THE PIONEER BLOG

MA budget woes and the federal stimulus package

Governor Patrick has to close a budget gap of at least $950 million at this point. How will he do it? What we know so far is that the Governor is seeking · Over $300 million in additional cuts · $128 million local aid cuts Which means that via withdrawals from state reserves and anticipated assistance from the still being defined federal stimulus package, he will need to close at least half a billion dollars of the budget gap. I think we will be learning quite a lot about the federal stimulus package from the Governor’s budget announcement at 11 a.m.

Fiddling while the budget burns

It took about a year after I left the State House to realize that no one outside the building cared when the Governor’s budget was released or who vetoed what or hundreds of other ‘events’ inside the building. With that in mind, I think its time for the House of Representatives to call themselves to order for real. The protracted drama over Sal DiMasi and the now-resolved Rogers-DeLeo spat made for great palace intrigue. But they crowded out important policy issues, like massive mid-year 9C cuts, a $3 billion deficit in FY10, and..yes..the upcoming release of the Governor’s budget.

What Problem Are They Trying To Solve

Bureaucracies have a wonderful, self-sustaining way of letting rules and regulations evolve. They are less skilled at pulling back from their day-to-day existence and asking “why do we do this?” I bring this up to frame a story of one particular family’s experience registering with the Boston Public Schools (which have seen enrollment decline over the past 10 years). And from anecdotal evidence, I can assure you that no one from outside Boston is sneaking their children into Boston’s kindergartens. Yet, upon presentation of proof-of-residency that included a copy of their property deed, multiple utility bills, proof of mortgage payment, and car registration, they were informed that additional documentation would be needed. (And as a sidebar, all this information is […]

Will the Guv hit a homer on charters or more ho-hum

The Governor is making an announcement on charters. He has taken a lot of heat on his opposition subsequent to the Boston Foundation report that clearly demonstrates their success. The question is whether he will come out and target attention on charters to the urban districts, which we believe should be the compromise, or whether he will come up with an unworkable finance scheme? If the latter, if he underfunds charters, then he is essentially making the argument that we should have a separate and unequal funding stream for charters. He doesn’t want to do that now, or does he? Remember: Ed reform in 1993 came out of a court case that insisted on a fairer use of funds for […]

Jeremy Piven?

Today’s Globe has a well-meaning op-ed that uses Jeremy Piven’s alleged mercury poisoning as its lead. This would be the ‘mercury poisoning’ that required him to go to Thailand to recuperate. For those of you with great interest in the topic, the NYPost recaps a variety of Mr. Piven’s exploits during his illness, including boozy late night parties and using mass text messages as a way of…ahem..meeting new friends. And a fisheries trade group took the liberty of posting Mr. Piven’s recent Good Morning America appearance on you-tube, with their own running commentary. In their defense, the op-eds authors do clear their throats two paragraphs into the piece, noting that Piven is widely discredited at this point. So don’t use […]

All We Got Was Paint and Carpet

Pioneer HQ has just undergone a facelift, but it appears we set our sights too low. Among the dirt thrown at departing Merrill Lynch CEO John Thain was that he spent $1.2 million sprucing up his office, including: $87,000 for an area rug in Thain’s conference room and another area rug for $44,000; a “mahogany pedestal table” for $25,000; a “19th Century Credenza” in Thain’s office for $68,000; a sofa for $15,000; four pairs of curtains for $28,000; a pair of guest chairs for $87,000; a “George IV Desk” for $18,000; six wall sconces for $2,700; six chairs in his private dining room for $37,000; a mirror in his private dining room for $5,000; a chandelier in the private dining […]

If you thought of them as customers, existing ones would be important

The Turnpike cranked out one of the more inexplicable pieces of public policy last week — adding a $.50/month charge for FastLane transponders. For potential new users, this is a actually a passable deal — you can get a transponder for free (versus $25.95 one-time charge) with a payback of more than four years. For existing users, this is ridiculous — you paid a flat fee upfront and the Turnpike is changing the terms of the deal. I wonder if EZ-Pass Arbitrage will increase? This space is a huge booster of open road tolling, so its disappointing to see the Turnpike do this, unless its part of some brilliant political strategy whereby the Turnpike alienates as many political constituencies as […]

