Senator Bob’s Blog

The nation’s unofficial economic policy over the past decade can be summed up in one word — debt.

The average American is more in debt than ever before, with a consumer lifestyle supported by, at least until recently, near unlimited access to credit. The federal government is in debt by more than $10 trillion, with foreign nations such as China and Japan holding more than 25 percent of the notes.

Here in Massachusetts, the situation is no different. The Commonwealth over the years has rung up more than $29 billion in outstanding debt on its credit card. To put that in perspective, every man, woman and child in this state would have to send a $4,529 check to Beacon Hill in order to pay off all that debt. Not only is that figure the highest in the nation, but it checks in at more than three times the national average, according to the state’s latest credit report from Moody’s Investors Services.

The fact that the state borrows money to pay for school building construction grants or to fix seawalls shouldn’t be much of a concern to the average taxpayer. Every state carries some debt, just like most businesses and homeowners. In fact, a demonstrated ability to accrue a responsible amount of debt and then pay it back on time is traditionally viewed as a positive characteristic.

The problems start when the government begins using its taxpayer-financed credit card like an irresponsible college student, making impulse purchases of the latest cultural fad (tax breaks for the biotech industry), using it to supplement their household budget (paying for the salaries of thousands of MassHighway employees) or other bad decisions (the MBTA spending billions to expand a transit system it already couldn’t afford to maintain and operate).

Again, some of this debt is needed. For instance, this past summer the Legislature approved $3 billion in borrowing that will allow the state to fix more than 100 dilapidated bridges over the next five years. But this past session, the Legislature also allowed the state to ring up another $1 billion in debt to pay for tax credits and construction grants for biotech companies. I was one of a handful of legislators to vote against this bill.

The state has tried this strategy in the past, allocating buckets full of money for the industry du jour in hopes of luring them to relocate and/or expand in Massachusetts. We did this with the high-tech, defense and financial service industries in the 1980s and 1990s. Fast-forward to 2008, and the Route 128 corridor is struggling, Raytheon is all but gone, and Fidelity keeps on shipping jobs to Rhode Island or Texas. Now we’ve borrowed more money and essentially given the governor the power to pick biotech winners and losers (although, as some joke, the final decisions may be as easy as whichever biotech firms throw the governor the biggest fundraiser).

Considering the state is facing at least a $1.5 billion budget deficit, this is not the time for $1 billion giveaways to corporate interests. And if we are going to adopt “corporate welfare” as an official state policy, we should do so in a way that benefits all sections of our economy, not just the flavor of the day.

Debt is also behind these outrageous toll hikes that the Mass. Turnpike Authority is considering. Back in 1997, the Legislature made the ill-informed decision to pay for the Big Dig project (which then stood around $8 billion) through tolls inside Route 128, rather than a statewide gas tax hike, which they knew could have killed the project from a public relations standpoint. I was the only Southeastern Massachusetts lawmaker to vote against this funding scheme.

Sen. Hedlund is interviewed on his thoughts about the current state of rock ‘n roll.

Says state housing guidelines should be toughened to meet federal guidelines that require immigration status check

BOSTON — A Nov. 10 Boston Globe editorial endorsed efforts by Sen. Robert Hedlund to allow public housing authorities to give preference to citizens and legal immigrants over illegal immigrants.

“On its face, it makes no sense to deny low-income citizens or eligible noncitizens access to housing in order to accommodate law-breakers,” according to the editorial. “Republican state Senator Robert Hedlund has filed bills, unsuccessfully, to bring state regulations in line with the federal procedures. That would be fair. If there are legal roadblocks, then the state attorney general’s office should provide an opinion on how to remove them.”

The state Senate has twice adopted language that would accomplish this during its budget discussions. Both times, however, it was not included as part of the final conference committee report.

Sen. Hedlund’s bill, S759, was placed into a legislative study by the Committee on Housing this past May.

It has received renewed attention since President-Elect Barack Obama’s aunt was discovered to be in this country illegally and living in a South Boston public housing complex.

 “Those who cannot learn from history are doomed to repeat it.”

-George Satayana

  We’ve seen elements of this situation before.  

Years of fiscal irresponsibility coupled with the ballooning cost of entitlement programs. A grim national economy brought on by housing speculation and bank failures. The state’s Democratic leadership fiddling while actual budget deficits grow by the month. Budgets that contain tens of millions worth of legislative earmarks despite known budget problems. Increased short-term borrowing just to pay bills and make local aid payments.

