budget deficit

Here's another budget article! [Itemlive.com]

We've just begun the calendar year 2012 and yet our state government is already gearing up for the fiscal year 2013 budget debate.  This still isn't a growth budget in the sense that programs and services cut over the past 4-5 years will not be restored and that more cuts should be expected.  Austerity wasn't a good economic and fiscal plan for growing the economy in Europe.  Why do our political leaders think the same failed economic and fiscal policies will succeed in MA?  That's a head-scratcher, for sure.

... Secretary of Administration and Finance Jay Gonzalez warns that more spending cuts will be needed to balance the [FY2013] budget.  “At the end of the day there are going to be lots of areas that are going to have to live with level funding or reduced funding or eliminated funding.”

“Most of the people coming in to meet with me are coming in saying, ‘Hey, the economy is coming back, the tax revenues are coming back, so can you put my money back,’” Gonzalez said. “What I tell all those people are that those expectations are out of whack with reality.”

The MBTA plans to cut services and raise fares.  Does that seem backwards to you?  Usually consumers are willing to pay a higher price if we get more, not less.  Unfortunately the current situation is that our public transportation system doesn't have adequate resources to run as usual...the operating budget is strained.  We also have heard about the capital and maintenance budgets with a backlog for repairs and replacements.

This is not a good situation for riders dependant on lower costing fares, and more frequent service.  We don't want more vehicles on the road; we can't afford more vehicles on the road. Our road systems can't keep up with the current flow of traffic and the environment will surely suffer.  Besides, there's no place to park!

So, here's a couple of things you can do:

• Participate in MBTA meetings.  Follow this link to learn about the proposed changes and the meeting schedule.   [MBTA Fare Change and Service Guide]
• Learn more about the other issues in your community that are important to you.  We need revenues to maintain healthy communities, healthy people, good schools...(you insert what's important to your community)  Check out the Campaign for Our Communities. and then join the campaign!

Remember, the government is us!

Its time for a paradigm shift in the economic, fiscal and tax policies of our country.  We can't cut our way out of the Recession...austerity didn't work for the English the first time and it's not working for them now nor with the countries in fiscal crises in the Euro Zone.  Will the Administration and our legislators have the courage and political will to face down the corporations and the wealthy to help the low income and middle class survive and thrive, to the benefit of the entire country?  Let's hope so.  Let's continue with our advocacy efforts to make this a reality.

As stated in The New York Times editorial, The challenge for Mr. Obama is to translate the plight of the middle class into an agenda for broad prosperity. Congress’s inability to cleanly extend even emergency measures though 2012 — including the temporary payroll tax cut and federal unemployment benefits — underscores the difficulty. The alternative is continued decline.

More jobs. Fewer foreclosures. Less financial risk. Progressive taxation. Those policies will give the middle class a fighting chance. But the list is not exhaustive. The pillars of a healthy middle class also include public education, Social Security, unions, child care, affirmative action and, not least, campaign finance reform, since inequality is reinforced by the political power of the wealthy.

The economic prognosticators were out in force at a hearing on Beacon Hill, predicting how high/low fiscal year 2013 revenues might be.  Predictions ranged from $21.7 billion, an increase of 3.2 percent (Amy Pitter, commissioner of the state Department of Revenue), to $22.28 billion, an increase of 4.1 percent ( David G. Tuerck, executive director of the Beacon Hill Institute at Suffolk University in Boston), with other predictions in between.  These predictions still leave the Commonwealth with a budget shortfall. [Full Article: Mass live.com]

Sen. Stephen M. Brewer, a Barre Democrat and chairman of the Senate Ways and Means Committee, said that tax revenue growth for fiscal 2013 is unlikely to be enough to compensate for cuts in federal grants and reimbursements or growth in items such as the state's $10.4 billion Medicaid program. Brewer said it will be difficult to avoid some spending cuts in the state budget for the next fiscal year.

"It appears like it's going to be a very sobering year," Brewer said after the hearing. "There may be in excess of $1 billion (gap) between expected revenues and needs. The revenues are growing but not to the needs of the line items. We have a lot of tough choices to make."

