"Baker’s role in Big Dig financing process was anything but ‘small’; Records undercut his campaign claim" by Michael Rezendes and Noah Bierman, Globe Staff | June 13, 2010
Throughout his campaign for governor, Republican Charles D. Baker has sought to minimize his involvement in the $15 billion Big Dig....
But those statements are sharply at odds with a picture of Baker’s financial leadership of the project that emerges from hundreds of pages of memorandums, letters, and other documents culled from his four-year tenure as secretary of the Executive Office of Administration and Finance, from 1994 to 1998. The documents show that Baker was the chief architect of a financing plan to sustain the project during its peak construction years, just as federal support was diminishing substantially.
Would you like Liar A or B, Massachusetts voters?
The $3 billion plan depended almost exclusively on heavy borrowing and modest toll increases, deferring the toughest decisions on tolling and taxes to future leaders. It wasn’t designed to deal with the massive cost overruns that would eventually plague the project, despite multiple warnings at the time that the price tag would likely grow.
Baker, in a recent interview, acknowledged that he played a major role in assembling the financing plan, but said many others participated in the effort. He also said the plan was responsible, effective, and based on good-faith assurances by other government officials that the Big Dig would be built on time and on budget.
His first mistake. Good faith by government indeed!
“There were a lot of other people involved in it, all the way through,’’ he said. “And I was looking to build consensus with all those other people who ultimately had to sign off on whatever we were doing, including the Legislature and the governor and the Turnpike Authority and Massport and all these other folks.’’
Translation: the whole system is in the thrall of banks.
By the time Weld named Baker as the state’s top fiscal officer in November 1994, Baker had already served as his secretary of health and human services and was considered a rising star. So valued was Baker’s counsel that Weld referred to him as “the man behind the curtain’’ and “the soul’’ of his administration.
By 1997, when the state was enjoying huge budget surpluses, the Big Dig, then expected to cost $10.8 billion, was the most daunting fiscal challenge on Baker’s desk.
At the time, the federal government was preparing to cut funding for the project by about $300 million per year. Project managers were desperate to find billions of dollars to fund the most expensive years, when contractors would be tunneling through downtown Boston.....
Baker’s borrowing plan
With federal dollars dwindling and little political appetite for raising tolls or taxes, Baker engineered a two-track financing plan.The first part relied on selling short-term bonds to investors that would be repaid by the Massachusetts Turnpike Authority and the Massachusetts Port Authority. The Turnpike Authority would kick in $1 billion, while Massport would contribute $300 million.
That money, under agreements Baker signed in 1997 and 1998, would be provided in large part through tolls collected on the Mass. Pike and the Tobin Bridge.
As a result, in 1997, tolls in the tunnels were raised from $1 to $2, and on the Tobin from $.50 to $1, inciting the ire of commuters and concern among elected officials about the political consequences. But it could have been steeper: Further increases, including higher tolls at turnpike booths in Greater Boston, were put off until 2002, after Baker and his bosses were gone. From there, turnpike and tunnel tolls in Greater Boston were scheduled to go up every six years.
The second part of Baker’s borrowing plan was more complex and, at the time, more innovative. It called for selling up to $1.5 billion in Grant Anticipation Notes, known as GANs, which allowed the government to borrow money and pay back the principal using future federal highway grants to the state. The interest — an estimated $550 million over 18 years, which has since ballooned to an estimated $840 million — would be picked up by taxpayers.
The "investors" thank you, taxpayers!
Also see: Massachusetts Democrats Keep Making the Same Mistakes
Both parties doing the same fiscal sleight-of-hand, huh?
Although the sale of GANs is common today, they had been used only occasionally at the time, and never on the scale that Baker proposed, according to state and federal records. The GANs eventually raised $1.5 billion, and will not be paid off until 2015, a decade after the project was virtually finished....
Former state transportation secretary James J. Kerasiotes said: “Charlie had a job to do, and he did his job and he did it well.’’
Serving Wall Street bankers.
So that's state government's job now, huh?
**********
While the Legislature approved the plan with little objection, others raised red flags.
Yeah, that's the OVERWHELMINGLY DEMOCRATIC LEGISLATURE!
So what difference does a letter make?
That was because borrowing against future federal transportation aid was nearly certain to delay other highway and bridge projects.
