State Teaches Cities Fiscal Responsibility

Posted on July 27, 2008 by billmanzi

One of the new items to come out of the state budget is the idea of a commission to study municipal budgeting and monitor local spending. It is covered in todays Eagle Tribune, where we learn that the state is concerned over municipal spending and all of the state aid that is sent to cities and towns. From the Eagle Tribune, David Guarino, for the Speaker.

His spokesman, Guarino, said the current situation is unsustainable.

“When local aid increases 2.3 percent, and they give out contracts (with raises of) 6 and 7 percent, that’s not feasible,” he said.

Dave is pretty good at math. But with the state under continuing scrutiny for gross fiscal mismanagement I am not sure I want to be tutored at that school. I look forward to that commission convening and looking into non-financial ways to help municipalities. How about removing the state imposed prohibition (through school committee veto) on consolidations between school and city. I wonder if the new commission will figure out that one body costs less than two or three. How about removing the seventy percent poison pill for cities and towns joining the GIC? Maybe someone should tell Dave Guarino that health care escalation has been killing cities and towns, and that giving unions additional leverage through that seventy percent number means that they will likely receive additional pay benefits so that cities and towns may receive their assent to join the GIC. I wonder if we need a commission to have the legislature mandate that in order to receive cherry sheet money no municipality could give collective bargaining agreements beyond 2.5 percent. Do we need a commission for that? I look forward to the workings of this commission, and hope some real good can come out of it. Read the Tribune article here.

Posted in Methuen, State News | 5 Comments

More Pension Follies

Posted on July 25, 2008 by billmanzi

The Globe is reporting today on the ability of some local and state employees to gather extra (and earlier) pension benefits by invoking a 1945 state law that gives the richer benefit to twenty year employees who have had their jobs phased out. From the Globe:

The law, passed in 1945, was intended to protect longtime public employees from politically motivated purges, guaranteeing them immediate and significantly higher pensions if their jobs are eliminated or if they are dismissed after at least 20 years on the job. Typically, workers in the state retirement system must wait until they are at least 55 to begin receiving a pension. Unions continue to defend the provision as necessary to help protect workers from being fired or to cushion the blow if they are.

The story highlighted the benefits received by employees of the financially strapped Massachusetts Turnpike Authority.

At the financially troubled Massachusetts Turnpike Authority, for instance, six former employees, including high-level Big Dig managers who were in their 40s and 50s, have taken advantage of the law to reap a combined $3.7 million in pension and lifetime health insurance benefits beyond what they would receive under normal pension rules, an average of more than $610,000 each.

The expenses, calculated by the Globe, were confirmed by the Turnpike Authority, based on state actuarial data on life expectancy and an examination of hundreds of pages of pension records. Many critics, including a few high-ranking state officials, believe that the law that allows for the enhancements should be repealed.

Based on these estimates the Globe has estimated system wide costs.

Extrapolating the costs of the turnpike managers across the entire pool of 386 employees, the state’s tab for all such enhanced pension commitments over the last five years could be as high as $235 million. Using a more conservative estimate, with workers making half as much as the Turnpike Authority officials, the commitment for enhancements over the last five years would be $115 million.

The Globe cited some of the individual cases involved. Here is just one.

Eric J. Waaramaa is among the Turnpike Authority officials who received such enhancements. In a 22-year career with the state and the authority, he worked his way up from planner to the authority’s chief financial officer. But he was terminated last year without explanation, according to a letter dated Jan. 1, 2007, resulting in a $42,036-a-year pension. At the time, Waaramaa was 45 and earning about $105,000 a year. If he had waited till 55, his pension would have been $33,688 a year.

Since then, Waaramaa has worked at the MBTA as deputy director of financial planning, at a salary of $86,142. He picked a 401(a) retirement plan at the MBTA, under which the agency contributes about $6,900 a year toward his retirement.

These stories on some of the abuses of the system are coming when folks are feeling some real pain out there, and quite frankly create a political backlash against all government employees. As we prepare for a referendum on abolishing the state income tax those standing against such a draconian measure should hope that proponents do not have the money to run sixty second ads highlighting some of the things talked about in the Globe today. No real reform could translate into no income tax after November!