Is it 2008? Or 1988? We know how the state budget crisis that began in 1988 ended more than two years later: $1.5 billion in debt, a credit rating near junk-bond status, and hundreds of millions of dollars in new taxes.  

The question now, of course, is where will the state’s current budget troubles lead us?

We were about $1 billion in the red the second as soon as the budget was signed in July, according to the Massachusetts Taxpayers Foundation and other fiscal watchdog groups.  And we were told this past week that revenue collections are down by more than $250 million and that number could quickly rise depending on how fast our stumbling economy eats away at sales tax and capital gains tax revenues.  

All told, we easily could be looking at a $1.5 billion budget deficit this year.

The main lesson we learned back in 1988-1990 was that delaying action and staying the course just makes a budgetary problem worse.  

For example, back in 1989, despite plummeting revenue estimates, the lame-duck Dukakis Administration refused to make any real cuts or layoffs, and insisted everything was going to be fine. They increased spending by 10%, exceeded personnel budgets, and raised fees by more than $200 million. The following summer, we were treated to the spectacle of Michael Dukakis being held hostage in the State House by his lieutenant governor who threatened to enact a series of spending cuts once he left the country on a trade junket.

Fiscal year ‘89 ended with the state $1.5 billion in the red. The infighting on Beacon Hill over how to fix the problem led a vice-president with Standard & Poor at the time to say at the time: “In my 12 years in the business, this is the worst fiscal management I’ve ever seen.” 

Rather than enacting reforms, the Legislature eventually voted to “temporarily” raise the income tax first to 5.95% and then 6.25%. And as we know now, that temporary tax hike is still with us.

On the bright side, the resulting anger amongst voters helped bring change to the state in 1990 by voting out several sitting legislators.  

There are some differences this time around. For example, Treasurer Timothy Cahill has been a model of fiscal responsibility by publicly calling for immediate action. “The issue is clear,” he was quoted as saying recently. “You either cut now or you cut later. But I don’t see any way around cutting. I keep saying that, I’ve been saying it for six months.”

But mainly, the Patrick Administration has been somewhat forthright about the state’s fiscal situation, more so than the Dukakis Administration ever was. The budget cuts he announced last week at least demonstrates recognition of the problems we are facing. Time will tell, however, if he is sincere in his interest to abolish the Turnpike Authority and reform the state pension system, or if that is just a politically-motivated gesture intended to save the state’s income tax. 

I remain concerned, however, by the lack of action from House and Senate leadership. They are particularly responsible for irresponsibly bloated state budget that they allowed to be stuffed with pork and new spending, even over the objections of Gov. Patrick. And their response so far has consisted of cutting the Legislature’s $59 million budget by 10%, and continuing their wait-and-see attitude.

It was a wait-and-see attitude that got us into such a big mess in 1989, and it would be foolhardy to simply cross our fingers and hope things work out in 2009. 

It’s easy to be a legislator when times are good and we can pass $750 million spending bills that allow us to build gazebos and fund corporate sailing races. But we really earn our money as elected officials when times are bad. 

I have been telling my town officials for at least three years now that Beacon Hill has been playing a cruel game with them. While it’s nice to send back millions in earmarks for pet projects, all we have really done is blown through billion-dollar surpluses during the boom years that we should have saved to ensure we would never have to cut local aid during the lean years. 

We have seen how political inaction can destroy a state’s economy for years. It’s a lesson we as your state leaders need to learn from, otherwise we’ll just be repeating history.

While much of the media attention has been focused on high-profile issues such as casino gambling, bond bills, and personality conflicts within the building, we in the Senate in recent months have passed a number of bills that – in most cases – should start to address some of the multitude of issues we face as a Commonwealth. It is important to note that while all of these bills have passed the Senate, they still await action in the House.

Public Libraries Fund: This bill would establish a special trust fund to provide a 50 cent match for every $1 a local library raises through endowments, cash gifts, benefactors groups, and capital drives, with a $50,000 cap on the state match. I am a big supporter of our local libraries and believe this legislation would reward libraries that take the initiative and look for ways to supplement their income without asking for additional property tax dollars.  

