Steve Poftak: How to tell the 'reform' sizzle from the steak
Tax increases come out of your wallet immediately. But will the reforms we were promised before new revenues come at all?
The House took less than three hours to debate and pass a 25 percent increase in the sales tax. Contrast that with the extended agony that accompanied incremental pension and transportation reforms, most of which were swept away in seconds of closed-door lobbying.
Yes, we will see some reforms this legislative session, but they threaten to be more sizzle than steak. As a public service, here's how to identify various categories of sizzle:
- Plugging small leaks as the dam collapses: The several variations of pension reform floating around the Legislature take an incremental approach to a few of the most obvious abuses. Unfortunately, they fail to get at the root of the problem - a system governed by those who benefit from it is an invitation to create new loopholes.
- Rube Goldberg contraptions: It has been generally acknowledged that the state's health insurance plan, also known as the Group Insurance Commission, has controlled health care costs better than the smaller plans operated by independent state authorities, such as the MBTA. Yet, rather than requiring MBTA employees to join the GIC, the Senate's transportation reform plan calls for a state agency to pass regulations that set up the framework for a study, including a savings threshold, then conduct the study to see if savings meet the threshold. Only then would it be decided if workers and retirees at the MBTA would be forced to join the state health insurance plan. Got that?
- Take credit now, pay much, much later: Proposed MBTA pension reforms would only affect new employees. This means that savings won't be achieved until the new employees pass the old retirement age threshold, sometime in the 2030s. The sales tax hike will kick in this year.
- Be For It, Until You Are Against It: The House Ways & Means Committee released its budget proposal with the very high profile elimination of funding for the Quinn Bill. A majority of the committee then signed onto amendments restoring the funding.
- Not Enough Time in this Session: This is the last resort. Despite the House's voting to raise the sales tax in three hours, it seems reform measures require multiple hard-to-schedule hearings, committee votes, special caucuses, and an eternity in the purgatory of first, second and third readings. Why don't we consider revenue increases last on the calendar? If we run out of time to consider reforms, then new taxes should be off the table.
The House passed a 25 percent increase in the sales tax during the worst recession in a generation. They did it quickly, with minimal debate, and by a veto-proof margin. Keep an eye on the reform promises and ask yourself if they save real money, or fit into one of the categories listed above. Then ask your representative and senator the same question.
Steve Poftak is research director at Pioneer Institute, a non-partisan, Massachusetts public policy think tank.