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The year of governing cheaply
So much for essential services. In 2003, we entered the era of shrinking government.
BY DAVID S. BERNSTEIN

THE YEAR OF governing cheaply started with a budget-busting bang: on January 1, 2003, nearly 500,000 low-income and disabled Massachusetts residents lost their Medicaid coverage for items like eyeglasses, dentures, and artificial limbs. Coming full circle, the year ends with news that the state has cancelled a January 2004 open-enrollment period for the Prescription Advantage program, leaving many elderly and poor people to wait at least until April for help paying for their medication.

All year, Massachusetts felt the pinch of services sacrificed on the altar of fiscal discipline. It started in January, when the $60.7 million in cuts announced in December 2002 by outgoing governor Jane Swift took effect. Despite those measures, when Mitt Romney took office in January, deficit estimates for fiscal year ’03 had grown. The new governor soon dropped his campaign promise to cut funding without affecting core services. With tax hikes off the table, the question was which core services would even survive.

Romney went straight to work exercising his emergency cutting power. He even asked the legislature for — and received — additional emergency authority to cut local aid and higher education. The resulting $114 million cut in local aid, which towns across the Commonwealth had already included in their budgets, created a cascade of layoffs in police departments, fire departments, and libraries. Originally touted as temporary, the emergency cuts ("A hodgepodge of quickly crafted ideas," said the State House News Service) set a standard for a new, lower rate of operation for many services — a standard later used to allocate funding for these services in the FY ’04 budget that began on July 1.

Next year might — might — not be as bad. Stronger-than-expected tax revenues have put the state roughly $250 million over expectations in the first five months of the fiscal year. That may spare the need for mid-fiscal-year emergency cuts this time around. It also appears likely that more will be available for the inevitable June make-up funding bill, which annually pays for services rendered after various departments’ budgets have run dry. And if the fiscal picture continues to improve, the FY ’05 budget might start to bring back some of the eliminated line items.

But given that recent estimates suggested a $2 billion budget gap for ’05, the unexpectedly strong receipts will go only so far. Unless lawmakers bite the bullet and raise taxes, it’s unlikely that much will be different.

Below is an overview of where the cuts hit the hardest.

Medicaid

Medicaid took deep cuts all year long, starting with the emergency measures announced in January, when Romney nixed coverage for emergency-detox centers and second-stage detox treatment. That cut, effective in April, saved the state $11 million. It also dramatically reduced the number of people who can be helped at any given time (see "Sentencing Addicts to Death," News and Features, May 23). Boston’s central intake phone line, where addicts and their counselors call for detox-center referrals, used to turn away 30 people a month because no space was available. By September, that number had risen to 120, according to John Auerbach, executive director of the Boston Public Health Commission.

The early emergency cuts also eliminated funding for MassHealth Basic, the state’s Medicaid program for 36,000 chronically unemployed people. In August, MassHealth Essential dropped 10,000 legal immigrants from its rolls, an estimated budget savings of $13 million a year (see "Faces of Denial," News and Features, November 14). The supplemental budget passed in November would have allowed about 2500 of them — the elderly and disabled — back on, but Romney vetoed the measure (see "False Economies," This Just In, December 5).

Everywhere the 900,000-plus MassHealth members turned, they saw premiums rise, enrollments capped, and eligibility tightened. The state capped enrollment in the MassHealth programs Family Assistance (which aids qualified aliens earning less than $33,000 for a family of four) and CommonHealth (for disabled adults). CommonHealth premiums went up early in the year, adding an extra $5 to $15 a month for low-income members. In November, monthly premiums rose for those in the Children’s Medical Security Plan. Many who previously had no premiums now must pay $10.50 per child. Those who were paying $10.50 must now pay $45.32.

The FY ’04 budget tightened eligibility guidelines for the HIV Medicaid-waiver program, which allows HIV-infected people into the state’s public health-care system. The eligibility cap dropped from 200 percent of the federal poverty level to 133 percent — that is, an HIV-positive person making less than $18,000 a year used to be eligible; now eligibility is restricted to those making less than $12,000. People whose income falls between those two figures have been booted from the system.

Local aid

In case you haven’t noticed it yet — through shorter hours at your library, say, or the closing of the closest fire station — the state government has severely cut aid to municipalities.

