WBUR

Gov. Patrick Cites $540M Budget Gap, Orders Cuts

BOSTON — Gov. Deval Patrick is calling for a series of mid-year spending cuts to help close a $540 million budget gap as state tax revenues remain below expectations.

To start, the governor is slashing $225 million, or about 1 percent, from agencies that fall directly under his control. He doesn’t need the Legislature’s permission to make these cuts, which include 700 new positions that will not be filled.

“I don’t think it’s a cause for panic because we have a plan,” Gov. Patrick said. “And I think we’re going to need our colleagues in the Legislature to join us in getting this plan in place.”

Patrick is asking the Legislature to approve $9 million in cuts to unrestricted local aid and another $25 million cut to the budgets of the state judiciary, constitutional officers and other non-executive departments.

He is also asking the Legislature to allow the state to take $200 million from the rainy day fund to help shore up the shortfall. That would leave a balance of $1.2 billion in the stabilization fund.

The moves are needed because of slower-than-expected growth in state tax collections. Gov. Patrick says one of the main reasons for the shortfall is the uncertainty over the “fiscal cliff” negotiations in Washington.

“Uncertainty is the reason so much capital has remained on the sidelines. There are people who see a certain amount of commercial activity and they’re ready to start hiring,” Patrick said. “They don’t want to make those decisions until they have a better and clearer understanding what the future of the economy will be and the future of the economy is affected by those talks in Washington.”

The reasons for the shortfall are of little solace to those that will be affected by the cuts. Geoff Beckwith, of the Massachusetts Municipal Association, says local communities will have a hard time dealing with even a 1 percent cut.

“Unrestricted local aid is used to fund school budgets, it’s used to fund public safety, it’s used to fund public works programs and general government services,” Beckwith said, adding that communities have already figured out their budgets based on the full amount of local aid and the cuts will destabilize those budgets.

State budget officials have seen revenues fall $256 million behind benchmarks between July and October of this year. On the positive side, revenues in November were $21 million ahead of expectations, though not enough to cover the previous months’ shortfall, prompting the governor to call for the cuts.

This post was updated with the All Things Considered feature version. 

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  • Lawrence

    Well, maybe if the Assembly Sq. Mall gives back the 235 million that Patrick awarded to them, and oh yes, how about the 10 million ‘loaned” to the W hotel that they won’t pay back and all of the other corporate handouts maybe we wont have to cut all of these social services.

    • jefe68

      I agree. There is a series of articles in the NY Times on this very subject. Government subsidies that have very low returns for the local and state governments that provide them. And don’t talk to me about jobs, if these companies want to work in this state let them come. But lets not give away so much that it breaks the states financial back. The state of Massachusetts spends 7 cents of every budget dollar on this or $345 per capita.

      http://www.nytimes.com/interactive/2012/12/01/us/government-incentives.html?ref=us#MA

  • sjw81

    this is great news finally. however he could really cut state govt, the salaries, the staffing, the perks and also cut the tax breaks he gives to all teh corporations like liberty mutual, et al and of course the greediest of all the so called non profits like colleges that pay minimal or no taxes yet make enourmous profits and charge us 50k year we cant afford with no job or making 40k yr…

    • Sandstone3

      I woudl not be surprised to learn how LITTLE of Fidelity remains here. They’ve moved so MUCH of their staff out of state (RI, Texas & I think NJ). I’m willing Mass had to give them some generous tax package to keep them here. Also, State Street is builing a significant ‘environmentally friendly’ 11 story state of the art building in the newly name ‘Innovation District’ on the South Boston Water Frond. I have little doubt tax perks were involved.

    • Stop Waste

      On the Money!

  • jefe68

    I once had a lawyer tell me that these cuts are putting a lot of stress on the judicial system across the state. There are now judges doing the work that would be done by a clerk which creates a backlog in the courts. This manifest itself mostly in civil courts apparently, but it is causing a state wide level of stress on the system. Then there is the infrastructure and the MBTA. More fare hikes anyone?

  • CastIronWithRustSpots

    what do you call a 1% cut? A good beginning.

  • Sandstone3

    Maybe if the drug lab learned to manage their staff and the mass highway safety chief is not hired through nepotism (Sheila Burgess) and we don’t hire the failed leader of the atlanta mass transit as the new GM for the T (Beverly Scott) and we monitor salaries of, say, housing chiefs (Michael McLaughlin, Chelsea) maybe, just maybe, we might be in a slightly different position? AND, Patrick is considering increasing the gas tax to pay for roads and bridges. What gets my goat is not the taxes per se but that no one is watching the stinking bank! The money is so mis-managed and/or political(ly correct) hirings occur that we, the people, end up paying the price. I personally don’t ‘hire’ people to do, ahem, ‘stuff’ like this.

  • Sandstone3

    Also, will the legislature approve those items that require legislature approval?

  • X-Ray

    But his Bud, Obama, tells us how well his jobs program is doing in the State. Not another lie, is it? And revealed so soon after the re-election, too.

  • Stop Waste

    Governor Patrick should start cutting all the fat off the Budget, by eliminating State Jobs. There is so much waste within so many State Agencies, like the Massachusetts Rehabilitation Agency wher many employees lounge around most of the day and provide no real employment and training for the public. This is one great example! MRC is top heavy, gloated with high paid lazy employees, who feed off the backs of hard working citizens in the private sector. Many MRC Workers once vested in the Union take Friday afternoons off and basically do whatever they feel like it with no true accountability.

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