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Author(s): Scott S. Greenberger and Scott Helman, Globe Staff Date: January 19, 2006 Page: A1 Section: Metro/Region

Describing Massachusetts as “resilient, robust, and strong,” Governor Mitt Romney used his final State of the State address last night to propose setting aside $200 million to help pay for a sweeping healthcare plan, saying the money should assuage legislators’ fears about the cost of covering everybody.

“Health insurance for all our citizens does not require new taxes,” Romney said. “Some of you have your doubts about that. I know that the uncertainty could stall our progress or even end it. The speaker, Senate president, and I have agreed that we have a once-in-a-generation opportunity. Our citizens are counting on us. Federal funding depends on us. Let’s not allow perfection to become the enemy of progress.” Until last night, Romney had argued that no new state money would be necessary to extend coverage to the state’s uninsured. Massachusetts currently spends more than $1 billion a year on medical care for the uninsured through its “uncompensated care pool,” and he has argued that simply redirecting that money would pay for his plan. The House and Senate both have approved their own healthcare measures, but talks between the two bodies have bogged down over the House’s proposed payroll tax, which Romney opposes.

Romney also modified his longstanding call to cut the state income tax rate, which voters approved in 2000. Democratic legislative leaders have resisted cutting the state income tax rate to 5 percent, saying the state cannot afford losing the tax revenue. Last night, the Republican governor suggested phasing in the rate cut, lowering the rate to 5.15 percent next year and then to 5 percent the year after that.

Romney announced last month that he will not seek a second term as governor, fueling speculation that he is planning to run for president in 2008. Last night’s speech had the feeling of a valedictory address: Although he proposed a handful of new initiatives for 2006, he spent much of the time ticking off past accomplishments and promising to fight for ideas he has put forward before.

The mood was upbeat in the House chamber, where representatives, senators, and other elected officials gathered. In recognition of the state’s efforts to help Hurricane Katrina evacuees, the Bay State Stompers began the night with a raucous rendition of “When the Saints Go Marching In.” As is customary, Romney walked a red carpet from his office to the chamber, and his arrival was heralded by officers wearing top hats and carrying maces.

“We have come a long way in a short time,” he said. “Just three years ago, our budget was in crisis. We were losing thousands of jobs every month. Today, we are adding jobs. We are running billion-dollar surpluses. We’ve replenished the state’s rainy day fund. And we’re making investments in our children, our schools, our healthcare, and our communities.”

Although the state’s budget picture is much improved, Romney’s jobs boast is subject to dispute. By November, the most recent month for which figures are available, Massachusetts had about 20,000 fewer payroll jobs than it had when the governor took office in January 2003. Although the state has added about 35,000 jobs since the low point of the downturn, it still has 171,000 fewer jobs than it had at its employment peak in February 2001. Between July and November 2005, the state lost 13,000 jobs.

Even with the creation of a $200 million reserve fund to help pay for healthcare, Romney said there is enough money in the state’s coffers to “reach the highest level of local aid in state history.” Last week, he told a gathering of local officials that he wants to increase nonschool aid to cities and towns by more than 17 percent in the next fiscal year, by far the largest increase in more than a decade.

The extra $197.9 million might slow fast-rising property taxes and enable some communities to begin restoring the employees and services they cut during the state’s fiscal crisis, which hit in 2002. The governor will officially begin Beacon Hill’s budget debate on Jan. 25, when he unveils a complete blueprint that will exceed $24 million.

But legislative leaders are dubious that the state can afford everything the governor wants. Romney hasn’t disclosed his plans for education aid, which makes up more than three-fourths of the money the state funnels to cities and towns, but he has promised a “very significant increase” in that area, as well. He also wants to set aside $30 million to reward communities that allow the development of more housing, especially in city and town centers.

Shortly after Romney’s speech, House Speaker Salvatore F. DiMasi said the extra $200 million for healthcare would give legislators “flexibility,” but he questioned whether the state could afford all of Romney’s proposals and an income-tax cut.

“All of that has to be considered in balancing whether or not we can afford any kind of tax break or whether we can afford to pay that kind of local aid,” DiMasi said.

Neither DiMasi nor Senate President Robert E. Travaglini clapped when Romney proposed the income tax rate cut.

Deval L. Patrick, one of the Democrats who want to replace Romney, also questioned whether the governor’s proposals “are sustainable if, at the same time, he’s advocating an income-tax rollback.”

The other Democratic candidate, Attorney General Thomas F. Reilly, backed the income-tax cut but rejected Romney’s view of the state’s economic situation. “I see a state that has lost population in the last two censuses,” Reilly said. “I see a state that has lost thousands and thousands of jobs. I see a state where the third largest city in the state is on the verge of bankruptcy.”

On the issue of education, Romney renewed his call for a package of bills he sent to the Legislature last fall. He wants to give bonuses to science and math teachers, Advanced Placement teachers, and the top one-third “most successful teachers in each school.” He has also proposed allowing the state to intervene more quickly in schools with sagging test scores and giving principals more authority to hire, fire, and deploy teachers. He once again called for mandatory “parental preparation classes” for parents of children in struggling schools.

But the Massachusetts Teachers Association and other teachers’ unions strongly oppose many of those ideas. The MTA, which has spent huge sums to back legislative candidates, is one of the strongest lobbies on Beacon Hill.

“We’re very glad the governor is committed to increasing funding for education,” MTA head Catherine A. Boudreau said. “[But] t he merit pay plan does nothing to improve student achievement. It’s ineffective. Quite frankly, it’s a distraction.”

Romney also said he will propose higher standards for police candidates, changes in the pension system for state employees, and “a long-range state energy plan that includes conservation, renewable generation, and sites for new facilities.”

He also pledged to push forward with plans to expand “abstinence only” sex education programs in Massachusetts schools, a position that is likely to play well among conservative Republican presidential primary voters.

“We have sex education in our schools. Let’s also have abstinence education in our schools,” Romney said. “Marriage and two-parent families are fundamental to the development of children and our success as a culture. We cannot afford to shrink from the timeless, priceless principles of human experience.”


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