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On Easter evening, we sat in horrible traffic on 128 heading home from Peabody. We were probably 20 miles north of the Mass Turnpike, yet we suffered from the state’s attempt to save money by limiting holiday toll workers. I also mourned the loss of lights on the Zakim Bridge to save money—albeit a cosmetic rather than critical expense. And last week, I listened to cafeteria workers and their supporters tell the Lowell School Committee about the “unfairness” of possibly losing their jobs. Believe me, I felt their pain. It’s unfair that the schools must cut between $5 and $10 million, and it’s unfair that the city may face even deeper cuts. It’s unfair that people are losing their homes and jobs. And it is unfair that the Senate’s proposed budget cuts even further than the House or Governor into human service programs that impact the neediest in our state. Yet, no one wants more taxes, and who can blame them? The reality is we are in a global economic crisis, and budgets must be tightened at all levels. Yet, there are some cuts that are simply too shortsighted and too deep to make sense, and that’s where the case for additional revenue must be made. No matter how you look at it, increasing taxes is nasty business, especially these days. But whether it’s the Governor’s gas and candy tax, the House sales tax, or another revenue-building scheme (such as closing corporate communication loopholes and municipal relief options), something must be done. We cannot sustain the level of cuts the Senate is currently proposing without severe impacts to our collective quality of life in the Commonwealth—not only because it will harm those most vulnerable, but because the losses will be far-reaching, long-lasting and in the end, more costly to recover. (The impact on youth program cuts alone—from gutting the Shannon Grant, DPH, and jobs for kids—will be felt for years in terms of increased crime and gang violence, more dropouts, drug abuse, and other related, costly ills.) As unpopular as it is, I stand for increased revenues along with smart belt tightening and sensible, much-needed reforms. Without it, there will be a lot more outrage and pain, and the road to recovery that much harder to find.

First off, I don’t think there has been a time in recent history when a governor has made so many visits to Lowell to talk to the people. (I don’t remember Mitt Romney ever doing it.) Today, I was proud to see Governor Patrick here again, surrounded by questioning citizens amid our beautiful, historic Pollard Memorial Library. He had an agenda of course: Patrick was here to pitch his plan to reform the state’s transportation system and raise the gas tax by 19 cents. I list reform first because the Governor was quite clear that he would not support raising revenues for transportation without reform—specifically: the pension system, which he called “too rich for the times;” the six individual agencies that must be integrated into one to coordinate planning and implementation of statewide transportation strategies; and the funds to take steps toward reversing decades of “neglect and shortsighted decisions” that have got us into this mess. 

As usual, I was struck by his sincerity, intelligence, and willingness to hear people out. And since it was Lowell, you can be sure there were many folks with opinions, ideas, and comments to share. (For a more thorough review, check LiL because Lynne was there with questions and a recording device, and I’m sure she’ll be posting too.) In answer to my question about why not do reform first, Patrick said reform is not enough to cover the debt as well as the needed repairs for roads and bridges. “Reform is first,” he said. “We have to do it. But we can’t do what we need to do with reform alone.” He also said that he was open to other ideas and varying combinations of his plan, adding he has “not dug in at 19 cents,” but that was the “most we could do within reason.” As tough as times are, I can’t help but feel hopeful with leadership that’s willing to take it to the people–that is one of the many blessings of a democratic government. Thank you Governor Patrick, and please visit Lowell again soon.

I was listening to WCAP while running errands yesterday and happened to catch an interview with Michael Widmer, president of the Massachusetts Taxpayers Foundation. Naturally, the discussion centered on the economy, and in particular, the governor’s alleged plan to raise the gas tax 29 cents, making it the highest in the nation. (Turns out, the governor is still in the planning stages on that issue, with his tax hike anywhere from five cents to 29 cents—the former number not even close to being the highest in the nation.) Today’s Globe reports: “The gas tax in Massachusetts is 23.5 cents per gallon, which has not been substantially increased since 1991. A 29-cent increase would bring the state’s tax to 52.5 cents per gallon. New York currently has the nation’s highest state gas tax, at 41.3 cents per gallon.”

