In The News: Public Finance

‘Unless municipal leaders are given the same powers as the state to design health plans outside of collective bargaining, surging health care costs will continue to push municipal employees off payrolls," Massachusetts Taxpayers Foundation president Michael Widmer wrote in a recent letter to lawmakers and candidates for office. Any candidate who fails to support such a reasonable change doesn't deserve election.

Massachusetts Taxpayers Foundation president Michael Widmer agrees. A high-profile skeptic about candidate Patrick's 2006 property-tax promise, Widmer notes that the state already faces a $2 billion budget gap next year and that when fully implemented, Baker's plans would cut state spending by up to $500 million.

Michael Widmer adds that, so far in the campaign, "political rhetoric ignores reality" in that all three candidates - Baker, Patrick and state Treasurer Tim Cahill, running as an independent - vow to cut taxes but don't say how they will close an impending $2 billion budget gap for 2012. "It's surreal. It's as if we were in the 1990s and were in a booming economy," he says.

Michael Widmer, president of the Massachusetts Taxpayers Foundation said based on other statistics like personal income - which he said declined 1.7 percent in fiscal 2009 and was forecast to edge up slightly in fiscal 2010 - "it would be a close call" as to whether lawmakers see a raise or a cut next year.

"The spending is only going to get worse, not better, in terms of the underfunding,'' said Michael Widmer, president of the Massachusetts Taxpayers Foundation. "The caseloads, the pressure's obviously only growing, not lessening.''

MASSACHUSETTS CITIES and towns need to get a firmer grip on their costs. Candidates for the Legislature can help by endorsing a slate of reforms proposed by the Massachusetts Taxpayers' Foundation: clear, simple ways to curb excesses in municipal pensions and health care, thereby saving enough money to withstand flat property-tax revenues and cuts in state aid.

Andrew Bagley, director of research for the Massachusetts Taxpayers Foundation, said state operating budgets across the board have suffered "huge losses" over the past two years. By the time an infrastructure project is completed, its operating budget could have been slashed, he said.

The nonpartisan Massachusetts Taxpayers Foundation opposes the sales-tax cut measure, citing "dramatic consequences" to the state budget.

The Massachusetts Municipal Association, which represents cities and towns, and the Massachusetts Taxpayers Foundation said they will try to put the issue to a popular vote if the Legislature fails to act next year, but it shouldn't come to that.

Michael Widmer, president of the Massachusetts Taxpayers Foundation, was skeptical of the monthly-holiday proposal when I first mentioned it to him. He said the Department of Revenue estimates that last weekend's spree will cost Massachusetts about $20 million in lost taxes and that if it were extended to once a month it could cost an already strapped state $250 million.