BETTY ANN BOWSER: Ann Oliveira can barely wait to get to her senior center in Fall River, Massachusetts, everyday. The 76-year-old retired seamstress loves the bingo games and the camaraderie.
BETTY ANN BOWSER: But the center may be closed when huge cuts in the state budget go through. That's because working-class cities like Fall River, with a low tax base, are more heavily dependant on the state to fund services like the center, than are wealthy tax-rich suburbs. Fall River Mayor Ed Lambert isn't just worried about closing the senior citizens center. The mayor's wondering what's going to happen to the city's 14,000 public school children, who've improved their test scores in the past ten years of educational reform.
TEACHER: How many times did you actually take the weight of that?
BETTY ANN BOWSER: When the state budget cutters are through, Lambert may have to lay-off teachers he says are crucial to the improvements.
MAYOR EDWARD LAMBERT: There'll definitely be an increase in class size. The legislature has reduced the class size reduction grant that Fall River has gotten, which is about $800,000, and that will mean in many classes a class size will balloon up to 30 or more. Education will go on, but not at the same level. And for a city like Fall River, education is the great equalizer for our kids, and that's what really has us concerned.
BETTY ANN BOWSER: Like so many states, Massachusetts is having a budget crisis because its revenues have been declining sharply. Tourism is down, the state's investments have floundered on Wall Street. Things have been so bad that the state's had two budget cuts in 18 months, but this third round is the most serious, a $3 billion shortfall. In the two previous rounds, the Fall River Fire Department had to drop 10 percent of its personnel. The police lost 15 percent. Police Chief John Souza is very concerned. He's down 32 officers out of a force of 260, at a time when the state and federal government are asking him to do more for homeland security.
SPOKESMAN: There they are telling us, "get out there and provide for... you know, lets keep the public safe and let's put their fears to rest. And, you know, we need to look at the assets that exist in your communities, and you need to be aware of them assets, and make sure that the security you provide for them is at the higher level." And I said, "how am I going to do this? I don't have the money."
BETTY ANN BOWSER: The state's newly elected Republican governor, Mitt Romney, dismisses such talk from city leaders. He says they just need to manage better.
SPOKESMAN: If they're well managed and aggressively work with their employees, they can make ends meet. The state has seen a huge decline in its revenues, and that means that as we pass revenues on to our cities and towns, they're going to have to see some reductions as well.
SPOKESMAN: Any headaches?
BETTY ANN BOWSER: As in most big states, Medicaid is one of the things that is driving the severity of the budget cuts. In Massachusetts, the number of elderly, poor, and mentally ill people needing care has skyrocketed over a period when state revenues declined. So, people in Fall River are also going to be hit by the cuts on a personal level.
BETTY ANN BOWSER: Seniors will lose prescription drug benefits, there will be fewer drugs covered, and poor people and the elderly on Medicaid will be asked to pick up a larger portion of their medical care.
SPOKESMAN: We have roughly one out of six people in Massachusetts who receive entirely free health care. They don't pay a dollar for a prescription, a hospital visit, or a doctor visit. People are buying cokes and hamburgers and, in some cases, getting cable TV. It seems that when you receive free healthcare, you ought to be able to put down a little bit of money as well.
BETTY ANN BOWSER: In the prosperous 1990s, the state cut taxes 40 different times, including the income tax. Massachusetts could raise taxes now, to cover a big part of the deficit. But Governor Romney intends to keep a campaign promise made last year: Not to raise any taxes, especially Massachusetts' flat-income tax.
SPOKESMAN: We think it's very important not to raise taxes on working families or people throughout the commonwealth. We fundamentally don't want to push people into economic crisis because of rising taxes, nor do we want to scare away jobs. Massachusetts is a great place for employers, in part because we're going to keep our tax basis and burden the same.
BETTY ANN BOWSER: Democratic speaker of the house Tom Finneran is going along with the governor, because, he says, there's no appetite for a tax increase of any kind.
TOM FINNERAN: The votes simply are not there. I have spoken to the members of the house, and more importantly, they have spoken to me. But these are the grim realities and the necessities that flow from economic realities. There are some people, for example, who have suggested that we undertake borrowing to sort of ease our way out of this. That would be a colossal mistake...
BETTY ANN BOWSER: Why?
TOM FINNERAN: ...You don't do that. It's irresponsible. First of all, you're putting off, you're evading your responsibility to address a reality today, and you're evading it by putting it off on younger folks, another generation, downstream. That's not what leaders do.
BETTY ANN BOWSER: But Fall River's mayor thinks it's the governor and legislature that are acting irresponsibly, for not raises taxes to cover the deficit.
MAYOR EDWARD LAMBERT: Maybe it's the legislature and the governor that doesn't have the appetite. But at some point, this train wreck is going to happen. If this budget gets enacted, those of us responsible at the local level for providing these services will have to deliver this pain. And it's going to be very significant.
BETTY ANN BOWSER: Michael Widmer, president of the Massachusetts Taxpayers Foundation, is normally an ally of Republican administrations on budget issues. But this time around, he says a tax increase is the only way to avoid cuts in core services.
MICHAEL WIDMER: The cuts are affecting basic services that Massachusetts has provided for decades, if not generations. So I think in the end, we're going to see layoffs in many communities, scores of communities in the state, across the board-- teachers, police, fire, highway employees, librarians. I think there will be thousands and thousands of layoffs over the next 12 to 18 months in the cities and towns of Massachusetts.
DEMONSTRATORS: No more cuts! No more cuts!
BETTY ANN BOWSER: Some of the very people who will lose their jobs, teachers, social workers, police, have been demonstrating at the capitol, demanding that taxes be raised. But the governor and the legislature have given no signal they intend to listen to their pleas.