Posted in State News | 14 Comments

Ethanol under attack

Posted on July 24, 2008 by billmanzi

With the prices of food commodities soaring Texas governor Rick Perry has asked the EPA to waive the ethanol requirements for gasoline in his state. From the New York Times:

Mr. Perry says the billions of bushels of corn being used to produce all that mandated ethanol would be better suited as livestock feed than as fuel.

Feed prices have soared in the last two years as fuel has begun competing with food for cropland.

“When you find yourself in a hole, you have to quit digging,” Mr. Perry said in an interview. “And we are in a hole.”

Further attempts to provide relief from ethanol mandates have been filed legislatively.

Ethanol is under siege from other quarters. Senator Kay Bailey Hutchison, Republican of Texas, has introduced legislation calling for a freeze of the mandate at the current level, saying it “is clearly causing unintended consequences on food prices.” The measure is co-sponsored by 11 other Republican senators, including John McCain, the presumptive presidential nominee.

And recent testimony by Fed Chairman Bernanke advocated elimination of the tariff on Brazilian sugar ethanol, currently at 51 cents per gallon. See my prior post on ethanol and the Brazilian import issue.

With food prices causing hunger all over the world isn’t it time to look at our policies here?

In a new report, the Organization for Economic Cooperation and Development is critical of biofuels, saying further development will raise food prices while doing little for energy security.

Well I think both points have been proven true. But the ethanol boondoggle continues unabated, with supporters launching political counter-attacks.

In ethanol’s home ground of the Midwest, where much of the corn is grown and the additive is made, Mr. Perry’s petition was opposed by 12 governors. Senator Charles Grassley, Republican of Iowa, accused the Grocery Manufacturers Association, the group leading the public relations fight against ethanol, of “treasonous” acts.

Ethanol supporters also hold out ethanol as critical to our energy future.

A cut in the mandate might be the beginning of a slippery slope that could mark the end for ethanol, said Lee Reeve, one of the pioneers of the industry. His Garden City, Kan., plant has been in operation since 1982. “If this goes through, I guarantee you that by next Thursday there would be arguments about how we should get rid of the mandate entirely,” he said. “And where are you going to find the oil to replace eight or nine billion gallons of ethanol?”

An expensive boondoggle that ought to have its taxpayer subsidy revoked. It is ironic that some of the biggest ethanol supporters routinely lecture us about the sanctity of “free markets” and “free trade”, except for Ethanol.

Read the New York Times story here.

Posted in National News | 1 Comment

It is time for Campaigning!

Posted on July 22, 2008 by billmanzi

I had the video below sent to me via email, and it is pretty clever. Blue Mass group has it posted as well. Enjoy.

Posted in National News | 2 Comments

Timetables, Horizons and al-Maliki

Posted on July 21, 2008 by billmanzi

The Bush Administration is seeking clarification from the Iraqi government after German magazine Der Spiegel printed remarks from Iraqi Prime Minister Nouri Al-Maliki that appeared to support the position of Barack Obama on a sixteen month withdrawal timetable for American troops. Maliki seems to be pushing the Americans for some sort of exit strategy, and has even gotten President Bush to support a “general time horizon” for withdrawal of American troops. How is a “time horizon” different than a “timetable”? I am not sure but maybe John McCain can explain that in his next talk on Iraq. After pressure from the Bush Administration the Iraqi government did indeed issue a “clarification”, putting out a statement that Der Spiegel had botched the translation. But the New York Times quickly blew that explanation away.

But the interpreter for the interview works for Mr. Maliki’s office, not the magazine. And in an audio recording of Mr. Maliki’s interview that Der Spiegel provided to The New York Times, Mr. Maliki seemed to state a clear affinity for Mr. Obama’s position, bringing it up on his own in an answer to a general question on troop presence.

The following is a direct translation from the Arabic of Mr. Maliki’s comments by The Times: “Obama’s remarks that — if he takes office — in 16 months he would withdraw the forces, we think that this period could increase or decrease a little, but that it could be suitable to end the presence of the forces in Iraq.”

