Gov. Patrick facing tough financial decisions as crisis impacts revenues

October 1, 2008 07:07 PM Email| Comments (0)| Text size – +

By Matt Viser, Globe Staff

With the state expected to announce Thursday that tax collections for September were about $200 million less than originally forecast, Governor Deval Patrick is confronting difficult decisions about which priorities he can pursue and which he may have to abandon due to the effects of the national financial crisis on Massachusetts.

While seeking publicly to steady a volatile financial situation, Patrick and his team have been scrambling behind the scenes to assess the damage to state tax revenues and credit availability and preparing various cutback scenarios in case the meltdown gets worse.

Other state officials, meanwhile, are hunkering down for major work at a time normally set aside for re-election campaigns. Travel plans among top leaders are being canceled, one notable casualty being a trade mission to Ireland that was to include Lieutenant Governor Timothy P. Murray.

Among the items up for discussion are whether to draw from the $1.8 billion remaining in the state's reserve account, and, if so, when to do it and how much. Emergency powers for the governor to cut further into the budget also are on the table, but so far the Legislature has balked, the Globe reports today.

"It's hard to say we're going to do A, B, C, or D until we figure out if we've hit bottom yet," Senate President Therese Murray said Tuesday. "And I don't know if anyone knows the answer to that."

Treasurer Timothy Cahill, Auditor Joseph DeNucci and other constitutional officers were summoned to the governor's office Tuesday afternoon for a series of one-on-one meetings about the state's financial condition, the AP reported this afternoon.

How the governor deals with the current fiscal challenge - and whether he can fulfill expensive campaign promises to lower property taxes, put more police on the streets, and reform education - is likely to define the middle phase of his four-year term.

"There are a number of challenges," Patrick said Tuesday at a State House press conference announcing a Medicaid waiver deal with the federal government that will help pay for insurance coverage for Massachusetts residents. "This is one, and a big one that we can set aside. . . . But there remain some challenges."