Susan Rice today took her name out of contention for the Secretary of State position, seemingly clearing the way for John Kerry to be named by the President to that slot, possibly as early as tomorrow. The intrigue may begin in Massachusetts. Will the Legislature change the law governing succession? If not will Governor Patrick impose a “promise not to run” caveat on the person he names to the interim slot? Buckle up, here we go. President Obama’s statement on Ambassador Rice’s withdrawal is below.
Today, I spoke to Ambassador Susan Rice, and accepted her decision to remove her name from consideration for Secretary of State. For two decades, Susan has proven to be an extraordinarily capable, patriotic, and passionate public servant. As my Ambassador to the United Nations, she plays an indispensable role in advancing America’s interests. Already, she has secured international support for sanctions against Iran and North Korea, worked to protect the people of Libya, helped achieve an independent South Sudan, stood up for Israel’s security and legitimacy, and served as an advocate for UN reform and the human rights of all people. I am grateful that Susan will continue to serve as our Ambassador at the United Nations and a key member of my cabinet and national security team, carrying her work forward on all of these and other issues. I have every confidence that Susan has limitless capability to serve our country now and in the years to come, and know that I will continue to rely on her as an advisor and friend. While I deeply regret the unfair and misleading attacks on Susan Rice in recent weeks, her decision demonstrates the strength of her character, and an admirable commitment to rise above the politics of the moment to put our national interests first. The American people can be proud to have a public servant of her caliber and character representing our country.
There has been much writing, and plenty of really obnoxious pontificating, on the Tim Cahill case. We have run the gamut, from speculation on retrying Cahill, to whether the non-verdict is a reflection on Martha Coakley, and how that impacts her political future, all the way to Bill Weld talking about Mazola oil.
Cahill was tried under a new statute that criminalizes the utilization of public monies for self promotion. The 2009 law tries to discourage the type of behavior that Cahill was charged with, and I am not sure who could argue with the premise. But as the Cahill trial showed, proving the allegation, even with an email trail, can be exceedingly difficult. So what can be done to achieve the policy goal that the new law seeks? Is it to place Tim Cahill into criminal court facing a five year jail term? I submit that it is not.
As with many things in government these days problems are not addressed with workable solutions, but with public relations stunts that end up leaving a big pile of smelly stuff on the table. And that smelly stuff is just what we ended up with in the Cahill case. We have the Globe editorial board admitting that this was a cluster, but urging folks not to take the wrong lessons from this case. The editorial showed just how stupid this law, and this prosecution, were, while trying to show the exact opposite.
It’s certainly true that the line between self-promotion and the outright diversion of resources can be hard to find in politics. Elected officials pursue policies that reward their supporters and make appearances at public expense in places whose voters they’d like to court. Boston Mayor Thomas M. Menino famously has his name on anything and everything the city touches — up to and including its recycling bags. The public should resist such practices. Yet the very pervasiveness of this conduct suggests the need to set some sort of line, to separate the gross abuses from the mundane. A politician who allegedly spends $1.5 million in public ad money for the stated purpose of promoting himself should be subject to prosecution. That money could better serve countless legitimate social needs.
So now we need to allow some of this conduct, but draw a red line at some undefined point. Recycling bags with pictures are not good but should not result in charges, but Tim Cahill must be prosecuted because he ran ads that did not mention him. Intriguing theory. Who will draw the line? Prosecutors? We have constitutional officers now making public pronouncements that they will omit any pictures and references to themselves. Hilarious. Are they aware that a public service message too close to an election might trip a prosecution? Or would it? The law itself will never bring a single conviction in its current form. The Cahill case, from a prosecutors view, is as good as it will ever get. That’s only my opinion, and I am not a lawyer, but lets see what the future brings.
