Archive for November, 2007
As noted in yesterday’s post, the Commonwealth signaled its intention to utilize the full $1b in short-term borrowing capability in advance of April’s tax receipts. April is typical the toughest month as personal income tax receipts aren’t due until the 15th and over $1b in local aid has to go out at the beginning of the month.
But the Treasurer just announced that the state will be maxing out its credit card in December, not April.
November 30th, 2007
The latest version of the Commonwealth’s Information Statement Supplement , the best source of concrete financial data on our state, is out. A few nuggets:
- The Surplus: pg. A-1 — The State ended up with a fiscal 2007 surplus of $190.9 million. Of course, there was a supplemental budget passed in October (for FY2007) that spent $212.1m and rolled over $60m in unexpended funds. Thus, without that supp, there would have been a surplus of $462m.
- Lottery Deficit: pg. A-2 — The lottery was short by $119m and will be short by $124m next year, unless sales pick up significantly. That’s $243m that the state needs to make up somewhere.
- Taxes: pg. A-3 — FY2007 tax revenues exceeded projections by over $400 million.
- Single-Party Harmony?: pg. A-3 — The Governor vetoed $40.7m in spending for FY08 and the Legislature has overridden $36.9m of that, thus far.
- Maxing Out the Credit Card: pg. A-7 — The Commonwealth expects to issue the full allowable amount of commercial paper, $1 billion, before April.
- Tax Cuts?: pg. A-7 — A few ballot initiatives are making their way through the process — one would eliminate the income tax, another would phase it out, and a third would change Prop. 2.5 to Prop. 1%.
- The $500M Plug: pg. A-16 — The capital funding plan contains about $500 million in ‘project-funded bonds’ over the next 5 years. This appears to be DIF-style funding, but there’s never been DIF funding at this volume anywhere.
- Good Luck: pg. A - 20 — Over 90% of Executive Branch’s union employees will have their contracts expire by June 2008.
November 29th, 2007
The Legislature may not have had time to take up gambling or biotech investments this session, but rest assured that the issue of band-instrument spittle is moving apace — just today the Senate approved a House bill establishing a task force to examine hygienic procedures pertaining to band instruments.
November 29th, 2007
Joseph Stiglitz was spot on about the costs of the Iraq War. But, like many Nobel Prize economists, he’s gained a tendency to believe he has a pulpit from which to preach. Sort of like being an economist and a New York Times columnist, except that Stiglitz still is an economist.
I enjoy Stiglitz less and less, I admit, but being cooped up in an airplane for 20 hours does something to you. You read what you brought or you watch the Transformers. (On that score, god, please let the Screenwriters strike stretch on –at least this year we will have fewer lousy movies.)
In one of the articles, Stiglitz, taking a page out of the John Edwards-Mike Huckabee-Barack Obama playbook, fashionably questioned upward mobility in the U.S., calling it a “lingering myth” that continues to attract immigrants.
I’ve spent my share of time in Asia and Europe, and this is one of the many chic things to say about the U.S., but it reflects other societies, especially Western European societies where old money is new money, and the nouveaux riches are still viewed askance.
Dr. Stiglitz might be interested in a hard-nosed empirical look at the question of mobility in America as did the Treasury Department. The Wall Street Journal (11/13/07) carried a great piece (Movin’ On Up) which called the view that “the U.S. is becoming a nation of rising inequality and shrinking opportunity” “so much populist hokum.” The money quotes follow:
The Treasury study examined a huge sample of 96,700 income tax returns from 1996 and 2005 for Americans over the age of 25. The study tracks what happened to these tax filers over this 10-year period. One of the notable, and reassuring, findings is that nearly 58% of filers who were in the poorest income group in 1996 had moved into a higher income category by 2005. Nearly 25% jumped into the middle or upper-middle income groups, and 5.3% made it all the way to the highest quintile.
