revenue policies

New Reforms Will Make Government More Transparent and Accountable

By Guest Writer, Deirdre Cummings,
Legislative Director, MASSPIRG

Transparency advocates praised last night’s vote by the Massachusetts Senate approving two reforms which will set a new standard for government transparency and accountability.

With unanimous votes during its budget debate, the Senate created a searchable new state budget website, making transparent much of state spending and revenue sources for all state agencies, including quasi publics. The website will allow the public, including local officials, businesses, lawmakers, citizens, and others to see where the state is investing our tax dollars.

It's time to take a long, hard look at what we value in our state - and how we want to support it. Last week, we discussed some potential revenue options.

Do you have ideas on how we should build a sound fiscal foundation for Massachusetts?

The ONE Massachusetts Leadership Team is meeting on April 2nd, and we're interested in using your suggestions to build our agenda for the upcoming budget season.

ONE Massachusetts network members are encouraging their legislative delegations to build new revenue options in next year's budget. Are you ready to encourage your legislators to take a close look at how they will support our communities - and avoid drastic cuts - with revenue options?

Here are a couple of sample talking points that could get you started...

As we look at the status of the Massachusetts budget, it is easy to forget that we are not alone in making some very important decisions about our state and our communities.

Not only can we learn from the consequences of our own state's historic budget and revenue decisions, we can learn from other states working through the same issues!

Sunday's Minneapolis-St. Paul Star Tribune Op-Ed, "The case for paying higher taxes, happily," laid out a scenario that was all too familiar - a state facing a structural deficit, another round of budget cuts, and advocates calling for even more tax cuts for big businesses. The authors, though push back, calling for a more balanced look at the effect of tax cuts:

What's good for General Mills usually is good for Minnesota. And despite the state's gigantic revenue shortage, some proposals at the Capitol to give further tax cuts and credits to businesses deserve a serious look.

But the assumption that more tax cuts are the only way to strengthen the state's economy is just plain wrong. It misses the truth on the flip side: What's good for the public also is vital for business in the long run.

The letter lays out a list of the ways those tax dollars would get spent that benefit large and small businesses as they do individuals throughout the state:

• ...Courts and the rule of law are essential not just for public safety but also for conflict resolution and contract enforcement for businesses.
• Delays and deteriorating roads -- due to the state's fast-growing congestion and crumbling transportation infrastructure -- build higher costs into the prices of products produced or sold here.
• Our public schools are being forced, in effect, to loan money to state government. Students at Minnesota's two-year colleges pay the third-highest tuition and fees of all 50 states. And Minnesota faces a growing achievement gap between white and nonwhite, and between affluent and poor households. These trends represent an erosion of Minnesota's educational advantage, the bedrock of our economic success.
  

As we move into the season where state legislators will decide on what gets funded in the state budget and what gets cut, we wanted to share various organizing materials for your use.

The most important single thing you can do during the next 5 months when the budget decisions are made is to organize a local meeting with your state representatives and state senators. Here you can tell them why these programs are important to you, why their funding must not be cut and cuts made should be restored, and the tax and revenue options that could enable this.

Each of your legislators will be meeting 1:1 with the powerful House and Senate Ways and Means Chairman during the next two months to tell them what their budget priorities are.

So when you meet with your legislators, you have a specific "ask" or proposal for them, namely, will they make funding the specific programs and at what funding level you care about be one of the budget priorities they make in their meetings with the Ways and Means Chairman.

You decide, based on your priorities which specific programs you want to bring up at these meetings. For example, as a youth violence prevention and teen jobs advocate, I will be bringing up programs like Shannon, DPH Youth Violence Prevention Program, Teen Jobs--YouthWorks and School to Career, ASOST, and/or Mentoring.

Remember that potential allies may be wary of promising support for our priorities while our state operates under a $3 billion deficit. They are forced to build budget priorities in an environment in which many worthy programs are competing against each other to be spared.

If we come to the table with suggestions on how to face our ongoing budget issues, options like reforming our current tax breaks, utilizing our Rainy Day Fund, and raising new, progressive taxes, then our credibility in asking for programmatic funding, or rolled back budget cuts is vastly improved. 

We wanted to share these documents for your use from a statewide training we did at the beginning of February:

1. Understanding the State Budget: how we got a deficit, what combination of cuts, savings, taxes was made last year, and what could happen this year.
2. Organizing meetings with legislators: A guide to setting meetings with your legislators, talking to them about your budget priorities, and what you can say on revenue if they say, "there's no money".
   

The Governor's budget for Fiscal Year 2011, which starts on July 1, 2010, along with some severe cuts, is proposing some modest new revenue streams that will help us address our structural deficit.

The Governor's budget proposal (House 2) continues budget cuts from the prior two years and recommends further cuts in several areas. It also generates revenue by reducing three business tax breaks and by extending sales taxes to cover soda, candy, cigars and smokeless tobacco. In addition it relies on continued significant federal assistance and on other temporary revenues including a modest withdrawal from the state stabilization fund.

A Preliminary Analysis from the Massachusetts Budget and Policy Center describes some of the major cuts and other initiatives used to balance the budget

As one of the long time community activists organizing to strengthen our neighborhoods and our communities through the Coalition of Social Justice and the Coalition against Poverty in the various South Coast cities and towns, I can tell you first hand how low and moderate income people have been carrying more than their fair share of the pain imposed by past budget cuts.

As members of ONE Massachusetts, we've been learning a lot about the various tax credits offered to corporations, especially the Film Tax Credit. We've studied reports from DOR and Mass INC, and are not convinced that we get a good return on the dollars we invest by paying 25% of the enormous salaries, the likes of Tom Cruise.

The Governor has taken an important step by imposing a temporary cap on the film credit although it still allows $50 million dollars in credits for FY11 and FY12. We'll be supporting this proposal, and may even be suggesting more!!!

We would all love to fully-fund each and every great public and nonprofit program that folks in our state work so hard on, and that make our state a better place to live. Unfortunately, each budget season, we find ourselves competing for a limited pool of funding for the good of our programs.

Lew Finfer, ONE Massachusetts Leadership Team member and Director of the Massachusetts Community Action Network, goes a step further. He integrates support for additional revenues into each of his budget requests.

Here is an example of a request Lew recently made to his network of advocates working on youth violence prevention and teen jobs programs:

The things that make Massachusetts a great place to live – including the public structures that many of you are fighting to support – are things that we are not able to do as individuals. In order to build safe, healthy communities, we must all work together to support our state.

Due to decades of deliberate tax and budget decisions, along with the national economic downturn, our state currently faces a $2-3 billion budget deficit. Because states are not legally allowed to run deficits, our state leadership must balance the budget using more cuts, tax increases, or a combination of the two options.

Last year, we saw big budget cuts across the board, but many cuts were reduced or avoided because they also raised the sales tax from 5% to 6.25%, bringing in over $700 million each year in new tax revenue.

The next time you set a meeting with your legislators, it is likely that they will ask you how they can justify voting for an increase for teen jobs and youth violence prevetnion programs (or even spare those items from cuts) in the face of a $2-3 billion deficit. They may even ask you what programs should be cut instead of the one for which you are advocating.