In light of the above do I believe that using public resources for political gain should just be allowed? Is Weld right in calling it Mazola oil? I don’t think so. Adjudicating claims against office holders of this type belongs with the State Ethics Commission, with big fines for activities that are clearly defined. If Cahill ended up before Ethics he might have thrown in the towel, agreed to a finding, paid the fine and moved on. The idea that even in light of the result it was a good idea to prosecute Cahill to promote future adherence to the law is more of that smelly stuff that the law itself left behind. Cahill and his family are human beings, and the idea of using them as guinea pigs should repulse decent people. He is, and was, dead politically.
Attorney General Coakley was in a difficult position. If she did not prosecute she would likely be accused of declining on the basis of politics. When she did prosecute she was accused along the same lines. The fault lies with the law, not with the A.G. But now the wise and prudent choice,moving forward, is the obvious one. I hope she declines to re-try.
When Tim Cahill was the Treasurer I served as Mayor of Methuen. He was very kind to the City in his capacity as the head of the Massachusetts School Building Authority, and the Methuen High School Project moved forward with his support. In the race for Governor I endorsed Deval Patrick.
As a footnote to this much has been made of Cahill’s lack of political acumen. He was repeatedly told that an independent candidacy for Governor was suicidal politically. But like many folks who think that normal rules of politics do not apply to them Cahill plunged forward and got his ass handed to him. He has been derided for that judgement, and justifiably so. But you cannot be tried for political stupidity. I hope that someone has the guts to look at the law, and recommend necessary changes.
I have done a couple of posts about the setting of the “municipal tax factor”, and the annual request by City Councilors from around the Commonwealth to Mayors and Managers to lower tax bills by raiding free cash and reserves. As you know I have been against such actions, and have outlined my reasons in those prior postings.
I find it amusing (but maddening when I was a Mayor) to hear City Councilors express “shock” at tax classification time at the idea that the budget that they voted for would now have to be funded. Of course that “shock” is now reverberating throughout the Commonwealth, as Councilors urge the burning of reserves that have taken years to build. Such actions go against every model of responsible financial management, and have no support from any responsible financial folks familiar with municipal budgeting. They lead to “structural deficits” in the following year, since the level of spending remains the same or goes up, while revenue remains below expenses by the amount of the utilization of one time revenues. What that means is that the following year you need to raise that money, by taxation, or cut spending. The burning of reserves now takes its place as the local version of the budgeting fad known as “kicking the can down the road”. Don’t want to make tough decisions at budget time? Burn some reserves at tax time, and let us promise to get tough in the next budget cycle! (Which will not be here for another six months.) Then rinse, and repeat.
When a municipal budget is submitted it is shown to be in balance by law, with the Manager or Mayor submitting not only the expense side, but the revenue side as well. That revenue side contains a number for the “tax levy”, the amount to be raised by property taxes. For those municipal councilors expressing “shock, horror, despair and despondency” during tax setting time the question must be asked: Why didn’t you demand that the tax levy number be reduced at budget time? And then why did you not propose budget cuts equal to the levy reduction? The property tax burden goes down for every dollar that you reduce the tax levy. That is how you reduce the property tax burden, not by burning reserves. So for citizens wondering about local budgetary double talk you can start right there.
Another rather funny response from those looking to burn reserves at classification time comes when they are shown the process, and the math, in public settings or through the media. They invariably shake their heads and come up with one of the following:
1) “The Mayor or Manager should cut the budget, not me.”
2) “I understand that your math and facts are absolutely right, but lets do this so we look good.”
3) “Even if citizens are actually seeing a reduction in their tax bills, it is bad for us if they think bills are going up.” “Lets burn reserves to combat that perception problem.”
Hilarious stuff, as long as you are not the CEO. But it is truly dangerous stuff for creating a stable financial outlook for so many cities and towns that have been hit hard by the economic downturn, and who still have serious financial challenges ahead.