Welfare Reform: Although this bill was touted as “welfare reform,” in my opinion it does little to return welfare to its roots as transitional assistance, and instead perpetuates a system of dependency that has led some to see welfare as a way of life. The Senate, however, did adopt two amendments that I co-sponsored; one would bar non-citizens from receiving welfare benefits, the second would require a detailed report on the number of recipients complying with their work activity requirement.

Employee Assisted Housing and Responsible Lending: Businesses that help employees find housing would qualify for $5 million in matching grant money from the state under this bill. The employee would have to make less than 120 percent of the region’s median income, and individual companies would have an annual cap of $100,000 in grant money. The bill also would set stricter rules for mortgage companies and crack-down on predatory lending tactics. It passed the Senate unanimously.

Booster Seats: This bill requires that children under the age of 8 or measuring less than 57 inches in height must be seated in a proper car seat while riding in a car. Current state law only applies to children under the age of 5 or weighing less than 40 pounds. It also mandates that children under the age of 12 must wear seatbelts while riding in cars. A group of doctors and police officers recently held an event here at the State House that demonstrated how some children may be in danger under the current set of guidelines.

 Housing in Weak Markets: This bill would allow the state to define a “weak” housing market based on a number of factors — including foreclosures, concentration of assisted rental units, median income levels, and building vacancies — and then waive requirements that would impede efforts to increase homeownership opportunities in those areas. While this may not affect any neighborhoods within my district, I do overall support efforts to revitalize our urban centers and increase homeownership.    

Prevention of Oil Spills in Buzzards Bay: This bill is in response to the 2003 oil spill in Buzzard’s Bay. The state’s first try at comprehensive legislation to prevent future spills was overturned by a federal court judge who ruled it conflicted with federal maritime law. This new version will subject tankers to treble damages should they fail to notify the state they are passing through the bay, and then spill oil. Although I am always conscious about the impact additional regulations on businesses will have on consumer pocketbooks, I feel this legislation is a fair attempt at protecting a valuable state resource.

Commission on Advanced Nursing: The state would establish a special commission on the use of nurse practitioners, nurse midwives, nurse anesthetists, and psychiatric clinical nurse specialists in our state health care system. In light of skyrocketing health care costs, I support this commission and am confident it will report back with some good recommendations and strategies on ways to improve services and patient care. 

Long-Term Care Insurance: Long-term care insurance is becoming increasing popular as our population lives longer and health care become more expensive. However, it is currently not subject to regulation by the state Division of Insurance. This bill would change that and provide a tax deduction of up to $5,000 for those who do purchase long-term care insurance. It also would make long-term care insurance available to state employees, but in a surprising twist, state employees would be responsible for 100 percent of the premium cost. 

Increased Burial Benefits for Indigent Veterans: This bill will increase the amount of money provided for the burial of indigent veterans from $2,000 to $5,000. It’s a shame that someone who voluntarily puts his or her life on the line for this country would pass away poor, but it is an unfortunate reality. The least we can do as a state is make sure that these honorable men and women are afforded a respectful burial.

Regional Greenhouse Gas Initiative: This bill codifies the state’s participation in this initiative. It also places a cap on the amount of carbon dioxide electric generating stations can produce annually. Money raised through auctioning off emission credits will be used to promote energy efficiency, and develop renewable energy sources. The Senate rejected an amendment I sponsored that would have given our cities and towns millions of dollars to help improve their energy efficiency. 

Safer Alternatives: This piece of legislation sets up a review and evaluation process to determine if some of the toxic chemicals in our everyday household products can be replaced by safer, financially viable alternatives. As I said earlier, I am very wary of imposing new regulations on manufacturers that will either drive them out of business or jack prices up on consumers, but I feel this bill strikes an appropriate balance between protecting manufacturers and the public. It is also worth pointing out that, partly thanks to pressure from myself and my Republican colleagues, this bill does not apply to lead found in ammunition.

Child Protection: Given the high-profile case of Rebecca Riley, I am all too aware of the need to revamp the Department of Social Services. While I’m doubtful that cosmetic changes such as changing the agency’s name to the Office of Children and Families will have any impact, the bill does strengthen mandatory reporting regulations, establishes a commission for grandparents raising their grandchildren, and creates the Office of the Child Advocate. I was disappointed, however, that Senate leadership refused to let me and my Republican colleagues propose amendments that would strengthen mandatory sentencing laws for sex offenders.

