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The Boston Globe

Opinion

Should Mass. raise taxes? | Jim Stergios

No: This isn’t real reform

To date, Governor Patrick’s most significant reform is allowing municipal employees to purchase state health insurance. It’s a big deal, annually saving municipalities over $100 million.

Unfortunately, the governor’s 2014 budget abandons all pretense of authentic reform. Here’s why his argument that reforms during his tenure warrant massive new tax increases fails:

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The governor’s reform record is mixed. Passed with promises of $6.5 billion in savings, the 2009 transportation reform law has yielded a tiny fraction of that. Even with a sales tax boost (over $600 million annually) to support transportation reform, we still pay hundreds of employees with borrowed money.

By requiring project labor agreements and so-called “prevailing wages,” even for civilian flaggers, the governor continues to inflate transportation construction costs.

What about public pension reform? The governor’s 2011 pension reforms promised $5 billion in savings over 30 years. Some elements were desirable, including lifting the retirement age for most state workers. But the “reform” also refinanced our pension debt, paying it off by 2040 instead of 2025, costing taxpayers tens of billions of dollars.

Worse, it forces the state to postpone paying down another huge unfunded liability — our $15.6 billion liability for retired state employees’ health care coverage.

The new spending blueprint is unwise. We cannot build new rail lines with low ridership even as the MBTA confronts an $8.9 billion debt and a $3 billion maintenance backlog. And can we take seriously a $1 billion a year transportation spending plan that doesn’t fund operations, maintenance, and debt service for planned expansions?

A year ago, the governor announced that he had fixed the “structural deficit.” Today, we know that’s not true: 2014 state revenues are a billion dollars shy of programmed spending. That’s the hole any new revenues will fill. Forget the promised transit lines, bike lanes, and education funding.

The well is dry. Between 2005 and 2011, state spending has grown at almost twice the rate of personal income and more than three times faster than GDP. That is the best evidence that Patrick’s record doesn’t justify massive new tax increases

Jim Stergios is executive director of The Pioneer Institute.
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