Episode Transcript
[00:00:00] Speaker A: State Representative Tacky Chain of Quincy is joining us for our May Day edition of Tacky Talk. How are you, techie?
[00:00:07] Speaker B: Hey, happy May Day. The first day of May. Joe.
[00:00:10] Speaker A: Yes. We're all going to go up to Mary Mountain, dance around the maypole.
[00:00:15] Speaker B: Well, that you actually are pointing out part of the story of May Day. Right. Celebration of spring involving a maypole. And unfortunately, it also means enormously high tree pollen count.
So those who heard me last week has probably realized that I'm not vastly improved in the last eight or so days since I last talked to you.
[00:00:37] Speaker A: Oh, no. You. Through the magic of modern technology, I was, I was able to make you sound just perfect tech.
[00:00:46] Speaker B: Well, if I sound like Bing Crosby, let me know.
[00:00:49] Speaker A: Yes, it's actually Mayday also is recognizing, I know, labor in some countries it's Labor Day.
[00:00:59] Speaker B: It is.
Places like Australia and other parts of the world recognize the first day of Labor Day. Like here. Labor Day is recognizing the importance and commitment and appreciation of people to work, but also as part of the organization and the value of labor unions and how to advocate for, not necessarily just for the membership, for all working people.
[00:01:26] Speaker A: Right. And now we can talk about May as AAPI Month, right?
[00:01:32] Speaker B: Yes, we can. It is the first day of AIP month. The House Asian Caucus, working with the Asian Business Economic Council is promoting Asian restaurants as part of our month.
It actually was kicked off in Cambridge on Tuesday. Unfortunately, we're in the state budget, so none of us in the House could attend the event.
But you always encourage folks to try something a little different. And Quincy being a large quantity of minority owned businesses and actually a lot of women owned businesses, people don't realize that. And we actually have a very low number of franchise owned businesses as well that people should take a shot and seeing something different and try something new. So I think sometimes it can be a little intimidating to try something different or something you don't know.
But there are a lot of restaurants, small businesses, retailers, services that are minority and women owned throughout the city.
[00:02:36] Speaker A: Oh, no question. Yeah. And then a good way to do that is to go out for lunch instead of dinner, try some lunch menus at different restaurants. So it's a lighter, lighter fare to see if you like it.
And don't be shy about asking the hostess or the servers for help.
[00:02:55] Speaker B: Yeah, no, people are very happy to be helpful to customers on trying to help over sale, so to speak. But you also have a lot of different storefronts too. So if you're not super ambitious on a sit down, obviously takeout is an option.
But you know, we do have a thing called YouTube and web pages and how to make your own meals at home. And there's no shortage of different Asian markets that's really accessible in Quincy that provides you a variety of items that you read on the Internet and wonder where can I find it? Well, I won't say you can find everything, but the hunts are pretty good. You're going to find it here.
[00:03:32] Speaker A: Yeah, for sure. I actually found a couple of Vietnamese restaurants that, that I enjoy, which I never thought I would, but. But I really do.
[00:03:42] Speaker B: Absolutely. So, you know, we'll be doing some posts on social media, not necessarily just in Quincy, but other businesses around the state regarding AIP Shop Month. And obviously, as I've talked before, May's busy month for me as well as people want to have me come around different speaking engagements. So my calendar is a bit of a mess right now that we're trying to sort through on which ones I can actually physically get to. And some folks, for example, like the Cambodian community low is also recognizing their Cambodian genocide once so coincides with a very sad situation up there.
Then the Viet recognized the 50th anniversary of Black Black Monday, which was the essentially the fall of Saigon. So.
[00:04:46] Speaker A: Right.
[00:04:47] Speaker B: Yeah. So a number of different anniversaries, tragic ones that just coincides with this time of year.
[00:04:55] Speaker A: Right.
You mentioned it. The House did pass the 2026 their version of the 2026 budget this week, right?
[00:05:05] Speaker B: Yeah, we been talking a little bit about that this month and House Ways and Committee's recommendation and we went to debate on Monday morning and finished it yesterday evening.
It was actually a pretty smooth debate this year, believe it or not.
We're very conscious of the fact that we don't know what the feds are going to do to us. So there's a distinct possibility that budget numbers may change. Not necessarily because we'll have more accurate revenue numbers in the month of April because, you know, tax day is where 65% of revenue comes in in one day. But there's pending the congressional action on tax cuts. And while this had a carryover budget, a continual resolution using the Biden numbers from the prior year, there's no guarantee those numbers will continue as they're continuing to try to figure out on there how to spend more money with less taxes, which I find amazing to try to do this again and not deficit spend and cut government services. So the feds try to do a lot of things at once. It's more than just chewing gum and walking. It's more like chewing gum, doing jumping jacks, you know, on a, on a tricycle, you know, spinning around a hula hoop. I mean, it's quite insane what you're trying to do. So depending on how the feds do the House in order, you know, we could be looking at a 15 to 16 billion dollars impact to us in our state budget because we do a lot of programs, grants, contracts, and state does do federal programs and those state employees are paid by federal dollars. And Medicare, Medicaid, mass health continues to be a major part of our budget. It's well past $8 billion, which is, which is also a 22% increase than it was five years ago in Medicare Medicaid spending. And it's a 50 reimbursement. 50% reimbursement from the federal government. So there's active talk down there about Medicare and, or Medicaid cuts. And some speculation is that they're going after Medicaid first, which impacts particularly children, single women that are pregnant in particular, and people with disabilities. Those are the three priority groups under Medicaid. So, you know, if they hit a point where they cut sufficiently, there's no way that we're going to make difference up at our level.
