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A Project of The Annenberg Public Policy Center

Spinning Romney’s Debt

An ad from the Obama campaign claims Massachusetts ranked No. 1 in state debt per person when Mitt Romney was governor. It’s true, but there’s less there than meets the eye. Massachusetts has historically been a high-debt state. Massachusetts has ranked either first or second in debt per capita in each of the past 11 years. It was second when Romney took office, not a far leap to first place. One could even argue that Romney slowed the growth rate of long-term debt compared with the four years before he took office.

We’re No. 1! Ugh.

The ad sets up its punch line with the opening line, “When Mitt Romney was governor, Massachusetts was number one.” The ad then says, “Number one in state debt.”

According to the ad, under Romney, Massachusetts had “$18 billion in debt — more debt per person than any other state in the country.”

First, we should note that this is not the same kind of debt we hear about with the federal government. The Massachusetts debt referred to in the ad is long-term debt for capital improvements, bonds to pay for such things as road or bridge repair, to erect new buildings at the University of Massachusetts or to expand courthouses. That’s not the same as piling up yearly deficits to support operating expenses the way the federal government is. In fact, like most states,  Massachusetts requires balanced budgets.

(Our fact-checking colleagues at the Washington Post noted that with an asterisk — saying that Massachusetts has historically shifted some operational costs, such as pay for workers on capital projects, to its capital budget. But that practice pre- and post-dates Romney.)

That being said, it’s true that the long-term debt went from $16 billion (see A-22) on Jan. 1, 2003, just before Romney took office, to $18.7 billion (see A-22) on Oct. 1, 2006, three months before he left. That’s an increase of $2.7 billion.

According to Moody’s State Debt Medians, in 2007 — the year Romney left office — Massachusetts had the highest debt per capita of any state in the country, $4,153. Connecticut ranked second, with $3,713, and Hawaii third, with $3,630.

But Massachusetts didn’t have far to go to reach the No. 1 spot. Massachusetts ranked second in 2003, the year Romney took office, according to Moody’s. And it was first in 2002.

“Massachusetts has always been a very high-debt state,” Michael Widmer, president of the nonpartisan Massachusetts Taxpayers Foundation, told us. “That was the case before Romney was governor and it’s been the case since.” (Indeed, Massachusetts ranked second behind Connecticut in 2010, 2011 and 2012.)

In fact, the pace of the state’s rising long-term debt load actually slowed during Romney’s time as governor.

In a comparable length of time before Romney took office — from June 30, 1999, to Jan. 1, 2003 — the long-term debt in Massachusetts went from nearly $12 billion to $16 billion (see A-23), a $4 billion increase. That’s a 34 percent increase, compared with the 16.4 percent increase during Romney’s years.

Widmer put it this way: “He didn’t put his foot on the accelerator any more, or really take it off.”

A few more pieces of context. In addition to looking at debt per capita, Moody’s provides data on debt as a percentage of personal income. This statistic more closely aligns with residents’ ability to pay. Massachusetts’ debt as a percentage of income rose slightly during Romney’s years in office, from 8.5 percent in 2003 to 9.4 percent in 2007. Still, Massachusetts has consistently ranked second among states with regard to debt as a percentage of income in each of the last 12 years — before, during and after Romney’s term as governor. And last, we should note that Massachusetts has maintained an excellent bond rating. It was Aa2 throughout the 2000s, considered a very low risk for potential investors.

There is some irony in the Obama campaign attack on Romney’s debt record. As the Obama campaign pointed out in backup material for the ad, while running for governor in 2002, Romney criticized his Democratic opponent, then state Treasurer Shannon O’Brien, for Massachusetts’ long-term debt. One TV ad from the Romney campaign featured a basset hound to sarcastically depict O’Brien as a failed “watchdog” because “O’Brien’s let her Beacon Hill pals spend so much money our state per capita debt has grown to the highest in the country.” During a debate, Romney ridiculed O’Brien for promising to reduce the state’s debt as treasurer, noting that Massachusetts had “the highest debt per person of any state in the nation.” Never mind that it is the state Legislature and governor, not the state treasurer, that decides how much long-term debt to assume.

In other words, this is a shaky tactic Romney himself employed when it suited him.

47th Out of 50, Again

The ad also rehashes the claim that under Romney, “Massachusetts fell to 47th in job creation, one of the worst economic records in the country.”

But as we wrote when the same claim was made in an earlier Obama campaign ad, it’s a bit misleading to say Massachusetts “fell” to 47th. The state ranking for job growth went from 50th the year before Romney took office, to 28th in his final year. It was 47th for the whole of his four-year tenure, but the ranking was improving, not declining, when he left.

According to data from the Bureau of Labor Statistics, Massachusetts added 49,100 net jobs during Romney’s tenure, an increase of about 1.5 percent. That was a far slower pace than the national average of 5.3 percent, however. In fact, looking at the entirety of Romney’s four years, Massachusetts ranked 47th out of 50 states in percentage of job growth. It had ranked 37th in the four years prior.

But as we said, a different picture emerges when one looks at year-by-year figures. In the 12 months before Romney took office, the state ranked 50th in job creation, and for his first 12 months in office, the state remained 50th. But by his final year, the state ranked 28th. That’s still mediocre, but an improvement, and not a decline.

The ad will air in the battleground states of Colorado, Florida, Iowa, North Carolina, New Hampshire, Nevada, Ohio, Pennsylvania and Virginia.

— Robert Farley