Widmer Forecasts Tough Times for County, State
 Michael Widmer, head of the Massachusetts Taxpayers Foundation, talked about the state's budget woes in Lenox on Tuesday. |
That was the word from Michael Widmer, president of the Massachusetts Taxpayers Foundation, on the state’s looming $2.1 billion deficit.
Dozens of Berkshire County selectman, teachers, town managers and school committee members gathered at the Town Hall on Tuesday to hear what Widmer had to say. The news, according to Widmer, isn’t promising.
"The last two, three, even four years have been very challenging and you guys bear the brunt of it," Widmer said. "This is the worst state fiscal crisis since the Depression. In terms of 2011, we're doing fine, the state budget is tightly balanced. The issue is Fiscal Year 2012. There are no stimulus dollars after 2011."
One of the main causes of the state deficit, said Widmer, is the constant drain of Medicaid spending.
"Medicaid costs $10 billion out of a $30 billion budget," he said. "Nationally, in 2000, the proportion of the budget that went to Medicaid was 21 percent. Now, in 2011, that proportion is 37 percent of the budget. Medicaid is cannibalizing the state budget."
In addition to Medicaid, Widmer cited other benefits such as pension and retirement plans (particularly for state and federal employees) and step increases for teachers as "unsustainable" in the current economic crisis.
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Medicaid is cannibalizing the state budget.
Widmer said that while the budget crisis is severe (and presumably lasting into at least the next decade) it is also to be expected.
"Think about what's happened since World War II. The U.S. no longer has an economic monopoly on the world scene," he said. "It is the natural order of things. No country is No. 1 forever."
The local implications of Widmer's talk did not escape Lauren Sartori, town accountant for Great Barrington. She said she has been watching the numbers and wondering what will come next.
“We’re just starting to see the decline in property values and the pressure is on real estate taxes,” she said. “Costs continue to go up and there are no real answers and no new resources. We’re going to start to see changes in service levels. We are all holding our breath at this point.”
Widmer reaffirmed Sartori’s observations by saying that further cuts in state local aid can be expected in the coming years.
“There will be 5 to 10 percent cuts in local aid. School transportation is critical in this,” he said. “I would plan on 10 percent if I was on a finance committee in the town."
State Rep. William “Smitty” Pignatelli, who recently moved to Lee, said that while he was not surprised by Widmer's grim report, it was important for others to hear it.
"It's an impartial 20,000-foot view,” the Democrat and new dean of the Berkshire delegation said. "Town officials now have a chance to get back to their committees with this information. The towns should see this as an opportunity to really start talking to neighboring communities about sharing services. We've really got to pursue the creative economy and higher education. We've got some difficult choices to make."
