Budget Cuts -- How cutting the state budget hurts our futures

Today we talk about Governor Healy's 9C budget cuts. We'll dive into how it affects our funding of programs that we need, tying it to the Fair Share amendment and tax cuts that they passed. We will be talking about how you know the downturn is affecting all of us, government programs in need of investment, and explore the state budget.
 
This is the audio version of the Incorruptible Mass podcast, season 5 episode 34. You can watch the video version on our YouTube channel.

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Transcript

Hello and welcome to Incorruptible Mass. Our mission here is to help all of us transform state politics. We know that we can have a state legislature and laws that support the needs of the vast majority of the residents of our beautiful state. So today we are talking about Governor Healy’s 9C budget cuts, we'll dive into that we're gonna be talking about, you know, how it affects our funding of all the programs that we need, we're going to be tying it to the Fair Share amendment that got passed, we'll be tying it to the tax cuts that they passed, just recently, we will be talking about how you know the the downturn is affecting all of us and, and and the state budget as well. We will be talking about the needs that the T has, and other places they could have put the money. So stay tuned. Before we do that, let me introduce my two lovely co hosts. I will start and thank you all for joining us in this new year. I will start with Jordan.

Jordan powers he/him, I'm in Worcester, Massachusetts. And I am excited to be here in the new year. And Jonathan. Jonathan Cohn, he/him/his, I’ve been active in electoral and issue organizing in Massachusetts for a number of years and excited for all the great discussions we'll have in 2024.

Fantastic. I am Anna Callahan. She/her coming at you from Medford, very excited for this new year to dive into all of these political questions that rarely, rarely get any notice by the media and certainly never analysis by the media. So here we are, we're going to dive in, and we're going to talk about the budget cuts that are called the 9C budget cuts. So before we get into 9C. Jordan, can you tell us what is being cut? And after that, we'll talk a little bit about 9C and legally sort of where that comes from?

Yeah, so just really quickly, you know, so we made $375 million in cuts, which means that they won't be spending the money that they had said that they will spend. And I think it's really important, because that's a big number. And you can't understand it, it's hard to just conceptualize that amount of money. So we wanted to just explain, like, what got like, what are the things that are going to be taken away. And there's a lot of things that are going to be taken away mostly from poor people, for people struggling from our local communities. And it's a real fix, it's not just sort of made up money. So for example, as if you were on MassHealth, that got the largest cut. If you are, if you get any sort of care, through the Commonwealth Care Trust Fund that got cut, and if you are a poor person, and you get transitional aid for families that got a huge cutting on a $13 million cut. And the rationale for that cut, is that the work that the legislature did to catch up because it hadn't been raising it. And I think two decades like 20 years that because there was a 30% increase. They're gonna cut it. But this is like a deport people that were not that was so low that they were still not getting by. If you if you believe that childcare is too expensive. In Massachusetts, the legislature and Governor Healy touted that they had given more money to childcare. Well guess what? That $12 million got cut back, they got $12 million got cut from that line item.

They love how they take the victory lap and then after they get the accolades, then they cut it.

Yep. If your kids are in Extended Learning Time, that got cut. If you get Supplemental Security Income, let's say you're an older person or you're a veteran that got cut, if you drive on roads or take the tea, the Massachusetts transportation trust fund got cut. If you are a public employee or an employee that uses the GIC, the group insurance premium that got cut, if you care about housing, the services to help people get housing support that they need that got cut, emergency aid to elderly and disabled children that got a $4 million cut Community College Success fund a fund to help people succeed in community college that got a 4 million fund cut if you the Massachusetts State scholarship fund. So if you go to higher ed and you that got a $4 million cut, if you have homecare of any sort that got a 2.5 million not right, etc, etc. And my favorite is the stem starter Academy. So something we clearly believe in that also got a $2 million cut, almost cut in half. So again, like these are, it's it's the media loses the forest, I mean, it loses the trees through the forest, it will give you a big number. It'll say, oh, money didn't come in. And we just cut some things like it's like no big deal. But it's a big deal. There's like things that really matter, mostly to people at the margins, who are going to be hurt. And I think it's really important to remember that when we remember that the reason for this is tax cuts for rich people. And poor people are going to hurt before we get to the tax cuts for rich people, which we're going to real soon. The list is over 50 items long. So we barely touched the surface of these items that are being caught. But but let's for a second, Jonathan, I'm hoping that you can give us a little explanation of what does section 9C mean, when is it triggered? Why are these cuts happening now? 

