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Romney touts his Massachusetts record as fiscal hawk

Romney says that as governor he guided the state out of a financial crisis by cutting spending despite opposition from Democratic lawmakers. A look at his record reveals a more complicated picture.

June 09, 2012|By Michael Finnegan, Los Angeles Times
  • When Mitt Romney was Massachusetts governor, state spending rose by 22%, nearly double the rate of inflation.
When Mitt Romney was Massachusetts governor, state spending rose by 22%,… (Whitney Curtis, Getty Images )

By Mitt Romney's account, his record as governor of Massachusetts shows how cutting taxes and public spending spurs economic growth — and serves as a model for shrinking the U.S. government.

He says he stood up for conservative principles, guiding the state out of a fiscal crisis by ramming cuts through a recalcitrant Democratic Legislature.

Romney takes credit for vetoing more than 800 spending items passed by the Legislature, saying he wiped out unneeded programs, cut taxes 19 times, built up a $2-billion rainy-day fund and balanced the budget four years in a row. All of that, he says, shows he can stop overspending. "We can balance our budget and live within our means," he recently told supporters in Ohio.

But Romney's telling omits key facts that clash with the agenda of his campaign for president:

• The Legislature overrode most of Romney's spending vetoes.

• State spending rose by 22% on Romney's watch, nearly double the rate of inflation.

• Romney increased corporate taxes and state fees by $750 million a year, outstripping his tax cuts.

Romney's fiscal record has become a central focus of campaign advertising in presidential battleground states and has been mischaracterized by both sides. In an Obama campaign TV ad, an announcer says that Romney "cut taxes for millionaires like himself while raising them on the middle class," omitting the fact that Romney's moves were not aimed specifically at the wealthy or the middle class.

A Romney response ad released Friday states incorrectly that he did not raise taxes as governor. The Obama campaign responded, in turn, with a false accusation that Romney left Massachusetts with a $1-billion deficit.

When Romney took office in 2003, Massachusetts, like many other states, was reeling from a sharp drop in tax collections in the aftermath of Sept. 11 and the dot-com bust. The state constitution required a balanced budget, and its shortfall had ballooned to $3 billion.

But Democrats controlled both houses of the Legislature, as they had since the 1950s. Philosophically, they were sharply at odds with the Republican Romney, an outsider and corporate takeover executive who had campaigned on a pledge to "clean up the mess on Beacon Hill," the site of the gold-domed state Capitol in Boston.

In Massachusetts, the governor proposes a budget, but a Legislature dominated by the opposing party can ignore it and adopt its own. The governor can veto spending, line by line, but lawmakers, unbowed, can then assert their power to override — a ritual of Romney's tenure.

Romney was unsparing in his vetoes, risking political fallout far and wide. He reduced allocations for state police and local sheriff's departments. He deleted spending on suicide prevention, emergency food aid, job training, higher education, treatment for gambling addiction and services for victims of sexual assault and domestic violence. His rationale was simple: The state couldn't afford it.

"During the time of greatest crisis, in '03 and '04, when revenues were collapsing and costs were out of control, Gov. Romney came in with strong medicine that really worked," said Eric Kriss, who was Romney's secretary of finance and administration.

Romney did leave office with a replenished rainy-day fund, thanks partly to a surge in capital gains taxes paid by investors in a rising stock market.

But his ability to gain support for his fiscal agenda was limited, in part by his reluctance to engage with a Legislature that he viewed as tainted by patronage and corruption. Tom Finneran, a Democrat who was House speaker from 1996 to 2004, said Romney made less effort than his Republican predecessors to work with the opposition.

And like other governors, Finneran said, Romney liked to generate headlines by casting himself as a brake on overspending by legislators, even if he knew they would ultimately prevail.

"They were not terribly troubled by us overriding those vetoes," said Finneran, who resigned in an election map scandal and went on to work as a lobbyist and host of a radio talk show.

Some of Romney's political calculations on state spending came to light in emails first disclosed in March by the Associated Press and later obtained by The Times. Shortly before leaving office, he was weighing whether to respond to a slowdown in tax collections by ordering midyear budget cuts, known as "9C" unilateral reductions by the governor.

In an email that he sent to advisors on Nov. 4, 2006, Romney defined his choice: leave the cutting to the new governor who would be elected in a few days or "let the fur fly" by slashing spending one last time before launching his 2008 presidential campaign weeks later.

"I hate appearing as if I am just playing national politics with 9Cs when in fact this is about getting spending under control for the state and a new admin. Hmmm," Romney wrote.

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