[00:07:48] Speaker A: Yeah, the overall budget, I have it in front of me for folks just, just if they're curious. It's really kind of. It's interesting to. It's broken down into, you know, transportation, education, healthcare, veteran services, workforce development. But overall it's $61.47 billion, which is 500 million below what the governor proposed. But I guess over the past week or so, the house added about 18 million, is that right?
[00:08:22] Speaker B: Yeah, we generally add a bit back in, in terms of people's earmarks and people's budget requests and you know, some programmatic changes. So the amendment process adds a little bit more. But we, we definitely are much lower than the government's recommendation. Part of the reason that happened is that we didn't adopt any new taxes. I've been getting a lot of emails saying that we increase taxes. That is complete fiction. I swear.
People keep getting like bad information constantly and we keep getting these emails. I keep staring at these emails like this is 100% fiction. But I mean, I get it. People need want to advocate and to advocate things important to them, even sometimes 100% wrong, which I find interesting. This is happening more and more often. The one can I do this? I remember the days when back again, back with postcards and phone calls, people were actually pretty accurate about the information they were asking about that was before the Internet age that we have today. Now we're at the Internet age and information I'm getting from people opposing and supporting issues is factually incorrect. It is such an interesting change dynamic that I've observed over the course of my lifetime here because I don't remember very often when I get a constituent call and the person was flat up wrong.
They were actually well informed. Now I just got flat out wrong. It's very, very fascinating.
[00:09:45] Speaker A: So I don't think it's so much the Internet as it is social media.
[00:09:49] Speaker B: Yeah, it's how people get information is scary these days because you can also.
[00:09:55] Speaker A: Use that same Internet to access real true budget that I have. This is a public document. It's not just exclusive to me. Anybody can get a hold of this.
[00:10:06] Speaker B: On the legislature's website. Again, I encourage Emory Legislature Gov and go to mass.gov you can pull up the numbers from the comptroller. You can agree or disagree with me. You could like it or dislike it, but the figures are there. This is the same thing at the federal level. People under this idea that's very opaque. The U.S. treasury Department for many, many, many, many, many decades have always been very transparent, back from the days of paper now to the days of the Internet age to provide information out there to see what the federal government spending is. It isn't a mystery ever. It's just that a medium we provided you has changed from physical paper to digital.
[00:10:45] Speaker A: Right. It's actually easier, way easier to access it.
[00:10:48] Speaker B: Right, Correct. And you know, they're trying to keep it more user friendly as possible in terms of helping you understand what's going on, explaining it. So even of our budget, we try to keep it fairly simple and explanation and big figures and we can quibble about, you know, 100 million here, 100 million there. But the reality is that, you know, it is a large budget. The reality is that 8.5 million, 8.5 billion of that budget off the top is statutory committed to the mbta, which is one penny in the sales tax, the school building assistance program, which is one penny of the sales tax and the statutory requirement for us to pay our state pension fund. Then you drill down to Medicare, Medicaid, MassHealth, it's 8.8-ish billion dollars or so. So you add those together, that's like 16, $17 billion. You toss in local aid plus Chapter 70 which is unrestricted money to sit in towns, Plus a Chapter 7 educational money. But if I had all the other educational money such as universal school breakfast And a lot of other programs like transportation and special education, you know, that's over $8.5 billion. I'm sorry, 9.5 billion. Now suddenly, you know, that budget looks really small, really fast. And what we can do with it where, you know, 9.5 billion, add that in there, that's your year.
[00:12:11] Speaker A: That's a. All those put together is like a third of the budget of the budget that's already, you know, set aside for fixed cost.
[00:12:20] Speaker B: That's correct. And then you toss in things like Department of Unemployment Insurance, which is your unemployment benefit office, you start tossing that. Those are federal programs that is not discretionary funding. And then you have a lot of this non discretionary grant funding too. So in the WIC program, for example, Women Infants and Children is a federal program that's actually part of our budget that your tax dollars being paid for, but it's not your state tax dollars. This is a federal tax dollar program. So that becomes another part of budget that's non discretionary. So you know, and obviously debt service is generally under 4%, 3% of a budget's debt service. And you can't do much with the prisons, even though the budget is smaller because we've eliminated UMass. I'm sorry, MCI, Concord's gone.
