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Last night, a packed room of area school and municipal leaders gathered at Middlesex Community College to hear from State Senator Steve Panagiotakos regarding K-12 state funding, as well as from Jeff Wulfson, deputy commissioner of the department of education. As expected, the news was not encouraging: The senator affirmed recent media reports that cities and towns could see a 10% reduction in state funding for next year. According to the senator, the best-case scenario would be level funding for schools. In Lowell, where the state provides more than 85% of the costs of educating our children, a level-funded budget for FY10 would require cuts of about $4 million. The notion of having to cut more, up to 10% from the budget or about $14 million, is disturbing since cuts that deep would absolutely impact the quality of education our children receive. (Last year, the Varnum Elementary School was closed to save $1 million, and with that savings came a ripple of disruptions still felt today as staff and students were distributed throughout the district.)

As part of his remarks, Senator Panagiotakos provided a presentation (link available soon, watch for future post) where he noted some interesting historical data, such as the fact that state spending from FY00 to FY09 increased an average of 3.2% annually. He also discussed Chapter 70, which refers to the Mass. General Law requiring the state to support public schools, as well as the role of the foundation budget, established in 1993, that sets an education funding minimum. And despite today’s headlines touting Massachusetts as the highest-ranking state in math and science, and one of the top scorers in an international exam ranking students from four-dozen countries, the future for funding the Commonwealth’s schools is bleak. According to the senator, some relief may come in the form of federal funding, the state’s willingness to reduce unfunded educational mandates, and re-examination of Governor Patrick’s revenue-generating ideas. More on all this later. 

Today’s newspapers are reporting that after record job losses, Congress will move toward providing “a short-term rescue plan” for the nation’s top automakers.  I’m no expert, but whatever funds are provided should come with an equal load of stipulations—from payback plans and executive salary caps, to a focus on developing fuel-efficient, alternative-energy autos. Earlier today, I overheard this comment: “What’s wrong with the Democrats is they’re always kowtowing to the unions” as if the need for the bailout is the fault of the auto unions. Is it the unions who shoulder the brunt of blame regarding the terrible mess that is the U.S. auto industry? After four years of working on the other side of the table with a variety of school-related unions, I am not naïve to the downsides of the power unions wield, but I find it difficult to fathom that this mess is their doing in any significant way. Although I don’t have details regarding the benefits and salaries auto workers receive, I got a compelling email from an acquaintance, which I share below:

“The anti-union organizations and the Bush union busters want you to believe the lies that they have saturated the media with. They want you to believe that the United Auto Workers are the cause of the downfall of the auto industry. They want you to believe that union workers make $70 an hour and that’s why the auto industry has failed and needs a bail out. Lies, and more lies. The average auto worker and machinist starts at about $14 an hour…The UWA union, in order to help the industry, took pay cuts and reductions in medical coverage, and more, while the CEOs continued to make millions of dollars—all while producing gas-guzzling cars no one wanted.” 

Determining the reasons for the industry’s failure are important because before Congress provides one cent to this cause, American taxpayers deserve a plan to turnaround the mistakes of the past, restrictions on how the funds are used, and a payback schedule.

Last Sunday was an unusually theatrical day for me. First, I attended a production of Once Upon a Mattress at the Peacock Players in Nashua with two 12-year-olds who thoroughly enjoyed the performance. (I did too.) That evening, my husband and I attended opening night of Skylight at Lowell’s Merrimack Repertory Theatre (MRT). This is our second year as season ticket holders, which despite my initial concern regarding conflicting schedules, has turned out to be a wonderful investment in Date Night and the immediacy of live theatre. Both events that day included fund-raising pitches to the audience. In MRT’s case, Artistic Director Charles Towers spoke about how difficult financial times were at the theatre lately. With state funding cut 75% this season (from $100,000 to $25,000) and no government bailout on the horizon, the theatre must turn to the community for its continued existence. The reality is, those who value live theatre must support it. That means attending shows and contributing to the cause—especially during tough economic times. Unfortunately theatre, like other arts and non-profit groups that vitally enrich our community, will never be on the short list for bailouts—unless we do the bailing ourselves.

