• Gov. Patrick Plans to Announce $325M in Budget Cuts Next Week
• Municipal and Education Accounts Could be Targeted for Mid-Year Cuts
• Municipal and Education Accounts Could be Targeted for Mid-Year Cuts
$325M State Budget Shortfall Announced – Last week, Gov. Patrick’s Secretary for Administration & Finance announced that the state is facing a $325 million shortfall in its fiscal 2015 budget, and said that the Administration would be unveiling plans to close the budget gap at some point during the week of November 17th. He said that the plan would not draw from the state’s $1.2 billion stabilization fund, but instead would rely exclusively on mid-year spending cuts.
The MMA has Called on the Patrick Administration to Avoid any Mid-Year Cuts Targeted at Cities and Towns – In a face-to-face meeting with A&F Secretary Glen Shor and top Administration officials at the November 12 meeting of the Local Government Advisory Commission meeting, the MMA and local leaders presented a strong case that cities and towns should not be hit with mid-year cuts, especially since the shortfall is in no way related to local government or the overall performance of the economy, and is primarily due to state spending decisions and the administration of state government. At this point in the year, cuts in municipal or school funding accounts would be extremely painful at the local level. However, Administration officials responded that they appreciated the “input,” but did not take local funding off the table.
The MMA has Called on the Patrick Administration to Avoid any Mid-Year Cuts Targeted at Cities and Towns – In a face-to-face meeting with A&F Secretary Glen Shor and top Administration officials at the November 12 meeting of the Local Government Advisory Commission meeting, the MMA and local leaders presented a strong case that cities and towns should not be hit with mid-year cuts, especially since the shortfall is in no way related to local government or the overall performance of the economy, and is primarily due to state spending decisions and the administration of state government. At this point in the year, cuts in municipal or school funding accounts would be extremely painful at the local level. However, Administration officials responded that they appreciated the “input,” but did not take local funding off the table.
State Budget Gap Caused by Shortfall in “Non-Tax” Revenues, Spending in the New Economic Development Act, and a Cut in the Income Tax Rate –A&F Secretary Glen Shor stated that the $325 million shortfall is caused by several factors. First, although state tax revenues are still expected to meet expected levels, the state income tax rate will be automatically reduced from 5.2 percent to 5.15 percent, effective on January 1, a cut that will be triggered by existing law. This will reduce the state’s fiscal 2015 tax revenues by $70 million. Second, lawmakers and the Governor approved an $80 million economic development bill late last summer, and state revenues are not growing fast enough to offset the cost. Finally, and most importantly, the Patrick Administration is now reporting a $175 million shortfall in non-tax revenues and agency fees. While the Administration is providing no specific explanation of the non-tax shortfall, independent budget analysts expect that a significant cause is the breakdown in the state’s health insurance exchange website, which forced state officials to enroll thousands of residents in temporary Medicaid plans, for which the state will not receive full federal reimbursement.
Governor Can Impose Mid-Year Cuts on Spending in State Agencies Under His Control, and Ask Legislature for Authority to Cut Local Aid, the Judiciary and Others – Facing a $325 million budget shortfall, the Governor has the authority to unilaterally cut spending in executive branch agencies under his control. In addition, the Governor can ask the Legislature to grant him expanded budget-cutting authority over other accounts outside of the executive branch, such as Unrestricted General Government Aid, Chapter 70 school aid, constitutional officers, the judiciary and independent agencies, a step he has taken in the past. With the Legislature in informal session and only able to pass items with unanimous consent, it is unlikely that legislators would grant Gov. Patrick expanded budget reduction powers targeting local aid, but if that is one of the Governor’s proposals, local officials will need to contact their Representatives and Senators immediately.
Important Municipal and School Aid Accounts May be Targeted for Mid-Year Cuts – The last time Gov. Patrick faced a mid-year budget deficit was in December 2013, when state was projecting a $540 million deficit. The Governor used his budget powers to impose $28.75 million in mid-year cuts to important municipal and school aid accounts, which left cities and towns reeling from unexpected revenue losses. In 2013, the mid-year reductions included a 5% cut to the Special Education Circuit Breaker program, a 47% cut to the McKinney-Vento homeless student transportation account, a 70% cut to the Chapter 70 pothole account, a 3% cut in Veterans’ Benefits reimbursements, a 1% cut in regional school transportation funding, a 1.4% cut to charter school reimbursements, and other important accounts. In addition, the Governor asked the Legislature to cut $9 million from Unrestricted General Government Aid, a request that lawmakers rejected.
