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02-26-2003

Page history last edited by PBworks 17 years, 4 months ago

February 26, 2003

ROMNEY UNVEILS $22.858 BILLION FISCAL YEAR 2004 SPENDING PLAN

Closes budget gap without new taxes, but with reforms, efficiencies, reductions

 

Saying Massachusetts is at a “crossroads” and must choose between yearly tax increases or reform, Governor Mitt Romney today unveiled a $22.858 billion spending plan for Fiscal Year 2004 that proposes the most sweeping changes to state government in a generation.

 

On a comparable basis, Romney’s budget represents a slight increase - one-half of one percent - over projected spending this year.

 

To save $50,000 in printing costs, the Governor’s budget will be available only on-line at www.mass.gov/eoaf . For the first time, new interactive features and search functions will allow the public to easily access the document, opening up state government to the taxpayers.

 

Romney’s spending blueprint replaces the traditional line item budgeting with 72 new master accounts. Currently, hundreds upon hundreds of micro accounts severely restrict the Executive Branch’s ability to manage state finances.

 

Romney said his budget proposal closes the $3 billion budget gap without raising taxes, saving more than $2 billion alone through reform and restructuring, closing tax loopholes and getting rid of waste, inefficiency and bloated bureaucracy.

 

Over the past several weeks, Romney has previewed major aspects of his budget by detailing plans to consolidate legal and press functions and to reform the courts, the parks system, transportation agencies and the confusing health and human service bureaucracy.

 

“Massachusetts is at a crossroads,” Romney said. “We can take the easy way out and keep raising taxes year after year to cover our growing structural budget gap. Or we can take responsibility, roll up our sleeves and get to work on the serious reforms our state needs to restore fiscal balance and economic prosperity over the long term.”

 

He added, “My administration has chosen the latter, and it has done so by submitting the most significant restructuring of state government in half a century.”

 

Romney’s plan calls for an overhaul of the Commonwealth’s public higher education system – the one major area of reorganization that has not been previously disclosed. The current hodge-podge of 29 public campuses has no rational basis and is based more on politics than sound planning.

 

Under the proposal, the existing college campuses will be consolidated into seven geographic regions – Berkshire, Pioneer Valley, Central, MetroWest, Boston, Northeast and Southeast – allowing schools to share resources, eliminating duplication of overhead and ensuring a system responsive to the distinct regions of the Commonwealth.

 

“By grouping our college campuses by region and providing for shared services between them, Massachusetts can save millions of dollars and provide a better education to our students,” Romney said.

 

Each campus will be overseen by an individual Board of Trustees, as is the case now. An all-volunteer Regional Council will help coordinate education policy in each region. The chair of each council will be a voting member of a new, expanded Board of Higher Education.

 

As part of the plan, six campuses in neighboring locations with low enrollments and high overhead will be consolidated into three larger, stronger institutions. The following schools will be merged: Berkshire Community College and the Massachusetts College of Liberal Arts; Greenfield and Holyoke Community Colleges; and Mount Wachusett Community College and Fitchburg State College.

 

Under Romney’s plan, campuses will retain 100 percent of their tuition and fees instead of sending the monies into the General Fund.

 

Schools will likely increase their tuition rates to a level competitive with public colleges in other New England and mid-Atlantic states. Currently, public college tuition in Massachusetts is below the average. To ensure tuition remains affordable to state residents, 46 percent of any tuition increase will be set aside as additional financial aid for Massachusetts residents in need.

 

The new regional approach to higher education will eliminate the President’s Office at the University of Massachusetts for a $14 million savings. The reorganization abolishes the need for this office, which allocates funds to the university campuses and conducts fundraising. Under the reorganization, both of these responsibilities will be handled elsewhere.

 

The UMass campuses in Lowell, Boston and Dartmouth will be led by their current chancellors and become part of the new regional system.

 

Three schools that cater to a unique niche – University of Massachusetts Medical School, Massachusetts College of Art and Massachusetts Maritime Academy – will each become private over the next four years. State officials will lease each of these three schools their property for $1 a year and continue to allocate state assistance to them over the next four years. Over the four-year period, each school will be permitted to raise their tuition and fees to market rate, as state assistance is reduced.

 

All three schools will continue to receive dedicated financial aid for Massachusetts’ residents in need.

 

The University of Massachusetts at Amherst will be spun off in a similar way to become a premier research university, but will not be privatized. It will always receive a base state appropriation. Currently, it does not receive enough funding to thrive.

 

But by making it independent and allowing the school to increase tuition in line with flagship public universities in neighboring states, UMass-Amherst will be able to more successfully recruit out-of-state students and compete for top research faculty and grants.

 

The entire education system – from kindergarten through college graduation – will be overseen by the newly created Executive Office of Education, led by Peter Nessen. Secretary Nessen will allocate all state appropriations to the schools based on a performance and enrollment formula.

 

The higher education plan represents $150 million in savings, according to Romney’s budget.

 

In addition to Romney’s focus on higher education, he also preserved the Commonwealth’s commitment to elementary and secondary schools by increasing direct education aid – known as Chapter 70 – from $3.26 billion to $3.33 billion, a boost of more than $70 million over last fiscal year.

 

The Chapter 70 distribution formula is updated with new school enrollment statistics, the first change in a decade.

 

“The total education of our children is the measure of a generation’s success or failure,” said Romney. “We need to make sure our education system takes our kids from kindergarten all the way to being qualified for a good paying job.”

 

Total local aid will decrease by $232 million, from $5.30 billion to $5.07 billion, a 5 percent reduction.

 

Romney noted that no community will lose more than 2 ¾ percent of their total municipal budget and that most will see budget increases year to year because of robust property tax growth.

 

The budget also introduces a new formula for distributing non-school aid to cities and towns, correcting previous inequities and allocating monies based on fairness to ensure all schools have the funds they need to educate students.

 

The category of local aid known as Additional Assistance is abolished. Because Additional Assistance is a remnant from an outdated 1980’s aid program, the amount that cities and towns receive are not tied to any current measure of need, but is based more on politics. A mitigation fund is created to help communities make this transition.

 

However, two new categories of local aid are established.

 

Romney introduces a new local aid account to give cities and towns an incentive to build more housing. Beginning in Fiscal Year 2005, the Administration will award $50 million in additional local aid to communities based on the number of building permits they issue in 2004.

 

A second new category of aid compensates municipalities that house state government facilities, which are not subject to local property taxes. Romney’s budget proposes $173 million in payments in lieu of taxes to cities and towns with state government property. Romney’s budget also calls for $75 million in so-called “blocking payments” from gaming facilities in neighboring states to keep expanded gambling out of Massachusetts. If unable to secure the appropriate payment, Romney said the Commonwealth will pursue the introduction of video lottery terminals, similar to those in Rhode Island, at existing gaming sites.

 

“During the difficult financial times we face in Massachusetts, we need to think of innovative ways how we can balance our state budget without raising taxes,” Romney said. “If gaming operators in other states aren’t willing to reward Massachusetts for staying out of their business, we will create new competition for them right here in the Bay State.”

 

Demonstrating his commitment to delivering the core missions of government, Romney noted that spending for health and human services grows by 4.6 percent.

 

This boost includes a 9 percent increase in Medicaid, from $5.97 billion to $6.5 billion. Romney also preserved benefits for veterans, welfare payments to the poor, childcare funding and the state’s investment in homeless shelters.


Tags: Taxes

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