Winking at us

By Steve Poftak
October 9th, 2008
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The Globe’s Eric Moskowitz engages in some amusing mischief in yesterday’s article on the income tax repeal question. Out of three ‘man on the street’ types interviewed, he manages to find two public sector employees who plan on supporting the income tax repeal. Well played, Mr. Moskowitz.

The Power of Charters according to the head of the DC teachers union

By Jim Stergios
October 9th, 2008
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You may have noticed that we have temporarily suspended the “Rhee Watch” entries on all the great stuff the DC School Chancellor is doing. It is not that Michelle Rhee has slowed down from her 100 mph pace, but rather, you know, everybody suspending something — a campaign for a crisis, a campaign for an anniversary. I suspended out of depression at how Ed Reform in this state has stalled out completely.

But if you doubt the power of charters, then consider this quote from George Parker, president of the Washington D.C. Teachers Union, as stated in the August 29 Teacher Quality Bulletin. (Tip of the hat to WT for passing this on.)

The union has now had to take on a dual role. Previously our main concern was bread and butter issues — to make sure teachers have good benefits and working conditions. We didn’t have to be that concerned about keeping children in [D.C. schools]. But now around 21,000 of our students are in charters and around 45,000 in public schools. We lost 6,000 students last year. The charter schools have created a competition where the very survival of the union and the job security of our teachers is not dependent on the language in our contract. It is dependent on our ability to recruit and maintain students because we are funded pretty much by the number of students we have enrolled in the public system. It puts the union in a different light. It’s not just the contract that protects jobs but also student enrollment.

Yes, the students matter. And so does competition.

Guv, you’ve got to move faster

By Jim Stergios
October 7th, 2008
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I appreciate that the Governor is moving before the election to staunch the budget red ink. But this is not just any old fiscal crisis. This is a once-in-a-quarter-of-a-century crisis. The deficit is going to be big — at least $1 billion, it is going to come fast, and we are not going to feel it until it is upon us. The collapse in capital gains is not going to be felt yet, but, folks, it is there.

Guv, act now!

Just look across flyover country at California. See this report on Bloomberg.com, where reporter Michale Marois alludes to Gov. Schwarzenegger’s probable call for an emergency budget session.

California Governor Arnold Schwarzenegger may order lawmakers into emergency session to address a mounting deficit, two weeks after a record-long impasse ended with the Legislature over the budget.

Noting the collapse of capital gains and its impact on California’s budget, Marois writes:

The situation is complicated by frozen credit markets that may impede the state’s ability to borrow as much as $7 billion of short-term notes next week. Without the loan, the state could run out of cash by month’s end.

Schwarzenegger last week wrote to Treasury Secretary Henry Paulson saying he may ask the federal government for an emergency loan if the state can’t find investors willing to lend the state money until tax receipts arrive.

(We’re in the same position — as Treasurer Cahill knows only too well.)

“The first quarter of the fiscal year has just ended, and we already are short $1.1 billion,” California Controller John Chiang said in statement. “Revenues are deteriorating faster than expected, and September’s cash flows send strong signals that the recently enacted budget is more out of balance than we feared.”

That is why Pioneer is releasing a press release and making calls to legislators tomorrow urging faster action. We lay out in the press release hundreds of millions of cuts that do not impact the poor and vulnerable. It can be done. It must be done.

Another failed test drive for police on civilian flaggers

By Jim Stergios
October 7th, 2008
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Police Captain James Guido noted in this space that he blocked flaggers from working on a construction site in Revere because

We were never consulted on the plan. An MWRA employee dropped off an envelope with a one page drawing at the front desk. the plan was flawed and did not account for parked motor vehicles on both sides of the work area. the plan also showed the manholes that they were going to be worked in out of the travel lane , which was not the case. the plan further showed two way traffic at all times which was not possible, and they had no provisions to direct traffic.

The MWRA was advised that they could set up if they were able to do the job as the plan showed.
They left because it was not possible.

I’d like to believe him, and I thank him for commenting on an earlier entry of mine. But it is a little hard to believe him after today’s news, as reported by the Globe’s David Abel, that

About 50 off-duty police officers surrounded civilian flaggers directing traffic around a road project, heckling the workers as part of continued protests of the governor’s new rules curbing paid police details at road projects.

“I hope you sleep at night,” shouted Stoneham Patrolman Joe Ponzo at the workers in neon vests and hardhats. “You should be ashamed of yourself — you’re union. This is a travesty.”

Off-duty officers from Arlington, Medford, Everett, and Woburn lined Lexington Street, a two-lane road where traffic backed up in both directions because of the protest. At one point, the workers for Mass. Highway had to stop cleaning catch basins because of the demonstration.

Several uniformed Woburn officers responded to the scene after one of the off-duty officers drove the wrong way between traffic cones, saying the civilian flagger sent him in the wrong direction.

The police again have failed the test drive.

