Tuesday, January 16, 2007

Widmer Sheds Light on Budget Numbers

Mass. Taxpayers Institute president Michael Widmer has a must read op-ed in today's Boston Globe about the discrepancy in the budget numbers that have been floating around for the past few months. In it, he mentions something that has been bothering me since the election.

The saga began more than a year ago when Romney started holding monthly press conferences to announce state tax revenues. He claimed they were rising at a rate that would produce a billion-dollar surplus in fiscal 2006 and called for an immediate income tax cut. During the gubernatorial campaign, Lieutenant Governor Kerry Healey and Attorney General Tom Reilly joined the billion-dollar-surplus bandwagon, using the claim to justify their support of a lower income tax rate.

Unfortunately, Romney's assertions had no basis in fact. Although tax revenues in fiscal 2006 did rise by a billion dollars more than estimated, the budget depended on $600 million in reserves, so the actual surplus was much smaller.
Widmer was on Beacon Hill today, testifying before a revenue hearing. He seemed to have the most pessimistic revenue forecast, settling on the $1 billion shortfall that could possibly narrow if the economy improves.