But you still have things like the district attorney judicial system and UMass. And we actually provided some more money to UMass program through the millionaires tax one time costs. And then of course your capital gains money goes straight to rainy day fund that's not actually spent on programmatic stuff. It goes to our long term reserve in case something really bad happens which may be sooner than later, giving how things are going in D.C. we'll see.
And then we have various trust funds, particularly from the casino money to healthcare to transportation, to regional mitigation issues to compulsive gambling and many other programs which are again a non discretionary meaning I can't really screw with the money. It's got to be, it's statutory committed away. So as I keep talking about all these things that I can't spend because it's not mine to spend, you can see how discretionary spending shrinks quickly to about one third of the budget too. So it reduces, but to one third. And then the budget amendment process we went through is reflection of the fact that we even have less wiggle room because we didn't add that much to the bottom line through the amendment process shows how much less wiggle than we have to to do local projects through earmarks or try to like increase certain line items because people feel like, you know, those programs are underfunded.
[00:14:29] Speaker A: Right. Yeah, yeah. And I always like to ask anything specific to Quincy Tacky you can talk about.
[00:14:36] Speaker B: Not too, too exciting. Again, the three of us divvy up to work so we don't overlap each other because you know, that'd be bad.
But you know, in terms of located in chapter 70, I think combined, I think it's like 46 million plus in chapter 70, but 23 million plus, give or take, you know, a hundred thousand on look away, which is about 73, $74,000 in located Quincy. And I've not seen the FY26 budget yet in Quincy, so I don't know what the proposal is. I've not had a chance to look.
[00:15:09] Speaker A: It's. The mayor will present it next week actually.
[00:15:12] Speaker B: Okay, so I didn't miss anything yet. I thought I missed. But I mean, the budget last for the city was $404 million.
And you know, we're looking, I suspect to be somewhere probably more than that, but in the ballpark. So I mean, you've already committed ourselves to $74 million. So just two types of assistance to the city, not including the council and aging, the library money, the veterans money, the various real estate abatement reimbursements that we do, grant programs, transportation reimbursement, spend money, et cetera, et cetera, et cetera. It just keeps on going. So, you know, you think about it, $4.4 million from last year. You assume the mayor's going to have a budget similar. And we committed 74 million off the top from our budget.
[00:16:03] Speaker A: Yeah, he's already indicated it's probably going to go up at least 20 million because of the pension bond obligation they funded a few years ago. So this is the peak payment on that this year.
[00:16:15] Speaker B: Yeah. So, you know, we're doing our bit to help out, you know, other stuff that's kind of interest. Obviously we fund the Mass Beaches Commission, which is the all the inner, inner cities, the beaches. And not strictly quinting issues of coalition. People forget the New England Aquarium Hospital is in Quincy. We provide a million dollars for that. The presidential library continue to be an important project for the city. It's a half million dollars.
We do a lot of local agencies. You know, we expect a surge in housing problems coming up with the shift economy. Unemployment claims was actually higher than expected today. Yes, unemployment number is going to come out tomorrow. We talked about this last week. So the April estimated numbers come out on May 2nd. So we get, you know, two caps getting ready for that stuff in terms of the housing challenges. So we give them $100,000 there. We all know Queen Transient Resources does great work. The immigrant community workforce has 100,000 and they do the same thing with Gerrytown Neighborhood center to fund their important programs regarding after school. The food pantry, counseling services. They have a lot going on over there too. So the ferry service is very important. There is general ferry money in the main air stacks, but we also get, I think another 50 grand for that 99, $95,000. Me and Bruce been working on continual overtime for state police patrols, especially in the summer months. And furnish broke in push and drive. The weather gets warmer, you know, people get interesting as it gets hotter. And so we make sure the troopers have enough money to patrol the area. So that's about $95,000.
Some local stuff. I mean the speaker has some neighbor associations that he's committed some money to in his area and is, you know, other smaller stuff like I said earlier regarding things like various local organizations, city groups that receive money through the state, but it's not necessarily an earmark. So like social stars, for example, you know our children daycare program and they receive money from the early childcare fund.
So again, it's a lot of some stuff that isn't like straight up saying you get a certain amount, but they're, you know, already part of our existing budget program. So the city gets back, you know, if you, you know, include our earmarks. And John Keenan's got his earmarks coming, obviously when they debate in the Senate, you know, well into, you know, it's going to be, it's, it closes in on $100 million.
[00:19:06] Speaker A: Interestingly notes here that the, the, the budget includes 1.95 billion transportation and education from the millionaires tax.
