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The financial health of Massachusetts is in the doldrums. Monthly revenues are down almost 16 percent from a year ago and the state budget is facing a more than $200 million shortfall.
If those figures hold, state services will have to be cut and Gov. Deval Patrick has told his staff to propose possible cuts to be implemented later this month.
Lawmakers have scheduled a joint revenue hearing on Thursday to go over the numbers. State officials will testify, along with economic experts, and the proceedings will be open to the public.
We went to the State House to speak with Senate President Therese Murray, who had a sobering assessment of the state's fiscal health. Murray said the budget shortfall might get even bigger after the governor finalizes revenue numbers later this month.
Bob Oakes: Senate budget chief Steven Panagiotakos is quoted as saying "the budget is as bad as we could have possibly imagined." Do you agree and do you see months ahead of trying to fill holes?
Therese Murray: Yes. I see months ahead of cuts, program elimination, layoffs and big holes.
That's a pretty bleak assessment.
It is, but there's no other way to look at it. We've already cut over $3 to $5 billion in the last two and a half years. So — facing this other $243 million just for July, August, September — you have to figure that you're going to lose additional money in October, November, December, given the fact that people are not spending.
So, we're in for a very tough couple of years.
Do you think it'll take a couple of years for this to wring itself out? Some economists say that they see signs the economy is on the rebound.
Well, that's what they tell us and I'm hoping that's what they're going to tell us today, but state and federal governments usually lag at least six months behind. So we have a ways to go, and we had stimulus money to get us through (FY 2009 and FY 2010), and that money is pretty much gone, so we don't have the savings to bring into (FY 2011), so (FY 2011) is going to be probably worse than (FY 2010).
There are some watchdogs and critics who say that the governor and the Legislature should not have spent down the rainy-day fund in the way they have in the last year and a half. Was there any other choice?
We were in a total free fall beginning last October. So, would those critics have liked us to completely decimate the state budget and end programs and jobs then? I just don't agree with that.
You said a few things that probably are going to send chills down the backs of state workers and city and town officials. What do you think is going to happen in terms of state employee layoffs?
Well, I'm not certain. The governor, on the 15th of October, he will have to change the consenus revenue number. So once that number's set, then he will exercise his 9C cuts and it will be across the board, I assume, in state government. They'll be percentaged depending on the programs.
If it's really significant, most likely he'll ask us for expanded 9C powers, which means that he would then go to the cities and towns and cut their budgets also.
You're talking about local aid.
Can the Legislature do anything more for cities and towns than it's already done? Obviously, in the last few months, it's given cities and towns the ability to raise some local taxes — the local hotels tax, if they have hotels; the local meal tax, if they have restaurants. And even those things are considered by some cities and towns just Band-Aids.
Well, it's a big Band-Aid. If you don't have any hotels and you have one restaurant, it's not going to do you much good. So they do rely on us. There's a municipal relief bill that is presently in committee that gives some opportunities to regionalize services to cities and towns.
If you look at the number of towns we have in the commonwealth — they all have a police chief, they all have a fire chief, they all have a superintendent of schools, pretty much — giving some money for the planning of that regionalization, in the long run that will save money, and there are some other things in the package, also.
In your opinion, have cities and towns across the state done enough to control their own spending given the state's money problems?
This is going to be slow and steady, with high unemployment for quite awhile. So cities and towns have to figure out how they're going to survive through that, and they're going to have to do some economizing also.
There has been a lot of talk nationally in this recession about the "new normal" that individuals and families are facing. Because of the economic hardships that they've endured, they can't spend as much on the luxuries that they had before. Is there a "new normal" in state government coming out of this recession?
I think the new normal started over a year and a half ago, when we saw things starting to fall and we pulled back. We've cut our budget significantly. We're going to be moving towards cutting our budgets deeper, and probably having to lose some people who've been here a long time.
In terms of the social responsibility that the state has long felt — the philosophy of helping the needy that the state government in Massachusetts has long-held — how's that going to be affected by what's happened in this recession? Can the state be leaner and still compassionate?
I think so. I think there are places we can go, to cut, that we right now don't have in front of us. We're working on here in the Senate, taking a look at, say, all the economic development agencies that the commonwealth has. There's too many. So I think we can go there and ask them what they actually do and maybe merge and cut back there.
The legislation we did pulling all our transportation agencies together, that will save us a lot of money. And the non-profits, I think they could merge. There's hundreds in my own county doing the same types of services.
Casino gambling, or expanded gambling in the form of slot machines at racetracks. The thought was, earlier this year, that there was going to be debate on that and that there would be a vote on that topic this fall. Why did it get pushed to next year and do you think there will be a vote?
I don't think it's necessarily been pushed to next year — the hearing's going to be this month. So we have three bills presently in committee. So we will be tooling and forming our own ideas on what should go into a bill.
So it's going to take us awhile. This is not an easy process. But there will be a hearing in October, and we'll start working on it.
Senate president's personal opinion: If we have casinos, should we also have slot machines at racetracks? If we're going to do one, should we do both?
I support destination casinos. But that's only my own opinion.
Is it inevitable?
Even in this down recession, we're seeing hundreds of millions of dollars spent by our residents going to Connecticut and Rhode Island. So I think it definitely is inevitable.
This program aired on October 8, 2009.
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