Thursday, October 7, 2010

Deval Patrick claims cuts of $4.3 billion from Massachusetts' budget

Rhetoric surrounding governmental budgets is always the same. You listen to the politicians claim that they’re cutting budgets, sometimes to the bone, and yet your property taxes go up or sales tax goes up or income tax goes up—you get the drift.

Our governor is crisscrossing the state claiming that he’s cut $4.3 billion from the state budget. No one seems adept enough to challenge his assertion, not even the other three candidates for the governorship.

When a politician says he “cut the budget,” invariably that means the new budget is bigger than the old budget. Make sense?

No?

Then why would Deval Patrick claim that he’s cut the budget when he hasn’t? Because politicians believe that reducing their wish list budget to the actual budget constitutes a budget cut.

Let me explain. Say that your family plans to take a Disney vacation and you budget $3,000 for it. You go and have such a great time that you decide to go again next year—not once but twice. Before next year rolls around, you find out that your hours are being cut back at work, so you cancel your plans for the second trip but can still swing one Mickey Mouse adventure.

An accountant would compare those two budgets—$3,000 spent in the first year and $3,000 spent in the second year. No change.

A politician would claim that he “cut the budget” by $3,000. If, instead, that second trip was an around the world tour, who knows how much the pol would claim? Most likely it would be described as a “draconian cut.”

So what’s the truth?

The commonwealth’s general appropriation act (GAA) for fiscal year 2006 (the year before Patrick took the helm) was $23.9 billion. Our current fiscal year, which runs from July 2010 to June 2011, started with a $26.7 billion GAA and the legislature is just about to add $400 million to it. At $27.1 billion, Patrick will have increased the budget $3.2 billion since becoming governor.

A more accurate description of the $4.3 billion in “cuts” would be $4.3 billion in “reductions to projected budgets that never got passed into law.” But that doesn’t roll off the tongue very well. Does it?

Click here to see the GAA trends. Make sure to look at page 2 to see the FY06 numbers.

The other statement Patrick is making relates to the number of state employees. This morning, he said that we have fewer employees now than when he took office.

So what’s the truth?

Patrick inherited 65,439 employees from FY06. The projected number of employees for FY11 is 66,702. That’s 1,263 more.

The counter argument to this would be that these figures, which reflect actuals and projections as of June 30th are not the actual numbers as of January 2007 and October 2010. Since the monthly figures are not posted anywhere that I can find, it puts me at a disadvantage debating this point.

Click here to see the comparison of employment levels. Again, make sure to look at page 2 for FY06.

It must be the auditor in me, but I remain skeptical of just about anything a politician says, especially when it comes to budgets and finance. As Jerry Maguire might have said if he were a CPA:

SHOW ME THE BUDGET ANALYSIS!!!

1 comment:

  1. Randy,

    Don't be too skeptical or you won't have any friends next January.

    Just kidding, I know you will do what is best for us when you get to Boston next year.

    When the Boston people raise our taxes, it is not really raising taxes, it is a cut. They raise the tax for us, take in more, cut what comes back to us in local aid and then the town raises their taxe. The end result is a cut in my disposable income.

    Sotheby

    ReplyDelete

I monitor all comments. As long as there are no personally defamatory statements and/or foul language, I'll post your comment. For this reason, your comment will not appear instantaneously. To comment without registering, choose Name/URL and type a screen name (or your real name if you like) into the Name field. Leave the URL field blank.