[00:19:19] Speaker B: Yeah, we still do treat the millionaire's tax more of a supplemental income item than an actual baseline budget item. It takes about three to five years for you to actually find steady flow on any kind of income source here. Covid kind of screwed up some stuff in terms of rejections. But now that we're five years out of COVID we can start re establishing new projections based on how the economy is going to roll. And how the economy rolls determines what happens to our revenue streams. So given the fact that last year we miscalculated by a billion four on the millionaire's tax, they decided to take more aggressive number at $1.95 billion in the millionaires tax. But if you look carefully at some of those items such as community College free community college scholarship programs, child care programs. Some of the stuff things get wrong in a millionaire's tax. We can try to backfill through things like the stabilization fund or the casino education trust fund or things like that. Or we could probably slice off a few things in the edges if we have to if the projections are off. So there's tax money is actually separate from the main budget in terms of how we do our internal accounting.
[00:20:37] Speaker A: Yeah. Also quite a, quite an increase in the Emergency Assistance Program. Tacky. 275 million. Wasn't. Wasn't it just 100 million last year?
[00:20:48] Speaker B: No, it was about 300.
[00:20:50] Speaker A: Oh was it?
[00:20:51] Speaker B: Yeah. So I thought it was going to be close to 350 but 275 is actually very conservative.
It's a reflection of the drop off on people in the shelter system Right now The eh. Shelter system is reducing gradually. Been reducing over the course of six months and I do think there may be an issue regarding unemployment uptick will result in people increasing foreclosure or unable to pay rent and going to need some emergency housing assistance. I think that's going to happen here.
[00:21:23] Speaker A: Yeah, I know it's. It's up from 26 to 30 weeks of benefits now. Right. Because of this increase in the Springfield area.
[00:21:30] Speaker B: Agreed. So even though we live in an area where believe it or not, you know our unemployment rate is fairly low.
[00:21:38] Speaker A: Yeah.
[00:21:38] Speaker B: But the state has uneven unemployment. So you get to the south coast, you get to Central Mass, you get to Western Mass, Springfield, you get to deepen the Berkshires way out there, the Merrimack Valley.
They're all different unemployment rates. And if you look at it's broken down by county most times. So if we start looking at, you know, make a ring around Boston, the further out you go we hit big pockets of unemployment.
[00:22:07] Speaker A: Yep, yep. And part of it will be you know, because of seasonal employment too, especially the Cape, maybe the Birch ears too.
[00:22:16] Speaker B: Agreed. There's that component as well. But we also see how some of these macro policy issues that Washington is doing is going to ripple in our business in this country.
It's not necessarily just imports. It's also our ability to export. And Massachusetts is an export state. Even though we actually do run trade deficits of Canada in particular.
We still ship out a lot of seafood where the major port in this region. Until you get to New York.
Things like apples and milk matter still. People kind of forget that around here. It's a fun thing to do in the month of October but it's a lifeblood in terms of produce shipping around the country from the state.
And then, you know, certain industries will have challenges. So the Wynn casino is doing really well here because it's the greater Boston area, close looking airport. The MGM casino in Springfield is a whole different conversation about customer attraction. And if the economy continues to draw down, you know, it'll be tougher for a MGM Springfield in area than it is for a win in effort.
[00:23:30] Speaker A: Right, Yeah, I know that the thought was that that would get a lot of the New York City market out there, but I mean, if the market's not there, they're not going to travel to Springfield.
[00:23:39] Speaker B: Yeah, it's a bigger state than a lot of us give us credit for. It really is. And the state continues to be very diverse, as I like to talk about every so often that we live our little bubble here. And we think a little bubble represents everything. And one of the interesting things about working at the state level in the legislature is that you get to learn from your colleagues about what's going on in their communities and how different their challenges are from our challenges. Like we don't have a massive asphalt deterioration of buildings like in some areas that were built during certain time periods of poor concrete. Right. You know, we don't have to deal beaver dams, right?
[00:24:22] Speaker A: Oh, right, yeah, yeah.
[00:24:24] Speaker B: Some other parts of the state, you know, have much more challenging water sewer infrastructure than we do.
So.
But at the same time though, other parts don't have marshland. Some other parts state don't have to deal with coastal flooding, but some states do have river problems where river erosion is, you know, causing flooding problems in certain communities. So again, it's a big state and I hope everyone kind of appreciates the challenges that we have at our level trying to balance the interest where, you know, obviously Boston gets everything, let's call it what it is, folks. But they are the economic engine at 50% of our state's GDP in one city.
But we don't ignore the other parts of the state. So, for example, regional transportation authorities mean nothing to us because we're an MBTA community. But once you leave the MBTA zone, regional transportation authorities are lifeblood for many communities on economic development, also transportation locally for seniors and businesses. And imagine having a regional transportation authority closed between hours of five and six.
[00:25:34] Speaker A: That would impact thousands of people for sure. I mean, it's not too far away. The Brockton Area Transit Authority is not that far away.
[00:25:41] Speaker B: Exactly. And if it wasn't for the state providing some supplemental resources like we do with the mbta, you know, Those communities are going to be in serious trouble. So while we are very much in a Boston media zone and all we talk about is the T, the T, the TDT and how horrible it is, you know, we don't. No one talks about up here about. Right. The Brockton region transport.
