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Weld's Fiscal Record Looks Too Familiar

August 23, 2005

By Nicole Gelinas

PRINTER FRIENDLY

William Weld, the former governor of Massachusetts, wants to be New York's governor, too - he said last week that he'll run for the Republican nomination to face Attorney General Eliot Spitzer, the likely Democrat on the ballot, next November.

Weld said he'll run on a platform of tax cuts in the fiscal tradition of Gov. George Pataki. But New Yorkers eager to throw off their crushing tax burden shouldn't embrace Weld quite yet.

Sure, Weld's own fiscal record in Massachusetts proves that he's a competent tax-cutter. As governor from 1991 to 1997, Weld designed tax cuts that were tailor-made to attract new investment to Massachusetts as it emerged from a recession that had decimated its suburban high-tech industry.

Weld gradually eliminated a tax on long-term capital gains and cut other investment taxes to encourage Massachusetts taxpayers to invest in new companies for the long haul. He also repealed a sales tax on the state's services industry to jump-start job growth there, and enacted massive tax credits to encourage research and development in high-tech industries.

In this, Weld's record is similar to Pataki's first six years in office. Pataki pared taxes in New York and offered targeted tax credits to businesses that invested in distressed regions of the state.

But to cut taxes permanently, a governor must also cut spending. In this, unfortunately, Weld's record in Massachusetts is similar - in fact, eerily similar - to Pataki's in New York.

Pataki and Weld each had to mop up the immense budget deficits of a Democratic predecessor after taking office. In 1995, Pataki had to stem the fiscal fallout from the Mario Cuomo administration. Two hundred miles to the east, Weld had already stanched the fiscal bleeding that was the legacy of Michael Dukakis' "Massachusetts Miracle."

Both new chief executives proved adept at plugging short-term budget shortfalls and at soothing bond investors. And the governors managed to actually cut spending in at least one of their earliest years in office - no small feat.

But Pataki and Weld also promised radical structural reform to each state's budget, to pare unsustainable growth rates in spending so that spending didn't vastly exceed tax revenues during the next economic downturn.

And both men forgot that pledge as the economies of New York and Massachusetts recovered. Workers and investors prospered during the 1990s, and tax revenues once again rose to unsustainable levels - fueling the same unsustainable level of spending, this time under a Republican governor's stewardship.

We know how the story turned out in Albany. Under Pataki, spending has regularly risen at nearly twice the inflation rate. That spending growth, much of it on Medicaid for New Yorkers without health insurance and for sweetened pensions for state workers, was behind the mammoth income- and sales-tax hikes in 2003, enacted by the legislature over Pataki's veto.

In Massachusetts, the story was the same. Spending under Weld during the mid-1990s grew at double the annual inflation rate. Weld expanded programs generously in his election-year budget - just as Pataki did.

Indeed, in 2002, with Weld long gone, the Massachusetts Legislature did what Albany would do just a few months later: It overrode a Republican governor's veto to enact the largest tax and fee hike in state history. That tax hike erased some of Weld's earlier progress on taxes, and it happened partly because Weld, and his Republican successors, had failed to reform the budget during the good times of the 1990s.

Weld does deserve some credit for rolling back unsustainable growth in Medicaid in Massachusetts - from double-digit increases to about 3 percent a year - but not too much credit. Medicaid spending per person in Massachusetts toward the end of Weld's term was second only to Medicaid spending in ... New York. Moreover, in Massachusetts, Weld never showed a stomach for sustained political showdowns with the legislature - which will be necessary to pare Medicaid spending in Albany.

Weld may pare taxes in New York - which is welcome. But voters should know his history on the spending side. If it's Weld vs. Spitzer next year, the crown of fiscal responsibility doesn't automatically go to Weld by virtue of his party - or his Massachusetts record.

Original Source: http://www.manhattan-institute.org/html/_newsday-welds_record.htm

 

 
 
 

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