If you saw Wednesday’s Lowell School Committee meeting (top issues: sex ed and special ed—watch for later post on this), you may have noticed my absence. I am currently at the Mass. Assoc. of School Committees (MASC) joint conference with the Mass. Assoc. of School Superintendents (MASS) in Hyannis. As the representative from the Lowell School Committee, I presented an amendment to the MASC delegation, which represents members from 99% of the 391 school districts across the state. The amendment, which passed resoundingly, involves special education student assignments and could save Lowell about a half million dollars in out-of-district tuition if made law. Now that the amendment has passed MASC, it will become part of four resolutions the association will bring forward to the state legislature. Although the other resolutions make sense and are important, they all require additional funding from the state. The Lowell proposal will NOT cost the state additional money, but will give local districts that must pay the bill, a say in where our children are educated when taken into DSS care.  (Currently school systems do not have a voice in determining if a student can remain in a public day school when placed in a residential facility by the Department of Children and Family Services, which burdens the district with paying private day school tuition and is disruptive, as well as limiting to the children involved.) As we all face difficult economic times, it is vital that the state repeal regulations that add unnecessary costs to local districts, particularly those with questionable benefits to students. This is a step in that direction.

We’ve stated our reasons (here, here and here) for voting ‘no’ on Question 1, the ballot referendum to eliminate the State Income Tax. Given Jackie’s recent post about being baffled by differing political opinions, a feeling that I have had as well with Libertarian family members, I’ve made an effort to understand the views of those who are planning to vote ‘yes’. To that end, I’ve been reading a mostly civil (and very long) discourse by citizens planning to vote for and against the question. I can understand some of the arguments, especially the frustration with waste and corruption, but I still think that this ballot question is like using a ‘hatchet when a scalpel is needed.’ The following exchange sums it up for me:

Your representatives will tell you they can’t do it (balance the budget). Tell them, “Do it or get out”

>Of course they can do it. Anyone can put a balanced budget on paper. The real question is do we want them to do it? New Hampshire is an excellent example of the problem. Trying to fund education primarily on the regressive property tax does not work, and is fundamentally unfair to children, whose education will vary wildly from community to community……I have looked at local budgets for a long time, and there is not a lot of fat anymore. If we lose the income tax, STATE AID will be cut. And municipalities, who CANNOT raise their own taxes enough to make up the difference within the limits of prop 2 1/2 (a bar NH does not have!).

Yes they can do it. I don’t think they should.

The regressive nature of the funding that will likely replace the lost income tax dollars is what keeps getting lost in the proponents’ arguments. I am still voting “no” on Tuesday.

Despite Bill Gates warning last week about a severe decline in consumer spending, sometimes you have to spend money to protect your investments even during tight times. In my case, we realized that trees were growing into our house, the paint was peeling to expose wood, and the porch stairs were rotting—factors that prompted us to take on some hefty expenses immediately. Believe me, we do not have thousands of dollars right now to invest in painters and carpenters, yet exposing our home, our biggest asset, to another New England winter would have been foolhardy. It reminds me of the Lowell City Council last night reaffirming its earlier decision to upgrade the city’s sewer system. This is a priority investment for so many reasons from protecting residents from floods to making sure the city remains eligible for federal funding and maintaining our precious waterways. It was the painfully necessary thing to do in spite of the difficult financial climate, and no matter how much angst they had about it, the City Council made the right decision. When it comes to government services to our communities, there are many areas that fall into that “priority investment” category, such as education and public safety. These services are important and don’t come cheaply, which is why I oppose Ballot Question 1 to eliminate the income tax. More efficient delivery must be the focus, rather than slashing support for vital services that impact our quality of life today and in the future. That way you ensure the money, at least, is well spent.

Yesterday’s Boston Globe featured an op-ed by UMass Lowell Amy Perlmutter and Joel Tickner (fellow and associate professor at the Lowell Center for Sustainable Production) that promotes exploiting the connection between environmentally friendly technology and future economic strength. The authors say, in addition to efforts around renewable energy, Massachusetts has “a leading edge in four other key areas”: green chemistry, green buildings, materials reuse, and emerging materials. They urge state power brokers to “take advantage of…the Commonwealth’s competitive advantages to become a world leader of the green economy of the future.” Contrast that message to James Carroll’s column on the same page where he discusses the “nice coincidence” of the government’s $700 billion Wall Street bailout costing about the same as the Pentagon’s yearly budget. Carroll’s point: “One need not be an economist to know that spending money on war planes, missiles, and exotic weapons systems, not to mention combat operations, creates far less social capitol than spending on education, bridges, mass transit, new forms of energy—even the arts. The genius of this nation’s most brilliant minds has been yoked for more than half a century to the invention of ways to kill and destroy.”

How’s that been working for us so far? The United States is a major exporter of weapons worldwide, which has aided the growth of terrorism and destruction of our environment; we desperately need leadership with a new vision for employment for our people and our role in the world. We must rethink our focus and put our best creative minds and resources to developing green technologies that will reinvigorate our economy and sustain our future.