Yeah, so that 9C is a part of the Massachusetts General Laws that says that considering that the state has the requirement of a balanced budget, that if revenue ends up coming in less than what the state's kind of the state's promised expenditures, that the governor has the ability to unilaterally cut executive funding from different executive offices so that a balanced budget can be restored. I think one thing that's kind of timely and important to remember, we have no such provision that says that when revenue comes below, it's time to cut, it's time to eliminate or like pause any tax cuts. And like, rather than recent recently passed tax cuts, whether it's any of the corporate tax incentive programs that we have, none of those ever get paused or cut, because of because of the misalignment of revenue and spending. It's only kind of unilateral budget cuts. 

Wow, that so I love how you're saying that. And that's fascinating that it by law, they can cut items from the services that we get in order to meet the budget, but they by law, there's never an expectation that they will stop giving tax cuts to the wealthy, because we can no longer meet our meter. But it's Wow, crazy. I mean, who would who would think of that if if you weren't here to say, Jonathan. So I want to just pause this for a second and just talk a little bit about the big picture that, you know, sometimes people's eyes glaze over and we talk about the budget, we talk about line items, when we talk about nine, subsection nine z like all these sort of boring things. We do not like we do not get anything from our state and from our legislation and from our entire state government, if there's no funding. So the budget is the way that we fund any of the things that we want. It's the way that we fund education. It's the way we fund our roads, it's the way that we fund like there are like anything that happens in the state requires there to be funding for it. Maybe that's obvious, but I just want to point it out and say like, we have to get that funding from somewhere. And when that funding goes down, guess what? cuts are made and those services are not provided. Jordan, I remember the last time we talked about like, how do we had one episode on how to fund everything. And I just there's a quote that you had in there that I just adored so much. You said, basically, well, there's only one group of people that has all the money, and that's the wealthy. So if we want to know where to get the money from, that's the only people who have got it. And just dive into that just a little bit in terms of like, you know, what did we just try to do in terms of getting some of this funding from the wealthy? And then what happened? Let's go walk through like Fair Share.

Yes, so rich countries. So Massachusetts is one of the most economically unequal places on Earth, which means that there's a lot of there's a few people with almost all of our money, and a lot of people who are struggling. And so I think it's really hard because a lot of us think of us as doing okay for us to fathom how much money has accumulated in the hands of very few people. It is more than you could possibly imagine or fathom it is a lot of money more than the Gilded Age more than, you know, Marie Antoinette and France like you are talking people who are really have more money while you are struggling to get by.

I want to– Can I jump in for one second? I'm so sorry to interrupt you, but I just looked up Gini coefficients of the of every state in the United States, right and the Gini Coefficient is a measure of mathematical measurement of inequality. And wow, we are it's hard to say what number we are because they're including Puerto Rico and you know, DC and stuff, but like we are, let's see. New York, DC, Connecticut, Louisiana, Mississippi, California, Florida, Massachusetts. So we are very very hot in the end, one of the quality one of the top 10, for sure, top eight or something in terms of how money will be one of the most unequal places, you you know, and so not as a sort of a sort of side, like one of the things I've been joking about is, you know, in, in Hallmark movies, it used to be that you would fall in love with somebody who had like, earned being rich, but now you just marry somebody who already is rich, which is a real telling side of how much it's unbelievable, even at Hallmark movies, like you can believe all sorts of things, but not that you can earn your way into into being rich. So, you know, like, it's just so bad. And I really think it's really hard for people to imagine how bad but it's really bad and you're struggling, and they're not. And so what we tried to do is say like, look, on every dollar you make over a million dollars, you should just pay a higher tax rate. I think the other piece that's really important is that we also said that if you don't work for a living, you just earn money on your money, you should pay a higher rate of income than people who work for a living. And this in the in the state caught that the most. So not only did so we went to the ballot, and we got you regular voters to agree to increase the amount of taxation on people who make more than a million dollars on the dollar they make above them, and that even up to up to a million dollars, the next dollar, they had to pay a small surcharge that they will never notice to pay for things like roads, and bridges and schools and transportation. And the was worth about a billion dollars and the legislature cut taxes for those people, almost geared towards other people worth a billion dollars. So here we are, we added money and they took it away again. And I think and more in the way they did it in two ways is one for like, focused on dead billionaires. But the other one was to say that if you earn money on your money, so you don't work, you just you if you don't work, but you and you make money on the money you already have that you did not earn, you can pay the same rate now, more at least a lower rate than you used to. Right. And I think that that's important to say also that this is this is that's the like how we got here. And so if we want to pay for things, there's a simple way to get sorry, yeah, no, no. And I just want to say one thing, which is, it's not like, hey, we put something on the ballot and passed it and then they they changed it right, then they undid it. It's like we spent eight years of organizing hundreds of thousands of people, 13 years, 13 years, I mean, the amount of effort that our sides spent to get the fair share amendment passed, and then within what, six months, they ended it. Yes.