I know Concord has a small regional transport. You get deep into Berkshire's Regional Transportation authority that services 30 communities.
[00:26:11] Speaker A: Yes. It's a lifeline. The Cape as well has their own. It's a lifeline for them.
[00:26:14] Speaker B: Sure, absolutely. So, I mean, in Quincy, you're like, you know, what do you mean? Regional Transportation Authority? And you know, obviously we take complaints about the T. It's part of our job. But other legislators, you know, get not necessarily complaint, but fear or the possibility of losing the Regional Transportation Authority because it needs government, namely state dollars, your state, you know, assistance to maintain those transit authorities. So, you know, a lot of stuff in the Budget, you know, is real balancing act because while we are very understanding that Boston is the economic engine of the state, we can't ignore the needs of other parts of state because it would detriment the citizens, but also their local economies.
[00:26:56] Speaker A: Yeah, yeah. Can you talk tacky a little bit about something that that does affect us is making rents more affordable in the greater Boston area. And the Budget takes that into account. Right. With change in brokers fees.
[00:27:09] Speaker B: Yeah. So the budget, House budget tries a greater clarification about the rights and responsibilities between tenants and brokers. And that is the crux of the problem in many ways. But the housing market obviously shifts in favor of the landlords, not the tenants. And this is kind of a market force problem that's very challenging to work with.
The House Budget puts in language that creates greater transparency and requires essentially a written contract when all conditions have been met between a broker and a tenant for exclusivity regarding representation and an understanding of the fee associated for said work.
So one of the major problems I've had is that the broker represents both the landlord and the tenant, but the tenant doesn't know they're being represented. This proposal is to create a contractual agreement where you exclusively work for the tenant and you're not working for a landlord. It turns out in the Boston area, there are unlisted properties for rent that are not represented by a broker.
They tend to be large, multi story units and those postings are put up by the property managers. So I didn't realize that brokers will. Some brokers will scour to look for these locations and you'll try to get tenants to hire them to find one of these locations that works for them by contacting the property managers and charge.
[00:28:50] Speaker A: Them a fee for that service. Right?
[00:28:52] Speaker B: That's correct. I have a lot of head scratching still about this whole thing. Believe me, I have a head scratching issue. But you know, the first thing it addresses is the disclosure and contractual relationship. Who's actually working for who.
[00:29:07] Speaker A: Yes. Yeah.
[00:29:09] Speaker B: You know, and the broker can't accept fees that exceed the current first, last and security deposit.
[00:29:17] Speaker A: Okay.
[00:29:18] Speaker B: So there's that component too. It's, it's, it's a lot of words going on in the House bill.
[00:29:24] Speaker A: So just what if, what if the broker does not finds, you know, an apartment for the tenant? Do they, do they does the tenant stuff to pay for that service anyway?
[00:29:34] Speaker B: It's regarding. It's based on contractual relationships or whatever the contract does controls the trouble.
[00:29:41] Speaker A: The tenant needs an attorney to represent them.
[00:29:45] Speaker B: Well, that's you, you hit. Another concern is that whether or not the tenants have sufficient legal understanding of what they're getting into. And the other, and I continue to still have, is, is really the market.
It's hard to work with a market where there's a scarity of housing. Negotiation of tenant rents is extremely challenging.
[00:30:10] Speaker A: Yes, yes. Right. And yeah, the market will, Will, will determine that, Right?
[00:30:16] Speaker B: That's correct. Yeah. You know, some of this stuff regarding brokers fees is largely driven by the market.
[00:30:22] Speaker A: Yep, yep.
Is there support for that, do you think, on the Senate side?
[00:30:29] Speaker B: The Senate did put some language in which is not the language the House is using in the housing bond bill last year. And the governor obviously included different language as well in his her budget in House one.
So the House, the Senate and the governor all have different language to address this issue, of which we'll see how it moves forward in the budget process because we still have the Senate debate followed by conference committee.
[00:30:56] Speaker A: Right.
[00:30:56] Speaker B: And of course the governor has the ability to amend budget as well as veto outside sections.
So we shall see. I mean, the process is still far from over.
[00:31:08] Speaker A: Well, right. Although is it getting done earlier this year than in years past? Seems to be quicker this year.
[00:31:14] Speaker B: No, we're still on schedule. The problem is that during the years during the COVID years, particularly 2020, 2021, the budget was nowhere near the normal scheduling because of uncertainty about literally everything.
So normal budget process for us has always been around Patriots Day amendments due before Patriots Day debate. The Monday after Patriots Day. The Senate follows a similar pattern where the budget amendments are due the week before Memorial Day week. So the debate going into Memorial Day. But the Friday before Memorial Day is when. I'm sorry, the Friday before that week of debate is when they finish their amendments. So if you look at the calendar, I think around May 22nd is a Monday.