Councilors have the right, at budget time, to cut the budget submitted by the Mayor or Manager. The next time you are at a coffee shop and you hear a Councilor railing against the tax burden ask him how much he proposed cutting out of the municipal budget. When you hear crickets chirping you will know that the tax talk is more political double talk.
A podcast of my weekly chat with Teddy Panos and the morning crew over at WCAP. Talking about the fiscal cliff, the potential for a deal, and what the right ratio of spending cuts to revenue increases should be. Thanks to Ted, Tod and Chris for having me on.
Republicans in Congress find themselves caught between a rock and a hard place. As the President digs in on the issue of tax rates for the top 2% of earners the Republican Party seems to be imploding, unable to make decisions that are both necessary, and ultimately in their own interest.
I have predicted here that we ultimately would “go over” the so called fiscal cliff. I based that on my idea that Republicans would not be able to be able to vote for any increase in the top tax rates, and that inability would force us over the cliff. So far the Republicans are meeting expectations. Why should the Republicans agree with the President? Wouldn’t that just be giving in?
Republicans helped craft both the “sequester” as well as the “temporary” Bush tax cuts. The sequester is a big group of budget cuts, including defense, that was designed to be so “onerous” that neither party would fail to reach agreement through the so called “super committee” to come up with a deficit reduction plan. The Bush tax cuts were designed as temporary by Republicans who were attempting to reduce the impact to the deficit score put out by CBO. It was calculated and deliberate. With the sequester coming on line, and the Bush tax cuts going off line Republicans want to eliminate the sequester (or at least the Defense portion) and extend all the Bush tax cuts. So much for their stated desire for deficit reduction. With President Obama winning re-election the Republican strategy of hold and grab, giving nothing and refusing to deal on anything until the election, has effectively blown up in their face. So where do they go from here?
Due to the strategy of the Republicans own making the Bush tax rates are going to expire for the top 2% no matter what they do. The only question left is whether, in a fit of pique, or just because they are having a temper tantrum, the Republicans refuse to pass tax relief for the other 98% of Americans. Their options at this point are not great, and if they had any sanity left the facts on the ground would compel a deal. As they look back at the blown opportunity for a “grand bargain” with President Obama they must now realize what a mistake they made. That mistake was driven by the hard right in the House Republican caucus, and led by Eric Cantor. Leaving aside the substance of the tax issue the political reality is that Cantor and the Republican caucus rolled the dice and came up empty, but now want a redo. The President is not having any of it. Republicans can drive us off the cliff, but the rates for the top 2% will still be 39.6%. And they will pay a heavy political price for having done so.
So the Speaker is stuck with some of the same circular firing squad members as he had before, and his help from outside the House is not what I would call assistance from friends. Speaker Boehner has offered $800 billion in revenues as part of his proposal, but claims you can get that number from “closing loopholes”. But he fails to identify which loopholes would produce the revenues. He also fails to take into account how such loophole closings might impact potential tax reform in the next Congress. All iterations of tax reform seem to rely on reducing or eliminating loopholes, and producing a simpler rate structure. Boehner’s plan would grab some of those now for simple revenue production, just to stop a relatively small increase in the tax rate for the top 2%. Unless reality sets in the Speaker is going to end up with egg on his face again. So what is a surrounded Speaker to do?
The Speaker first needs to determine that he will allow forward a bill that does not have a “majority of the majority”. If he refuses to move a compromise forward on that basis the odds are we go over that cliff. What might that compromise look like? I believe that the Speaker, being a realist and a deal cutter at heart, is willing to give on rates. But they do not have to be a replica of the Clinton era rates. The current threshold of $250,000 could be changed, with a smaller rate increase for that category, and new higher rates for higher thresholds. ($500,000 and $1 million?) Obviously the numbers have to work (the new revenue number will be reduced from the Presidential ask of $1.6 trillion down to between $1 and $1.2 trillion as part of the bargain). Once that part of the problem has been solved everything else will fall into place, with the possible exception of the debt ceiling. A new sequester will be devised for the bulk of the “entitlement” issue, which will essentially kick that can down the road to the next Congress. The President and Speaker could eliminate the defense sequester, but leave some portion of the non-defense sequester in place to satiate Republicans. The AMT patch could be enacted, and the two may trade off on the estate tax and capital gains tax, with a likely result being a hike in the capital gains rate in exchange for some level of continuation of current law on the estate tax. There does not seem to be a lot of support in Washington for an extension of the payroll tax cut, but that could be coupled with an extension of unemployment benefits that in some way has each side giving some. (Republicans give on unemployment but manage to get rid of the payroll tax cut).
