A Moral Budget for Massachusetts
[Moral Budget Committee:
- Co-Chairs: Savina Martin and Jonathan King;
- Staff: Jelena Mitić Elliott,Brian Garvey , Sergio Rivero;
- Consultants: Andrea Burns, Rep. Mike Connolly, Ruth Rodriguez Fay, Lee Farris, Lisa Guisbond, Prof. Marilyn Frankenstein, Lee Farris, Cole Harrison, Michael Kane, Dan Luker, Prof. Caesar McDowell,, John MacDougall, John Ratliff, Councilor Quinton Zondervan].
1. Introduction: Too Many Mass Residents are Hurting:
Massachusetts is home to 6.8 million people. Of these 16.5% are over the age of 65, and 19.8% are under the age of 18. More than 16% were born outside the United States. Our residents are well educated compared to the national population with some 43% holding bachelors degrees. Nonetheless millions of people across the state are struggling to achieve or maintain a decent quality of life. (Anderson, Travis, Boston Globe, Feb 2, 2020, P.B2)
According to 2010 US Census categories some 10% - close to 700,000 people - are living below the poverty level. Many more are struggling with high housing costs, student debt, and inability to afford adequate healthcare. The number of persons experiencing homelessness last year was at least 20,000. (State of Homelessness -https://endhomelessness.org/homelessness-in-america/homelessness-statistics/state-of-homelessness-report/)
2. Government Budgets are Moral documents:
Municipal, state and federal budgets are among the clearest and deepest statements of a society’s values and priorities. The funds expended come primarily from residents in the form of property, sales, state and federal income taxes. Sadly the legislative choices and decisions are often made out of public view, and generally poorly reported in the media.
The legislative decision making, budgets are often considered in isolation. Thus the Mass state legislative debates over the state budget are generally silent over the fact that some 30% of the state budget comes from federal funds appropriated by the U.S. Congress and then transferred to agencies within the Commonwealth. This generally prevents a real comparison of the choices available. Thus the state legislature can claim that the budget lacks funds to end homelessness, by ignoring the enormous expenditure of billions of tax dollars for new nuclear submarines.
The Moral Budget addresses the issues more candidly and directly by recognizing that the choices made by the US Congress in setting the annual discretionary budget, has profound consequences for the state budget and people of Massachusetts.
3. The National Economy:
Over the past few decades, U.S. economic inequality has skyrocketed to morally unacceptable levels. Since 1968, the top 1 percent’s share of national income has nearly doubled while the official poverty rate for all U.S. families has merely inched up and down. Wealth inequality is even more extreme than income inequality. The richest 5% of Americans now hold about two-thirds of national wealth. (“Facts: Wealth inequality in the United States,” Inequality.org, accessed May 22, 2019, https://inequality.org/facts/wealth-inequality/)
The concentration of income and wealth at the top has siphoned resources away from those at the bottom end of the income ladder. It has also increased the political power of the ultra-rich, which they’ve used to shape tax, labor, health care, campaign finance, and other policies to serve their narrow interests.
“The immoral narrative says that the poor just take and take, while the wealthy earn everything they get. That’s not true! Our government spends billions of dollars giving subsidies and tax breaks to the upper middle class and to the wealthy, and they treat corporations like rich individuals. And all the while, low income workers have to beg, march, and protest to demand a $15 minimum wage and a union. That’s not right!”
- Suzanne Krull, New York
Public investments and other policy changes aimed at shifting from a highly unequal to a more equitable economy is a matter of both moral justice and good economics. Inequity is intolerable; a few cannot have the most resources, while the most have little. It is also morally reprehensible and economically unsustainable. This imbalance prevents full participation in, and therefore weakens, the nation’s economy. If the United States is to have a strong economy, all must have maximum capacity to participate in that economy. We can increase the financial viability for all by making changes to our tax code such that large corporations, wealthy individuals, and big banks on Wall Street pay their share. In this way, revenues can be delivered to invest in an equitable social order, creating solutions for social needs in the near and long term.