A big chunk of the local-aid cuts came directly from school education — including the near zeroing-out of $50 million in school-transportation aid. In all, education aid to municipalities was cut by four percent in the FY ’04 budget. Add to that a 15 percent reduction in lottery distribution and additional assistance, plus a 21 percent cut in funding for veterans’ benefits. In all, state aid in the FY ’04 budget is down 6.78 percent from the previous year. (Another $23 million axed by Romney was overridden by the legislature.)

Many of the state’s regional schools are now operating with 20 percent less state money than they did a year ago. Those that have already cut staff and programming as far as they can are seeking more radical solutions: Gateway Regional School District in Huntington, for instance, has recently floated the possibility of going to a four-day school week.

Cities also got whacked by new assessments of fees and taxes they owe to the state. Lawrence, for example, didn’t lose much state aid in the ’04 budget, slipping from $141,930,061 to $138,303,284 — but its payments owed to the Commonwealth leapt from $1.7 million to $11 million on the state’s "cherry sheet," the annual tabulation of local aid. Springfield, Fitchburg, Fall River, Lowell, and other urban areas were similarly hit.

Of the 16 municipalities that rely on state aid for more than 50 percent of their total budgets, all but one will receive less in actual dollars from the state in FY ’04 than in FY ’02, after subtracting assessments. But no town got whacked like the state’s capital. Boston’s cherry-sheet bottom line is down 18 percent from a year ago.

In September, a group of the state’s mayors testified that budget cuts have left their police and fire departments so depleted, they would be unable to react effectively to a terrorist attack. Look at Lynn. After losing $2.4 million in the March emergency cuts, the North Shore city saw another $5 million cut at budget time. The 79 municipal workers laid off as a direct result included 36 firefighters.

Shrinking government

The January ’03 emergency cuts included $134 million from departments within the Executive Office of Health and Human Services, $21.6 million from the Department of Public Health (DPH) alone. "It’s been a devastation of the Department of Public Health," says Steve Collins, executive director of the Massachusetts Human Services Coalition. HIV/AIDS treatment and prevention, which lost $3 million, was one of 18 DPH line items reduced or eliminated.

Rape-crisis centers are closing down across the state. The DPH line item that funds rape-crisis centers, among other services (including breast-cancer screenings, maternal-health services, and a poison-control hotline), shrank from $11 million in FY ’03 to $2.8 million in ’04. (See "Rape Crisis," News and Features, May 30.)

The Department of Social Services has laid off counselors. The Department of Mental Health has lost funding for residential and day programs. Romney vetoed $4.8 million of the already reduced Department of Mental Retardation budget — and cut another $2.3 million by ordering the Fernald Development Center, in Waltham, shut down.

Many of these budget allocations fund outside service providers; cuts can, and in some cases have, forced providers to lay off staff or even to go out of business. That makes it harder to restart those services even if funding is later restored to the budget, as new employees or providers must be found and brought up to speed.

Of course, real people simply end up making do with less. Starting in September, the monthly welfare check to 16,000 of the state’s poorest dropped from $303 to $268, thanks to a $5 million cut made by the legislature to Emergency Aid to the Elderly, Disabled, and Children.

The state also slashed special-education funding. After promising that it would reimburse 75 percent of costs above $29,000 per student, the Department of Education announced — after the districts had set their budgets and started the school year — that it was dropping reimbursement to 28 percent.

Higher education has also taken huge cuts, including a 26 percent reduction in the UMass budget, while a $371 million bond package for University of Massachusetts construction projects was put on indefinite hold. A Board of Higher Education report issued this fall said that state and community colleges need another $1 billion in construction and expansion — much of it just to equip old buildings with handicapped-accessible features and high-tech wiring.

The cuts are everywhere. The Massachusetts Highway Department has undertaken massive layoffs. The state’s courts are operating with budgets reduced by as much as 20 percent. The Massachusetts Office of Travel and Tourism has laid off nearly half its staff.

Even the legislature itself bit the bullet. Facing a $2 million deficit in the Senate’s operating budget, Senate president Robert Travaglini cut staff budgets and laid off 23 Senate employees in September. Romney pitched in by eliminating 32 communications positions, including 21 press secretaries laid off on January 28. He also consolidated legal departments in the executive branch and eliminated positions there.

Fees instead of taxes

Romney promised no new taxes, and the legislature didn’t try to force the issue. New fees, on the other hand, are another matter. (Imagine the fee hikes if the income-tax-elimination initiative had passed a year ago!)

The FY ’04 budget contains huge increases in fees and fines, however you count them — amounting to $500 million, according to a National Conference of State Legislatures study, or $313 million, according to Romney’s people.

