Yesterday
Governor Patrick announced a series of actions to bring the current year budget
into balance. The need for mid-year budget solutions highlights two realities
that have shaped Massachusetts budget debates for years: our national economy is
still recovering from the worst recession since the Great Depression and we
continue to have substantially reduced revenues because the state adopted over
$3 billion of income tax cuts during an economic bubble in the late 1990s
(described
HERE). Those tax cuts led to deep cuts
in funding for local aid, education, public health, and other investments that
can strengthen our economy, expand opportunity and improve the quality of life
in our communities. In addition to forcing painful cuts, the loss of $3 billion
in revenue has caused ongoing fiscal instability.
These
long-term challenges are now compounded by a few short-term ones: a coming
automatic reduction in the personal income tax rate, non-tax revenue collections
that are below projections, and additional economic development spending
commitments that were made with the expectation that there would be more revenue
available than is currently projected. The administration estimates that
combined these have created a $329 million gap for the rest of FY 2015. To close
this gap, the Governor yesterday announced $198 million in cuts to executive
branch agencies as authorized by Chapter 9C of the General Laws (explained in
What are 9C Cuts?). The Governor also
proposed additional solutions in areas beyond executive branch agencies --
including to local aid -- that can only be implemented with legislative
approval.
The
$198 million in 9C cuts to programs within the executive branch include:
- $45.4
million by delaying the implementation of rate increases for providers in
MassHealth. Net savings to the state, however, will only be about half this
amount, since these cuts will lead to reduced federal reimbursements (for more
detail please click HERE).
- $18.7
million to Regional School Transportation, bringing funding down to FY 2014
levels.
- $10.0
million to Pathways to Self Sufficiency, bringing funding down to $1.0 million
for FY 2015. This job training program was newly created as part of last year's
welfare law.
- $7.1
million to the Municipal Regionalization and Efficiencies grant program.
- $5
million from mental health services for children and adolescents, likely
resulting in the delayed implementation of the Caring Together initiative for
children in residential care.
- $3.1
million to State Parks and Recreation.
- $2.4
million in cuts to elderly support programs, decreasing the number of people
able to receive in-home care, which keeps them out of nursing homes. This cut
may result in wait lists for these services.
- $1.0
million to Extended Learning Time Grants.
Additional
proposed cuts to non-executive branch agencies, which the Governor cannot
implement on his own, include:
- $25.5
million in cuts to Unrestricted General Government Aid, which would bring
general local aid down to FY 2014 levels.
- $21.8
million in cuts to most other non-executive agencies (e.g. the attorney
general's office), mostly the result of across-the-board 1.5 percent cuts.
- $10.0
million in cuts and savings within the Department of Transportation.
- $73.6 million
in other solutions, including commitments from some quasi-public agencies to
return a portion of funding received from a recent economic development bill.
This total also includes some additional federal and departmental
revenues.
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