Figure 1. Brief summary of the 2019 Congressional Discretionary Budget
4. A Moral Budget for America - OVERALL FINDINGS:
The overall federal budget and the Congressional Discretionary budget are the two pools of public capital that citizens in theory have control over, through their elected members of Congress. The overall budget includes spending termed “mandatory” including Social Security and Medicare. These are not paid from income taxes, but are trust funds which citizens pay into during their working lives, and then draw from later. In contrast the Congressional discretionary Budget comes primarily from individual, family and corporate income taxes, and is voted each year by the Congress. Figure 1 shows the discretionary budget from 2018. The single largest category is Defense spending. This value is an underestimate because nuclear weapons are financed by the Dept of Energy budget. In addition Veteran’s Administration funds, which is covering the human costs of past wars, is not part of the Defense budget.
Figure 2 shows President Trump’s proposed budget priorities for the next few years. The Congress will not adopt this as is, but the Republican controlled Congress is not likely to make major departures from its priorities.
Examination of the Budget reveals that the nation has abundant resources for an economic revival that will move towards establishing a moral economy. The Moral Budget for America report identifies:
- $350 billion in annual military spending cuts that would make the nation and the world more secure
- $886 billion in estimated annual revenue from fair taxes on the wealthy, corporations, and Wall Street; and
- Billions more in savings from ending mass incarceration, addressing climate change, and meeting other key campaign demands
The below comparisons demonstrate that policymakers have always found resources for their true priorities. It is critical that policymakers redirect these resources to establish justice and to prioritize the general welfare instead. The abundant wealth of this nation is produced by millions of people, workers, and families in this country and around the world. The fruits of their labor should be devoted to securing their basic needs and creating the conditions for them to thrive.
At the same time, policymakers should not tie their hands with “pay-as-you-go” restrictions that require every dime of new spending to be offset with expenditure cuts or new revenue, especially given the enormous long-term benefits of most of our proposals. The cost of inaction is simply too great(from Poor People’s Moral Budget - https://ips-dc.org/wp-content/uploads/2019/07/PPC-Moral-Budget-2019-report-FULL-FINAL-1.pdf )
Figure 2. - White House Proposed Budget through 2023
5. Federal Contributions to the State Budget:
Overall Federal spending in 2019 was $4.1 Trillion dollars. Of this Massachusetts received $78 billion, about 2%. The overall budget includes major categories that are trust funds - SocialSecurity and Medicare - and other categories not subject to annual Congressional votes. The $ directly allocated by the Congress each year constitute the Congressional discretionary budget, funded by income taxes. Massachusetts sends $19,000 a year to the federal Government to provide for this budget. If the M0ral Budget was adopted by Congress that would make available an additional order 1 trillion dollars. This would provide an additional $20 billion a year for Massachusetts Human, Social and Environmental Service Programs.
Since some weapons contracts would be cut, those dollars coming into Massachusetts would be reduced. For example some F35 components are manufactured in Mass, and some of the missiles and bombs provided to the Saudis by Raytheon are financed by Defense dept contracts.
However, these weapons and weapons components make no contribution to the needs of our citizens - they don’t house us, clothe us, get us to work, improve our health care or protect our environments. In fact their enormous cost is one of the reasons the US is so backward in areas like public transits, sustainable energy, and health care for all.
The weapons industry is of course a source of employment. Cutting weapons spending reduces that employment, but the transfer of funds to civilian programs expands employment in those sectors, which contribute much more to the quality of life. A careful study by UMass faculty Heidi ….. and Robert Pollin showed that in general civilian infrastructure projects generated many more jobs per dollar allocated than military contracts.
Many of the programs, such as the upgrades to nuclear weapons, decrease national security. For example increasing the accuracy of missiles launched from submarines can only alarm potential adversaries, since they look as if they are designed for a first strike, to eliminate the adversary’s deterrents. Given that the US refuses to adopt a No First Strike policy, such weapons programs increase the likelihood of an inadvertent or intentional nuclear exchange.
