BHI State of the Household Survey Winter 2002 Readers see state economy improving

from NewsLink, Vol. 6, No. 2, Winter 2002 Although the state faces a recession, BHI NewsLink readers believe that the Massachusetts economy may be on the road to recovery. According to BHI's State of the Household Survey 2002, 43% of respondents expect to see the state's economy improve over the next year — signaling a turnaround in confidence from last year's survey. Only 29% believe the state's economy will worsen over the next year while 24% said it would neither improve nor worsen. Last year's survey results, collected before the official start of the current recession, found that more than 57% believed that the Massachusetts economy would worsen in 2001, while only 14% thought it would improve. Layoffs and budget woes that began last year appear to confirm this expectation. However, the growing confidence of respondents mirrors conventional sentiment about improvement in the economy later this year. Since 1999, BHI NewsLink has surveyed its readers for their opinions on a variety of economic and public policy issues. The BHI Household Survey is part of our ongoing State of the Household Project, which seeks to assess the thoughts and economic well-being of Massachusetts households. We received 247 responses after mailing this year's survey to 2500 readers in January. The results have a margin of error of plus or minus seven percent. As for the timing of an economic turnaround, 60% of those responding to this year's survey believe that the recession will end in the second half of the calendar year. On the international front, a plurality of respondents (34%) said the global economy would neither improve nor worsen while only 29% thought that it would improve in 2002. The Household Survey also touched upon issues relating to the state's economic competitiveness. The Survey found that 85% of respondents continue to believe that labor in the state is more expensive than other states. Only 25% believe that quality of high schools is very good. Only 10% believe that Massachusetts students excel in math and science. These perceptions are in line with the findings of BHI's just-released State Competitiveness Report 2001, a 50-state analysis of how Massachusetts and other states are doing in their efforts to compete with each other for jobs, capital and markets. The State Competitiveness Report, like the Household Survey, shows that, within Massachusetts, perceptions about the state's competitiveness are generally negative. A survey conducted in summer 2001, in conjunction with the'Competitiveness Report, found that opinion leaders believe that the state continues to operate at a competitive disadvantage. Interestingly, the perceptions identified by the Household Survey and the survey conducted in conjunction with the Competitiveness Report, are in stark contrast to the underlying reality. Contrary to the negative perceptions revealed by these surveys, Massachusetts is doing very well, when assessed according to objective data relating to human resources, the strength of its high-tech and finance sectors and other indicators of competitiveness. Said David G. Tuerck, executive director of the Beacon Hill Institute: “The biggest deterrent to the well being of Massachusetts and its residents may be the state's inability to shake off its reputation as a haven for tax-and-spend politicians and powerful labor interests.” On other matters, respondents expressed strong support for an idea discussed on Beacon Hill that would move the state toward a two-year budget cycle. Fifty-five percent approve of the idea while 19% oppose it. Respondents approve of a measure to abolish the current bilingual education system by an overwhelming margin of 79%. The measure will appear on this fall's ballot. Only 13% favor the current system. Seventy-four percent oppose a proposal that would extend unemployment benefits to parents who stay at home with a newborn or newly-adopted child, while only 14% support this so-called Baby UI bill. Last year the Survey found that 78% of respondents opposed the measure. BHI survey respondents continue to support proposals to redirect funds from government to nonprofit organizations. This year 69% expressed such support while only 18% opposed the idea – virtually the same percentage as last year. Survey respondents continue to support education reform in Massachusetts with 62% favoring current spending levels. Only 20% oppose and 25% neither favor nor oppose a continuation of current funding levels. Here too the numbers remain relatively unchanged from last year. When asked how best to provide affordable housing, respondents favored the use of tax incentives (38%) and cutting government red tape (21%). The other choices — enforcing the state's "anti-snob" law, increasing funding for state housing vouchers and enacting the Community Preservation Act all received a combined 25%. Tough talk on taxes Respondents continue to oppose proposals to increase taxes. Indeed, a slight majority (53%) favor a proposed ballot initiative that would abolish the state income tax. The survey found that 32% oppose the abolition of the income tax while 14% had no opinion. When asked whether they favor property tax surcharges to fund open space, community preservation projects and affordable housing, 66% said they were opposed, seven percent neither favored nor opposed, and only 25% favored the surcharge. Survey respondents also opposed, by a margin of 50% to 38%, any increase in liquor taxes that would be earmarked for substance abuse programs. Ten percent neither favored nor opposed the idea. When it came to earmarking dollars from the state's landmark tobacco settlement, respondents told a different story. More than 70% said they wanted to ensure that funds from the settlement were earmarked for health or health-insurance-related programs. The survey also found continued opposition to any law mandating universal health care in Massachusetts, with 62% opposed, 28% in favor and 8% voicing no opinion. Last year a slightly larger number of respondents (69%) opposed universal health care. In an effort to measure the adoption of new technologies among its readers, BHI also asked respondents how they connect to the Internet from home. Most (42%) said they used the older technology – dial-up modems — while cable modem and digital subscriber users accounted for 28% and 11% respectively. Twenty percent said they used other means or did not answer the question.

NewsLink is the quarterly newsletter of the Beacon Hill Institute for Public Policy Research at Suffolk University. © 1996-2002. All rights reserved.

HTML format revised on 9/10/02 9:55 AM