The Non Profit Alliance of Greater Lowell is hosting their annual Legislative Breakfast, on Tuesday, October 7, 8:00 – 9:30 am, at the Wannalancit Mills Conference Room (1st floor), 600 Suffolk Street.

The focus will be on Question One, the binding referendum question that would repeal the state income tax; its impact on local communities; and what nonprofit staff, board, and constituents can do to respond to this initiative.

Senator Steve Panagiotakos will attend and give his perspective on the ramifications of the proposal. Update: I just learned that Representatives Murphy and Golden will also attend.

The breakfast is for members of the Non Profit Alliance, their staff, board, volunteers and constituents, as well as anyone else concerned about the impact that eliminating the state income tax will have on the non profit sector. If you have an interest in non profit concerns please consider attending and learning more about how Question 1 will affect the schools, hospitals, municipalities and agencies that serve our community. To RSVP, email g polites @ ltc.org by Friday, October 3rd.

I decided to flip through the Massachusetts Voter Guide which reminded me that November 4th is coming up fast! First of all, it’s not too late to register to vote! The deadline is October 15. To register, go to City Hall, fill out a form and keep the receipt. Official acknowledgement should arrive in 2 to 3 weeks. Mail-in registration forms must be postmarked October 15.

Next, I read the arguments for and against Question 1, the proposal to repeal the State Income Tax. As we’ve mentioned before, this is a bad idea for many reasons (dramatic cuts in state aid which will drive up property taxes, drastic reduction in state funding for schools, police, fire protection, lack of funds for infrastructure, etc). Reading the arguments for the proposal as put forth by the Committee for Small Government, the claims, besides the obvious one of more money in your pocket, is that

“Your “Yes” vote will NOT raise your property taxes NOR any other taxes.”
“Your “Yes” vote will NOT cut, NOR require cuts of any essential government services.”

This seems ludicrous to say the least! Certainly, in Lowell we will have to raise local taxes just to maintain a minimum of services, and I don’t even want to think what will happen to the school system, which relies heavily on State money. Perusing their website (just search Question 1 and it will pop up on google), I couldn’t find anything to back up the above assertions. They also have a carefully worded statement in the Voter Guide: “‘41% waste in Massachusetts state government’ reveals survey.” The survey appears to be a web poll, which their readers respond to, and 41% is the “mean, average response.” What, they can’t come up with any real statistics? On government waste??? They then proceed to use this “statistic” to make their argument: “with 41% waste, a 17% cut isn’t enough to remove even half the waste in state government spending.” Isn’t this – using a biased sample to prove a point – a logical fallacy of some kind?

For more about this group, see Tony’s interesting post about their funding.

Quote above: attributed to Benjamin Disraeli and taken up by Mark Twain, who said:

There are three kinds of lies: lies, damned lies and statistics.

Yesterday’s Globe had an article entitled A Crash Course in Credit that shows how the woes of Wall Street end up on Main Street. A seriously in-debt homeowner and two businesses are profiled, showing how hard it is becoming to get loans. The homeowner, already “awash in mortgage and credit card debt” is an example of the easy credit problems that led us to this point. The fact that he wants to borrow more money is a little scary; however, the pendulum is swinging too far the other way, illustrated by the two business owners who are also finding it hard to get credit and are putting projects on hold, scaling back and just trying to hold on. To quote the subheading of the article:

When lenders are afraid to lend, the economy stalls and uncertainty grows.

That was yesterday. Today, with Republicans pulling out of the bipartisan bailout plan (which their leadership helped to craft), there’s no deal. No one was 100% thrilled with the plan; however, this stalling and playing politics isn’t doing anyone any good. As I heard on Morningstar.com this morning, it should be called a Main Street Safety Net rather than a Wall Street Bailout. Why? Because if the big banks who hold the toxic loans aren’t stabilized with an infusion of cash and more importantly, confidence, the credit that fuels our economy becomes harder to get. Morningstar’s Pat Dorsey likens credit to the oil that keeps the engine running and without it, the financial markets, like an engine without oil, will seize up. Many businesses, such as the two mentioned above, rely on short-term loans for inventory, day-to-day operations, crafting deals, etc. Without these funds, they will grind to a halt, increasing business risk for themselves with a ripple effect out to consumers, employees and other organizations. Credit has been tightening since the subprime crisis began almost a year ago; but now we’re about to find out what happens to an economy when there is no credit. We might like the poetic justice of letting Wall Street twist in the wind, but we’re all going to feel the pain.