State revenues are clearly in the tank. But Bill Walczak, CEO, Codman Square Health Center worries that none of the gubernatorial candidates will address the shortfall in earnest because they're afraid of violating their own no-new-taxes mantra:Be afraid. Be very afraid.
A Massachusetts Taxpayers Foundation report on State and Local Finances concludes that tax revenues have been sinking like a stone (a $2.62 billion reduction in tax revenue from FY08-09), with a FY09 $4 billion budget gap that was mostly filled by using the rainy day fund, stimulus dollars and other one-time funding sources. Rainy day funds now stand at under $800 million, as FY10 continues the financial slide. We entered FY10 with a $4.8 billion structural deficit, filled by $2 billion in spending cuts, more use of stimulus dollars and further spending down of the rainy day fund, along with the increase in the sales tax. Even this is not enough. We’ve all been told to expect 9C cuts (the cuts governors are required to make if tax revenues don’t keep up with budget projections) later this month, due to continuing tax revenue declines.
But what is even more frightening is MTF projections on FY11. With even fewer rainy day and stimulus dollars available, MTF forecasts a $2.775 billion deficit.
So, coming into next spring’s state budget season, what can we expect? We’ll have arrived in gubernatorial election season, and with Massachusetts having joined New Hampshire with gubernatorial candidates all taking the “pledge” of no new taxes, we’ll have Mihos, Cahill and Baker all talking about how they’ll cut taxes and how they’ll find waste, fraud and abuse to make up the difference, positioning Gov. Patrick to also be against new taxes.
The press releases will focus on how each candidate will solve the budget crisis without new revenue, with all calling one another on specifics of what they’ll cut to balance the budget.
What will it mean for health reform? Health care is the single largest part of the state budget. FY2010 sees the safety net system in deep trouble, with Boston Medical Center, Cambridge Health Alliance and many other Disproportionate Share Hospitals (hospitals that see a high percentage of poor patients) bleeding red ink, the Medicaid managed care HMOs in trouble and all spending whatever reserves they have to stay afloat. It is very doubtful that Congress will authorize another stimulus fund bailout, and how many one-time revenue sources still exist?
Whatever else health reform has done, it has proven that patients with insurance cards will not abandon their usual sources of care. Both the safety net hospitals and health centers have been booming with new patients, even as they lose money. The primary care system is saturated, and newly insured patients are having a great deal of difficulty finding primary care doctors to see them. If the state’s solution to health cost (the global payment system) is going to work, it needs comprehensive systems that work well treating the sick, and preventive and health maintenance systems that help the well stay that way. Dismantling the safety net will do neither.
The question for our prospective gubernatorial candidates is: what will you do to ensure that the systems of care used by those affected by health reform are not dismantled?
This program aired on October 2, 2009. The audio for this program is not available.