Gov. Patrick's plan to close the budget gap

October 15, 2008 05:30 PM Email| Comments (0)| Text size – +

Here's how Governor Deval Patrick plans to close the $1.4 billion budget gap:

SPENDING CUTS

$755 million – hundreds of immediate cuts using budget-cutting authority the governor has under Section 9C
$146 million – expected costs, such as overtime requests, that were not budgeted and will now not be approved
$52 million – voluntary cuts from areas beyond the governor’s budget-cutting control, including the state Legislature, attorney general’s office, and judicial branch
$100 million* – extending by two years the amount of time the state will take to pay off its pension account. Instead of paying it off by 2023, the schedule would be extended to 2025.

NEW REVENUES

$100 million – one-time tax and legal settlements through the Department of Revenue
$55 million – new federal money that was unanticipated
$13 million* – tightening the tax code for telecommunications companies, requiring them to pay taxes on their telephone poles
$40 million – quasi-independent agencies, such as Mass Housing and Mass Development, will pick up the tab for costs currently funded by state tax dollars
$28 million* -- tiering state health care plans to income levels, which will raise the premiums for the highest-earning state employees

USE OF RESERVES

$200 million* – the state will spend $600 million total from reserves this year instead of the original $400 million. It will leave $1.6 billion in the fund.

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* These items will require approval from the state Legislature, and these figures assume they would act by early January.