[00:32:08] Speaker A: The 19th. Is that Monday going to Memorial Day?
The 9th. The following Monday is Memorial Day.
[00:32:17] Speaker B: Yeah. So that, that's when they'll start their budget debate.
[00:32:21] Speaker A: Okay, okay. All right. So, yeah. Okay, so we have a little time and. And then technically the new fiscal year begins July 1st. Is that right?
[00:32:32] Speaker B: Yeah. We'll see how close we. We get to being on time on the budget this year. It's always a continued criticism that we receive. I'm not oblivious to it.
[00:32:40] Speaker A: Right, right, right. All right. Well, thank you for breaking that down for us. Seeing as we're talking about budgets and money and numbers and things. Let's talk about. We always like to talk about the national economy in this program and some numbers out just Yesterday regarding the GDP.
[00:32:57] Speaker B: Yeah, negative 0.3 GDP. Much to my surprise, the projection for quarter one was 2.4. Positive.
[00:33:03] Speaker A: Yeah. It's contracting quickly and they're depending on who you talk to. There are different reasons for that.
[00:33:11] Speaker B: Yeah, you're actually correct. The numbers are a little bit perplexing because there's a lot of things happening in quarter one. And I love how the president's complaining about the fact that the Biden administration is responsible. And it's. He's actually incorrect. He had been transmitting since the campaign that he was going to create a whole bunch of tires. They've been transmitting they wanted lower taxes. They've been transmitting that they're going to do this massive deportations. They've been transmitting a lot of stuff even before he became president.
So the businesses and the markets and the global economy had already started responding, especially when he started the tariffs against Canada, Mexico, that became start, stop, start, stop back in February. And you think businesses sit and wait for consequences. When you're actually transmitting, you're going to do something. Businesses start to prepare. So if you look at the import numbers starting in November of last year, all the way to March, imports has been insane in terms of how much of the trade deficits insane. And the reasons, because businesses were afraid they need to get all their stuff in before the tariffs hit. You know, like I said, Apple flew in a billion dollars worth of value of iPhones before the tariffs hit, which means that the import X numbers on the trade deficit is out of whack as opposed to a steady flow of on demand products. This is what we normally do. Based on inventory you get as you need, you have this massive hit, which should have an inverse reaction in quarter two, which we're in now, because as we talked before, the shipping ports are not coming in. They have 60% decline of the LA shipping ports of cargo scheduled to come in, which then will create a crunch on you and I on certain products that we buy.
And it's a bit of a messy set of numbers because unemployment is still relatively low. Very low. It was floating at the 4% level. Consumer spending confidence is terrible, but spending continues. And the core PC and CPI, well, is not 2%, you know, has been sticky for many months now in that 2.73% zone. So you and I, as you know, consumers are adapted to whether we liked it or not, to this kind of sticky inflation.
So the whole quarter one, you know, is, you know, ignoring the stock market for a second, has been a complete mess in terms of all these numbers. That should indicate some kind of recession, but they're not a recession.
And, you know, lower GDP generally demonstrates a decline in the economy, but we're not in decline because unemployment doesn't reflect and the consumer spending doesn't reflect yet. However, leisure spending definitely is. It's already started. I got another coupon thing from bookings.com saying that I'll get a 10% reward for booking something by May 23rd.
[00:36:20] Speaker A: Yeah, they're trying to fill up seats.
[00:36:22] Speaker B: Yeah, trying to fill up seats.
And then you have people buying cars, like insanely before the tariffs because the price hikes were not, were not pretending. People weren't pretending weren't coming. And some car dealers, car manufacturers are trying to offer fixed rate, I mean, fixed price for a while. Like this is our fixed price for X period of time.
[00:36:45] Speaker A: Right. Because they have cars and lot they want to move. Right? Exactly. Yeah.
[00:36:48] Speaker B: Yeah. Everyone's trying to try to keep the consumer interested and then. But housing sales, the Northeast is not the situation, but when we get to the rest of the country has declined.
It's hard to move a home, particularly in regions of the state that aren't densely populated, which is bad for the national economy level because home builders, furniture sales, appliances, and they're all going to go up in the price too, because of the tariffs. So you got this like, all this stuff going on here in Q1 as people prepare for the Trump administration's actions.
[00:37:27] Speaker A: Yeah. I'm going to be curious to see what the Fed does with interest rates next week. I think they're meeting. I. It'll be curious to see what happens.
[00:37:35] Speaker B: You're going to want three months of data. Yeah, I'm going to gamble they won't do anything. At least a quarter three.
[00:37:41] Speaker A: I think you're right. Yeah.
[00:37:42] Speaker B: To see where things are going because they could change in a motors no moments notice. And you know the big boys in the global economy is basically two areas is the EU trading block which is kind of this crazy hodgepodge of countries trying to get to a decision but they seem to be reaching one. And in terms of retaliation Trump administration.
[00:38:04] Speaker A: Oh yes. Yeah.