It's a democratic supermajority. And what struck me so much when hearing different legislators talking about this is the kind of basic and numeracy that was present in legislators who didn't, who didn't seem to acknowledge that if you've raised like a billion plus new revenue, and then you cut a billion dollars, that you're effectively that you're effectively negating it, or even if those are all additive, they can, the only way that it can be that that new revenue can be additive, is if you're cutting things elsewhere. And that inherently, and that, that all the tax cuts, effectively mean reduced spending somewhere and that like that, it's it was fascinating to watch that not fundamentally click for legislators. I love this, because my kid is nine, and I swear to God, I will be in a car with him and his friend in the backseat. And we'll talk about things like this. This wasn't one of those things. But this is exactly the kind of thing where you would say this out loud to a nine year old. And they would be like, Well, that's obvious. What it is able to understand that if you you know, add taxes, and then you put the same amount in taxes. Ah, it's so frustrating. It seems like a nine year old would obviously understand it's the most basic math. It's like saying that if you had if I had 10 balls in this pile, and then 10 balls in this pile, and then I took away 10 balls, like my word problem. No, you don't still have 20. These people would not pass their MCAS. Oh my God. Oh, boy. So um, Jonathan, talk to us a little bit about downturns. Yeah, so

one of the of the things that's especially problematic that I think that this kind of augurs for the future. So last year during the debate about the tax package, one thing that a number of progressive against had pointed out is that cutting taxes then it particularly when a number of months, we're seeing kind of below what the forecast in revenue collection, that if that was happening, then it that's like the worst possible time. There's no good time to give tax cuts for rich people. But that's an especially bad time. Because what that means is that as the as revenue collection falls, you'll be on, you'll be on less stable footing, and then you'll be having to cut things. And that was a point made, legislators were largely ignoring it. And we've already seen with an addition to the statement about the nine, the 9C cuts that the governor's office is kind of revising their revenue projection for the next fiscal year. And you already see different legislators talking about like this, including as a speaker Ron Mariano talked about the need for some belt tightening coming up, when, which is like, as we've already kind of been noting here, it's just insulting that they will after spending all that time about the importance of reducing state revenue with the tax package to say, Oh, well, we have to do some belt tightening now.

Not there, it's not their stomachs.

It's like do you know? Do you know that meme about that, like, about that goose chasing somebody? And like yelling at them? Do you know the one that I'm talking about? They're like, I keep thinking about that. It was like, when they're talking about these cuts is like, where did the money go? But like, or like who got that money? Like? Yeah, yeah. Right. Right. I mean, it's just like, you know, it's just, and I think the other Iris also remind my people that like, when, when these cuts happen before they happened, we had Max from the MTA, he talked about the thing that he cares a lot about, which is higher education. And we had he had a bill that could for the cost of the dead billionaires tax cut, because, again, you know, no person who is alive. benefits from the estate tax. For the dead people who got that tax cut. We could we could provide all Massachusetts residents free higher ed education. Yeah. So like, it's makes me cry. And it's like, and I think the other piece is because the media covers it, like it's a one day event, they pass this thing. And then that's it. But those tax cuts are permanent. So every single year, that money that day passed for dead billionaires and for investors to get a tax cut, every single year, that revenue would be going to higher ed, to public transportation, to educating your kids to helping the poor people who are now the target of, of cutting opportunities, right cutting money we're spending. So we are spending less money on you. If you have an after school program, if you have any sort of insurance, if you hear about driving or getting around the state, you are getting less money spent on you big to facilitate permanent tax cuts for rich.

Well, I'm hoping Jordan that you can also talk to us a little bit about the fact that we basically just cut budgets, cut, cut, cut, this isn't this is nothing new. Right, that they're cutting parts. Right along with it's been going on for.

