Out of the Mouths of Babes
Nothing reveals the true priorities of politicians like tough economic times. By that measure, even the supposedly progressive lawmakers who dominate Beacon Hill are an inconsistent and cowardly lot.
Democrats in our state, reputed to be the most liberal in the nation, are eviscerating early education and nutrition programs for preschoolers despite bucketsful of evidence that show they are crucial to the successful development of disadvantaged children. Democrats, in fact, are chipping — and in some cases hacking — away at public support for the poor in general. Consider, for instance, the proposed 20 percent funding reduction for a program that literally puts food in the mouths of hungry children — even as our state’s leaders funnel billions in tax breaks to corporations with no strings attached.
State politicians sell all this as the regrettable but inevitable consequence of the worst financial crisis since the Great Depression. But that argument is particularly galling, because in the middle of that same bad economy, the state continues to find money for tax incentives for corporations — like one that just moved 1,100 jobs out of state after pocketing millions in concessions, and another that recently left Massachusetts entirely.
Instead of retooling these misguided tax policies and demanding that wealthy individuals and businesses pay more, not less, Governor Deval Patrick and the Massachusetts Legislature are advocating spending cuts that read as though they were written by Congressional Republicans bent on appeasing the anti-tax Tea Partiers on whom their political future depends. But it’s the Democrats who are pushing to reduce state aid by $65 million and slash $23 million from emergency homeless shelters, which serve many children — all while lowering the corporate tax rate from 8.75 percent to 8.25 percent.
What is going on here? Does Patrick really think he’ll be able to stump over the coming months for President Obama’s reelection by excoriating Republicans for their corporate sympathies and hostility to the poor while mimicking the same behavior at home? Does he expect thoughtful people to buy that undermining the social compact between the state of Massachusetts and its most vulnerable residents is an acceptable way to close a state budget gap estimated at between $1 billion and $2 billion?
The Great Recession that caused this shortfall in tax revenue was the result of those in government inviting risky speculation, first by deregulating the financial sector and then through tax cuts that, Princeton economist Paul Krugman estimates, have added roughly $2 trillion to the national debt in the past 10 years. Democrats in DC, now limited by borrowing still more money, don’t have the will to raise corporate tax rates. They have discussed cutting deeper into social programs.
That approach in Massachusetts has led us to a wholesale assault on crucial social services like the Women, Infants, and Children (WIC) nutrition program for low-income pregnant and postpartum women and preschoolers. Patrick and Democratic lawmakers propose slashing one out of every five dollars WIC gets, which would come on the heels of a 9 percent reduction in state and federal spending on the program in the past three years.
Since the federal government launched WIC in 1972, research has consistently linked the program to dramatic reductions in preterm births and low birth weights, two key predictors of infant mortality, as well as to decreases in the incidence of iron-deficiency anemia, the cause of long-term cognitive development problems. WIC’s emphasis on nutrition education has also increased the rate of breastfeeding, which bolsters infants’ immunity to disease. The program works so well that even the Romney administration kept its mitts off it.
What makes the assault on WIC all the more confounding is that the program actually saves the state bundles of money. Patrick’s own Health and Human Services secretary, JudyAnn Bigby, estimates that for every dollar spent on WIC, Massachusetts saves three dollars on Medicaid, the publicly funded health insurance program for the poor. Given that Medicaid is one of the state’s biggest budget busters, doesn’t it make sense to protect a program like WIC that helps lower its cost?
Even worse is that the proposed budget doesn’t just deprive poor kids of food; it also keeps them out of subsidized nursery schools and, for those with developmental delays, out of early intervention programs. The $7.5 million earmarked for the Universal Pre-Kindergarten Program is a 40 percent reduction from 2009 levels, according to an analysis by the Massachusetts Budget and Policy Center. And the $21.5 million budgeted for early intervention services is $8 million less than last year. According to the policy center, these cuts reduce or eliminate services for something like half of the 30,000 infants and toddlers now receiving occupational, physical, speech, or other therapies.
And, as with WIC, these cuts represent foolish policy. Researchers have documented the benefits of early childhood education for the past 40 years. A conference at the MIT Workplace Center in 2005 discussed the economic benefits of publicly funded preschool, and noted the irrational tendency of states during times of financial stress to subsidize businesses while reducing quality early education programs. “Investing in early education generates economic development for communities in the short run in the form of jobs, the purchase of goods and services, and a more efficient workforce. In the long run, quality early education builds an employable, educated workforce,” concluded a report from the conference titled “Early Childhood Education for All: A Wise Investment,” written by Leslie Calman and Linda Tarr-Whelan. Their report, which confirmed what dozens of longitudinal studies across the country have found, went on to say: “Children who receive quality early education arrive at school ready to learn and they do better in school. They need fewer costly special education classes. They are more likely to graduate from high school and to hold jobs. They are less likely to be on welfare. And they are significantly less likely to wind up in the courts and in the jails and costing taxpayers a fortune.”
And yet stating the obvious — that preserving the safety net for those most in need requires higher taxes on those most able to pay — is out of political fashion. Making deep cuts in social services now passes for sound fiscal management at all levels of government.
Meanwhile, we are using tax breaks to entice companies to come to Massachusetts — and to convince them to stay — even though there is little evidence the strategy works.
Tax incentives, credits, and state subsidies to businesses in the name of economic development are costing Massachusetts more than $2 billion a year. And yet, in two recent notorious cases, such munificence didn’t produce the desired effect. Evergreen Solar packed up and left 800 Massachusetts residents out of work only two years after the renewable-energy firm built a factory in Devens using $58 million in taxpayer dollars. And then there’s Fidelity Investments, which, despite 15 years of generous tax incentives, this spring moved more than 1,000 jobs to New Hampshire and Rhode Island. Fidelity, by the way, continues collecting its tax breaks to this day.
With governor after governor in Massachusetts, businesses pull a kind of corporate blackmail. It began in earnest in 1995, when Raytheon Corporation threatened to leave the state — and the company’s local workforce — behind unless the commonwealth and Governor Bill Weld gave the local defense contractor millions in tax incentives. Once it got them, Raytheon went ahead and fired thousands of workers, anyway.
Just this spring, state Auditor Suzanne Bump released a report detailing the lack of accountability for companies that take the money and run. Going back decades, she reviewed 92 agreements for tax breaks or credits awarded to businesses, and found that only seven of them required a periodic review of their effectiveness or a reimbursement to the state if the company reneged on its commitments.
In the wake of the Evergreen and Fidelity rip-offs, Patrick now says he will consider whether beneficiaries of the state’s corporate welfare policies deserve more scrutiny. Shouldn’t he also be asking whether they deserve less taxpayer money? How about leaving just enough to feed the kids?