During the interview, Widmer said that some gas tax would be acceptable if it was tied specifically to improving roads and coupled with reform of the state’s transportation agencies. He also went on to explain the difference between his foundation and Citizens for Limited Taxation (CLT), probably most familiar to readers in the form of Barbara Anderson and her many columns. Widmer noted that while CLT strongly supported Question 1 on last year’s ballot—you know the one to eliminate the state income tax—the Massachusetts Taxpayers Foundation, a research-based think tank, determined the proposal would be devastating to the delivery of services and require a steep rise in property taxes. As someone concerned with quality of life issues and services that impact our community’s health, such as education, I think it’s important to stay informed about an organization that has both credibility and objectivity on its side.

I read with great interest yesterday’s article in the Lowell Sun regarding newly elected State Representative Jim Arciero’s bill to end a decades-old perk that enables legislators with 20+ years of service to increase their pensions substantially if they are fired or not re-elected. According to the Sun article: “Depending on their salaries and time of service, the perk allows officials with more than 20 years on the job to begin collecting “superannuation” pensions immediately, along with life-time health insurance.” The article goes on to list a series of gluttonous beneficiaries of the perk that defies belief: such as Mike Lewis, former director of the Big Dig, raising his pension base by one million dollars to $2.47 million, or Representative Christopher Hodgkins more than quadrupling his pension. That Arciero, who served for years as a staff member for State Senator Steve Panagiotakos, has introduced this important reform legislation less than two months into his first term is impressive. If he can get the support he needs from his colleagues, even better. Aside from the stunning realization that boosting pensions this way has gone on since 1950, how could anyone NOT support putting an end to such a blatant abuse of taxpayers’ money? Let’s keep our eyes on this one to see if there truly is any hope of self-reform under the Commonwealth’s Golden Dome.

In another blatant attempt to bully the school committee, today’s Lowell Sun features its second editorial in eight days lambasting the board while ignoring basic facts and context: “How this perk was ever extended to the nonunion sector is anybody’s guess. But the shame of it falls on the School Department’s Central Office financial whiz kids who didn’t see the error of their ways, and on the school board for its lack of oversight in rubber-stamping the payments.”

It is not a guess how this benefit extended to non-union employees: it is a way for management to dissuade employees from joining unions, which allows them greater flexibility in scheduling and other management rights. Extending these benefits has been such a longstanding practice, in fact, not only in our schools but with Lowell city employees and municipalities across the state, that it defies logic for the Sun to blame it on the school committee. (But then logic and truth don’t factor much in these editorials.) For instance, Lowell Code 56-6 E clearly specifies that employees “shall be paid for unused accumulated sick leave on a forty-percent ratio” with a maximum buyback not to exceed $20,000 and without a longevity requirement. (The benefit for school employees—including the 47 non-union members—pays only those with 15+ years of service and accrues at a 33 percent ratio with no cap.)

The major problem with sick-leave buyback is that it is extremely expensive; this year’s school budget allocates $1 million to pay for it. However, removing the benefit for most employees can’t happen by a simple vote from the school board or the city council. Sick-leave buyback was negotiated into union contracts decades ago—presumably as an attendance and retirement incentive, as well as a perk when salaries were low. The only way to get it out of our contracts, which impacts more than 2,000 unionized school employees, is to negotiate it out.

Regardless of the nasty editorials, the Lowell School Committee must vote regarding the 47 non-union employees. Unlike the city, we do not have an ordinance that grants the benefit in writing although the non-union members may fall under city jurisdiction. Nine of the 47 have served 15 years or more, which means they are vested and expecting to receive a total of about $136,000 in buyback payments if they retire today—a benefit they have seen their colleagues (both union and not) receive for decades. As is often the case with these editorials, the true shame is how inaccurately a complex issue is portrayed, and what a disservice that is to the public. (My response to last week’s rant here.) The school committee will meet at 7 p.m. on Wednesday, 2/4, which will be televised live on channel 10.

