Even by Massachusetts’s standards, the way Beacon Hill manages the state budget is a disgrace. It has become a political plaything: one day it’s in surplus, the next in deficit. It’s time to end this foolishness. As soon as Deval Patrick is sworn in as governor, he should make it a priority to work with the legislature to enact “transparency reforms” as quickly as possible. If this is done the right way, it will end the Bozo-style fiscal management that is a Beacon Hill hallmark and will help the public understand the true condition of state finances.When Mitt Romney can boast a billion-dollar surplus one day and announce a $425 million deficit the next, you know it’s time for a change. Romney’s not the only offender. Throughout the recent gubernatorial campaign, candidates — including Patrick, who took a wait-and-see position — disagreed about whether, and when, the state could afford to roll back the income tax to five percent, as mandated by the voters in 2000. In November, politicians and pundits disagreed on whether Romney’s “emergency” freeze on funds was based on a real fiscal shortfall or not. Then, when Romney restored some of those funds, nobody could agree on whether he should have done so — or if he should have restored more.
Now, Patrick — who hasn’t taken a firm stand on either Romney’s emergency cuts or their partial restoration — is warning citizens and special-interest groups that he will likely have to limit spending. The Associated Press quoted Patrick saying that, after reviewing state-budget materials, “the revenues may not be as robust as we were told they would be.”
How is a taxpayer supposed to square that with reports that November and October tax revenues were significantly higher than expected?
To get those answers, we need to reform the way the state budget is explained and reported to the public. Two months ago, a group of experienced budget analysts and former public officials, calling themselves the Massachusetts Budget Transparency Project, released a report with 12 recommendations for making the budget more accessible and understandable to citizens. (And, we would add, to reporters.)
It calls for the government to publish, for example, the economic assumptions behind the revenue projections — a simple thing that could have cleared up a lot of the confusion about Romney’s emergency cuts last month.
For the current fiscal year, which began in July, the budget conservatively assumes that tax revenues will be 2.6 percent higher than last year’s. If accurate, that would leave the budget $550 million in deficit.
But that’s just a projection. The budget could be in balance, if tax revenues grow at a more robust 5.0%. So far, it’s been somewhere in between: higher than projected, but not enough to achieve balance.
On the other hand, lottery revenues and the state’s annual share of the tobacco settlement are coming in lower than projected. Variables like those would also be identified and explained under the Budget Transparency Project reforms. So would major risk factors, such as outstanding lawsuits, and federal revenues that could potentially be taken away. The state provides this information to its bond investors. Its citizens deserve at least as much.