And that is why our bridges and roads are in horrible shape -- as millions upon millions every month went to interest payments to banks.
Baker maintained that using the money for the Big Dig would not compromise road and bridge work elsewhere in the state, arguing that at least $400 million would be available every year for other projects.
Well, he was wrong about that one.
“I don’t see how anybody could argue that the artery will be pulling money away from non-artery projects,’’ he said during a 1998 legislative hearing.
But others disagreed. “The administration kept denying the obvious,’’ Michael Widmer, president of the Massachusetts Taxpayers Foundation, a business-backed watchdog group, said in a recent interview. “If you keep spending more on the Central Artery, you’re going to have less to spend on state highways. I learned that in second grade. If you’ve got a dollar, you can only spend it once.’’
Time to borrow more, right?
That's the state's solution to everything -- that, and raising taxes.
In the interview, Baker said overall spending on other state road and bridge projects actually grew — with the help of additional state funds — after the financing plan was approved.
Nevertheless, the need for road and bridge repairs has long exceeded the state’s ability to pay for the work, and Baker’s financing plan for the Big Dig exacerbated the problem, by committing federal aid to the project until 2015.
Aren't you sick of them throwing away and sucking up your tax dollars?
A blue-ribbon panel in 2007 concluded that the state was underfunding its transportation needs by nearly $1 billion a year.
Moreover, in a 1999 report, the Taxpayers Foundation pointed out that issuing the GANs would require taxpayers to pay substantial interest on the loans, “adding to the mounting spending pressures on the budget.’’
Today, Baker stands by his plan, insisting it was the right tool for the right job at the right time.
“I think the GANs worked,’’ he said. “They served their purpose as intended....’’
Yeah, if you are a bank.
Governor Deval Patrick, faced with limited revenue to rebuild deteriorating roads and bridges, has used a similar approach in borrowing $1.1 billion against future federal highways grants. Like Baker’s plan, this has drawn criticism from Widmer, who says it “puts a burden on future taxpayers because of a refusal to pay for our obligations now.’’
Thus HIS CRITICISM carries no weight!
Also see: Biotech Giveaway Was Borrowed Money
Working for the banks again!
The decision, during Baker’s tenure, to delay major toll increases also had ripple effects. As the Big Dig’s needs grew, successive governors, transportation officials, and state lawmakers also balked at raising tolls and entered into ever-more complex financing schemes, leaving the Turnpike Authority at the brink of insolvency before the Legislature and Patrick agreed to dissolve it last year.
Is that YOUR GOVERNMENT looking out for YOU, taxpayers?
Patrick and state lawmakers also increased the state sales tax rate in 2009, in part to pump $100 million a year into turnpike debt and avoid a politically unpopular toll increase....
That is why the SERVICES they said they would be SAVING are STILL getting SLASHED, folks! Bankers GOT THEIR GUARANTEE!
I notice they are ALWAYS FIRST at the TAXPAYER TROUGH of GOVERNMENT!
Bechtel Parsons/Brinckerhoff, the private engineering consortium overseeing the project....
The war-looting "rebuilding" contracts must not be enough for them.
By 2005, seven years after Baker left the State House, and five years after Big Dig managers conceded that the project would cost more than $1 billion more than the public had been told, the final bill came to nearly $15 billion, with taxpayers facing another $7 billion in interest that will not be paid off until 2038.
They DESTROYED YOUR FUTURE and DESTROYED YOUR STATE so that BANKERS could BENEFIT!
Today, as Baker runs for governor, one of the central tenets of his campaign is that state government should live within its means.
“In my administration,’’ he pledged, as he was accepting the Republican convention endorsement in April, “we’re going to stop spending money we don’t have, starting on day one.’’
Sigh. Uh-huh.
Going to shut off the tax-looting payments to the banks then?
In his interview with the Globe, Baker said he has no regrets about the course he pursued. But he did take away a larger lesson.
Well, he's not the one paying the interest charges.
“The biggest issue on all of this stuff,’’ Baker said, “is we should be very careful about entering into these things going forward unless we really know what they’re going to cost.’’
Little late, ain't it?
We have $ 7 BILLION -- with a B -- bucks we are going to be OUT!