Two years ago, many of my colleagues appeared before their local municipal boards and spoke grimly of the state’s financial state. They urged their local officials to budget conservatively, to not expect the types of local aid increases they had seen prior to the most recent economic downturn. We just don’t have the money, they said.

 And then these same legislators went back to Beacon Hill and voted for every spending bill they could. The highlight came in June of 2006 when the Legislature passed a pair of bills contained a combined total of $742 million worth of new spending.    One of these bills was the so-called economic stimulus bill that featured money for projects like the infamous $100,000 Braintree gazebo and $200,000 for Victorian lighting in downtown Melrose. I was the only senator to vote against this bill, which even the Boston Globe referred to as “pork laden.” Unfortunately, this is all part of a cynical and unfair fair game many of my colleagues play at the expense of our local cities and towns. They go before their local boards promising to deliver local aid, and then spend like drunken sailors when back in the State House. And what’s the first thing they cut when times get tough? Local aid.   

I feel that one of my Republican colleagues in the Senate, Richard Tisei, of Wakefield, best summed up this often twisted relationship when he said: “When times are bad, the state always goes to the cities and towns and says we’re in a partnership and we need to cut local aid. When times are good, when new revenue is coming in, we conveniently forget we’re in a partnership. We haven’t been a very good partner with cities and towns.”

  Tisei, who serves as the Senate’s Minority Leader and has been in the Legislature since 1985, made that statement on the floor of the Senate during a discussion this week on a bill that would put into law the Commonwealth’s participation with the Regional Greenhouse Gas Initiative. For the record, I support this pact among the Northeast states, as I am extremely concerned about the impact we are having on the environment.  

One of the primary features of this piece of legislation is a cap on the amount of carbon dioxide – a leading type of greenhouse gas – that power generating stations can emit. Under this bill, power companies would have to bid on credits in order to emit carbon dioxide, with each credit equaling one ton of pollution. The amount of credits available would be capped at 26.7 million, or approximately the average amount of carbon dioxide emitted in recent years.

  This auctioning of credits, which is believed to be the first of its kind in the nation, is expected to raise more than $120 million, which would then be placed into a trust fund and used to pay for energy conservation and efficiency measures, as well as help support the emerging green power market. 

As I said earlier, I support this initiative not just for the positive impacts it would have on the environment, but also that it creates a new stream of revenue — revenue that could be partially returned to our cities and towns. I, as well as my four Senate Republican colleagues, offered an amendment during the debate that would have required that 25 percent of the newly created trust fund’s annual expenditures – or about $30 million – be returned to our communities to help pay for such things as installing new energy efficient lighting fixtures, or replacing old boilers and drafty windows.

  Naturally, it was defeated by a largely-partisan vote, as my colleagues once again showed they are all talk and little action when it comes to returning money to their districts. 

I don’t expect a much different outcome for a bill House Minority Leader Bradley Jones has filed. His legislation would return the $450 million that our municipalities were robbed of by the state earlier this decade. I consider it robbery because when the state Lottery was created in 1971, 100 percent of the profit was supposed to be returned to cities and towns as an additional form of local aid. Well, in 2003, rather than cut spending, the vast majority of the Legislature opted to “cap” Lottery aid payments, diverting hundreds of millions of dollars of local aid into state coffers, and away from the communities. The result was layoffs for teachers, firefighters and police officers.

  I provide all this background as we head into budget season here on Beacon Hill. Once again my colleagues are advising their town officials of the billion dollar-plus deficit being projected for the fiscal year starting in July, and urging them to budget conservatively. Except this time there is an additional level of truth behind it.  

Another issue debated on the floor during our Senate session last week was the deficit in the Lottery Aid account. As it turns out, state budget writers have been promising way more money in Lottery Aid for cities and towns than the Lottery could produce. As a result, the Lottery Aid account now stands about $250 million in the red – a figure that will likely be made up using the state’s $400 million surplus from the most recent fiscal year. But just in order to level-fund Lottery Aid accounts in fiscal ‘09, the state will likely have to kick in $100 million of its own money, making a significant increase highly unlikely.

  I will continue to be honest when I speak to my constituents and local boards and vote against wasteful spending here on Beacon Hill so that I will remain true to my promise: that local aid is a top budgetary priority of mine.