Globe Editorial

By postponing hard choices, Beacon Hill risks greater pain

May 2, 2010

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THE STATE’S predominantly Democratic leadership might not be expected to pick fights with public-employee unions and other entrenched interests in an election year. But state finances are tight, and voters are restless. Unless Governor Patrick and state lawmakers enact further reforms — so that the state’s public sector shares more equitably in the sacrifices that the private-sector workforce has made during the recession — these officials will face a far worse budget picture next year.

Or their replacements will.

Under budget plans offered by Patrick and House leaders, Massachusetts would only tread water until after November. The House would balance the budget in part by cutting into higher education and state aid to local governments; Patrick would use a mix of spending cuts, reductions in tax exemptions, and further withdrawals from the state’s dwindling rainy day fund. Neither approach amounts to an aggressive response to the state’s underlying financial troubles.

In recent budgets, the state has relied heavily on federal stimulus money and the state’s ever-shrinking rainy-day fund. This one-time money is likely to dry up much faster than tax revenues recover; the Massachusetts Taxpayers Foundation is predicting a $2.5 billion shortfall in fiscal 2012. That’s bad enough. But voters will likely be confronted in November with ballot initiatives to cut the state sales tax from 6.25 cents to 3 cents and to repeal the sales tax on alcohol purchases altogether. Should those measures pass, billions of dollars in expected revenues would vanish. Those measures are more likely to pass if voters believe the Legislature tends to noisy special interests over the broader public good.

A firefighters’ rally at the State House last week was a baleful sign. Fresh from his role on an arbitration panel that gave Boston firefighters a budget-busting 19-percent raise, Robert McCarthy, head of the state’s main union for firefighters, appeared at the rally to rail against possible cuts in state aid to municipal governments. He also denounced legislation to give local governments more power to cut costs by modifying the terms of their employee health care plans. This took some nerve: Cities and towns wouldn’t need as much local aid if they could keep their employee health costs in check. But McCarthy, it seems, wants the state to keep bailing cities and towns out after they make — or as in Boston’s case, are cudgeled into making — utterly unjustified concessions to their public employees.

It’s not just the firefighters; many other unions have resisted cost-cutting changes. It’s not just the unions; public employees at multiple levels benefit from a pension system that remains overly generous. And it’s not just payments to employees and retirees; some entire agencies, including the Probation Department, need to be overhauled, and others, such as most pension boards, need to be abolished altogether.

The tolerance for bloat and dysfunction threatens the viability of progressive government in Massachusetts. Last week, presidents of public colleges and universities were begging to avoid further cuts, and private colleges were desperate to preserve state scholarships to students who attend those schools. Human-services advocates are trying to preserve money to fight child abuse. Meanwhile, the state can’t fix enough roads. It can’t upgrade the community college system. It can’t expand a historic-rehabilitation tax credit that would spur faster redevelopment in the state’s old mill cities.

Last year, the Legislature did pass pension reforms that will free up money, at least in the long term. But there are signs that, in this election year, lawmakers are inching in the wrong direction. Just last week, the House passed a “municipal relief’’ bill that will let pension boards grant larger cost-of-living adjustments to retirees. Never mind that defined-benefit pensions are increasingly rare in the private sector, and that very few of the remaining ones grow with inflation.

In an age of layoffs, furloughs, and pay cuts, it’s hard to convince most private-sector employees that pensions for workers who retire at 55 should be untouchable, while initiatives to develop the economy, encourage higher education, and protect children are strictly optional. The purpose of budget season isn’t to find a way to scrape by until next year; it’s to set priorities. And if the governor and the Legislature want to soothe voters’ anxieties, they’ll lay the groundwork now for a government that is both progressive and efficient.

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