[00:38:05] Speaker B: And you got China down there. And for those unaware, the Chinese economy is growing at 5% give or take. That's slow for economy when you have 1.4 billion people you need to be growing at like 7% because your per capita is like $20,000. Our per capita is like $86,000. Yeah. You know, so while they're a huge economy in 19 trillion and we're a big one at 29 trillion, our per capita is not the wealthiest in the world by the way. It's actually the small countries like, like, like Norway because of very special circumstances allows them to have a higher per capita. But I mean in terms of like big country, I mean we have much more spending power than pretty much every big country out there in terms of like over 100 million people. Right. So you know the Chinese economy is having some deflation which is bad over time which is when wages and products go down together. The import numbers are lower than ever. It's not just because of tariffs because the people don't have the money to spend. They're not going to buy as much reduces the imports. So yes, tariffs plus reduced spending and their exports to United states since the first Trump administration. So eight years ago was about 26 25ish percent. Now it's at 13 40%. So during the Trump and Biden administration are decoupling to the Chinese economy has reduced their dependent on us 13 14%. Still very significant by the way. You really that's a lot going to place but it's a far it was double that eight years ago. It's because both the Trump and Biden administrations have been gradually decoupling to find other sources especially post Covid as businesses now diversify themselves globally. So you know who has the edge here? Well, depends on the IB hover. Right. You know, obviously we still have an overspending power. We were until this quarter the only really growing strong growing GDP relative to the size of the population.
And you know it's about who can hold out longer between the the Chinese consumer, the US Consumer. And like I said, Canadians were very smart. They announced tariffs, the EU announced tariffs targeting very specific areas where they've already, they already have product that can replace U.S. product.
And they targeted very specific parts of the country. Not surprising, Republican states which oddly enough had product export that already existed in the eu Canada.
So it's not. They need more milk. Canadians have a lot of milk.
[00:40:57] Speaker A: Yes, well, it's an agricultural country mostly. Right.
[00:41:01] Speaker B: And you know, even then, if you look at the Canadian import numbers and the Trump trade agreement, the usmca, I think that's what it's called.
They never met the quotas. U S Farmers never met the quotas. They were allowed to go up there and sell milk under free trade and they never met the quarters of what they were allowed to sell either. So, you know, great deal never properly utilized. Right. So the administration constantly blames everybody else and you know, they're going to continue to blame, you know, Democrats and immigrants and people that don't look like them and you know, aliens or whatever that they can get their hands on to convince you, the public, they did nothing wrong. And we're not responsible, but we're making all the decisions. But we, but we're not responsible even a way of making other decisions. And today's talk in Congress is actually about some tax increase to offset their tax cuts. And this is kind of again the interesting thing about Republicans, you know, where we, we, we believe in small government. You believe in spending a lot of money in cutting taxes and it affects your district. There is no such thing as small government. So let's cut the crap folks. I mean, this is the thing I find mind boggling that I consider common sense. Spend more, take less revenue. That's good. And the idea is that you can grow your way out. You, no government has ever grown their way out of deficit. It does not happen. You can't prude them anywhere. That happens in the world. It does not happen.
[00:42:36] Speaker A: No, it just, it just adds to the debt level, that's all.
[00:42:39] Speaker B: Well, for you to grow your economy means that your earned income has to be enormous. You know, against a reduced tax structure, you have to make a whole lot of money as individuals. And the reality is that, you know, the vast majority of people are not uber wealthy. And the burden comes on to, you know, 90% of the population to have to make a whole lot of money to make up the differential.
[00:43:03] Speaker A: I mean it really, it really is simple. You know, think about it in your own household budget, make more than you spend, period.
[00:43:13] Speaker B: All Right, that's correct. And this is kind of my always baffling thing, right? And people want to see a shakeup. People want to see a change. And I was saying the other day that whenever the government closes down, people don't really feel into it, like you need a passport or something. Right.
But now it's a little bit different when this government shutdown, the government comes back to life and eventually, you know, things move on.
I have no idea what's going to happen regarding the restructuring and reducing of services, including Social Security offices, things like that. Like when we do recessionary periods and we do like government early retirement programs, you trust me, feel it whenever we do things like that to try to bring our budget into balance. Because we have balanced budget state, the balanced budget states can't spend more than they take. That's why we have the rainy day funds and the stabilization funds fund. Right. That's why we have the stabilization rate and date funding to allow us to kind of, you know, in the emergency backfill. Right. I always point to the Boston bombing. When the Boston bombing happened, you know, we had to realize supplemental funds because it was an emergency. We needed $20 million. Now, like, how would this moment to immediately beef up security as we're trying to catch those two guys? Right. You know, because we're officially responsible state and we always have reserves. We can pivot with what happens around us.
[00:44:37] Speaker A: Right, Right. And by, by law, that's by design. That's not just, you know, by chance.
[00:44:42] Speaker B: But that's constitutionally required.
[00:44:44] Speaker A: Right.
