WHAT IS Governor Deval Patrick thinking?
When it comes to state budget matters, he's sending taxpayers a mixed message that simply doesn't add up.
He's backing a sales tax holiday, which will cost the state at least $15 million in revenue. At the same time, he's telling taxpayers dark fiscal days loom ahead. He recently acknowledged the possibility of a $1 billion gap between revenue and expenses in the upcoming fiscal year.
To deal with a possible deficit, Patrick wants even more power to make budget cuts than his predecessor, Mitt Romney, sought when he was governor. He expects taxpayers to bail out the badly mismanaged Massachusetts Turnpike Authority. He wants health providers and insurers to kick in $130 million more to subsidize the state's healthcare reform law, which they are so far declining to do.
Meanwhile, the governor also rolled out a new education reform proposal that could cost at least $1 billion to fund.
A sales tax holiday is one of those feel-good, short-sighted gimmicks beloved by large retailers, average citizens, and the politicians who want to please them. This year, it passed overwhelmingly in the House of Representatives by a vote of 139-15 and in the Senate by 31-6.
The rationale for granting it is that state tax revenue for the fiscal year that ended on June 30 exceeded projections by $500 million. But that money has already been spent, and then some, according to Michael J. Widmer, who heads the Massachusetts Taxpayers Foundation. Even so, Patrick, House Speaker Salvatore DiMasi, and Senate President Therese Murray opted to support the sales tax holiday. DiMasi initially opposed it, but changed his mind.
State Representative Ruth Balser of Newton, one of a handful of legislators who voted against it, said she did so because, "The state desperately needs revenue. Our cities and towns need revenue. I would rather have some of that money in my own city. We are closing branch libraries and laying off employees. It could be used for any number of worthy projects for the state."
As for the sweeping support it garnered, Balser commented: "What can I say? Giving tax breaks is an easier sell than doing what it takes to get the revenue."
Widmer, of the Taxpayers Foundation, calls the sales tax holiday "a bad idea" and "an illusion of action" with significant fiscal consequences. "We sacrifice $15 million in lost sales tax revenue . . . it is pure lost revenue for no economic gain," he said.
Getting behind a sales tax holiday makes it harder to convince people later on that a serious fiscal crisis exists. It feeds into the already cynical attitude about government spending. If the state can afford to forgo that much revenue now, how can it say it doesn't have enough money later?
In his July 13 budget message to legislators, Patrick said, "We should prepare now for trouble ahead." Projected revenue drops could cause state revenues to drop below budget estimates, he wrote, threatening state programs, particularly "safety net services which play a fundamental role in protecting the well-being of the people in difficult economic times."
In the face of Patrick's own warnings, legislators this week are expected to take up a variety of spending bills, including a $3 billion capital facility bond bill and a $1.6 billion environmental bond bill. A $3 billion bridge repair bill is also pending, along with the $2.3 billion turnpike bailout, which Widmer called "the most fiscally risky proposal being given consideration by the Legislature during my 16 years as head of the Taxpayers Foundation."
All this is happening under a governor who won election on the pledge that he would provide substantive property tax relief. So far, promised tax relief comes in the form of a cheap gimmick, the sales tax holiday.
Said Widmer: "I don't know what the thinking is. The governor is sending confusing and inconsistent messages."
What's Patrick really thinking?
Maybe that his friend Barack Obama is going to be president, that he will be going with him to Washington, and that the Massachusetts budget mess will be someone else's problem.
Joan Vennochi can be reached at vennochi@globe.com.