As for Patrick and his hypocritical criticism:
"Patrick has double standard, critics say; He assails Baker but tapped officials with Big Dig roles" by Michael Rezendes, Globe Staff | July 7, 2010
Since the early days of the gubernatorial race, Governor Deval Patrick and his campaign have repeatedly attacked Republican Charles D. Baker over his role in the $15 billion Big Dig, for which Baker assembled a financing plan during peak construction years.
Patrick, during a recent radio debate, derided Baker for his involvement, just as the state Democratic Party was updating a website designed to remind voters of Baker’s history with the massive highway project. In his speech at the Democratic Convention last month, Patrick reprised a theme from his campaign four years ago, promising “a permanent end to the Big Dig culture.’’
But the attacks by Patrick and other Democrats belie the fact that the governor has tapped at least four officials who played roles in the project to fill key posts in his administration.
They include Jeffrey B. Mullan, Patrick’s secretary of transportation and chief executive of the Massachusetts Department of Transportation; Joseph Landolfi, a former top media strategist for Patrick who is now assistant transportation secretary; James A. Aloisi Jr., who preceded Mullan as transportation secretary and has since left the administration; and Arthur Bernard, Patrick’s chief of staff....
See: The First Brother and Sister of Massachusetts
Morning T Ride on the Patrick Prevaricator
Have a nice ride in, readers.
At the heart of Patrick’s critique of Baker is the role the Republican played in engineering a financing plan that pushed politically difficult decisions about taxes and tolls into the future, and instead borrowed heavily to fund construction, diverting federal highway aid from state bridges and roads. But Patrick is planning to finance his $3 billion bridge repair program with a borrowing plan that echoes the one Baker authored.
Some analysts, including Maurice Cunningham, a political science professor of the University of Massachusetts Boston, say that the appointments, as well as Patrick’s use of a Big Dig-style borrowing plan, “somewhat impairs’’ his ability to attack Baker for his role in the project.
Others, noting that the Big Dig spanned almost two decades, question whether it would be possible to run the state’s sprawling transportation network competently without relying on managers with experience on the project.
“You would in many cases be rooting out first-rate public servants,’’ said Stephen Crosby, dean of the McCormack Graduate School of Policy Studies at the University of Massachusetts Boston. “There were problems on the Big Dig, to be sure, but it also had a tremendous number of competent professionals of all types working on it.’’
If that's an example of competency and first-rate public servants we are sunk.
Indeed, Crosby stood at the heart of the gubernatorial administration of Paul Cellucci when it was rocked by revelations of major cost overruns on the Big Dig. In response, Cellucci named Andrew Natsios, then his secretary of administration and finance, to the top Big Dig position; Crosby took over for Natsios.
When Baker was secretary of administration and finance, from 1994 to 1998, he engineered a plan to fund the Big Dig’s peak construction years, a time of diminishing federal support, by borrowing $1.5 billion against the future federal highway aid. That debt is scheduled to be paid off in 2015, at a cost of more than $800 million in interest to state taxpayers.
This is why cops, firefighters, and teachers are being let go.
Today, Patrick is poised to borrow $1.1 billion against future federal highway aid to help fund his Accelerated Bridge Program. That debt will be paid off in 2021, with interest estimated at more than $200 million.
Michael Widmer — president of the Massachusetts Taxpayers Foundation, a business-backed fiscal watchdog group — has criticized both borrowing plans because they put off the costs of transportation projects with borrowed funds, saddling taxpayers with burdensome interest payments.
But seeing as the POLITICIANS work for the BANKS.... bend over, taxpayers!
But he said the Patrick plan is less egregious than Baker’s, because it will not divert federal highway money away from state bridges and roads and because it may save money by rebuilding bridges before they deteriorate further, triggering more costly repairs. “It’s less fiscally irresponsible,’’ he said.
Yes, as with all your elections you must SELECT the LESSER of TWO EVILS, Americans!
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And it turns out Chuck is a tax-raiser, too?
"Baker relied on revenue increases" by Frank Phillips, Globe Staff | April 28, 2010
Republican Charles D. Baker is campaigning for governor as a fiscal hard-liner, repeatedly attacking Governor Deval Patrick and Democrats in the Legislature for raising taxes and showing little discipline on spending.
