Listen to the nightly news and you’ll probably conclude that we live in two worlds at the same time. One is the world of high productivity growth, higher housing values and expanding home ownership rates, low inflation and the Bush tax cuts that have boosted disposable income. Add to this scenario a stock market that finally took off in 2003 across the board: The S&P rose 22%, the DJIA rose 21% and the once disappointing NASDAQ rose a remarkable 45%.

After wandering in the doldrums of a soft recession, the U.S. economy grew last year at the very impressive annual rate of 4%. Most economic forecasting is positive if not overtly bullish, even concerning jobs.

Up against this rosy scenario is the other world of massive layoffs and outsourcing of good jobs and wages overseas, the federal deficit and the equally-troubling trade deficit. Add to this the high cost of health care and education and voters may find themselves in a foul mood come November.

Most observers note that the nation is divided politically. Given the highly political environment of a presidential election year this is no surprise. The economy may be recovering but that apparently isn’t good enough. Exit polls from the Wisconsin presidential primary found that three fourths of voters said that trade with other countries destroys jobs in the U.S.

Uncertainty about the economic recovery appears to be influencing local opinion in Massachusetts. Fiscal conservatives, a group more inclined to support the President’s policies, and less disposed to the growing drumbeat of pessimism, are voicing some of the same concerns as the general public.

Fifty-six percent (56%) of respondents to the Beacon Hill Institute’s State of the Household Survey 2004 believe that the Massachusetts economy will improve, a significant increase from last year’s finding. Yet 52% rate their household finances as middling — neither improving nor worsening as they enter the new year. Seventy-three percent (73%) of respondents, believe that the national economy will improve more than the state’s economy by nearly 20 percentage points. Only 23% believe that their own economic standing and that of the state is improving.

The survey, conducted each January since 1998, is the only measure of the opinions of fiscal conservatives in Massachusetts, those likely to support free market policies and the candidates who espouse them. More than 450 individuals responded to this year’s mail-in survey which has a margin of error of +/- 6 percentage points.

As expected, this sample overwhelmingly believes that both Governor Romney (75%) and President George W. Bush (68%) are performing well in their jobs. This distinct segment of the Massachusetts electorate is also more likely to oppose tax increases (75% want the personal income tax rate returned to 5%); more likely to abolish the state excise tax (61%) and less likely to expand social programs (68% oppose extending unemployment benefits, so-called Baby UI, to new parents). Sixty-seven percent (67%) believe that it will not be necessary to raise taxes in 2004.

However respondents diverted from conventional economic conservatives on several issues.

On others matters of state tax policy, voters are oddly selective. While strongly opposing targeted tax cuts for the biotech industry (42% to 30% with 29% voicing no opinion), an overwhelming majority of respondents show a willingness to provide tax incentives for manufacturing (74% to 17%). Twenty-six percent (26 %) support both tax incentives. These choices are demonstrably favorable to “old economy” manufacturing and unfavorable to “new economy” biotech. Only 12 percent opposed both.

Respondents were also of mixed mind when considering the state’s Medicaid system. Forty-two percent (42%) agree that the Commonwealth should limit the ability of elderly citizens to shift assets in order to qualify for publicly assisted nursing home care; 46% opposed the idea while only 12% voiced no opinion. Such a division may make it difficult to tackle the state’s nursing home crisis or encourage planning for the private provision of long term care for the elderly.

Meanwhile, 43% opposed asking Medicaid recipients to pay more out-of-pocket co-payments, while the same number favored the idea and 15% voiced no preference. The Romney administration has argued that curbing the growth of the state budget requires some form of co-payment by Medicaid recipients. Spending on Medicaid comprises 30% of total state spending in 2004 and shows no sign of abating in the next few years.
Is local government better?

As with previous surveys, respondents demonstrated support for local government even though they favored abolishing a source of revenue to localities, the excise tax. Sixty-six percent (66%) opposed cutting local aid to cities and towns only 18% favored the measure with 17% holding no opinion. Meanwhile, 44% of respondents who expressed confidence in Governor Romney’s performance also opposed cutting state aid to local cities and towns.

Respondents continued to express support for charter schools and the Education Reform Act of 1993. Fifty-two percent (52%) favor a continuation of Ed Reform spending at current levels with only 19% opposed and 28% voicing no opinion. Despite arguments about the fiscal constraints they place on state and local funding, charter schools continue to enjoy support: 66% oppose any measure that would cap the number of such schools.

Respondents were also asked whether they agree or disagree with the following statement: The MBTA had no choice but to raise public transit fares? Forty percent (40%) agree, 33% disagree while 26% expressed no opinion.