He continued: “Who wants to exit in a quicker way has a better assessment of the situation in Iraq.”

A top advisor to al Maliki talked of the domestic political discontent over the presence of foreign troops in Iraq.

“Foreign soldiers in the middle of the most populated areas are not without their side effects,” he said. “Shouldn’t we look to an end for this unhealthy situation?”

With Obama on a diplomatic tour of the region the al-Maliki comments had to have stung President Bush. And Iraqi discontent with foreign troops on a semi-permanent basis in Iraq is a political problem for the Iraqi Prime Minister. I find it stunning that the Iraqi political leadership is routinely lectured by American politicians about breaking partisan gridlock in Baghdad and showing political courage in the face of hostile public opinion. Do you think the Iraqis ever ask about the Washington situation in response? Read the New York Times story here.

Posted in National News | 3 Comments

The Gore Speech

Posted on July 20, 2008 by billmanzi

Al Gore gave a major speech last week on energy. I know that the Gore haters will flame this post, but Gore is breaking some important ground. And in anticipation of the criticism lets get right to it. It has been 8 years of Republican “energy policy” that has brought us to the edge of energy disaster. And what can we talk about in this post. Well lets start with the fight in Washington over CAFE (Corporate Average Fuel Economy) standards. Without going into all of the details of CAFE let me simplify by saying that there has been a move for many years to increase the existing CAFE standards so that auto manufacturers would be forced to increase fuel efficiency of the autos they are selling the American public. And every time that issue comes up we hear the Republican opposition (and John Dingell) state many things. They have essentially told people that cheap gasoline is an American birthright. They have said that raising CAFE standards would cost jobs and cripple American auto manufacturers. Well it appears that the Republican policy of build em big and thirsty has brought the Big Three to the brink of disaster. GM Chairman Rick Wagoner is still trying to figure out what happened. While he is thinking about it GM is burning as much as a billion dollars a month in cash. They have said that raising CAFE standards will lead to safety problems on the roads. What nonsense.

While the Republicans have told people that everything is fine in energy we as a nation are preparing for a winter where many people will not be able to afford to heat their homes. The Republican have stood in charge of the greatest transfer of wealth in the history of commerce, sending trillions overseas to buy oil, and not producing one tangible policy to reduce that dependence. The best I can figure for energy policy from the Bush Administration is going to Saudia Arabia and begging the King to pump more oil. We can do better, and we must do better. So lets talk about the Gore call in that context. It has been Gore giving clear and unambigous warnings about where we were headed. Lets talk about energy policy in this country, and the total abdication of leadership by this administration. I will try to do postings on some of the energy proposals and the political disputes that surround many of them in the weeks ahead.

Posted in National News | 10 Comments

Cahill moves to standardize design

Posted on July 18, 2008 by billmanzi

State Treasurer Tim Cahill, in charge of the Massachusetts School Building Authority, has called for standardized design to be used for new school construction. The Cahill call for such use is in line with a long-standing request by Inspector General Gregory Sullivan for such a program. From today’s Boston Globe:

State Treasurer Timothy P. Cahill, trying to head off what he calls “Taj Mahal” high schools, said yesterday that he wants cities and towns to begin using off-the-shelf building designs that could cut school-project costs by 30 percent.

The goal, Cahill said, is to shave tens of millions of dollars from the cost of building new schools, which have reached as high as $197.5 million for the new Newton North High School, a lightning rod of discontent over the escalating price tags for such projects.

Cahill would like to create this program and add financial teeth to it by refusing to fund projects that fail to utilize the standard design.

Cahill said that towns that have suitable sites and refuse to use the cheaper designs might not receive state funding or would be told they can renovate their school but not build a new one.

Cahill estimates savings of up to thirty percent on some projects were this program to be implemented.

Of course standard design has some naysyers.

“In Massachusetts, there are no prototypical sites or prototypical communities,” said George Metzger, a principal with HMFH Architects in Cambridge, arguing that most designs would have to be substantially modified to fit a site. “I’m skeptical it would save any money, and we could lose the character of our community-based school systems.”

