Massachusetts: Real Problems and Phony Solutions

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[by Joe Auciello]

Even before the banking and financial crisis erupted in September, hard times have become harder for more people in New England. Just “getting by” has become more difficult. This not a matter of a catastrophic event, like a stock market crash, but a series of smaller events that, step by step, make life tougher for a growing number of workers and the poor.

Economic and census reports published last summer revealed a growing gap in wealth in the United States, where the richest saw a gain in income four to five times that of the poorest.

This widening economic disparity has been especially severe in Massachusetts, where income inequality has increased faster than every other state in the country but two. According to a University of Mass. study, since 1989 the richest state residents enjoyed a steady 11% income gain while most saw no increase and while the bottom twenty per cent of the population suffered an actual decline.

Not only are the poor getting poorer while the rich are getting richer, the number of poor and near-poor are increasing. Throughout the state basic necessities of life — food and shelter — are harder to sustain.

In Mass. fuel costs are increasing ominously, not just automobile gasoline but home heating oil and natural gas. Estimates in August were for a 30% jump in cost per family, meaning state residents would collectively pay $1 billion more this year than last. Already, home fuel prices are two dollars more a gallon than last year, which cost more than the year before, and these increases come earlier than in the past. That is, price increases occur in the fall and rise even more sharply in the winter when, in the coldest months, oil and gas supplies are lowest.

Prices are also rising for ordinary consumer goods, especially food. State and local relief agencies report an increase in food pantry applications while some cities and towns have already exhausted their resources. In the social safety net, the holes are widening.

Across the state, more homes have been foreclosed; in Massachusetts as well as the United States, the older you are, the more likely you will file for bankruptcy. For the elderly, income tends to remain fixed while medical costs soar, forcing an increase in bankruptcy that rises with the rise in age.

More people in Mass. are unemployed and for longer periods of time. More houses are selling but for a lower price, as property values fall. Meanwhile, property taxes increase on homes that continue to lose their value.

Families with students are finding life more difficult. It’s not just that Massachusetts spends far less than most states on public higher education. At the end of July the Mass. Educational Financing Authority announced that it would not, for the first time in its twenty-six year history, be able to provide student loans. Forty thousand students saw tuition loans dry up. In its place parents and students turned to home equity loans, credit cards, or more costly private loans, thereby risking a potentially dangerous accumulation of debt. Some students gave up on college altogether. Naturally, the worst hit were those who were already the worst off.

Even the few bright spots are clouded. More people than ever before in the state have health insurance and access to healthcare, yet the Moody’s rating agency predicted that rapidly spiraling medical costs will kill the Mass. (not-quite-so) universal health plan.

Overall, then, more people are finding it more difficult to live and are trying to cope as best they can, as their quality of life steadily deteriorates.

In mid-October the governor announced a series of cuts to the state budget in light of a tax shortfall. One billion dollars of planned expenditure was eliminated, which included the loss of 1,000 state jobs, less money for the state’s already struggling higher education system, social welfare programs, etc.

Massachusetts is looking fearfully to Rhode Island, wondering whether the Ocean State, with the second-highest unemployment rate in the nation, is the future of the Commonwealth.

In the face of escalating hardship, what is the potential for a fight-back? There will be no Democratic Party response to the Republicans because the Democrats already control the state legislature and have their man in the governor’s office. The majority of the state’s Congressional delegation are Democrats, including the two U.S. senators. In Massachusetts, the Democrats are the ruling party.

Across the state, the trade unions are weak and losing members. There is no labor party to defend the interests of workers and their families. Third party formations like the Greens have self-destructed or, for all practical purpose, disappeared. Naturally enough, no mass socialist or revolutionary party exists. None of the small socialist groups here is sufficiently strong to garner a public hearing and provide even a hint of leadership.

There is no force capable of organizing a popular challenge to the major political parties and their wealthy masters. In fact, the very idea of a social response is barely seen as legitimate. In its place there is only a personal response in which people act in a small way as either voters or individual consumers, as if, for instance, the energy crisis could be solved by changing light bulbs in each family’s home. The idea of collective action is not even raised at all.

Instead, on the ballot this November is Question 1, whose main spokesperson is a former Libertarian Party candidate for governor. Question 1 is a binding referendum which, if passed, would repeal the state income tax and would mean a loss of $12 billion, more than 40% of the state budget.

Six years ago, in better times, a similar referendum question won nearly 45% of the vote.

The large and growing support for this ballot question is a distorted form of popular protest. It appears to empower citizens in a fight against the state and it appears to benefit all, especially the most needy.

Supporters of Question 1 calculate a typical taxpayer would save $3,600 a year, every year, in taxes. This is hardly a small amount of money. When, for instance, home heating oil costs $4.70 per gallon today, compared with $2.59 in 2007, and when the cost is expected to increase next year to approximately $3,000 per household, a repeal of the income tax looks more than tempting. The appearance is deceiving, as the unions are the first to point out.

Massachusetts unions, especially teachers and health-care workers, are organizing for a “No” vote in November. They point to the cutbacks that would follow in public education and social services, the deterioration of roads and bridges, the reduction in public transportation and environmental protection, research, and development.

What’s more, the elimination of an income tax would result in an increase in property taxes and an increase in tuitions and fees in public education. Just as economic hardship drives more families to find aid in public services, the money to sustain them would dry up, leaving the poor, the elderly, and needy even worse off than before.

Question 1 is no answer to the hardship that so many in Massachusetts endure. It is a phony solution to real problems.

A real solution is already underway. Those unions that have begun to respond to Question 1 need to continue their efforts in an on-going campaign that would reach out to other unions, non-unionized workers, and all immigrants. Together, it is necessary and possible to create an effective response to the on-going crisis in both this state and the nation.

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