The Great, The Good and The Bad of the Gov's speech to local officials

Today’s speech by the Governor before the Massachusetts Municipal Association was largely a very good one based on some very good plans. Kudos to the Governor. Let’s start with the Great, and, yes, there is also Bad. Great • The idea of requiring “each community to move all of your retirees to Medicare coverage and give you the option of extending your pension schedules within fiscally responsible parameters” is great. • The push to regionale “municipal services and other reforms around procurement and contract advertising” is great, but we have seen few details on the tools and incentives the state wants to provide. Pioneer’s own Steve Poftak was also at the MMA, presenting our recent study of obstacles and lessons […]

So you want European-style health care

Atul Gawande has a great piece in this week’s New Yorker on the many varied ways to get to additional, and even universal coverage. Sidebar: Great, with the exception of his high praise for Paul “Ugh” Krugman, who he notes “received a Nobel Prize in Economics in part for showing that trade patterns and the geographic location of industrial production are also path-dependent.” Fact is, the insight that technology and trade patterns were “path-dependent” was well known to Piero Sraffa, neo-Marxian economist and author of The Production of Commodities by Means of Commodities. Yes, I know such obscurities can only be explained by personal histories. Dark histories. I wrote my undergraduate thesis on the man. To all accounts Piero was […]

Ken Lewis is on the clock

Ken Lewis’ dramatic firing of John Thain from BofA only highlights the next departure — Ken Lewis. He bought Merrill at the height of the crisis and clearly fumbled the due diligence on the deal. Otherwise, why does he need $20b in funds and $120b in guarentees from the Feds to do the deal only a few short months later? A hidden winner in all this? Old Friend Brian Moynihan, who takes over for Thain.

NEA's largesse from their disclosure report

The Education Intelligence Agency‘s just released scoop, entitled “The National Education Agency shares the Wealth to the Tune of $11.7 Million,” gives you a breakdown of where all those teachers’ dues went. (Supplementing members’ dues is “a small percentage derived from advertising and other miscellaneous revenues” and “sponsorship funds from major corporations: $25,000 from Verizon, $67,000 from Target, and $71,000 from Hyundai.”) Keep checking in with EIA, as they will soon have further revelations from NEA’s disclosure report. An Education Intelligence Agency analysis of NEA’s financial disclosure report for the 2007-08 fiscal year reveals the national union contributed $11.7 million to a wide variety of advocacy groups, charities, and advisors. The total is about the same as it was in […]

Urgency on education

No increase in the charter cap. No urgency to put back into place an accountability system that Governor Patrick zeroed out in his first budget. No urgency whatsoever to do more than talk about the achievement gap. This is when criticisms about “just words” begin to make sense. We have seen great gains in education, but none of it is attributable to anything this administration has done. For they have not done anything but talk about education policy. Consider the difference between the Governor’s record on education, as we head into year three, and the urgency of Mayor Adrian Fenty, of DC, who has made change in education the number one priority of his administration. Perhaps the quickest way to […]

Obama-Day Mind-Meld

To a comment left on a post on state budget cuts I made the other day at Blue Mass Group, I suggested that federal stimulus dollars might only exacerbate the structural problems in the Commonwealth’s budget because money that flows in this year that is applied to operating expenses will, eventually, have to be supplemented once federal stimulus is off the table. As I wrote, Relying on federal money to close an FY10 budget gap would simply be kicking the difficult decisions we need to make down the road. Well, now, in a meeting with the Washington Post’s editorial board, President-elect Obama had this to say when discussing Social Security, Medicare and the country’s long-term budget deficits: What we have […]

Someone please strip of him of his chairmanship

It seems Edolphus Towns, the incoming Democratic Chairman of the House Committee on Oversight and Government Reform, is calling for hearings on college football’s Bowl Championship Series. He’s even considering subpoenas for NCAA officials, coaches, players, athletic directors and college presidents. So, let me get this straight. The economy’s in meltdown, Israel has launched a war on Hamas in Gaza, we’re fighting two wars of our own, Russia’s doing it’s annual cut-off-the-gas-to-Ukraine routine, no one seems able to account for the first $350 billion distributed during phase one of the financial sector bailout, the national debt is about to cruise by $10 trillion at 65 mph, if there’s a single state out of the 50 that isn’t staring a yawning […]

Tax Time

Some smart aleck once said that the two most effective reforms would be to require every elected official to send their kids to public school and to fill out their taxes without any outside assistance. The second part of that point is reinforced today by the story of Treasury Secretary Geithner’s tax problems — he failed to pay a portion of his taxes during his term at the IMF and had a housekeeper who was briefly out-of-status. The point here is that the head of the New York Fed and presumptive Treasury Secretary, using an accountant, can’t properly understand the tax code. What are mere mortals supposed to do?