The Massachusetts budget gap of ’15 was a big bad surprise. After years of celebrating economic victories like employment rates and credit ratings that were among the best in the nation, the news that we have about $750 million less than we need, to say nothing of the $5.5 billion MBTA debt, has come as a shock to the fans, as if the government has snatched defeat from the jaws of victory, and the winning streak is suddenly, impossibly, over. If ever there were a red flag for the need for more transparency, accountability, and fiscal responsibility, this is it.
Newly inaugurated State Treasurer Deb Goldberg ran in part on creating a new state agency to make sure this never happens again, modelled on the Congressional Budget Office (CBO). The Office of the Treasurer, she said in her inaugural address, should “create new tools that will provide independent, non-partisan analysis of how potential legislation will affect state spending”. The new agency could project revenue and spending and provide multi-year budget forecasts so we aren’t caught off guard again, at least not by $750 million.
It sounds so obvious you’d think we were doing it already. In fact, Massachusetts is only one of seven states that does not have a legislative fiscal office. But of the 43 states that do, 42 have offices that are overseen by legislatures, with staffers who answer to either Republicans or Democrats, and do not provide the independent fiscal analysis Goldberg is looking for. Only one state does: Pennsylvania.
The Independent Fiscal Office of Pennsylvania was created in 2012 after growing frustration in the general assembly that they did not have a central office to produce estimates, and the practice of some previous administrations of withholding their thinking on revenues in order to gain leverage. Matthew Knitell, Director of Pennsylvania’s Independent Fiscal Office, says the agency was modeled on the CBO, and that expectations of the office have been met. “When the office first started there was discomfort,” he says. “There was uncertainty about how the interaction would work. We worked hard to allay those fears, and it’s working as intended. There has never been any pressure to adjust figures one way or the other.” The office operates with a staff of 10 at an annual cost of $1.6 million.
State Senator Jamie Eldridge sees an independent legislative fiscal office as an essential tool to responsible budgeting. “One of the frustrations of many rank and file legislators, as well as the general public, is that we don’t have an independent source for how much a bill would cost. For example, with health insurance mandates the governor will say a mandate will cost $10 million, but with all due respect, sometimes there is a sense that there is an agenda to prevent a bill from passing and perhaps the cost is overstated, not to mention that it doesn’t take into account the savings.”
Senator Eldridge is sponsoring legislation to create the agency Treasurer Goldberg is looking for. “An Act Establishing a Legislative Fiscal Office” would provide an independent fiscal analysis of all legislative and budget matters before the legislature, modeled on the CBO. Why not rely on the model used by 42 other states, where the legislature has oversight over the budget analysis? Eldridge says that wouldn’t be enough. “It would have to be independent and not under the control of anyone in government and adequately funded so that the staff is expert in their analysis.”
The House side has a staunch supporter for independent budget analysis too. State Rep. Jay Kaufman has wanted an independent legislative fiscal office for years. He says the legislature needs realistic numbers. “At the moment,” he says, “other than through the Department of Revenue (DOR), which is an underfunded executive agency, there is no place to turn to for analysis. When I want to look at a realistic set of numbers I get numbers from DOR, the Mass Budget and Policy Center, and the Massachusetts Taxpayers Foundation. They are nonprofit and independent, and have their own sponsorship. DOR does a very good job within the limits of its staffing, but we need a much more robust set of analysis.”
When asked if he thinks Governor Baker would support the agency, Kaufman is hopeful. “The initial beneficiary of the office would be the legislature and not the executive branch, but even the governor would have access to the information. If it were staffed in a truly nonpartisan professional way it would be a very powerful instrument for transparency and informed debate so I hope he would support it.”
Senator Eldridge says that, with new Senate President Stan Rosenberg, he’s more optimistic about success. “I think what you’re seeing in the state senate is really an empowering of members in the senate. Part of that is giving every legislator, and therefore every member of the public, access to independent information. I think there will be strong interest in this idea in the senate. As the lead sponsor, I’ll be pushing hard for it.”
The embarrassing national spotlight on the MBTA’s performance and budget woes, brought on by record snowfall right when Boston is trying to put its best face forward to win its Olympic bid, shows how overdue Massachusetts is in taking a good, hard, independent look at the numbers. The Pioneer Institute, which advocates for removing the power of the MBTA Board, says the MBTA debt is $5 billion. Charles Chieppo, a public policy media strategist, wrote in an opinion piece in the Boston Globe that debt and interest is “nearly” $9 billion. The so-called D’Allesandro Report of the MBTA, prepared in 2009, lists debt at $8.52 billion, and forecasts “rapidly increasing annual debt payments”. So the debt is really $9 billion, but at least it hasn’t increased much in the last five years?
With Treasurer Goldberg newly in office after running on the creation of an independent fiscal agency, a strong push for this in an increasingly progressive Senate, and a governor elected on a platform of accountability, transparency, and good management, the final say may come from the House, and an increasingly powerful Speaker DeLeo. But if frustration continues to build, and with this year’s big bad fiscal surprise fresh in everyone’s mind, he might not want to wait ‘til next year.