PLEASE ASK YOUR LEGISLATORS TO OPPOSE ANY PROPOSAL TO IMPOSE MID-YEAR CUTS TO UNRESTRICTED GENERAL GOVERNMENT AID OR CHAPTER 70 EDUCATION AID – The MMA will strongly oppose any cut to unrestricted municipal aid or Chapter 70, because that would destabilize local budgets in the middle of the fiscal year, and force reductions in community services. Unrestricted municipal aid has already nearly $400 million below original fiscal 2009 levels, and any additional cuts would be painful for cities and towns across the state. In addition, please tell your legislators that you are very worried about potential cuts to important municipal and school accounts in the state budget, including the Special Education Circuit Breaker, McKinney-Vento funding, charter school and regional school transportation accounts, and other programs.
Please Call Your Representatives and Senators Today and Ask Them to Oppose Any Proposals to Cut Municipal or Education Aid, and Share Your Concerns About the Impact of Mid-Year Cuts to Local Programs and Services.
Don't spend that money for the Senior Center yet !! I spoke with Senator Brewer last night and he said the money will be there as long as Gov. Patrick doesn't cut the budget. Ype !! Give with one hand and take with the other !! I don't think our town can stand another hit financially. Our town workers did not miss the message they received from the voters, when they refused to give they what amounted to a small increase in their pay. Our town workers have put up with a lot of grief in the past couple of years. . For some a lay off, and for some short hours. We have lost some really good people like Bethany who is going to a job that pays well, and just happens to be closer to her home. The distance was not why she left, it was the money she can make. She should be dancing out the door, but she isn't. Leaving is hard for her because of the friends she has made with the other town workers, and the elderly she has come to know.. Our town workers have supported each other thru thick and thin, and that counts for a lot. Now that it has snowed, Bud has to ask his junk equipment to get us through another winter. Not a easy task ! So to those who did not support the people that keep our town running, I would like you to think about this, where will the elderly go if they need help with a ride to the doctor, and all of their kids are working or not available ? The Senior Center provides lots of different services to the older people, and guess what ?? We all get old !! Sooner than you think !! The guys on the Highway Department will give you the best service they can, provided the equipment runs. People expect 100% from these workers but chose not to support them in kind. I know people on Social Security argue that they have not seen a increase in what they earn, but I think they did. It is always off set by a insurance increase, so they get us one way or the other. The town workers have not had a raise since 2011, but they will be there when you need them, because that is their job. Bev.
ReplyDelete"Bev" I think it is important that the voters know most of the people the taxpayers pay did get their raises. By that i mean the NRSD people,TMLWP people these people get their raises every year. Even when the town couldn't pay the bill they got their raises. Funny how when the time came to fix the towns money problems it was only the people who did not get a raise in the last 3 years that paid the price. We have an older highway fleet and less workers so it will be hard to do the job as good as in the past. The truck i drive is 30 years old with 200,000. miles and just needed a major job to keep it from the scrap pile. I hope the taxpayers enjoy their new roads. The work to complete them was done by the best crew the town could ever hope to have. I ask the town people to please hope and pray for the speedy recovery of our injured Highway worker. Time will tell if the department can function normal with less of everything to do the job with. I know the men are up to the ever changing challenges were faced with. It's hard to think were appreciated when the no vote was so high. I was told by one of our assessors the yes vote would have added 10 cents to the tax rate and 14.00 to the tax on a 150,000.00 home. It's hard for me to look at that amount and feel good about it not passing. As always when you see the sander in the middle of the road pull over so we can sand the road for you and others as well. Were just trying to make it safer for the people in both lanes as soon as we can.
ReplyDeleteA deficit of $325 million is close to 10% of the the total state budget of 36 billion.
ReplyDeleteTo cut the state budget by 10% one quarter of the way into the fiscal year will be difficult and cause hardship to the communities in Massachusetts.
Will the governor cut regional transportation? Local aid? highway funding?
Stay tuned.
Whatever cuts are made they will hurt.