[From feds $76 billion, 16th nationally 28.7%]
6. Sources of Revenue Made Available through Adoption of the Moral Budget:
A) Fair Taxation:
- Fair taxes on the wealthy, corporations, and Wall Street could generate as much as $886 billion per year in revenue to meet urgent social and environmental needs. (If policymakers adopted all of the proposals identified in this section, revenue estimates would need to be adjusted to account for interactions between the reforms.)
- Capital gains taxes on fortunes passed on to heirs would raise an estimated $78 billion per year — approximately the estimated cost of giving every American child a modest savings account at birth that would earn interest and grow, providing a nest egg for education or to buy a home.
B) Pentagon Spending Cuts:
The Moral Budget for America calls for $350 billion dollars cut in Pentagon spending, which would still leave almost $400 billion dollars for military expenditure, more than the next 7 largest national military budgets;
i. Steps toward Nuclear Disarmament:
Among the cuts that would actually increase national security are reigning in the nuclear weapons upgrades, as described in the SANE Act: According to co-sponsor Rep. Blumenauer:
“These disastrous weapons will never be the answer to solving our complex and ever-changing national security threats, especially with a reckless administration in charge of the codes,” “We should not be investing trillions of dollars of our budget on an outdated and irresponsible nuclear arsenal. There are far more important programs and initiatives that will actually help and protect the American people. This legislation will put us on the path towards a safer, nuclear-free future.”
The Smarter Approach to Nuclear Expenditures (SANE) Act will prohibit the fielding of so-called “low-yield” warheads, prohibit space-based missile defense, remove the nuclear mission from the F-35 and will:
- Reduce the purchase of Columbia-class submarines from 12 to 8, cut the existing ICBM fleet from over 400 to 150, and reduce deployed strategic warheads from approximately 1,500 to 1,000 - saving $13.1 billion
- Cancel the development of a new air-launched cruise missile and an associated warhead life extension program - saving $13.3 billion
- Reduce to 80 the purchase of new B-21 long-range bombers - saving $11.6 billion
- Cancel the development of new ICBMs and a new nuclear warhead - saving $13.6 billion
- Cancel the development of a new submarine-launched cruise missile - saving $9 billion
- Limit the plutonium pit production target to 30 per year - saving $9 billion
- Prohibit funding for a nuclear processing facility - saving $2.6 billion
- Retire the B83-1 megaton bomb as previously planned - saving $4.4 billion
A copy of the SANE Act can be found here.
ii. Cut Support for Saudi military adventurism:
Another major saving will come from cutting off support for Saudi Arabian military interventions in Yemen and other Middle Eastern sites.
- [Brian Garvey to add)
iii. Terminate the Overseas Contingency Operations;
This off-budget category is essentially a slush fund for Pentagon contractors providing overseas services.
iv. Close 300 of 800 Overseas Military Bases:
Most of these bases serve no legitimate national defense function, butg alienate the citizens of the communities and countries where they are sited. They are a source of considerable profit to the contracting corporations which provide many of these services needed to keep such bases operation.
7. The 2019 Massachusetts State Budget:
Federal funding is the largest financial source for Massachusetts after State Taxes. Even since before the Great Recession, the share of state’s funding that comes from Federal Government has been and remained about one third. In 2017, Federal money, $78.7 billion for Mass, has accounted for 28.7% of Mass. Total MA spending (excluding soc. security payouts and medicare/medicaid) in 2017 was $48,981,354,583 as it is outlined in the categories below.
