Wednesday, July 9, 2003,
Frank Conte, Communications
Report Card Grades the Governor
Romney earns a B+ for his first budget. Needs improvement in limiting
the size of state government.
– Having fended off pressure to raise taxes in the face of a much-heralded
budget shortfall, Governor Romney is earning his grades. According to
a report card devised by the Beacon Hill Institute at Suffolk University,
Romney deserves a solid B+ overall for his performance.
what he was up against, he did a pretty good job,” says David
G. Tuerck, Executive Director of the Beacon Hill Institute and chairman
of the economics department at Suffolk University. “We like to
give out grades, and judging from our criteria, Governor Romney understands
the principles of good budgeting.”
graded Romney according to five principles of effective budgeting: neutrality,
equity, efficiency, responsibility and limiting government. These principles
and his grade on each follows:
Avoiding taxes and expenditures that distort private choices and
discourage economic activity.
Achieving fairness in taxes and expenditures; secure the social
Keeping the cost of government low; constraining unit costs.
Balancing the budget.
Achieving the proper balance between the needs of the public sector
and those of the private sector.
has met most of the expectations on which he campaigned last year. Despite
protests, the Governor’s budget is more than fair to the poor;
it increases spending on Medicaid by 10.5%. In meeting the test of responsibility,
the governor has also used his veto pen wisely making sure that spending
did not exceed revenues. With regard to efficiency, the governor set
out to close the FY 2004 budget gap with some success although he failed
to convince the legislature to accept his consolidation of the Massachusetts
Turnpike Authority and the Mass. Highway Department.
only in the area of achieving fiscal “balance,” that the
Governor gets a low grade. There are a number of reasons to believe
that voters want a state government that takes a smaller share of the
economic pie. Governor Romney comes up short, in part, because he has
bought into the idea of a “structural deficit” that makes
any shrinkage in government politically impossible.
The FY 2003 budget ended with a small surplus and the FY 2004 will be
balanced at $23 billion. But we have heard and will continue to hear
opinion leaders expressing worries about multi-billion-dollar structural
deficit, defined as the difference between the revenues available to
government and the revenues government needs to maintain services. Implicit
in the expression of these worries is the supposition that government
is powerless to reduce the unit cost of providing services and therefore
that the only remaining recourse is to raise taxes.
a consumer who walks into a grocery store with less money to spend,
government has a lot of control over what it pays for things,”
notes Tuerck. “If government has the capacity to get what it buys
at lower prices, then it doesn’t have to shrink the services it
delivers even if the amount of money it brings in temporarily levels
off or falls.”
report calls for bold steps in reducing unit costs: Reducing Education
Reform Act money would be one such step. Others would be repealing the
Pacheco anti-privatization law, eliminating costly police details and
the Quinn Bill as well as scrapping project labor agreements for school
construction. The MBTA is another budget item in need of reform.
can’t fault the governor for having a legislature that makes such
reforms a daunting challenge,” says Tuerck. “But we can
fault him for buying into the idea of a structural deficit that makes
it impossible for him to make any meaningful dent in the size of government.”
card can be found on BHI’s web site at
25-Jan-2007 11:43 AM