in better times. State government will get used to it and find ways to spend it.

As we all know, many individuals are struggling due to high costs, unemployment, reduced incomes and decimated values in investment savings. This is no time to nickel-and-dime our citizens. Rather, these economic times call for across-the-board reform and waste cutting as the first course of action in balancing the budget.

As you may have heard in recent news media reports, our pension system is in dire need of reform. State employees take pensions for their three-highest earning years rather than their total average salary. Outrageously, they only have to put in one working day to qualify as a year of service! This system needs to be reformed now.

Can you imagine that we have two separate highway agencies within our border? We need to initiate transportation reform and merge the two systems in a way that stops the duplication of costs and services.

I continue to have a problem spending over $3 million to pay public employees to go out and volunteer at non-profit entities. Yet we do. Don’t get me wrong, I deeply believe in the charity of volunteer work, but for most people outside the state bureaucracy, volunteering doesn’t come with a paycheck. Why the dictionary definition of volunteering doesn’t apply to state employees is beyond me, and a sign that your state government is not serious about tightening its belt.

We knew that lean times were coming, yet that didn’t stop Governor Patrick from increasing the State’s workforce by over 2000 people, with additional hires being proposed in his FY ’10 budget. This is just the beginning of a list of governmental growth that we cannot simply sustain.

Let me be clear. We cannot tax and spend ourselves out of a recession. Government will just continue to exacerbate the problem. State government needs to realize that when it uses the term “revenues”, it is your earnings they are talking about, not theirs. State revenues are money coming out of your pocket, out of your hard work. When there is a decrease in expected revenues, it means people are having trouble paying their bills.

The budget shortfall is due to two reasons 1) taxpayers are hurting and 2) state government is bloated. So it is astounding that instead of using this economic crisis as an opportunity to reform government, the Majority Party will continue to feed state government’s appetite for growth while simultaneously increasing the burden on taxpayers’ shoulders. They will try to sell this irrational behavior as “sharing the pain” (and keep in mind that many of these politicians accepted pay raises). This arrogance of governmental power should be unacceptable to all the taxpayers of Massachusetts.