According to 24/7 Wall Street, a USAToday’s partner on financial news and commentary, and based on the 2017 reporting from the Rockefeller Institute of Government and the US Census Bureau, Massachusetts is the third lowest recipient of Federal money per capita, followed only by New Jersey and Connecticut, with -$2368/per capita and -$4000/per capita, respectively, in federal funding:
• Net federal funding: -$2,343 per resident
• Total revenue from fed. gov.: $78.7 billion (16th most)
• SNAP benefit recipiency: 11.7 percent (25th lowest)
• Median household income: $77,385 (4th highest)
(Stebins, Samuel. How much money does your state receive from the federal government? Check out this list. 24/7 Wall Street. Published 6:00 am Et March 20, 2019, Updated 8:43am ET March 20, 2019 - https://www.usatoday.com/story/money/economy/2019/03/20/how-much-federal-funding-each-state-receives-government/39202299/ Accessed Jan 1, 2020.)
Figure 3. Federal Grants as Share of State Budget -USA breakdown
Categories below are in the order of the Mass Budget categories:
I Current Mass Budget for Education -
$8,583,445,046 or 17.95% of 2019 Budget :
i. Early Education & Care - $ 665,005,475
ii. Higher Education - $1,254,399,985
iii. K-12: Chapter 70 Aid - $5,039,067,402
iv. K-12: Non-Chapter 70 Aid - $ 721,997,040
v. K-12: School Buildings - $ 902,975,144
II Current Mass Budget for Environment & Recreation -
$ 227,277,155 or 0.48% of 2019 Budget:
i. Environment - $ 97,854,679
ii. Fish & Game - $ 31,988,277
iii. Parks & Recreation - $ 97,434,199
[Moral Budget for Environment & Recreation ….]
III Current Mass Budget for Health -
$ 21,240,328,804 or 44.43% of 2019 Budget:
i. Mass Health (Medicaid) & Health Reform - $ 18,020,813,673
ii. Mental Health - $ 897,031,765
iii. Public Health - $ 691,614,881
iv. State Employee Health Insurance - $ 1,630,868,485
[Moral Budget for Health ……]
IV Current Mass Budget for Human Services -
$ 4,724,162,376 or 9.88% of 2019 Budget:
i. Child Welfare - $ 1,033,629,292
ii. Disability Services - $ 2,066,650,409
iii. Elder Services - $ 541,693,248
iv. Juvenile Justice - $ 183,581,259
v. Other Human Services (includes VA services) - $ 214,148,262
vi. Transitional Assistance (including SNAP) - $ 684,459,907
[Moral Budget for Human Services …….]
|image: Good Photo|
V Current Mass Budget for Infrastructure, Housing & Economic Development -
$2,497,209,486 or 5.22% of 2019 Budget (includes transportation):
i. Commercial Regulatory Entities - $ 74,143,287
ii. Economic Development - $ 192,356,266
iii. Housing - $ 533,664,694
[Moral Budget for Infrastructure, Housing & Economic Development …]
|image: Andrei Stanescue||image: Auseklis|
iv. Current Mass Budget for Transportation -
$1,697,045,239 or 4% of 2019 Budget:
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Moral Budget for Transportation :
- by Sergio Rivero
For the 2021 Mass Transportation program the Moral Budget projects the following improvements,enhancements and new projects:
From the 2020 Moral Budget adjustment, we estimate an additional $1.2 billion would be available for transportation and public transit:
i. Fully fund the MBTA Capital Acceleration Program
Firstmost, would be to fully fund the MBTA CAP to increase productivity and allow the MBTA to hire temporary specialists to help decrease the workload of regular employees while also creating a safety net for their budget to accommodate any accidents or delays.
ii. Make MBTA Bus Fare free by XXXX year
This increases the accessibility of low income families to expand their reach and employment opportunities. It would entice a higher usage rate of public transportation while the need for a car would decrease.
iii. Modernize the MBTA Fare Collection
The MBTA is in progress of creating a new fare collection but needs more funding as the project is more complicated as they originally thought it would be.
