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Romney's record: Tax-and-spend liberal?

Posted By Michael Carl On 01/21/2012 @ 9:00 pm In Front Page,Politics | No Comments

Mitt Romney says he wants to cut taxes and spending if he is elected president, but political analysts from at least three think tanks argue the candidate’s record as governor of Massachusetts suggests otherwise.

Center for Small Government Executive Director Carla Howell says that Romney’s boast of reigning in his state’s spending as evidence of his fiscal conservativism is blatantly false.

“The Massachusetts state statutory budget was $22.7 billion a year when he took office in January of 2003,” Howell wrote. “When he left office four years later, it was over $25.7 billion, plus another $2.2 billion in spending that the legislature took ‘off budget.’”

Romney, Howell points out, “never reminds us of this fact.” She claims in a report that the actual impact of Romney’s tenure as governor was a huge increase in state spending.

“The net effect of budgets proposed and signed into law by Mitt Romney? $5.2 billion more in state spending and a similar increase in new taxes and mandatory fees,” Howell wrote.

She says Romney’s record on job creation is, in her estimation, suspect as well.

“I asserted during our 2010 ballot initiative in Massachusetts, that for every one government job created, two private sector jobs are lost. This is primarily because the government spends twice as much for each employee, including pensions, health care, sick and vacation time and other things,” Howell said. “Regarding Romney on job creation, or job destruction, I think the biggest argument against him there is that more government spending equals a loss of private sector jobs. Romney increased spending per my ‘Mitt Romney: Champion of Big Government’ report.”

She continued, “You can also note that for every paid government employee there can be as much as one government pensioner, usually relatively young and able-bodied, collecting massive pension and health-care benefits that cost as much as many employees’ wages and benefits cost, or more.

“Romney made all this worse by increasing Massachusetts government spending,” she concludes. “His claim that he ‘cut spending’ at all, much less by two or three billion dollars, is a flat-out lie.”

Political analyst Steve Baldwin says that Romney is also misrepresenting his record by exaggerating the size of the $3-billion deficit he supposedly “cut.”

“The state budget was indeed projected to be $3 billion short,” Baldwin explains. “But as it turned out, the projection was way off. The state eventually took in about $1.3 billion more in capital gains taxes than had been expected. In addition, $500 million in unanticipated federal grants further reduced the predicted shortfall.

“Thus, the $3 billion shortage turned out to be only $1.2 billion. In other words, Romney misled people into thinking he closed a massive budget deficit, and groups such as the Club for Growth simply repeated this myth, while in reality the deficit was a little more than a third of what he claimed,” Baldwin said.

“Romney also asserted that ‘fee increases accounted for approximately 10 percent of the solution,’ but this too was false, since almost half the deficit was closed by fee and tax increases,” Baldwin said.

“The fee increases were very pervasive throughout all sectors of society,” Baldwin continued. “When Romney wanted to balance the Massachusetts budget, the blind, mentally retarded and gun owners were asked to help pay. In all, then Governor Romney proposed creating 33 new fees and increasing 57 others.”

David Tuerk, executive director of the Boston-based Beacon Hill Institute, says Romney is also dodging his record on increasing taxes.

“[Romney] doesn’t talk about ‘closing the loopholes,’ but he raised about 290 million dollars a year in new taxes starting in 2003 to 2005,” Tuerck said. “That was an important exercise on his part, and the fact that he doesn’t talk about it does not reflect well on him.”

Tuerck does point out, however, that not all of the tax hikes are completely the fault of the former governor.

“[Romney] had a commissioner of revenue who was determined to close loopholes for as much on principle as for the purpose of raising revenue,” Tuerck said.

“One could argue that the better thing to have done was to do something about the state’s corporate income tax rate, which was then and still is one of the highest in the country,” Tuerck said. “After all, if we were having to close so many loopholes and we are losing so much revenue, it must be because firms want to report their income in other states where the tax rates are lower.”

Romney’s final record on economic growth and job creation has also come under fire.

“While Romney did pursue a few pro-growth policies,” Baldwin asserted, “he also initiated a host of tax and fee increases, bashed the Bush tax cuts, raised the minimum wage, engaged in pork spending [and] failed to pass any broad-based tax cuts, unlike his GOP predecessors.”

Tuerck says however, that to his credit, Romney attempted to get the personal state income tax rate lowered Tuerck explains that the voters passed a referendum in 2000 to cut the rate from 5.95 percent to 5 percent, a move that was later reversed by the Massachusetts Legislature.

“It’s much to his credit that he tried to get the Legislature, although unsuccessfully, to cut the rate back down to five percent,” Tuerck said.

Tuerck contends that on balance, Romney deserves neither the credit nor the blame for Massachusetts’ economy.

“The Massachusetts economy is generally strong. It was before he took office. It continued to be while he was in office, and it continues to today to be relatively strong compared to the rest of the country,” Tuerck said.

“Romney correctly points out that he had a low unemployment rate on his watch, and right now the state has a low unemployment rate compared to the rest of the country,” Tuerck said.

A Bureau of Labor Statistics chart of the seasonally adjusted unemployment rate shows that the unemployment rate for Massachusetts never went above six percent while Romney was governor.

Romney left office in January 2007. The Massachusetts rate stands at about 7 percent after a reaching a 2010 high of about 8.5 percent.

Tuerck says that the Massachusetts economy functions mostly outside the reach of the governor’s power: “I would say that Romney is not to be blamed for what can be seen as lackluster job creation, nor is he to be given credit for the continued strength of the state’s economy through his administration.”

“Nor is he to be given credit,” is putting it mildly according to Baldwin, who argues that Romney’s real record in Massachusetts is nothing on which the former governor should campaign.

“To be frank, Romney’s economic record was not as solid as he and many conservative leaders would like people to believe,” Baldwin said. “By the time he left office, he presided over an economy that, judged by any measure, such as job creation, was near the bottom of the country.


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