In a five paragraph paper, please describe three (3) most critical challenges facing Governor Baker's new administration. For each challenge, please give your opinion and factual content that would support that opinion.
Governor Charlie Baker of Massachusetts, as with many state-level chief executives, has no shortage of pressing issues with which to contend during the current fiscal and calendar years. Chief among those issues, at least from the governor’s perspective, is contending with the state’s estimated $768 million budget deficit. As with most Republican politicians, Governor Baker’s philosophy of leadership and governance eschews budget deficits, and the goal of a balanced budget remains one of his top priorities. As is always the case, however, the question of how to balance the budget – and many of his Democratic opponents do not share his concern with the state of the budget – is unresolved. Republicans in general eschew tax increases while advocating budget cuts as the principle means by which to move towards a balanced budget. As budget cuts are usually insufficient, however, politicians often seek to employ fiscal maneuvers that often don’t pan out, and Governor Baker’s budget proposal may fall into that category. As reported in the Boston Globe,
“The plan relies on a little more than $100 million worth of “reversions,” money that is budgeted but not used and then given back to the state’s general fund at the end of the fiscal year, which runs through June. It also banks on some money coming in from a proposed state corporate tax amnesty program as well as additional federal grants.” [“Charlie Baker Unveils Cuts, Tax Tweaks to Bridge Budget Deficit,” February 3, 2015, URL link provided below]
Such plans often look good on paper, but the anticipated revenue often does not materialize for any number of reasons. It is reasonable, therefore, to question the viability of the governor’s budget proposal, especially given the opposition that will emerge to some if not most of his planned cuts, including to Medicaid, Head Start, and other social welfare programs that have large constituencies and powerful supporters in the state assembly.
Another major challenge facing Governor Baker is the continued implementation of the Affordable Care Act (“Obamacare”). Massachusetts happens to be one of the state’s most advanced in its provision of health care for all of its citizens, and already maintained a viable health insurance exchange – an essential component of the ACA that has proven highly problematic for some states to implement. While Massachusetts is ahead of the curve, however, it still has work to do, and reconciling the federal mandate with its existing state-run program will present a challenge for the governor.
No matter what one thinks of the Affordable Care Act, and it has its share of critics, the Act is the law, and must be implemented. The scale of that effort varies from state to state, but even in smaller states (by population; Massachusetts ranks 14th on the list of states by population, with over 6,745,000 people), the task of enrolling citizens and restructuring existing health care systems is formidable. As polls suggest that health care remains one of the most important issues for Massachusett’s population, the governor will need to work closely with the state legislature to ensure proper implementation.
A third major challenge for Governor Baker is closely linked to the first: the overall condition of the economy and the creation of jobs. Job creation is often tied directly to a state or city’s tax structure. Corporations looking to reduce operating costs by relocating to regions with lower tax rates will normally avoid states that don’t meet that criteria. The importance Massachusetts residents place in fiscal responsibility, however, can run afoul of the goal of attracting new business with the jobs that entails. While the long-term advantages of negotiating tax breaks to attract business can constitute sound policy, the near term disadvantages are clear: lower tax rates equals less revenue entering state coffers. Nationally, Massachusetts ranks right in the middle (#24) for business tax rates. It does, however, have among the higher individual income tax rates in the nation (#8). [See “States with Highest and Lowest Taxes,” USA Today, October 28, 2012, http://www.usatoday.com/story/money/personalfinance/2012/10/28/state-taxes-states-highest-lowest/1654071/]. It also has a 6.25 percent sales tax rate, which is reasonable relative to the rest of the country (at least those states with a sales tax; five states do not have a sales tax. Balancing the demand for fiscal discipline with support for social welfare programs while attempting to build the state’s economy while creating employment opportunities is a difficult juggling act for any government, city, state or federal. Massachusetts is no different, and Governor Baker’s emphasis on reducing the size of the state’s fiscal deficit will involve very skilled budgetary maneuvers.
Because of the close association of the economic and budgetary issues discussed above, a fourth major challenge will be addressed, that of the state’s aging mass transit programs. Massachusetts has long had a good system of trains and buses, but the infrastructure supporting that system is decaying. A 2011 report on the condition of the state’s mass transit system and overall transportation infrastructure noted the following:
“The Massachusetts transportation system is aging, unable to maintain itself in good condition and even more unable to expand to meet the requirements of the Commonwealth’s people, environment, and economy.” [See Maxed Out: Massachusetts Transportation at a Financing Crossroads, October 2011, http://www.t4ma.org/site/wp-content/uploads/Maxed-Out.pdf]
Across the nation, aging infrastructures remain one of each state’s most pressing issues. Undergrown water and sewage pipelines, roads and bridges, etc., are aging and failing, with the costs of repairs exceeded only by the costs of total renovations, which make more sense in the long-term, but cost more in the short term. Governor Baker cannot afford to ignore this problem, but the financial details, coming within the context of the above discussion about fiscal deficits, will be difficult to reconcile.