Many of those fee hikes apply to the courts, where they can often serve as barriers to people seeking justice. It’ll cost you $180 (up from $150) to file a civil complaint in Boston Municipal Court, Suffolk Superior Court, or Appellate District Court. Actions in the Supreme Judicial Court cost a tidy $300 (up from $250), plus another $270 (from $225) to file an appeal. Superior Court fees have also gone up.

An insidious new fee kicks in if your case drags on for more than a year — as many do. On each anniversary of the filing of the action, you’ll be charged $90 for a municipal case or $120 for a Superior Court case. Romney’s chief counsel, Daniel Winslow, says the new fee is meant to prod the notoriously slow civil courts into swifter action. That seems unlikely, however, since the fee rewards the courts for delays while punishing those seeking justice.

Legal paperwork of all kinds costs more now. Sheriff’s fees have been doubled for civil summonses, subpoenas, writs, attachments of real estate, property seizures, real-estate notices, deeds, bail bonds, and posting warrants. Changing your name used to be free; it now costs $100. Restraining orders, formerly $75, have risen to $90. If you’re placed on supervised probation, you’ll have to pay $85 a month to the state instead of the former $50.

Anything you do in land court now costs $240 instead of $200. Probate- and family-court fees have shot up: it now costs $200 to file for divorce (up from $140), and most other probate fees have gone from $70 to $150. Entering a notice of intent to marry used to cost four bucks. Now it’s $50. Firearm-permit and -license fees have increased. Court-ordered injunctions are up from $70 to $100.

A particularly cruel new fee charges $150 to file for bankruptcy.

Traditionally, groups could arrange to meet during the day in the Great Hall or Grand Staircase of the State House free of charge. No more. Charges now run from $1800 to $4650 for the privilege. You want to take the bar exam? Last year, $385, this year, $800. There’s also a new $25 fee for transferring your score to another jurisdiction.

Businesses have been hit, too. Licenses to sell or make alcoholic beverages have doubled (in the case of selling sacramental wine, tripled). An importer’s license shot up from $1000 to $5000. Storage and transportation permits have also increased dramatically.

FOR THE MOST part, the state legislature has cooperated with Romney’s budget cutting, but it has stood up to him and drawn the line on some specific measures.

That was particularly true with its response to Romney’s FY ’04 budget-line-item vetoes. Romney’s vetoes — more than 300 of them, totaling $201 million — included zeroing out funding for the Massachusetts Legal Assistance Corporation, Mental Health Legal Advisors Committee, and Correctional Legal Services. The House and Senate voted to put the money back in. Also saved from total or near elimination: smoking-prevention programs, kindergarten-expansion grants, recycling coordination, river-ways protection, zoo funding, nurse’s-aid scholarships, regional emergency medical services, compulsive-gambling treatment, suicide prevention, weights-and-measures enforcement, early-literacy grants, reading programs for the blind, and school breakfasts.

In all, the House and Senate replaced $155 million of what Romney had taken out of the budget. The judiciary pitched in, too; Judge Joseph Tauro nullified an emergency cut that would have reduced the reimbursement rate to nursing-home pharmacies. The legislature also passed a $111 million supplemental budget in November, which includes $3.7 million for the Department of Social Services, $3.1 million for the Department of Youth Services, $3.2 million for the Department of Mental Retardation, and $1.5 million for the Department of Public Health. Romney vetoed a little over $30 million of that supplemental budget, including $500,000 for family health services, $5.3 million for trial courts, $300,000 for arts, and close to $2 million to update voting technology; the legislature can consider overriding those vetoes in January.

Those override votes will lead directly into the process of drafting the FY ’05 budget. With House and Senate elections looming, Romney would love the legislature to propose a tax-rate increase to give Republicans an issue to run on. With that in mind, it seems likely the Commonwealth will go at least another year before taking up the idea of a tax increase.

Without a tax hike, however, even the improving economy won’t erase all of a projected $2 billion FY ’05 budget shortfall. That means at best holding the line on current funding levels, if not more cutting. In addition, many of the cuts made this year will actually create more costs for the state in subsequent years. People ejected from Medicaid get indigent emergency care that the state pays for. People who can’t get into rehab often end up in prison at a high cost to the state. And so on. This year’s budget cuts may actually make it harder, not easier, for the state to balance its books in the long run.

David S. Bernstein can be reached at dbernstein[a]phx.com


Issue Date: December 26, 2003 - January 1, 2004
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