Yeah, I mean, so since 2004. And even before that, since 1994. We've had a structural deficit. So what does the structural deficit mean? It's a big word. If we spent all the money we're supposed to spend, based on the laws that we've passed, saying, We want to help these people want to do these things. If we spent all the money we're supposed to spend, we don't raise enough money and revenue to pay for those things. That's even without the fact that every single year they pass a bond bill and a bond bill is borrowing. So it is money that is not in the budget, that they're spending money that they're going to pay interest rates on, you know, you get credit card, and it's not like the federal government who can print money, so tax a budget. So like deficits don't matter. Massachusetts can't print money, so deficits do matter. And so do the bond bill is another way. So then, so now we're paying interest. So we're facilitating interest on past abilities, to balance our budgets and pay for the things we want. And we don't we don't bring in enough revenue. Deval Patrick said to me, so this is some time ago, that under his administration, because of all the tax cuts, we had passed tax cuts we gave out in tax cuts more than we raised in revenue, which is to press So let me just think about that. So we give rich people, corporations, other people occasionally, money from the government, we give for free back to them, then we bring it. And so I don't know if that's still true. I haven't looked at that fact in a while. But like, that's, you know, that's bad. It's really bad. And so if you are the legislature, and you are the you're the governor, you have two choices, you can raise taxes, but we just cut taxes. Or you can cut poor people who we don't care about or visible to us don't vote who are a part of our lives, water part of the things and will pay no, and will and will pay no political benefit from that because they're not just invisible to legislators. What was the last time NPR ran a report about a TANF cut? When was the last time NPR or the Boston Globe did an interview about the effects of cutting the GIC on regular people? When was the last time that Commonwealth coalition frontline and, you know, Commonwealth Commonwealth Magazine did the frontline have a poor person who you know, needs the housing assistance? Right? We're not talking about the little they're invisible to the media, the media has on all the time, these right wing zealots who don't believe in any taxation they have on all the time voices who are elite who are in their circles, we want to call it right there. So they, they're gonna be fun. So it's like, yeah, so I just think it's really, it's really important that we have been cutting since 2004. And that's what happens is poor people get cut, cut, cut, and then what we'll get, we'll get a little bit of grease, we'll put some money back. And then immediately something bad happens. Where did the cuts happen to have an abortion?

And let me comment that the fact that we are a vastly, like highly unequal state with a really high inequality compared to other states, that ain't an accident, right? So it's not like, oh, we started off as a highly unequal state, maybe we can do something about it. It's like, we cut and cut and cut, as Jordan is saying we'd cut all these programs for people who desperately need it. And then we give more and more tax cuts to the wealthy. That is how we become an unequal state. Jordan, I mean, Jonathan, can you talk to us a little bit about the T because this is another place that the the state could have put funding and didn't?

Yeah, you can do so one thing we were as we were chatting before. And Jordan, if you remember who the folks who who kind of issued that report, where there's a report that came out that needs about $2 billion, that the T would need, and that over the years that there have been a number of different numbers, talking about how much if we wanted to actually and deal with all of the repairs that the team needs for the T it goes that the 2 billion number comes from the T that makes it easy, it is what they need to do their job. And that's like, it's one thing that that's kind of striking with that is there has been battling the Baker administration, there was always that discussion of having reformed with that revenue for the T. And the idea of reform of that revenue is this kind of generally, false and toxic kind of neoliberal position that you also see with schools, where people think that problems can be solved simply by changing who's in charge, or by or by like, somehow, the way in which Baker thought that you could fix the T by just letting the staff attrition over time so there would be nobody left. Like, as somehow anything can improve if there are fewer people working on it. But any like these times, it kind of underscores whenever you talk to somebody, particularly in Greater Boston, one of their top priorities will be to like, have a functioning public transit system. And whenever we hear that, like, there's such a disconnect between that very clear will from the voters, and what we see out of the state house, because although with the money dedicated from the Fair Share, there are important new investments that will be undermined by the tax cut expenditures. And like we need new money for that and has to come from somewhere pretty good to have a balanced budget requirement. And it's just a stunning disconnect. And it's a disservice to people across the entire region. Yeah. And it also connects to the fact that like, so few of the people in the statehouse, like reliably even use public transit.

Yeah, I think we are going to close up here. But we want to remind you all that this is the kind of analysis and discussion that you hear almost nowhere else, and you can always donate to us. You can donate it's just below. You'll see the link there and that goes to our young and very talented team of folks that help us with graphics with round with editing with social media and all those things so thank you all for listening we have more guests coming up later this month and we look forward to chatting with you all next week.