[00:44:45] Speaker B: Not all states have this. And the US Government, most definitely not. But, you know, I do respect and understand the U.S. government is, you know, biggest economy in the planet.
We have the ability to print money, you know, we have the ability to keep issuing bonds. But I do understand that low interest rates for so long allowed them to basically borrow money at zero cost.
Just why, you know, which is why they did a lot of deficit spending because they paid no interest. So paying that back to principal was very simple. I'm sorry, paying back the interest was very simple against the principal.
So I get it. But they keep, you know, but you can't behave like that consistently when things keep changing around you and they changed. And you know, again, by administration. My always criticism, just like the Trump administration, is that you got two guys living in two different time periods that no longer exist. I mean, the 70s and 80s are gone. This is the 220s. And you have to change your mindset of how to run government based on it. You know, today, decade you live and not the decade you want from yesterday. Yeah, yeah, like when Secretary Ludwig gets on TV and says, you know, we can have millions of people putting screws and phones.
[00:45:58] Speaker A: Huh? No, we don't.
[00:46:01] Speaker B: At what, $3 an hour? I mean, yeah, you know, even if.
What is he. I mean, this kind of statements, I mean, if you believe him, quit your job now and go through some food, Screw some, say you want to screw some, screw some phones together.
This is what I always tell people you think is a grand deer. You go do it yourself. Go quit your job and do it. Don't tell me it's someone else's thing to do. It's not someone else's thing to do. If you believe that stuff, you go quit your job now and go get that.
[00:46:38] Speaker A: Well, it doesn't exist, so you won't.
[00:46:39] Speaker B: Yeah, well, yeah, exactly, it too. But you know, go advocate to D.C. that you're willing to give up your, you know, whatever salary you're getting to go get a, you know, a greatly reduced paying job and say you're supporting Trump's America. Go do it. And you know, when I say things like, people, look, I have seven heads, I'm like, no, I'm not. I'm serious. I mean, you believe it enough. Go put your money or your take your own money away from yourself where your principles are.
You know, if you hate government employee, if you're a government employee that hates government, well then quit. Give up your pension or you'll advocate. Your pension should be privatized by the Republicans and take your chances in the market opposed to a guaranteed benefit. Democrats protect your pensions, not Republicans.
We're protecting your 401ks, not Republicans.
[00:47:32] Speaker A: That reminds me, Congressman lynch is having a rally for the working class this Saturday on the Hancock, Adams Common and Quincy Center. Postponed because the rain last week.
[00:47:42] Speaker B: So folks, it might rain in the after. Yeah, I know.
[00:47:46] Speaker A: It's supposed to rain again. I know.
[00:47:49] Speaker B: We'll see how as you can guys right here. My voice is still kind of problematic.
So we'll see how my health is as I go into Saturday morning and whether or not I have the capacity to, to withstand combination of pollen and.
[00:48:04] Speaker A: A chest code in the rain.
[00:48:09] Speaker B: I do age people and it is getting harder and harder to recover.
[00:48:16] Speaker A: I'm sorry, Jackie.
We should probably let you go today so you can get some rest.
[00:48:22] Speaker B: The thing I meant most about aging is my recovery time takes longer.
[00:48:28] Speaker A: Well, I got news for you. It doesn't get any better.
[00:48:32] Speaker B: Thanks. Just, just what I need to hear. It's you know, I remember, you know, telling Michael Morrison one time that you know, he's getting older too and you got, you got to stop pacing yourself, you know, not necessarily because you want to keep doing these jobs in politics, but also he has family. Right. And you know, you want to be with your family, you know, as long as days you can have.
So you know, I think personal care, I need to pay more attention to personal care too. You know, I want to be able to spend more time, you know, my mother, as you all know, I'm the caretaker for my mother. But also, you know, I do have a nephew who's who's turned 21 and you know, I have a lot of friends, you know, that are not in politics, believe it or not, and in their lives as well. So I got to take better self care folks. Absolutely. Clearly I'm doing that wonderful trust shot at this. Also budget week I do have to show up in the state House and she was worse than I am now. People can attest to that there because you have to vote, but not just vote. But if you can't advocate in person, you have an increased odd. You're not going to get what you want.
[00:49:45] Speaker A: Right.
[00:49:46] Speaker B: So despite coughing and wheezing and wearing a mask and social distancing because they want to share what I have, remember you still have to get, get to the office.
[00:49:57] Speaker A: Well, that's a good place to let you go. Get some vitamin C and some rest. Let folks know that they can call you, email you, check you on social media or visit the State House.
[00:50:11] Speaker B: Yeah. 617-722370 Room 42 at the State House. Tacky channel malegislature Gov State Representative Tacky chain Facebook and hopefully by next week I will be much more audible before you are when I talk to Joe next.
[00:50:34] Speaker A: We look forward to that Tacky. Thank you so much.
[00:50:36] Speaker B: Take care, Joe.
