Carolyn Morwick: Mass. session boosts transport, higher ed

This is one of a series of reviews of  2014 New England legislative sessions by Carolyn Morwick, writing for the New England Board of Higher Education (nebhe.org).

In 2013, Massachusetts Gov. Deval Patrick was often at loggerheads with legislators on big-ticket items, including education funding and transportation. In 2014, the atmosphere was more cordial. Just prior to the close of the 2013-14 legislative session, lawmakers sent a $36.5 billion  fiscal 2015 budget to the governor.

The governor and legislators agreed on a spending plan with no new taxes, despite a limited revenue stream. They generally agreed to make investments in the state’s transportation system, restore cuts to the higher education system and reform the system that pays for human services providers.

Patrick vetoed $16 million in line items, all but one of which legislators overrode. The governor also asked lawmakers for authority to make unilateral spending cuts if necessary. But lawmakers would not go beyond the current “9C powers” that allow a governor to make cuts in the budget without the approval of the Legislature if it’s determined that state revenues are not sufficient to support spending in the budget that's been approved.

Included in the 2015 budget:

• a $34 million increase in early education and care programs, much of it targeting Income Eligible Child Care, which has a substantial wait lists for families
• $1 million for the K-1 Classroom Grant program that will fund new pre-K classrooms with an emphasis on "Gateway Cities"
• a 2.7% increase in funding for K-12 with total funding for K-12 at $155 million (still nearly $75 million below pre-recession levels)
• a 2.3% increase in Chapter 70 education aid to cities and towns or approximately $99 million
• a $70 million increase for public higher education
• $4.7 billion for MassHealth Managed Care
• $3.2 billion for MassHealth Senior Care
• $88 million for children’s mental health services
• $436 million for adult mental health services—a 4% increase over FY14
• $184 million for mental health facilities—a 5% increase over FY14
• $112 million for substance abuse and addiction services
• an increase of $125 million over FY14 for the state’s transportation system
• an increase of $3.6 million for library programs (even with the increase, funding for libraries fell by 46% because of $3 billion in tax cuts dating back to FY 2001
• a provision for a Tax Amnesty Program expected to raise $35 million
• a delay in implementing the FAS 109, a special deduction included in legislation to lower the corporate tax which was enacted in 2013. The delay postpones the loss of nearly $46 million in corporate income tax revenue.
• an increase in salary for the state’s 11 district attorneys from $148,843 to $171, 561.

Higher Education                                                                       

The FY15 budget continues reinvestment for a third year in the public higher education system. Spending for higher education is approximately $70 million above FY14, but still 21% below the FY 2001 level.

The total amount for public higher education for FY15, is $998 million including $519 million for the five campuses of the University of Massachusetts, almost $230 million for the nine state universities and $249 million for the 15 Community Colleges.

For the second year in a row, funding in the budget for UMass will allow for freezing tuition and fees. However, the same 50/50 formula designed to split the cost between state appropriations and student tuitions was not applied to the state universities and community colleges, where officials warn that student bills will go up by several hundred dollars.

The State Scholarship Program got a $3 million increase in the FY15 budget, while the High Demand Scholarship program to encourage degree completion in disciplines that are deemed to be critical shortage was level-funded at $1 million.

The budget also funds the STEM Starter Academy at $4.7 million for community colleges, $3.2 million for the Performance Management Set Aside Incentive Grant Program to allow the Department of Higher Education to continue with grants to promote operational efficiencies at community colleges, the state universities and UMass in meeting the goals of the Vision Project.

The budget establishes a Foundation Budget Review Commission to review the state’s methodology for determining school district foundation budgets. The current foundation budget was designed more than 20 years ago and is out-of-date. The budget calls for the new commission to conduct four public hearings in different parts of the state and report back to the Legislature by June 30, 2015.

Other Legislation Passed

The Legislature continued to increase funding for the state transportation system and capital improvements on the  Massachusetts Bay Transportation Authority and Regional Transit Authorities, while working to end the practice of borrowing money to pay for the MBTA.

