The Dukakis miracle - Massachusetts government spending during administration of Michael Dukakis

National Review, August 19, 1988 by Ed Rubenstein

The Dukakis Miracle

MICHAEL DUKAKIS retains an aura of miracle-maker despite clear evidence that Massachusetts government spending has been less than marvelous during his administrations.

FEDERAL AND STATE SPENDING TRENDS

              (In Billions)
Fiscal             All States
 Year      Federal    Ex-Mass.     Mass.
 1979      $ 503.5     $322.3      $ 5.2
 1983        808.3      459.3        7.1
 1986        989.8      580.5        9.7
 1987       1,014.0     625.1       10.9

PERCENTAGE INCREASE/(DECREASE)

1979-83  60.5      42.5      35.6  Gov. King
real terms 16.6    3.6       (1.4) "
1983-87  25.4      36.1      53.5  Gov. Dukakis
Real Terms 10.0    19.4      34.8  "

During the last four fiscal years, under Michael Dukakis, Massachusetts's spending rose 53.5 per cent, more than twice the federal rate and nearly 50 per cent higher than the spending increase in the other 49 states.

Under his predecessor, state spending fell 1.4 per cent in real terms during a period when the Feds were spending 16.6 per cent more, and other states 3.6 per cent more. That austerity permitted a tax reduction from 17.6 per cent of personal income in the last year of Dukakis's first term (1978) to 14.8 per cent in Governor Edward King's last budget.

But Taxachusetts is now back: At the end of Dukakis's second term the state's personal-income-tax burden was $680 per capita, more than twice the national average ($313), and second only to New York's $700 under Mario Cuomo. Last year, citizens of Massachusetts paid total state taxes of $1,446 per capita, nearly triple the per-capita tax in neighboring New Hampshire, and larger even than New York's tax.

While it's true that Massachusetts has participated in New England's remarkable high-tech economic renaissance, state government cannot claim credit. In fact, the New England states in general invest less public revenue in research and development than any other region in the United States.

The economic impetus derives primarily from private-sector entrepreneurship, aided by the highest concentration of professional and skilled technical workers in the United States. With only 5.3 per cent of the nation's population in 1982, New England produced 8.3 per cent of all science PhDs, 11.0 per cent of physics PhDs, 9.3 per cent of MBAs, and 27.2 per cent of professional engineering degrees, the great majority remaining in the region after graduation. All this achieved by private institutions unfettered by state or regional manpower-planning initiatives.