Jay Gonzalez, state secretary for administration and finance, said he could not make any commitments to any spending levels in the budget including state aid to communities. He said nothing is sacrosanct at this point...."Everything is on the table again this year," Gonzalez said after the hearing. "It's another challenging year."

Cities and towns are now beginning their FY 2013 budget planning and estimation processes.  There's no more federal stimulus dollars, and the economy hasn't bounced back as everyone hoped it would.  The state hasn't been able to provide much financial relief...it has reduced local aid and other program funding for the past handful of years.  When will the Administration and leaders in the State House come to fully understand that we need new revenues to invest in our communities for the health, education and safety of all our people?

One concerning trend is the decreasing level of revenue from economic growth, such as permit fees, commercial tax growth and excise taxes. The amount of that revenue has gone down two years in a row.

"Those are reflections of economic activity," Walters Young said. "When economic activity slows, the amount of money the government collects goes down. [Full Article: Wicked Local Natick]

Paul Krugman writes - class warfare, says who?  We benefit from participating in this society in which the government is at its center; the wealthy could not have garnered its wealth without being part of this society.  They clearly have benefited greater than the lower and middle class folks.

... big cuts in top income tax rates,...there has been a major shift of taxation away from wealth and toward work: tax rates on corporate profits, capital gains and dividends have all fallen, while the payroll tax — the main tax paid by most workers — has gone up.   According to new estimates by the nonpartisan Tax Policy Center, one-fourth of those with incomes of more than $1 million a year pay income and payroll tax of 12.6 percent of their income or less, putting their tax burden below that of many in the middle class.  [Full OpEd: The New York Times]

Civic engagement is definitely needed to get Congress back on track.  As Abraham Lincoln said...It's government of the people, by the people, and for the people... Therefore, it is not for some small group of ideologues to govern and control the purse strings...

A political battle ... is threatening to slow money to the government’s main disaster aid account, which is so low that new rebuilding projects have been put on hold to help victims of Hurricane Irene and future disasters.  [Full Article:  The Boston Globe]

Budget and deficit reduction decisions in Washington, DC have substantive (and potentially harmful) consequences for local cities and towns, not only in the current year but for decades.  It now seems that some in Congress now want to play "chicken" with the transportation department as part of the deficit reduction debate.  We need to stay informed and engaged with this issue...

Federal transportation policy shapes, in a profound way, the way Americans connect to their communities and to the economy. When the feds get it right, cities flourish. And when they get it wrong, the consequences can last for decades.   [Full Op-Ed: The Boston Globe]

In the past three years, Lawrence lost $12 - $15 million in local aid.  The lack of these funds have severe reprecussions. Lawrence lost one-third of their police ranks due to these budget cuts and layoffs , so consequently when emergency services recently were faced with a large and unruly crowd, they were forced to call in reinforcements from the state and another town to assist in handling the situation. Clearly Lawrence residents have been adversely affected by State and Municipal budget cuts.  It seems they don't have what we all strive for - a safe community to live and work. We all need to work to change this...all communities in MA should be safe to live and work, supporting healthy families, and with the opportunity for providing quality education for all our children.

"I feel pretty positive we will be able to restore some of those cuts," [State Rep. David] Torrisi said. "It's not consolation to the people suffering right now, but we're trying our best to deliver the resources."  [Full Article: Eagle-Tribune]

Warren Buffet raised the profile of the discussion of taxing higher incomes ($1 million and above) at higher rates.  He also focused the discussion on the type of income and the tax rates - wages versus investment income where investment income (including hedge fund managers income) currently carries a lower tax rate. 

So, what do some of  the wealthy in Mass. think about Mr. Buffet's revenue/tax/budget proposals?

“It serves to set an example that some people who can well afford to pay more are paying more,’’ said Cummings, a local developer and founder of the Cummings Foundation, one of the largest philanthropic organizations in Massachusetts...Jack Manning, chief executive of the real estate finance company Boston Capital Corp.,  "If more tax revenue is needed to tame the deficit, he said, it should come only from those with deep resources."...Others are less enthusiastic or put caveats on their comments.  [Full Article:  The Boston Globe]