iv. Expand the MBTA’s reach
The MBTA’s reach can be extremely pivotal for many of the working families who escape the ever-increasing cost of housing in commercial districts. The North-South Connector would unify the nearly entire east coast rail while also fixing many confusing commutes. A small example would be getting to North Station to South Station where they are only connected respectively via half of the trains. We would also like to extend the Blue Line to Lynn and re-establish train service in “South Coast Rail”: New Bedford and Fall River. Overall, expanding the MBTA’s reach would economically and socially benefit Massachusetts while creating a stepping stone to eliminating its own carbon footprint.
v. Upgrade Green Line stations to the original plans
[Unsure what to add here.]
vi. Build more bicycle lanes
As people’s personal demand to eliminate their own carbon footprint becomes prominent, so does the demand of accessibility to bike around Massachusetts. This would help fund projects that are more biker oriented that would create a safer environment for bikers whilst increasing....
|image: Torresigner||image: Juan Anzola|
vii. Establish a regional bus transit
“In Massachusetts, outside of the Greater Boston region, fifteen Regional Transit Authorities (RTAs) provide public transportation service to millions of Bay Staters. For those who ride the RTAs, they provide a lifeline.”
~A Vision for the Future of Massachusetts’ Regional Transit Authorities
VI Current Mass Budget for Law & Public Safety -
$3,098,667,602 or 6.48% of MA Budget 2019
i. Court & Legal Assistance - $ 831,430,814 (Includes Committee for Public Counsel Services)
ii. Law Enforcement - $ 421,528,094
iii. Other Law & Public safety - $ 62,703,633
iv. Prison, Probation & Parole - $ 1,588,758,499
v. Prosecutors - $ 194,246,563
[Moral Budget for Law & Public Safety …]
VII Current Mass Budget for Local Aid -
$ 1,170,027,616 or 2.45% of 2019 Budget
[Moral Budget for Local Aid …]
VIII Other - $6,269,993,877 or 13.11% of 2019 Budget:
i. Constitutional Officers - $ 92,214,952 (includes Voting related items)
ii. Debt Services - $ 2,742,231,293
iii. Executive & Legislative - $ 79,048,688
iv. Libraries - $ 27,873,268
v. Other Administrative - $ 653,865,676
vi. Pensions - $ 2,674,760,000
Total MA Budget 2019: $ 47,811,111,964
IX not represented in the budget:
- State Tax Reform
- Minimum Wage
- Safe havens for immigrants
Complete breakdown of all Mass Budget categories and subcategories and funds allocation for current previous years can be found on the Massachusetts Budget and Policy Center website.
Current State of Massachusetts Education
Education in Massachusetts is under attack on all fronts, from pre-K, K-12, to Higher ed. Public schools are failing under the state's poor care and reduced funding. Public colleges and universities are suffering from budget cuts and reductions of state’s education funding.
In the public education system preK-12, there is a growing inequality gap, which the state has not been able to close. The inequality gap is due to the outdated formulas used to determine levels of funding for schools in cities and towns throughout MA (Foundation Fund, Chapter 70, property taxes, additional donations). While some districts have millions of dollars in their reserves, others can’t afford to pay their teachers. Students with special needs aren’t getting the attention they require because school districts can’t or refuse to fund their additional requirements, until the student is completely failing. Schools are annually threatened by program cuts without the necessary funding that should come from the state - music, art, physical ed, library, teacher aids, counselors etc. Massachusetts legislative bodies have neglected to provide the necessary care needed to make ALL our public schools strong and give ALL students opportunities to thrive.
Massachusetts funding expectations and obligations to prek-12 have not been revised since 1993. Since then, many have called for a revision of the State’s role in funding public schools. In 2019, the state passed the Student Opportunity Act(SOA), which is a step in fixing a system that is failing and failing Massachusetts children. (more details to put in about SOA???) Budgeting for education increase is just one part of the equation. Making sure that funds are carefully appropriated where it is needed is also important. (more about - Charter schools - quasi public schools under management of private companies taking funding away from public schools).