Yes George wants us to be able to keep our local character, and in doing so continue to pay huge fees to architects. I am quite sure that those fees are secondary in his mind to the “local character” issue but I have a feeling taxpayers prefer the less expensive method proposed by Treasurer Cahill.

IG Sullivan strongly supports the concept.

“I consider it to be one of the most significant financial reforms in Massachusetts over the last 25 years,” Sullivan said. “It could save hundreds of millions of dollars over the next decade.”

The Massachusetts School Building Authority has made key reforms of the entire local school building program, and cut away some of the frankly ridiculous local practices that had driven costs up to the stratosphere. (But we did have a lot of local character).

The idea of standardized design makes so much sense that is hard to believe that someone is actually considering it. The Treasurer deserves credit for creating a system that saves money, and in doing so allows more local projects to be built. What some find hard to understand is that there are financial limits. As Methuen is one of three approved High School projects in Massachusetts I can tell you from experience that the Building Authority has instituted badly needed reforms that will mean that more school projects will be built in Massachusetts. Kudos to the Treasurer for this concept and for the management of the M.S.B.A. Read the Globe story here.

Posted in Methuen, State News | 4 Comments

Methuen adds lacrosse

Posted on July 18, 2008 by billmanzi

I have had numerous requests in the past year to add the sport of lacrosse to the outstanding menu of youth sports activities in Methuen. With a group of persistent residents nipping at my heels I have promulgated an executive order creating a Methuen Lacrosse Committee to gauge resident interest and create a lacrosse program for our city.

The program would initially be run under the auspices of our Recreation Department, with the goal of creating an independent association similar to the other youth groups running sport specific programs in Methuen. My thanks to Caroline Hamel, who put the idea forward at a neighborhood gathering, as well as Ernie Difiore and Wayne Puglisi. We will try to get started with a lacrosse clinic in September that the new committee will set up. As always we are fortunate to have a great Recreation Director in Bill Pare, who has helped to coordinate all of this effort.

As a UMASS Amherst graduate I remember the glory days of the UMASS program run by coach Dick Garber. “Garbers Gorillas” were a nationally ranked team playing at the very top echelon of national lacrosse, so we have a rich history of lacrosse in Massachusetts. Hopefully we will soon have something similar in Methuen. Read the Tribune story here.

Posted in Methuen, Sports | Leave a comment

Texas moves further ahead on wind

Posted on July 18, 2008 by billmanzi

Texas, the national leader in wind power, has approved what is being described as the nation’s largest wind power project. From the Globe:

Texas officials gave preliminary approval yesterday to the nation’s largest wind-power project, a plan to build billions of dollars worth of new transmission lines to bring wind energy from gusty West Texas to urban areas.

Texas is already the national leader in wind power, and supporters say yesterday’s move by the Public Utility Commission will make the Lone Star State a leader in moving energy to the urban areas that consume it.

“We will add more wind than the 14 states following Texas combined,” said PUC Commissioner Paul Hudson. “I think that’s a very extraordinary achievement. Some think we haven’t gone far enough, some think we’ve pushed too far.”

Texas will increase wind generation from 5,000 megawatts to about 18,000 megawatts. Good job Texas.

Posted in State News | 1 Comment

Legislature Removes Municipal Retiree Cola

Posted on July 17, 2008 by billmanzi

The legislative budget conference committee removed the provision that had been inserted in the Senate version of the budget that raised the base for calculating municipal retiree cost of living increases from $12,000 to $16,000. This prospective change, made without the benefit of additional state funding, had been widely criticized by the MMA and other local officials (including myself). See my post “Pension Pile On” The legislature agreed to further study the state and local pension systems by creating a commission to do so and including a representative from the MMA. It was a wise decision made by the legislative leadership, in spite of the fact that retirees at that level could use an increase. Funding sources must be identified for future benefit increases or the house of cards that exists today will be made worse.

Posted in Methuen, State News | Leave a comment