Sounds pretty easy, eh? Maybe it is, for me. But the Speaker, if he agrees to what he must end up accepting anyway, will be put under a massive attack by that circular Republican firing squad. A deal that requires the Speaker to rely on Democratic House votes to pass is packed with political peril for John Boehner personally. But a deal that requires Republican majority support will be substantially harder to find. The Speaker is trying to gain control of his caucus, and he got Eric Cantor, Paul Ryan, and Kevin McCarthy to sign on to the $800 billion revenue offer. Can he get those three to sign on to rate increases? Doubtful at best.
For those looking for the betting line: Over the cliff is still a favorite, although the odds have been reduced in favor of a deal. The President’s weekly address is below.
Rep-Elect DiZoglio to Host Holiday Jazz Brunch to
Support Local Families in Need
Methuen, MA – State Representative-elect Diana DiZoglio (D-Methuen) invites local residents to join the Methuen Arlington Neighborhood Inc.’s effort to help local families in need this holiday season. DiZoglio will be sponsoring a Holiday Jazz Brunch to raise awareness and support for their “Adopt-A-Family” program. All donations welcome and %100 of the proceeds will go directly to the families in need.
The goal of Methuen Arlington Neighborhood Inc. is to increase and enhance entrepreneurial opportunities, neighborhood investment, revitalization activities, and self-sufficiency of low and moderate income residents of the Methuen Arlington Neighborhood.
“We support low-income, working poor families that otherwise would not have anything under the tree for their children because they are just trying to make ends meet”, said Safe Haven Coordinator Linda Soucy. The Executive Director of the Methuen Arlington Neighborhood, Bill Manzi, points out that the “Adopt-A-Family” program, has sustained great success over the past sixteen years. “We have helped many working/poor families in the neighborhood enjoy their holiday thanks to the unmatched support and generosity from individuals and companies in the community”, said Manzi. “The Adopt-A-Family Program and Holiday Food Basket Delivery are crucial to the families of our neighborhood. These specific programs ensure that financially strapped families in our community are able to enjoy their holiday season, grateful that their children have been provided with food and presents during this stressful time of year. With your help and support, we can continue this great tradition,” said Manzi.
The Holiday Jazz Brunch will be held on Sunday, December 16th, from 11:30am – 2:00pm at Taza Mediterranean Cuisine Restaurant at 169 East Street, Methuen. A buffet style brunch will be served and guests will enjoy a live, jazz performance by Ed Saindon and Billy Novik.
“I spoke with members of the board at Methuen Arlington Neighborhood Inc. to find that the sorts of things on the wish lists for these children are warm winter boots and blankets. I am pleased to host this event and join in the effort to engage our community by providing an opportunity to meet other active residents, listen to live music, and enjoy a great meal to support neighbors in need this holiday season,” said DiZoglio.
Please contact M.A.N with any questions about this amazing program by calling (978) 691-5645, or by emailing methuenarlington@yahoo.com. For more information about the Methuen Arlington Neighborhood Inc. visit their website at http://www.methuenarlington.com. To find out more about the Holiday Jazz Brunch, please contact Chris Cremens by calling (617) 413-4935 or by emailing Chris@DianaDiZoglio.com.