As the Mill City braces to cut $3 million in response to Governor Patrick’s recent reductions in state aid (difficult under any circumstances but especially tough mid-year), Lowell looks to the schools to bear a portion of the burden. The city manager’s plan for the school district’s share of the cuts is based on a 20% ratio: Lowell contributes about 20% of its non-school revenue to its schools, so a 20% cut in that revenue ($604,000 out of $3 million) is what the schools are being asked to cut from their current budget. Keep in mind, this equation does not address Chapter 70 funding, which is state money earmarked for education. In Lowell, Chapter 70 covers about 80% of the district’s total school budget: that’s $118 million in state funding out of $139 million budget in FY09. As part of its contribution under Education Reform, the state expects municipalities to pay their share, a complex amount based on property values, income, and other factors.

As a longtime advocate for the city paying its fair share of the costs of educating our children, I’ve watched as Lowell has missed and lately begun making progress toward meeting the state’s education- spending requirement. In fact, last year, the city’s contribution was only $100,000 shy of the state’s school-spending requirement—the closest it’s been in 12 years. Prior to these mid-year cuts, Lowell was on track to exceed its school-spending requirement in FY09, but as we know, these are not easy times. To weather these difficulties, we must work together for the good of the entire community. It’s especially important that we do not pit one side against the other and work together to make sure important services to our community continue. That said, the Lowell School Committee’s Finance Sub-committee will meet on Monday, Feb. 2, to discuss how to close the $604,000 gap in the current budget.

While it’s no surprise that a certain editor of our local paper has gone on a recycled rant against the Lowell School Committee (many of today’s accusations are retakes from ad nauseam tirades last summer), the simplistic, unbalanced, and inaccurate nature of the attacks never fail to amaze me. On point: There absolutely needs to be reform at all levels of government spending—the process is painfully slow and wrought with obstacles, many of which are completely out of the school committee’s control. It is, however, false that no progress has been made or that the Lowell School Committee, in particular, is to blame. Lowell school salaries are within range of other districts as well as its benefits, which mirror (or in some cases, fall below) the city’s compensation package. In the real world, most folks get that effective hiring requires market-level compensation. While blaming the board is easy and fits nicely with this editor’s agenda for an appointed school committee, it does little to accurately inform readers or to help achieve what should be our shared goal of continuing to improve the quality of public education despite diminishing resources.

Accuracy has never been at the top of this editor’s priorities, and that alone would be tragedy enough if it weren’t so distracting from the real challenges the schools face, or the reality of how critical it is to our economic survival that all students receive a quality education. The reality is that government today is faced with fiscal challenges that will require substantial cuts to services for all residents, with particular devastation to those most in need. The reality is that as unemployment, homelessness and poverty increase, so does domestic violence, drug and alcohol addiction, and families in crisis—factors that directly impact a child’s readiness to learn. The reality is that reform is desperately needed to control spiraling costs in health insurance, special education, and sick leave buyback, but many obstacles exist well beyond the scope of a local school board. Our future depends on our ability to continue to improve our public schools, despite the fiscal crisis, and to do that we need creative solutions, a new approach to complex issues, and all levels of government working together. Given that reality: simpleminded blame is not only misleading, it’s downright harmful.

This time of year, my mailbox is full of welcomed cards from friends and family from near and far, as well as the standard amount of bills. There also seems to be an unprecedented number of requests for donations from different organizations. In a few weeks, I’ve collected requests for money from more than 33 nonprofit groups, most of them doing very important work and deserving of every dime we can spare. Here’s a sample of groups looking for my dime recently: Rosie’s Place, Salvation Army, WGBH, American Heart Association, World Wildlife Fund, National Children’s Leukemia Foundation, New England Home for Little Wanderers, Project Bread, Catholic Relief Services, and Paralyzed Veterans of America. Local groups soliciting me include Merrimack Repertory Theatre, Stand for Children, Saints Memorial Hospital, Lowell General Hospital, Community Teamwork, Girls Inc, Merrimack Valley Food Bank, Acre Family Child Care, Lowell Community Health Center, Lowell Humane Society, Coalition for a Better Acre, and the United Way.

