Brown’s account lacks accounting
SCOTT BROWN made history last year. He’s busy remaking it this year.
The state’s junior senator kept a relatively low profile during the recent debt-ceiling debate. Thus I was intrigued when he addressed the debt and deficit in a recent guest column in the Globe - the more so since he used Massachusetts as a model for tackling the federal fiscal problems.
“In 2001 to ’02, the bursting of the technology bubble hit the Massachusetts economy hard,’’ Brown wrote. “Our unemployment rate was growing faster than any other state in the country, and we faced a fiscal crisis that many experts said was the worst since World War II. The projected deficit for 2003 was nearly $3 billion.’’
And how did Massachusetts solve its problems? “[I]nstead of raising taxes . . . we tightened our belts and balanced the books by cutting spending,’’ Brown maintained. “It wasn’t easy, but . . . we turned our deficit into a surplus and the economy and jobs started coming back.’’
No it wasn’t easy. Nor was it done simply by cutting spending.
In fact, in 2002, the Legislature passed a revenue package worth about $1.1 billon - tax increases that took effect on Jan. 1, 2003. That was part of a balanced approach that saw the state reduce spending, raise taxes, and tap rainy day reserves, notes Michael Widmer, president of the Massachusetts Taxpayers Foundation.
Surprised by Brown’s account - one the senator is repeating in speeches around the state - I called on Monday to ask him about it. I’d caught him just as he was walking into an event, Brown said, but added that he’d get back to me “when I can.’’
He never did. Instead, spokeswoman Marcie Kinzel called shortly thereafter. She said the senator was talking specifically about action taken under Mitt Romney, who became governor on Jan. 2, 2003. And to be fair, later in the column, Brown does write that “when the Legislature was faced with those daunting deficits in 2003, we didn’t panic and increase taxes.’’
That’s certainly a convenient starting point, ignoring as it does the big tax hike that began to benefit state coffers that very year. But even then, the notion that once Romney took the helm, Beacon Hill simply cut spending is misleading. Under Romney, the state hiked fees for permits and licenses and closed corporate loopholes to raise hundreds of millions in new revenues.
Those fees and loophole closings (closings that businesses certainly viewed as tax hikes) brought in more than $600 million. Include other one-time dollars, and the state used about $800 million in additional revenue to close the budget gap, Widmer says. Add in the fact that the budget problem turned out to be a third smaller than the preliminary projection of $3 billion, and the truth is clear: New revenues were a substantial part of the solution.
“Every time we ran into a bump, no matter whether the year was ’01, ’02, ’03, or ’04, it was a combination of stuff,’’ recalls former House Speaker Tom Finneran, a fiscal conservative. “We would draw down the rainy day fund, we would do cuts, and we did revenue.’’
Now, I don’t bring this up to play a game of gotcha with Senator Brown, but rather because the federal deficit is a pivotal issue. Decisions about how to fix it will affect this country and this state for years to come.
As a nationally known Republican who says he’s committed to bipartisan problem-solving, Brown is in a unique position to make his voice heard - and to have an influence.
What if, instead of penning a revisionist history of this state’s budget problems, Brown had offered the fuller picture that Finneran and Widmer present?
If he were interested in that kind of clear-eyed analytical approach, he wouldn’t be contending that Massachusetts had solved its budget problems through cuts alone. Instead, he’d acknowledge that new revenues, be they the 2002 tax hike or the Romney-era fees, loophole closings, and one-time measures, were also a big part of the solution.
And if, with that truth acknowledged, Brown was still gutsy enough to hold Massachusetts up as a model? Well, then, he’d be showing real independence of mind by breaking with the GOP’s no-new-taxes absolutism and forthrightly advocating the kind of balanced approach most fiscal experts recommend.
Scot Lehigh can be reached at email@example.com.