Near the close of the session, legislation was passed which strengthened gun laws. The new law gives police chiefs the authority to turn down a resident’s request to purchase a rifle or shotgun if they have reason to believe the person may be a danger. It also makes Massachusetts part of the National Instant Background Check System to provide a rapid response about whether a person is suitable to possess a license for a gun. Another provision of the new law requires that data be collected on all guns used in crimes or that cause injuries.

In response to the Supreme Court overturning the Massachusetts “buffer zone” law for access to reproductive health clinics—and at the urging of Atty.  Gen.  Martha Coakley—lawmakers passed legislation giving public safety officials the power to clear access to the clinics. The prior law provided a 35-foot buffer zone, which the court rejected; the new law restricts protesters to 25 feet.

An Act Establishing the Childhood Vaccine Program

Creates a stable financing framework enabling Massachusetts to guarantee that all children up to age 18 receive all the vaccines recommended by the national Advisory Committee on Immunization Practices. The legislation will allow access to all recommended vaccines for children and fund the Massachusetts Immunization Registry, which assists providers in keeping immunizations up-to-date.

An Act Restoring the Minimum Wage and Providing Unemployment Insurance Reforms

Gradually raises the minimum wage to $11 over three years, lowers unemployment insurance (UI) costs for employers across the state, strengthens safety protections for workers and makes permanent the multi-agency task force charged with combating the underground economy where tens of thousands of workers, many of them undocumented, are paid under the table, thereby avoiding payment of taxes.

An Act Establishing a Domestic Workers Bill of Rights

Extends basic work standards and labor protections to approximately 67,000 nannies, housekeepers, caregivers and other home workers in the Commonwealth.

An Act to Promote Economic Growth in the Commonwealth of Massachusetts

Provides for increased job growth and economic stability by investing in advanced manufacturing, IT workforce training and “Big Data” innovation. It will provide $15 million for a Gateway Cities Transformative Development Fund for economic revitalization and $10 million is slated for the reuse of brownfields in economically distressed areas. The legislation creates an advisory council to boost the financial services industry in Massachusetts.

An Act Relative to the Broadband Institute

Allows the Massachusetts Broadband Institute to use a $50 million bond for expanding broadband infrastructure.

An Act Relative to the Expansion of the Boston Convention and Exhibition Center

Approves borrowing $1.1 billion to accommodate a 1.3 million square foot addition to the center, which would allow Boston to be host to larger conventions.

An Act to Foster Economic Independence

Provides a pathway for low-income families to become self-sufficient, especially those who are receiving “cash assistance.” The pathway will include job readiness, the development of life skills and English-as-a-second language. Over $15 million in aggregate funding improvements to the Department of Transitional Assistance for additional caseworkers and the Department of Higher Education for program evaluations and scholarships. Additional legislation introduces a “full employment program” and more effectively identifies welfare fraud as part of a companion bill.

Carolyn Morwick handles government and community relations at the New England Board of Higher Education and is former director of the Caucus of New England State Legislatures.

Charles Chieppo/Mary Z. Connaughton: More corruption comin' up!

BOSTON As we learned during the recent trial about the Massachusetts Probation Department’s job-rigging scheme, there’s a difference between patronage and cooking the books. Patronage is legal; cooking the books to foster patronage and political favoritism will land you in prison.

It’s ironic that only five days after former  Massachusetts Probation Commissioner John O’Brien and others were convicted, Gov. Deval Patrick signed legislation to expand the Boston Convention and Exhibition Center in a boondoggle designed to feed the Massachusetts Convention Center Authority’s patronage empire and premised on layers of fictional numbers.

On the merits, the $1 billion expansion simply doesn’t make sense. This sums it up: There was a little over 36 million square feet of exhibition space in the United States in 1989. By 2011, that number had nearly doubled to 70.5 million. In the midst of this decades-long convention-space explosion, demand has remained flat at best.

Lest you think that Boston is immune from the trend, the BCEC — touted to be so full that it had to be expanded — is generating less than half the hotel room nights that had been predicted in the 1997 feasibility study on which the decision to build it was based. Before being cannibalized by the BCEC, even the much-smaller Hynes Convention Center had years in which it generated more.

