Thursday, October 28, 2010

Deval Patrick's Massachusetts Economic Scorecard

Is Massachusetts better off than it was four years ago? Since Deval Patrick took office in January 2007, over 100,000 jobs have been lost in the state as the unemployment rate nearly doubled from 4.6% to 8.8%. A lengthy list of clich├ęs is applicable: You can’t argue with the tape, the scoreboard doesn’t lie, and you are what your record says you are. The employment figures are simply the tip of the iceberg on Patrick’s economic record. When contemplating keeping Patrick in his current position on November 2nd this simple scorecard should come in handy.

Over 100,000 jobs have been lost as unemployment rose to 8.8%. According to the Bureau of Labor Statistics, at the beginning of 2007 employment in Massachusetts was 3,282,773. By the end of August 2008, it stood at 3,171,545 – a loss of 111,228 jobs. The unemployment rate rose from 4.6% to 8.8% (a 91% increase). For comparison, New Hampshire went from 3.4% to 5.7% (up 68%). Of course when the score is this bad, Patrick wants to distract with the nebulous concept of 25,000 jobs “saved”. It is an affront to rational thought and an argument made by someone trying to sucker the people from the truth. By that reasoning he saved 3.2mm jobs! The reality is that over 100,000 jobs have been lost with Patrick at the helm.
Government spending has risen by $2.6 billion, over twice the rate of inflation. The fiscal year 2008 budget had the Massachusetts government spending $26.8 billion. The fiscal year 2011 budget has the number at $29.4 billion. This is an increase of 9.7%. During that same period, the consumer price index rose from 208.4 to 218.0 – an increase of 4.6%. Had Patrick kept spending in line with inflation, $1.4 billion would be saved. While Massachusetts families are tightening budgets to gird for tough economic times, Patrick increases spending twice as fast as the cost of living rises.
The unfunded pension liability has grown almost 50%, to $20 billion. On January 1, 2007, the Public Employee Retirement Administration Commission in their Commonwealth Actuarial Valuation Report pegged the unfunded actuarial liability at $13.3 billion. In the 2010 version, the number balloons to $20.0 billion. While the stock market dip will be blamed for this nearly 50% liability growth, it can realistically only have caused a small portion of it. Stocks generally declined in that time period by 20%, and bonds increased in value. The culprit is that it is easier to promise benefits than increase pay. In addition to actual budget spending increasing under Patrick, the total future bill has massively increased. Aside from current taxes owed, there is an implied forward tax rate, and the $20 billion is a massive future tax burden.
Taxes have increased. Every dollar of government spending must come from a dollar of taxation. As spending has ramped up, so too have taxes. Property taxes have increased, though Patrick promised they would go down. Based on Department of Revenue data, total statewide property taxes in fiscal year 2008 were $5.3 billion. In fiscal year 2010, they were $5.7 billion. This is an increase of $400 million, or 7.3% in two years. The consumer price index is up 3.5% in that time period - less than half the pace of property tax. To add to the burden, the sales tax went up from 5% to 6.25%, an increase of 25%. This is a regressive tax raising the cost of living at the worst time, but claimed to be necessary to support the outsized increases in government spending. Never ask a barber if you need a haircut, and never ask Patrick if you need to pay more in taxes. He has a vacuum in your pocket.
Healthcare costs are up. While Patrick inherited the current healthcare system, he is an unabashed fan and has exacerbated its massive cost increases. The cost to the state has gone up $2.2 billion. For fiscal year 2011, the office of the Secretary of Health and Human Services has a budget of $8.1 billion. The number for fiscal year 2008 was $5.9 billion, which means an increase of 37%. Massachusetts now has the highest cost for health insurance in the country, as well as the highest rate of cost inflation. Patrick embraced the incorrect assertion that the uninsured raise medical costs, when in actuality it is the mandates and government involvement in the market that drive prices ever higher.

The last four years have been the result of tax and spend and promise - the failed economic policies of a one-party monopoly on power. And the dismal economic scorecard reflects that. Flowery rhetoric is one thing, but the numbers do not lie. The economic record is what it is and the buck stops with Deval Patrick. As the scorecard clearly shows, the Massachusetts economy is worse off than it was four years ago.

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