City of Methuen Annual Tree Lighting, Sunday December 9 at the Nevin’s Memorial Library. Event starts at 4:00 pm upstairs in the library with talented singers of the CGS and Marsh school chorus. Santa arrives at 4:30 pm and will be seated inside the library in the fireplace room (great photos!). At 5:00 Santa will escort the visitors outside to the grounds of the library to more entertainment by DJ Donna and the singers from the Center for Performing Arts. The tree will be lit promptly at 5:30 pm. Parking is available at the Library, the Quinn Bldg and shuttle service will be provided from City Hall running from 3:30 pm – 6:30 pm.
Some comments from Michael Widmer, laying out some of the issues facing the Commonwealth, and some of the unpleasant options facing the State as we begin looking to the FY 14 budget. Widmer was a guest on WBUR, Public Radio.
Mayor Thatcher Kezer III of Amesbury, in response to some disagreements with the Newburyport Daily News over the municipal tax situation in Amesbury, did a posting on Facebook rebutting the position of the paper. I have cut and pasted that posting into this posting, and have done so without his permission. I hope he does not mind.
The Daily News has made much of the “tax rate” in Amesbury, which is $20.24. Amesbury has a unitary tax rate, which means that it chooses not to shift additional burden onto it commercial base. The Daily News has focused on that number, calling it one of the highest in the state, and calling for tax relief for Amesbury. I did a post on this generic subject a couple of days ago, since tax classification time invariably brings calls to subsidize the tax rate by burning reserves. As I said in my earlier post that is the easy way out. But what about Amesbury?
The criticism of Mayor Kezer centers around that “tax rate” number of $20.24. As the Mayor points out in his post the number is not really relevant in measuring relative tax burden. The actual tax bills, and the property tax “levy” (the overall amount raised by the property tax in the City), are the proper standards of measurement. The tax cutting measure passed many years ago, Proposition 2.5, is supportive of that view. Because of the vagaries of individual property tax valuations Proposition 2.5 limits the overall “tax levy” increase to 2.5% annually (with new growth outside the cap). So when Citizens for Limited Taxation fought to impose fiscal discipline on Massachusetts municipalities they capped the overall tax levy. They left room for growth of 2.5% annually, which is now consistently under attack. Some folks prefer Proposition 0, which quite frankly is not realistic. Mayor Kezer has come in $1.8 million below that Proposition 2.5 levy limit, which is $1.8 million in tax relief for Amesbury property tax payers. When measured the correct way, as the Mayor points out in his post, Amesbury falls into the middle of the pack in terms of relative tax burden. There is no question that residential property taxpayers face a higher burden from year to year everywhere, not just Amesbury. The unitary tax rate leaves a higher portion of that burden with residential taxpayers in Amesbury than in some surrounding communities, but that is a policy decision for Amesbury.
The Mayor has built reserves of over $2.5 million in addition to the excess levy capacity, which means that Amesbury has “buying power” (my term) of about $4.4 million. That has led to the calls for the Mayor to “subsidize” the tax rate for property tax payers this year by substituting some of those reserves for property tax dollars. I don’t want to retake the ground covered in my last post but the Mayor called this “poor financial planning” in his comments to the Daily News. He is correct. Amesbury has just received a bond rating upgrade, to A+, from Standard and Poor’s Rating Services. I can tell you that rating increase comes, in large degree, from the City’s strong reserve position. Utilizing one time revenues as budgetary offsets simply postpones a budgetary day of reckoning, and creates an immediate budget shortfall in the following budget cycle. Want to give real property tax relief? Cut the budget! But calling for the insertion of reserves six months into the fiscal cycle, as the Newburyport Daily News has done, is truly poor advice. You can rest assured that when budgetary problems ensued, or when Amesbury suffered a bond downgrade the paper would likely issue a stinging editorial asking why Mayor Kezer did not properly plan for Amesbury’s future. The Mayor’s comments are below. The Daily News editorial is here.