Mumbles grumbling about hookah-hogwash

By Jim Stergios
October 7th, 2008
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This blog entry should be a line item analysis of whether the state can afford to pass Question 1 and whether the sky will fall. But how can you be serious when you discover the cause of the Mayor’s mumbling? Kurt Nickish of WBUR lodges this report on Q1, and he gets in a pro, a con, a Carla Howell, and then the Mayor of our Fair City, as Click and Clack put it.

Why does the Mayor mumble? He is spending too much time at Hookah bars. How else to explain this exchange?

NICKISCH: The prospect of an income tax repeal has some government officials threatening to raise property and sales taxes instead. Here’s Boston Mayor Tom Menino:

MAYOR TOM MENINO: Don’t let people fool you; we don’t have to pay taxes. That’s a lot of hookah-hogwash. You pay one way or the other. It costs money to run government. It costs a lot of money to run government.

Now question number one is, what is he smoking?

In the study of George Washington

By Jim Stergios
October 3rd, 2008
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At this moment in the Republic’s history, we can only look on the the current situation with the sadness of having stumbled upon a car wreck. The government’s recklessness with Fannie Mae and Freddie Mac is alarming — and should instill in us disgust at our irresponsibility. It should also alert us to the contamination of both private and public, when we do not clearly assert the responsibilities of each. Never again should a government-sponsored enterprise like Fannie be erected. I am willing to pay $700 billion for that, if we hold to it.

We must also recognize that undergirding the invisible hand that so many simply state as a belief lies the profound philosophy of Adam Smith that few know, from his The Theory of Moral Sentiments:

How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it. Of this kind is pity or compassion, the emotion which we feel for the misery of others, when we either see it, or are made to conceive it in a very lively manner. That we often derive sorrow from the sorrow of others, is a matter of fact too obvious to require any instances to prove it; for this sentiment, like all the other original passions of human nature, is by no means confined to the virtuous and humane, though they perhaps may feel it with the most exquisite sensibility. The greatest ruffian, the most hardened violator of the laws of society, is not altogether without it.

It seems to me that in government, and in the private sector we risk the entire enterprise of the Republic, of freedom and individual responsibility if we forget our need to “sympathize” with others, to recognize ourselves in them. Our Wall Street traders forgot that. Our representatives — above all Barney Frank — forgot that.

As a friend noted a few moments ago, we are in “a troubled state.” He sent this aphorism from George Washington — and there is no better summary of where are than this:

Government is not reason, it is not eloquence, it is force; like fire, a troublesome servant and a fearful master. Never for a moment should it be left to irresponsible action.

It is Friday afternoon. Quiet. Time to turn out the light.

Failed test drive in Revere and Everett for police details

By Jim Stergios
October 3rd, 2008
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Jessica Fargen reports in today’s Herald that police blocked two work sites where the state was test driving the policy of replacing police details with civilian flaggers.

Angry police union members chased away MWRA workers in Everett and Revere today citing safety concerns in the first test of the state’s new rules on road details.
In Everett, union members shouted and picketed the workers as they showed up to perform routine maintenance inside a manhole at 11:30 a.m. The MWRA crew left without doing any work.
In Revere, the union members followed the MWRA crew soon after to protest and a city police captain would not allow the two-man crew to work on a manhole their either.
“Your plan is faulty and we’re not going to allow you to work,” Revere Capt. James Guido told the MWRA crew.

Which raises a very good question about the regulations. Currently the regs say that state transportation officials have to develop a work site safety plan in consultation with local public safety officials. So, if Captain Guido told the MWRA crew to scram, had he already signed off on the plan? If not, the state folks should have gotten his John Hancock on the plan before sending folks out there. If they did reach out to the good captain and got his approval, then it would seem that Captain Guido, uh, overstepped his bounds.

Either way, we will see many more Captain Guidos at work sites, I’d guess, over the next few weeks. We will quickly see if the Governor is willing to use transportation dollars to get our public safety officials back into line.

Friday Quick Hits

By Steve Poftak
October 3rd, 2008
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- And then there was one? I noticed this yesterday and Ross Kerber mentions it briefly today. By my count, the last two Fleet-BankBoston alumni still standing at B of A were Anne Finucane and Brian Moynihan. Moynihan being notable as one of the few Fleet employees to relocate after the merger. It can’t be good news that John Thain is essentially replacing him.

- Anyone else worried about this? The Commonwealth announced a plan to buy tracks from CSX (which is a good idea) and even gave the LG a nice Worcester-oriented press rollout for it. But buried at the end of the Globe story is a sidebar that worries me. The ongoing sticking point for the deal has been CSX’s insistence that they be absolved of any liability associated with the tracks. That issue has not been resolved, both parties have basically just agreed not to talk about it until later. But doesn’t the resolution of that issue (and I take no position on what it should be) affect the value of the deal?

- Don’t we have to spend billions on transit for the biotech sector? Maybe not.

- Is there a better story in sports right now than Cluj-Napoca? I knew you’d agree.

- A raised eyebrow (or should that be a tip of the pen) to the Donahue Institute for taking in a cool $250k in quasi-public and industry funds to produce a 25 page report (well, 14 pages of substantive text) on the workforce development needs of the life sciences industry. An interesting early project for the Mass Life Sciences Center and hopefully not a harbinger of their fiscal management prowess, given their $1 billion warchest.