Like most of us, I’ve seen our savings depleted, our home devalued, and our financial solvency destabilized during the recent economic downturn. And yet, the overwhelming requests reflect the real needs of people in our community. In my family, helping others is not only about sharing (as Christ noted, whatever you do to the least of my brothers, you do unto me), but also is based on the very practical understanding that as members of a community, we do not fully prosper if fellow members suffer. And so, we decided an amount we can afford during these tough times (when giving is even more important) and to prioritize who gets the funds. (We’re leaning toward local groups where people we know provide for neighbors in need.)

Last night, the Lowell School Committee supported my motion requesting “the Superintendent prepare two budget proposals: one for a level-funded budget and one with a ten-percent reduction in state funding.” Although there was discussion regarding the timing and details of the proposals, especially since cuts this deep will require layoffs and there was concern regarding employee morale, the majority consensus was that we need a plan—the sooner the better—to deal with the current fiscal crisis. According to State Senator Steve Panagiotakos’ presentation, reported here last week, a level-funded budget is the best-case scenario—requiring $4 million less for Lowell schools with as much as $10 million in reductions a possibility. I’ve watched the district cut programs and staff since 2002, before I even got on the committee, and I don’t see how we’re going to make cuts this deep without seriously impacting the quality of education our children receive. It is going to require new approaches, thinking outside the box, and a reassessment of priorities, both in terms of the district and its funding sources. Each year, health insurance, utilities and compensation costs have risen—outpacing revenues—but the challenges we face and the children’s need for a high-quality education have not diminished. As the state faces its own fiscal crisis, there is some hope that Lowell will top the list for additional funds through the governor’s Readiness Project. Massachusetts Secretary of Education Paul Reville visited Lowell schools on Monday, and told us he was impressed, particularly by the district’s partnerships with UML and MCC, and the investment of community stakeholders. Supt. Scott, Chancellor Meehan, and MCC President Cowan pitched their “Pre-K to 16 Pathways” plan to him as our version of the governor’s project, with hope that when funding is available, the state will look to Lowell as one of its first pilot sites.

There is also hope that the federal government will offer some relief. As the creators of No Child Left Behind, national legislation that left the funding behind, the federal government has a responsibility to fund its mandates, as well as a moral and practical imperative to ensure educational excellence nationally. It appears the new administration gets the intimate connection between an educated populace and economic stability. According to an article in yesterday’s New York Times, President-Elect Obama has pledged $10 billion for early-childhood education, representing ”the largest new federal initiative for young children since Head Start began in 1965.” His platform also supports “new federal financing for states.” Many of his supporters are expecting him to deliver on his campaign promise to make education a priority even after federal bailouts for Wall Street bonuses and automakers’ incompetency: After all, economic revival is not possible without skilled employees.

I took Microeconomics in college and found it pretty dismal, so I never made it on to Macro or any other economics classes. Lately, however, I find myself becoming something of an economist groupie, reading articles and blogs by experts in the field who might be able to shed some light on the financial crisis, sub-prime meltdown, rising unemployment, falling dollar, falling oil prices, deflation, stagflation, and so on. I like James Surowiecki’s concise, clear-headed columns in the New Yorker, and I check out his blog, The Balance Sheet whenever I think of it. Closer to home, I always like to hear UML Professor Bob Forrant’s opinion on things. His refreshing, contratian ideas will keep you on your toes, and I will miss hearing him on the late, lamented morning radio show, Sunrise. An example of his style is agreeing with conservative columnist William Kristol’s statement in the New York Times that economists should come out and admit that they don’t know what they’re doing, that they don’t have a clue how to fix a crisis of this magnitude. He is also critical of Obama’s newly-formed economic team. The good news is that the Sunrise website archives are still accessible and you can hear Bob’s latest podcast along with those of other local financial pundits.

I am also exploring a list of economics and finance blogs that I found in last week’s Boston Globe. So far, I like the macro approach taken by Barry Ritholz in The Big Picture. Maybe I should have given Macroeconomics a chance after all!