K-12 State & Federal Spending per student (http://reportcards.doe.mass.edu/2019/01780050 )
Situation is just as dire with public higher education. As Marty Meehan, the president of the University of Massachusetts system said ”It’s fair to say we are a private university that receives a 20 percent subsidy from the state.” Unfortunately, SOA will only provide some relief to Mass Higher education. After many decades of cuts, funding levels for public colleges and universities will only be raised to the 2001 levels. The difference is made up through privatizing as universities are turning to corporations and employing privatization practices to make up for the missing, but needed funds. The greatest suffering is with students and their families, and faculty and staff, as the burden of increased costs of tuition and fees is being transferred unto students and their families, while faculty and staff are facing layoffs and reduced benefits.
Massachusetts holds more than $24 billion in student loan debts. This is a tremendous financial burden on the state, which relies on its highly educated workforce, of whom the majority comes from public colleges and universities - 9 out of 10 graduates of MA pub. schools live and work in MA after graduation.
While MA has a very strong private college and university presence with vast financial aid, for students, particularly from lower income families, the choices at public schools are limited and financially very costly, and in the last decade almost on par with the private schools. From 1987-2010, real price tag at private universities rose 55%, compared to 193% rise at public schools, which used to be financial safety schools. Between 2004-2016, average student loan debt for individuals from public schools rose 77% in MA, faster than any other state except Delaware. Consistent and constant increases in fees are detracting new students from enrolling, while for those that are enrolled, financial indebtedness will have a lifelong impact - every $1 of debt takes away $4 dollars from the individual lifetime wealth, savings and home equity.
Moral Budget for Education -
current spending $8,583,445,046 or 17.95% of 2019 Budget :
Fully fund all public schools and public higher ed
Higher Education - ASKS:
- A right to free higher public education up to four years to all Mass residents
- Student loan forgiveness to Mass residents
- Re-establish funding levels from 2001, returning more than 500 million per year to Mass public colleges and universities.
- Freeze tuition and fees for five years
- Support Student Loan Bill of Rights, giving opportunity for higher education to undocumented students, protecting all students from all forms of sexual violence, and provide one full year of tution and fees after first year at any state college or university.
- Protect workers rights on and off campuses - give all faculty immediate access to health and retirement benefits, pay parity with full-time faculty, and give them priority consideration for new or vacant full-time positions and provide public employees with the right to engage in a strike.
K-12 - ASKS:
- Reform funding formulas for public schools
- Realign funding levels and funding allocation between all districts
- Reform Charter Schools
- Less testing, more learning - testing reform
- Reform Curriculum for more wholesome learning -
- Support and expand music and arts, create new immersive foreign language programs, expand students’ exposure to math, science and technology.
- Higher teacher wages, and better benefits
- Respectful and culturally more sensitive environments for student teacher relationships
Proposals for additional funding:
End all testing and reallocate human and financial resources dedicated to creation, distribution and analysis of tests to creating student led activities and engaging learning environments.
Fair Share Amendment (RaiseUpMA) - A proposed amendment to the Massachusetts Constitution that would create an additional 4 percent tax on annual income over $1 million, raising $2 billion a year for public education and transportation.
An Act relative to certain endowment funds in private institutions of higher learning (S.1669) - This bill taxes private college endowments of over $1 billion at 2.5 percent to fund public education.
An Act relative to the endowment match program (S.2235) - This bill provides state funds to match private donations to public college and university endowments.
An Act to strengthen the foundation of the Commonwealth (H.2424) - This legislation would strengthen the foundation of the Commonwealth by raising substantial new revenue through progressive means, including raising rates on interest, dividends, and capital gains; implementing a tiered corporate minimum excise tax; and ending the inheritance loophole for capital gains.
Increasing State Revenue - Fair Share Amendment
... in progress...
Massachusetts State budgets have remained stagnant for the past twenty years, which represents continuing decline, once corrected for inflation. State of Massachusetts (http://www.massbudget.org/browser/index.php )