Headlines Make the News
Things must be going too well in Amesbury. The Newburyport Daily News is back to writing headlines that stir up controversy with no substance. Yes, Amesbury’s tax rate is going up and yes, Amesbury has one of the highest rates, being the 10th highest residential rate in the Commonwealth last year. Last week, the Newburyport Daily News conjectured in an article that Amesbury was possibly going to be number one in the state with a “record breaking” tax rate. Both conjectures are wrong and I’m not sure what “record” they were referring to, but it sounded good.
Tax rates don’t matter, tax bills do. When ranking average single family tax bills, Amesbury was ranked 69th in the state. A respectable rank for the level of services we provide and for being listed along with several dozen western Massachusetts communities that barely exist as local government services go.
So here is a headline for the Newburyport Daily News to run, “40% of all Amesbury Residents to Receive Tax Cut.” Yes, so despite falling values, causing the rate to increase, many residential taxpayers will see their tax bills go down. Of those who are seeing an increase, 46% of those will see an increase of less than $200 for the year.
The average single-family tax bill will increase $128. For this “average”, we have invested $600,000 more in our schools and accelerated much needed infrastructure improvements. A portion of this “average” increase on single-family homes is a result of other categories of residential property values falling at a greater rate than the single-family homes. Most condominium owners will see significant cuts in their tax bills due to the 8% decline in overall condominium values. The single-family homes that will see the larger increases are the newer, larger homes, some of which have actually increased in value by nearly $40,000 in one year.
For many residents, they bought a house in Amesbury because it was affordable. It is that lower, affordable value that makes buying a home possible for so many. Divide that lower value into providing the services the residents expect and you get a higher rate than those high-priced communities that provide the same municipal services. What matters most then, is the amount of the tax bill to pay for those services. Amesbury is ranked in the middle of the pack when compared to our neighboring Essex County communities. There’s no headlines there.
The Governor today announced his mid-year budget cuts in response to the revenue shortfalls being experienced by the state. They are below, and they include a 1% cut to unrestricted local aid. The Governor also tapped the rainy day fund for $200 million, which leaves a balance of $1.2 billion. That cut in local aid would translate for some of our local communities as follows.
Methuen $45,988
Lawrence $166,073
Haverhill $83,129
North Andover $17,334
Summary of Budgetary Reductions and Solutions
$225 million or about 1% in the aggregate in spending reductions through 9C cuts in Executive Branch agencies. After accounting for reduced federal revenue related to such reductions, the net amount of the budgetary savings from their cuts is $157 million.
As a result of the hiring controls the Administration imposed in October, over 700 of the new positions that were originally planned and funded in FY13 are being eliminated and will not be filled, resulting in a savings of approximately $20 million. This will result in the total state workforce having more than 6,000 less positions at the end of FY13 than it did before the recession
A number of new investments for projects and programs in FY13 have been reduced or eliminated, including limiting new or restored funding for investments across a range of government services.
$200 million from the Rainy Day Fund, bringing the total draw to $550 million in FY13 – leaving a balance of $1.2 billion, one of the highest in the country.
$25 million from a 1% reduction in the budgets of the Judiciary, Constitutional Officers and other non-executive departments.
$98 million in additional federal revenues in support of safety net programs operated by the state on behalf low-income residents.
$20 million from a total of $113 million in savings in state borrowing and health care reform costs. The remainder of this funding will be used to offset some unavoidable deficiencies which must be funded this fiscal year.
$20 million from a reduction in the amount of sales tax revenues that will automatically be transferred to the Massachusetts School Building Authority to support local school building costs.
$11 million from certain reserve fund surpluses.
$9 million from a 1% across the board reduction to unrestricted local aid. The Governor has filed legislation that ensures if lottery profits exceed the $1.026 billion amount currently budgeted in FY13, all of such excess proceeds be committed to increasing the amount of unrestricted local aid.
Bill Manzi.com 