- Interesting to note that the FDIC-backed purchase of Wachovia’s banking operations by Citigroup has been superceded by a no-government-involvement merger offer by Wells Fargo. This is a good outcome and leads me to wonder how many purchasers are staying on the sidelines until the full extent of government intervention becomes clear.

- Tired of government waste and inefficiency? Be glad you don’t live in New York. Where the Long Island Railroad’s retirees have claimed disability at rates in excess of 90%, far above any other railroad and costing taxpayers millions. Where Congressman Rangel (chair of House Ways & Means and writer of tax legislation) has four, count’em four rent-controlled apartments and has skipped paying income taxes on his vacation villa (he helpfully complains that every time he asks about the finances, the folks on the other end of the line start “speaking Spanish”). Where Assembly Speaker Silver flys first-class (at taxpayer expense, connecting through Washington) to get from New York City to Albany.

The Guv today exercised real leadership - ideas on cuts

By Jim Stergios
October 2nd, 2008
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Yesterday morning we worked on a press release that started:

BOSTON– Given near-certain steep declines in capital gains, sales tax and other critical revenues, as well as once in a quarter century uncertainty in the economy, the Governor needs to revise the revenue estimate and make cuts now. Waiting till after the election will only exacerbate an almost impossible problem for the Commonwealth, as the Governor will necessarily have to make even deeper cuts the longer we wait.

“We need to remember the lessons of 2003, 2001, and 1991, when Governors had to make deep midyear cuts into programs. We face the decline with a steady hand on the wheel now or we will have to try and steer ourselves over a cliff,” said Pioneer executive director Jim Stergios. “The road to the cliff is easy to reach. The way down is harder to control. We need a show of courage, and we need it now.”

Well, the Governor beat us to the punch — and he is to be commended. Acting now, before the elections, is what most leaders are afraid to do (that’s why calling them “leaders” is probably a misuse of the term). Good on ya, Guv. Today’s Pioneer press release was instead:

BOSTON – Governor Patrick is to be commended for acting swiftly and decisively to address daunting state fiscal challenges that have been exacerbated by the crisis in the nation’s financial markets.

In addition to making so-called 9C emergency spending cuts within the executive branch, the Governor is calling on the Legislature, Judiciary and constitutional offices to do the same, and demonstrating leadership by cutting Governor’s office spending by 7 percent. He is also calling for reforms that will not only save money now, but serve the Commonwealth’s long-term interests by reforming the state and MBTA pension systems, dismantling the Turnpike Authority and consolidating other state agencies.

In a show of leadership, the Governor has vowed to implement cuts by October 15th, rather than waiting until after the election.

Remember: In 2002, state revenue fell nearly 15 percent when the bottom fell out of capital gains receipts. We should expect a similar drop in revenue this time. Given the $223 million first-quarter budget shortfall, officials should be prepared to make up to $1 billion in cuts to stem the tide of red ink. That means we should not make further withdrawals from the stabilization fund until after cuts are implemented and we have a clearer sense of the likely length and depth of the fiscal crisis. This could be a long recession.

What to cut? None of it is pretty, but here is a start that will get you close to the goal line:

· Return the number of state employees to 2003 levels ($350+ million).
· MassPike consolidation into MassHighways — a Pioneer idea the Guv picked up ($20 million).
· Pull 30 percent of the 829 earmarks, which are valued at almost $740 million ($220 million).
· How about the Quinn Bill, community corrections programs in the Trial Court, $10 million to promote the lottery, $20 million for MWRA sewer rate relief?
· Increase the match paid by state employees into the GIC ($10s of millions).
· Eliminate prevailing wage on public construction projects and other state work (many many millions).

And, oh yeah, forget about all those expensive pieces of the Readiness Project such as free community college and universal early childhood education that could cost up to $2 billion annually.

Printing the press release

By Jim Stergios
October 1st, 2008
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Friendly note to Kay Lazar of the Globe: Talk to folks outside of government when writing an article on the health care reform. Kay does great work, but today’s article on the state’s agreement with the federal government on the waiver related to our Medicaid programs needed more than was in the official press release. Yes, quote the Governor, Secretary Bigby, the Senate President and Ted Kennedy. That all makes sense. But at least when it comes to new penalties on employers, you cannot simply take the party line:

Bigby, the state’s human services director, said in an interview that the concerns raised by businesses were “compelling” and that the state’s intent was not to “penalize small businesses.”

To soften the impact, state officials said yesterday, they would not only delay the new rules but apply them only to businesses with 50 or more full-time or equivalent workers - rather than businesses with 10 or more such workers, as was originally planned. Under the new rules, the larger companies would have to pay 33 percent of their workers’ premiums within 90 days of hiring and make sure that at least 25 percent of their workers are covered by the plan.

Suggestions to Kay: (1) Ask what this means in terms of impact. For example, how many businesses will be affected? How much revenue will the new penalties generate? (2) Seek the opinion of an employer to see how “soft” they think the new penalties are.