A small group of consultants show up in city after city to prop up the declining convention industry. They made the same claims in such  cities as Sacramento, St. Louis and Myrtle Beach, S.C., which got the same or even worse results than were achieved here. Learn from their mistakes? In a 2005 legal deposition, Charles H. Johnson, who conducted the 1997 BCEC study, said, “Once the deal is done, if we’re not engaged, we … give them our report, our final invoice, and wish them good luck.”

But all that can be overlooked to feed the convention center authority’s patronage empire and reward political friends. None of the 80 percent of Massachusetts construction workers who don’t belong to a union will be working on the BCEC expansion, because the legislation includes a union-only project labor agreement.

Security guards also got a piece of the pie: The expansion bill extended the commonwealth’s prevailing wage law to include them.

From the beginning, BCEC expansion has been a case study in government at its worst: A group heavy with tourism industry sycophants was assembled to explore the feasibility of expansion. When they gathered each month, the choir was preached to by convention cheerleaders. After they predictably endorsed expansion, a case made by using unrealistic projections about the convention center authority’s finances and hotel-tax receipts was blessed by state officials disinterested in the substance.

Is it any wonder that the result will be to enhance the ability of politically connected players to dole out jobs and favors to the detriment of the taxpaying public? Time will tell whether it’s all just patronage or it rises to the level of cooking the books.

Charles Chieppo is senior fellow and Mary Z. Connaughton director of finance and administration at the Pioneer Institute, a Boston-based think tank.

Charles Chieppo: Boston convention centers follies

  By CHARLES CHIEPPO

BOSTON

Rarely is Massachusetts state government’s dysfunction on display more than in the waning days of a legislative session. This time around, exhibit A is the rush to approve a $1.1 billion expansion of the Boston Convention and Exhibition Center (BCEC) despite enough red flags to fill the quarter-mile-long building.

Apparently the $620 million the Massachusetts Convention Center Authority claims the BCEC and the Hynes Convention centers pumped into the local economy last year makes it easy to set aside doubts. But a closer look at how the MCCA arrives at that estimate makes you realize why there are no real numbers in the convention industry.

Convention centers are designed to attract people from outside the area who wouldn’t otherwise spend money here. But one thing the industry doesn’t want you do know is that about half of convention attendees — whether in Boston or elsewhere — are generally locals who’d be spending their dollars at a nearby mall if they weren’t eating in a Seaport District restaurant. It’s no accident that the number of hotel room nights generated by the BCEC and the Hynes is less than the number of people who attend events at the facilities; many of the attendees sleep in their own beds at night.

Yet when Pioneer Institute obtained a description of the methodology by which the MCCA derives its economic impact number, we discovered that it includes a “dollars saved” category and assumes “the in-state attendee would have attended the event regardless of location.” Believe it or not, the MCCA actually pretends that every local attendee at a BCEC or Hynes convention would still have gone if it were held in Las Vegas or Orlando, and the authority includes the savings as part of its “economic impact.”

Did that $620 million number just lose a zero?

The economic-impact follies are just the latest in a line of troubling revelations about the expansion proposal. First came word that, contrary to MCCA claims, taxpayers would indeed pay a price for expansion. Receipts from taxes that flow into the Convention Center Fund and support the authority could revert to the commonwealth’s general fund once BCEC bonds are paid off in 2034. Expansion of the facility would keep that money flowing to the MCCA until about 2050, siphoning off at least $5 billion from state coffers.

Next we learned that the expansion bill doesn’t require the MCCA to go back to the Legislature if it wants to take more money from the Convention Center Fund. The waiver is akin to a blank check when it comes to the hefty public subsidy that will be needed for the 1,200 to 1,500 room headquarters hotel that is part of the expansion plan.

Finally we learned that the legislation exempts the project from state procurement and public disclosure laws. That means we might never find out how large a subsidy that new hotel will require.

Thankfully, as the Herald recently reported, Senate Bonding Committee Chairman Brian Joyce (D-Milton) thinks the BCEC expansion question requires more thought and deliberation. Let’s hope this is one time when lawmakers won’t pass a bill to find out what’s in it.

Charles Chieppo is a senior fellow at Pioneer Institute.  He is a former vice chair of the Massachusetts Convention Center Authority.