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Massachusetts Liberal

Observations on politics, the media and life in Massachusetts and beyond from the left side of the road.

Wednesday, March 26, 2008

Here comes that rainy day feeling again

Even when you filter out the politics, the warning signs are ominous.

Treasurer Tim Cahill says Massachusetts is going to need to borrow $400 million on a short-term basis next month to pay its bills. And that the Commonwealth -- just like you and me -- is going to need to tighten its belt as the fall-out from Wall Street Behaving Badly expands across the country.

Cahill, who may have visions of the Corner Office in 2010 dancing in his head, takes a shot at Deval Patrick and legislative leaders for the inability to get ahead of the looming crisis. And there is plenty of blame to go around that the casino gambling fiasco ate up so much of our time and attention.

The heart of that issue was revenue -- h0w do we raise cash for state programs without raising taxes (although gambling revenue is really nothing more than a voluntary tax). The options aren't tantalizing.

In place of casino cash, we are now looking at tightening corporate tax loopholes and raising the ultimate sin tax -- the one on cigarettes. There's also talk about dipping into the rainy day fund again this year.

But that would only be a short-term solution as Massachusetts copes with the ticking time bomb that comes from what is arguably the biggest public policy success of the generation -- health care reform.

The state's insured population has increased significantly as a result of the landmark law. But the looming fiscal nightmare scenario goes to the heart of the overall budget problem -- how do you pay for it?

Right now, that burden falls harder on the individual without coverage than the company that doesn't provide it. This year, the sliding scale penalty for a person not buying coverage can slide all the way up to $912.

For the company that doesn't pay its fair share, the cost is $295 per person.

That employer price tag is controversial to say the least. Mitt Romney was for it before he was against it and tried, unsuccessfully trying to veto it from the compromise bill.

But employers have apparently had the last laugh, according to calculations from Health Care for All.

The law clearly calls for equal sharing of the burden among all the players in the system -- users and providers. Business will argue, with some justification, that they too will feel the impact of the looming recession and tossing people out of their jobs will only tighten the screws on the already shaky system.

But any long-term solution to the state's fiscal problem requires that we address this issue. And the sooner the better.

Before our bridges crumble and the MBTA goes belly up. Or voters choose to eliminate the income tax come November.

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