In Baker’s telling, Patrick and Democratic lawmakers have avoided tough budget-cutting decisions, choosing instead the easy path of raising revenue to balance the budget.
But Baker’s own experience in the public and private sectors — as a one-term selectman in Swampscott, as the state’s top budget official, and as the chief executive of a major health insurer — muddies his critique.
In all three roles, Baker either relied on new revenue to balance the books or had the luxury of a booming economy, obviating the need for drastic cuts.
As if that were a "luxury" as the Globe puts it.
Despite all our problems I noticed the politicians still living in the lap of taxpayer luxury.
In Swampscott, he helped build local budgets that imposed higher property taxes on home owners and supported an override of Proposition 2 1/2. At Harvard Pilgrim Health Care, he presided over insurance premium increases that averaged 10 percent a year. And while he was secretary of administration and finance in the 1990s, robust tax proceeds were flowing into the state treasury.
Baker, in an interview, rejected the notion that his record undercuts his campaign attacks against Patrick. He pointed to what he said were bold reforms and restructuring that he put in place in state government, where he helped overhaul the welfare program and consolidate agencies, and at Harvard Pilgrim, where he said he cut jobs in half and kept administrative costs flat.
And he was paid how much?
“I think we engaged, at both Harvard Pilgrim Health Care and in state government, in wrenching reform efforts, which, while very difficult, positioned both organizations to move forward,’’ he said.
The tax increases during his time as a Swampscott selectman, Baker said, mostly came in the form of voter-approved Proposition 2 1/2 overrides, one to build a high school and another for operational budget increases, which he supported.
Baker also said he sees a big difference between raising health insurance premiums and taxes, saying insurance clients can shop elsewhere for coverage, while taxpayers have no choice.
I'm not seeing that big a difference.
Related: No Choice With Obamacare
A Dollar a Day Keeps Obama in Play
We will be seeing even less in more way$ than one.
Baker has been able to parlay his management experience on Beacon Hill, at Swampscott Town Hall, and at Harvard Pilgrim into a strong public profile that now forms the backbone of his candidacy. He earned a reputation as a sharp mind in the Weld and Cellucci administrations in the 1990s, guided Harvard Pilgrim out of bankruptcy 10 years ago, and used his management experience to help his hometown.
Indeed, even his political opponents credit him with having a successful career managing some difficult and complex organizations....
Translation: He's kissed the right asses.
A major theme in Baker’s campaign platform is a rigid opposition to new taxes. He calls for the immediate repeal of last year’s sales tax boost, from 5 percent to 6.25 percent, that Patrick signed to help close a budget shortfall. And Baker wants to cut the state income tax rate to 5 percent....
Sounds good, but....
But as a selectman in Swampscott, a town of 14,000, Baker approved budgets that raised property taxes, and he supported a tax levy override to fund town operations that raised taxes beyond the cap set by Proposition 2 1/2. In one of the three years he served, the tax rate climbed nearly 8 percent because of the override.
State and local budgets are very different, of course, but there are similarities, as budget officials at both levels face increasing costs of staff, energy, health care, and other items and must find revenue or spending reductions to offset them.
Minutes from selectmen’s meetings and local news reports offer no indication that Baker opposed increasing the local tax burden. He voted to approve annual town budgets, voted to place the override on the ballot, and later voted for the override at the ballot box.
Baker said he backed the override to support town services, and he made a distinction between voters choosing to raise taxes and lawmakers imposing tax increases from on high....
Of course, when we do choose to lower them government ignores us. Works out for the state each time.
Adam P. Forman, a former selectman who served with Baker and a Democrat, said he strongly supports Baker for governor after having worked alongside him.
Not a good sign for the sitting guv.
Baker was secretary of administration and finance under governors William F. Weld and Paul Cellucci at a time of economic boom. His tenure, from late 1994 through 1998, came as the state was roaring back from a recession. Tax revenue was rising by as much as 10 percent annually.
Globe's way of saying he got lucky?
Baker boasts that he balanced state budgets without raising taxes and proudly points to the 27 tax cuts that took place under the GOP administrations he served in. He argues that his experience demonstrates that he could balance the state’s nearly $28 billion budget with layoffs, restructuring of state agencies, and overhauls and not through new taxes.