Of those in the second lowest income quintile, nearly 50% moved into the middle quintile or higher, and only 17% moved down. This is a stunning show of upward mobility, meaning that more than half of all lower-income Americans in 1996 had moved up the income scale in only 10 years…
Those who start at the bottom but hold full-time jobs nonetheless enjoyed steady income gains…
Only one income group experienced an absolute decline in real income — the richest 1% in 1996. Those households lost 25.8% of their income. Moreover, more than half (57.4%) of the richest 1% in 1996 had dropped to a lower income group by 2005. Some of these people might have been “rich” merely for one year, or perhaps for several, as they hit their peak earning years or had some capital gains windfall…
The key point is that the study shows that income mobility in the U.S. works down as well as up — another sign that opportunity and merit continue to drive American success, not accidents of birth. The “rich” are not the same people over time…
Being successful is not always a matter of hard work and good choices, but hard work and good choices most often lead to success. The fluctuations in fortunes outlined in the Treasury Department study are unlike those in the rest of the developed world. Truly exceptional. And truly very healthy for our society.
November 28th, 2007
The ethical controversy surrounding embryonic stem cells engendered by the scientific use of stem cells may now be at an end. Dr. Maureen Condic and Dr. Markus Grompe write in the Wall Street Journal (11/23/07):
Two major scientific papers published this week in Science and Cell magazines unveil a proven way to generate patient-matche, human pluripotent stem cells without human cloning, and with the use of human embryos or human or animal eggs.
Exciting stuff. And, one hopes, a way past what many considered a slippery slope of giving ethical “easements” on the basis pure hope (and as we are not sure of the potential yet, perhaps even hype).
Science has provided a resolution to the ethical and political debate, and all parties emerge victorious. Scientists have access to an ethically uncompromised source of pluripotent stem cells for research, patients may ultimately benefit from therapies using these cells, and all citizens are spared the corrosive effects of ongoing cultural warfare over embryo-destructive research.
I’d love to hear what this all means for the biotech stimulus package being contemplated? Does the stem cell bank provision still make sense? Should it be revised on the basis of this breakthrough? Is it necessary if stem cells can be so easily replicated?
I don’t know - but would like to!
November 27th, 2007
What does it say about the Democratic party that its entirely uncritical relationship with the teachers’ union has become the baseline against which to measure other panders.
This from the Talk of the Town section in the most recent New Yorker, in which George Packer analyzes the Republican presidential candidates, who he claims try to outdo one another, burnishing tough foreign policy stances while
“. . . pandering to the war lobby as if they were Democrats addressing the teachers’ union.”
And this is The New Yorker, mind you, not the National Review.
November 26th, 2007
Been traveling so catching up on some items. In case you missed it, the Globe’s circulation is down 6.66% (to 361,000) and the Herald’s 8.7% (to 186,000). I loved the November 6 Globe’s headline: “Newspaper circulation still on decline.” All true, though the numbers for the Globe and the Herald were decidedly steeper than for all newspapers except for the Dallas Morning News and the Atlanta Journal-Constitution.
While it might be interesting to understand why the circulations of Boston papers are headed in the opposite direction from that of the Philadelphia Inquirer (up 2.3% to 338,000), the broader, more important question is why the decline in newspaper readership is steeper in Boston than elsewhere? Other cities and regions have Metro papers or the equivalents of BostonNow. Other cities and regions are internet savvy.
With circulation so slowed, how close are the Globe and the Telegram-Gazette to life support? And what does this mean for the New York Times? Time to sell?
November 25th, 2007
I’m confident that no previous New York Times’ article has ever mentioned this level of alcohol consumption. From the NYT’s helpful guide to carving a Thanksgiving turkey:
“One year the turkey took a long time to cook and I went to carve it after about 13 beers,” said Maurice Landry, who lives near Lake Charles, La. “The way I remember it, I bore down to take off the leg and the whole thing went shooting off the platter and knocked over the centerpiece.”
Happy Thanksgiving!
November 21st, 2007
Buried in the outside sections of Governor’s latest supplemental budget is a provision to move the Mass Turnpike’s accounting system into the main state accounting system (that’s NewMMARS for you budgeting enthusiasts).
This change will now make the MTA’s accounts (and spending down to a very detailed level) transparent to state budget officials.
I’m not sure whether to be happy about the progress or sad that such a basic thing counts as progress.
November 20th, 2007
From today’s Globe editorial promoting universal wireless in Boston:
Boston is trying to invent a more open model, with a network to be built and maintained by a newly created nonprofit using donated money. This nonprofit would pursue the civic mission and welcome commercial partners. So, for example, Verizon might offer low-cost e-mail service. [Emphasis added]
Great idea, you could call it Hotmail. Or maybe Gmail. No wait, how about…….
November 19th, 2007
Previous Posts
