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Governor Offers Plan to Plug $1.4B DeficitStaff reports
iBerkshires
06:23PM / Wednesday, October 15, 2008
BOSTON — Gov. Deval Patrick announced Wednesday nearly a $1 billion in cuts and the slashing of a 1,000 jobs as the state struggles to cover a looming deficit in downward spiraling economy.
He's also asking lawmakers to dip into $200 million from the state's rainy day fund.
"With the economy slowing and state revenue declining, we have to act," said Patrick. "These decisions are not easy. I know there is a good idea or a good person behind every one of these cuts. But we are going to share the sacrifice now so that we can all be stronger when the economy recovers."
Two weeks ago, the governor warned that the softening economy would require savings reform and set Oct. 15 as the day to unveil a five-point plan to control and reduce state spending.
Revenues for the first quarter of the fiscal year that began in July were $223 million below estimates, signaling "worse news ahead," said Patrick. "The national economic downturn, tightening credit and its impact on business activity and consumer spending, market volatility and its effect on capital gains all require us to take further steps now to assure a balanced budget."
The global financial crisis has sent Wall Street reeling; after bouncing back more than 900 points on Tuesday, the Dow Jones fell 733 points on Wednesday.
A disclosure document filed Friday for bond investors indicated state revenues would be $800 million to $1.5 billion less than expected this year.
Earlier Wednesday, Attorney General Martha Coakley pledged making between $500,000 and $1 million in budget cuts in her office for the remainder of the fiscal year.
"The attorney general's office plays multiple roles in the commonwealth, both bringing in revenue for the commonwealth and saving taxpayers' money," said the North Adams native. "As such, we are diligently and carefully reviewing our budget in order to best determine how we can trim our spending while not impeding our ability to recover funds for the commonwealth and to continue to advocate for consumers."
Coakley said her office saved or recovered more than $200 million for the state last year.
State Rep. Denis E. Guyer, D-Dalton, last week urged the governor to consider a four-day work week for non-essential public workers as a way to save money.
"These desperate times require those of us in positions of leadership to push our comfort zones, and think outside the box a little more than we already do," said Guyer. "I am asking Governor Patrick to strongly consider this idea, which has been implemented in other states, and will save money primarily through reduced energy use."
To close the $1.4 billion deficit, Patrick proposes to:
To use his statutory authority to make $755 million in cuts across executive branch agencies and implement $146 million in additional spending controls.
To draw an extra $200 million from the state's Stabilization Fund, leaving a balance of $1.6 billion.
Encourage nearly $100 million in voluntary spending cuts from other parts of government and quasi-public agencies, such as Coakley's efforts and the commitment from the Legislature to cut $9 million from its budget.
Depend on $100 million in expected corporate tax settlement payments currently being negotiated at the Department of Revenue, and $55 million in additional Transitional Aid to Needy Families funds from the federal government.
Restructure the way state employees pay for health insurance, which is expected to save $28.5 million for the remainder of fiscal 2009. The proposal is similar to what the governor introduced earlier this year.
The governor also had announced plans earlier to merge the Massachusetts Turnpike Authority with the Highway Department as a cost-saving measure.
Patrick said cities and towns will not lose local aid, though their receipts will be reduced in direct proportion to the amount of revenue they will receive from the repeal of the telecom tax exemption. Communities that do not receive funding from the telecom tax will not see a decrease in their aid.
Some $3 billion in bridge repairs, such as the long-awaited Hadley Overpass reconstruction, are also safe for now. According to The Boston Globe, Bernard Cohen, the state transportation secretary, said the eight-year program will be paid through the capital budget. Cohen said the governor hoped the bridge program would be a catalyst for the state's economy. |
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