Governor Mitt Romney: Balancing the Massachusetts budget
Upon entering office, Romney faced a $3 billion deficit. Facing an immediate fiscal crisis, the Governor asked the state legislature for emergency powers to make "9C" cuts to the fiscal year 2003 budget. Refusing to raise taxes, Romney cut spending and restructured state government. An unexpected windfall in capital gains taxes reduced the deficit by $1.3 billion, and Romney raised an extra $500 million in revenue by increasing hundreds of fees (such as driver's license and marriage license fees) and by closing tax "loopholes." The state also cut spending by $1.6 billion, including $700 million in reductions in state aid to cities and towns. In response, cities and towns became more reliant on local revenue to pay for municipal services and schools.
Massachusetts finished 2004 with a $700 million surplus and 2005 with a $500 million surplus.
With the help of a reviving economy, Romney was able to balance the state budget and replenish the states' "rainy day fund" through government consolidation and reform. As a result of the fiscal turnaround, Romney has repeatedly pushed the state legislature to roll back the state income tax from 5.3% to 5.0% (Massachusetts has a flat income tax).
http://www.umass.edu/chronicle/archives/03/01-24/romney.htm
Romney given broader budget cutting power
by Daniel J. Fitzgibbons, Chronicle staff
Lawmakers voted last week to expand Gov. Mitt Romney's authority to make emergency cuts in the areas of local aid and higher education to close a $450 million to $600 million gap in the current state budget.
Romney administration officials said they would assess tax revenues before detailing any cutbacks in state spending. Updated revenue reports were expected to be released Wednesday. Romney's cuts will probably be announced early next month.
Under the measure, Romney can reduce funding for any state program, except for the 14 percent of the state budget which supports constitutional officers, the Legislature, inspector general, comptroller and the judicial branch and debt service.
The expanded fiscal authority, which extends through June 30, gives the governor the power to reduce the $5.5 billion set aside for local aid and the $950 million for public higher education, which includes the University, state college and community college systems.
The measure limits the local aids cuts to one-third of the projected shortfall, or about $200 million, in the worst-case scenario.
The Senate, which removed House language that called for equal percentage reductions to cities and towns and protecting "foundation" education funding for poor communities, easily passed the measure 29-8. The House then agreed to the changes after Romney promised to treat all communities equally.
Last week, a President's Office spokesman said the Board of Trustees will likely defer budget discussions scheduled for its Feb. 12 meeting until after the governor details his plans.
http://www.boston.com/news/local/articles/2005/04/16/romney_hits_patrick_on_tax_rollback/
Romney criticizes Patrick on taxes
Says Democratic rival is defying voters' will
By Frank Phillips, Globe Staff | April 16, 2005
Sounding as if he was girding for a reelection campaign, Governor Mitt Romney yesterday attacked Deval Patrick, the newest Democratic candidate in the field, for opposing the governor's efforts to roll back the state income tax rate when the state has a budget surplus.
For the second year in a row, Romney included the rollback in his budget proposal to the Legislature in January, and he said in an interview yesterday that Patrick is defying the will of the voters who approved the tax cut in a 2000 ballot question.
Patrick, who announced Thursday that he would seek the Democratic nomination, said in an interview that he would challenge Massachusetts citizens over whether they wanted to finance new initiatives, such as expanded healthcare or new education initiatives, with higher taxes or cuts in services. He did not call for a tax increase, but would not rule it out.
Romney mocked the Democrat's assertions that he would listen to citizens as to how to pay for new initiatives.
It doesn't seem he is challenging the citizens; it seems he is arguing with them," Romney said after reading Patrick's comments. The governor spoke by telephone from California, where he is to attend a dinner this weekend honoring his brother-in-law.
Romney pointed out that the state enjoyed a $700 million surplus last year and expects another healthy surplus in the current fiscal year, which ends June 30th. An income tax rollback would cost the state $225 million in the first year. In fiscal 2007, the state projects a $450 million loss from a 0.3 percent rollback.
Government will always spend what people give to it," Romney said. We're running surpluses, and it is time for us to live within the budget people have set."
In a statement released by his campaign, Patrick said he has never called for a tax increase and accused Romney of forcing tax increases on Massachusetts through the hikes in property taxes imposed by cities and towns deprived of state aid.
I haven't called for a tax increase," Patrick said in the written statement. The only candidate in this race who has raised taxes is Mitt Romney, giving us the 'Romney Property Tax' increase. He has to explain how a $700 million dollar structural deficit, which is ballooning the property tax burden on people throughout the Commonwealth, equals the surpluses that he touts."
Patrick also said Romney's use of fees to raise revenues to deal with the state's shortfalls two years ago is
fiscally irresponsible."
He's pushing the costs of services onto the backs of our children and their children, amassing a mountain of debt," Patrick said.
Patrick said that he would back a tax cut at some point, but oppose the income tax rollback at this time because, he said, the state cannot afford it.
Attorney General Thomas F. Reilly, who is expected to seek the Democratic nomination, has also opposed Romney's proposal for an income tax cut.
The governor said he was focused on Patrick's comments and not on Reilly, who has been on record for some time opposing the tax cut.
The income tax rollback has been a contentious issue between Republican governors and the Democrats for the last 15 years. The Legislature consistently rejected GOP calls to reduce the tax, saying that, despite surpluses, the state still faces a structural deficits caused by huge future obligations for Medicaid and other healthcare programs.
But in 2000, voters by a wide margin approved an initiative petition sponsored by governor Paul Cellucci to roll back the income tax from 5.95 percent to its previous rate of 5 percent in three phases by 2003.
The Democrat-controlled Legislature froze the rate at 5.3 percent as the economy slowed in 2002.
Romney also tweaked Patrick for suggesting that he would seek the public's opinion on the financing of new government programs.
Leadership is about setting a vision, setting out what you are going to do, and following through," Romney said. People who are leaders don't come in and run opinion polls to see how we should spend taxes."
Arguing with the citizens over their vote isn't the right course," he said.
Romney's attack on Patrick is an unusually aggressive move for the governor. Many strategists have speculated that he will not seek a second term, choosing instead to run for the 2008 GOP nomination for president.
Romney has said he plans to run for governor again, but aides have indicated that he will make a final decision by early fall.
Still, after a flurry of out-of-state appearances before Republican groups in key presidential primary states, Romney appears to have refocused on Massachusetts in recent weeks.
Dipping into his political account, the governor hit the radio airwaves with ads that call for more bipartisan cooperation on critical issues such as healthcare.
The ad blitz, which will cost $50,000 a week, marks a departure from Romney's strategy of using Democrats as targets in his out-of-state speaking engagements.
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