But the surge in revenue that allowed Baker to balance the budget while taxes were cut came in part from proceeds from an income tax increase that Governor Michael Dukakis and Democrats in the Legislature had put in place years before....
I'm starting to wonder whether it even matters to go vote.
When Baker joined Harvard Pilgrim in May 1999, the nonprofit insurer was staggering from huge annual losses, losing more than $200 million that year. Baker received credit for navigating the insurer back into the black. He trimmed costs, including a controversial decision to shut its Rhode Island operation.
But Harvard Pilgrim also raised premiums to generate revenue. Facing skyrocketing charges from providers, including hospitals and doctors, the insurer continued to raise premiums through the next decade, as many other insurers did. To help remain solvent, Baker and his board approved average rate increases of about 10 percent or more annually.
Baker’s financial management paid off. The nonprofit survived and has in recent years been consistently ranked the best or among the best insurers nationally.
From 2000 through 2009, Harvard Pilgrim’s net income exceeded $400 million in all, according to federal tax filings.
I thought it was a nonprofit?
Also see: The Massachusetts Model: Tax-Exempt Memory Hole
The Massachusetts Model: Partnering With Wall Street
Unreal!
At the same time, Baker’s compensation nearly tripled to about $1.7 million, which included a $692,000 bonus for the company’s performance, although his pay was not out of line with that of the leaders of other major insurers in Massachusetts.
As JOBS were CUT (and as if the "comparable" pay thing is supposed to justify looting).
Baker rejected any suggestion that imposing higher premiums on policyholders to bolster Harvard Pilgrim’s budget is any way comparable to what Patrick and the Legislature have done to bolster the state budget....
Of course he would.
--more--"
So much for change this fall.
But the Globe can still play the game:
"Baker takes the heat in first major 3-way debate; Cahill helps keep focus off governor" by Noah Bierman, Globe Staff | June 17, 2010
Governor Deval Patrick is battling a recession and a national backlash against incumbents, but it was his Republican rival, Charles D. Baker, who found himself on the defensive more often yesterday during the first major debate of the gubernatorial campaign.
The wide-open format in the initial face-off, and the presence of independent candidate Timothy P. Cahill, helped Patrick deflect criticism on issues where he is most politically vulnerable: taxes, health care costs, immigration, and state government spending....
So that is why Cahill is in the race. To help his former Democrat friend.
Polls show Patrick leading his two main competitors, even as voters express a mixed evaluation of his performance. The debate dynamic underscored the difficulty Baker faces in defeating Patrick as long as Cahill remains a viable candidate, preventing Baker from making a one-on-one case against the governor.
Related: The Collapse of the Cahill Campaign
Yeah, he is no longer viable.
A fourth candidate, Jill Stein of the Green-Rainbow Party, complained that she was excluded from the debate.
Sorry, you are not viable.
The two most memorable moments yesterday came when Baker sparred with his two opponents over his record as a cabinet secretary for governors William Weld and Paul Cellucci, and his more recent tenure as chief executive of Harvard Pilgrim Health Care....
That's according to the agenda-pushing Globe.
The second instance came as Baker was critiquing Patrick’s management of the state budget. Patrick had just finished explaining why thousands of state workers were being paid with borrowed money, a practice he has acknowledged is not sustainable....
Patrick responded by mentioning Baker’s involvement in the Big Dig....
Pfffft!
A story in Sunday’s Globe chronicled Baker’s role, as state secretary of administration and finance in the 1990s, in engineering a financing plan that pushed the $15 billion road project forward, but depended heavily on debts that are still being paid off today. Baker contended that his role was small in the context of the entire project, and pointed out that Patrick has used a similar borrowing plan to fund road and bridge work.
Baker at one point asserted that he “never actually worked on the Big Dig at all.’’
?????
“The Big Dig lasted 24 years,’’ he said. “It started in the early 1980s, when I was barely out of college. And I spent four years as A and F secretary at a point in time when the big issue was what to do about federal funding.’’
Patrick, despite being the incumbent, was seldom forced off his message, even when discussing his past support for tax increases or his differences with Cahill and Baker over immigration enforcement.....
So it was a friendly forum for the governor, 'ey?
--more--"
Also see: Baker ally’s woes go beyond red tape
Keep tossing dirt on him, Globe.
If for no other reason, that's why I will probably mark him on the ballot.
