For those of us who have been around for a while, the warning signs are flashing red for the prospects of a budget crisis for our state and our cities and towns thanks to the promised changes in policies by the new administration in Washington.
It is (in the immortal words of Yogi Berra) deja vu all over again
We are not making a political judgment or statement of any kind. We simply are explaining what we see as the new reality for which our elected officials must be prepared.
We were around for the fiscal crises of the late 1970s under Gov. Michael Dukakis; the late 80s/early 1990s under Dukakis and Gov. William Weld; the early 2000s under Gov. Mitt Romney, and the period of the Great Recession under Gov. Deval Patrick in 2010.
Two of those governors were Republicans and two were Democrats, but they all shared one thing in common: Our state’s finances were at the mercy of national politics and the national economy, both of which were beyond their control.
The consequences of those fiscal crises were profound and long-lasting. Cities and towns laid off scores of local employees, including teachers, police, and firefighters. Fire stations were closed and athletics and extracurricular activities were cut from school budgets.
At the state level, there were hiring freezes and layoffs. Many state employees, including those in the judiciary, agreed to pay cuts in the 1990s and again in the early 2000s amounting to two-weeks of their salary so that the jobs of their co-workers could be preserved. We would note that such drastic action had not been seen since the Great Depression among the state and local government workforce.
Part of the problem in the 1980s was that cities and towns had become dependent on the revenue-sharing program by the federal government (which was the pet project of Wilbur Mills, the powerful U.S. House Ways and Means Chairman) in the 1970s. Every city and town in the country received a nice check directly from the feds with no strings attached. However, under President Ronald Reagan, revenue-sharing eventually disappeared (to pay for Reagan’s tax cuts and defense spending) and cities and towns were left with gaping holes in their budgets that led to the layoffs of the 1980s. A similar scenario is playing out today with promised reductions in funds to the states from the federal government.
In addition, cities and towns in the early 1980s were greatly affected by the passage of Prop. 2 and 1/2, which reduced their revenue-raising capacity.
All of those fiscal crises also shared something else in common: Our officials did not realize until it was way too late that revenue was declining, month-by-month-by-month. The longer they waited to do the obvious, the more pain it caused.
Simple arithmetic informs us that those four financial crises from the late 1970s through 2010 occurred basically in 10-year cycles. We have been fortunate that we have avoided a similar fiscal calamity for almost 15 years. But it would appear that “the times they are a’ changin’ “ and we soon will be in for a rocky road ahead.
Finally, we would note that the breadth of state government has grown hugely in the past few years. Former Gov. Charlie Baker’s proposed budget for FY 2022 was about $45 billion (the legislature eventually passed a budget of about $48 billion), but this year’s proposed budget by Gov. Maura Healey is about $62 billion, which is more than 25% greater than the final budget of four years ago (and almost 40% more than what Baker initially had proposed).
While it is true that the state has about $8 billion in its Stabilization Fund (a/k/a the Rainy Day Fund), state coffers have been reduced by more than $1 billion in the past year and are facing further depletion because of the immigration crisis.
As we write about the goings-on in the local communities we cover, we are amazed at the growth of the bureaucracies at the state and local levels. There are new departments and new jobs that could not have been imagined back when we started our career in journalism 50 years ago. But we think the time is now for our elected officials to face reality and make the difficult decisions to ensure that government’s core functions, public safety and public education, are maintained, and eliminate things that are non-essential.
Maintenance for the MBTA is essential. Constructing new, seldomly-used bicycle lanes is not. (We ourselves are dedicated cyclists who train for triathlons, but as much as we’d like to see bike lanes everywhere, we have to concede that they rate at the bottom of the list of government priorities.)
In short, if our elected officials do not take steps now to pare back public spending, then, as history has shown time and time again, when the opportunity for making responsible choices has passed, the eventual day of reckoning will be far worse than we could have imagined.