Governor announces budget cuts; staff, services to be affected

October 2, 2008 01:40 PM Email| Comments (0)| Text size – +

By Matt Viser and Martin Finucane, Globe Staff

Citing lagging revenues and warning that the “road ahead will be rough,” Governor Deval Patrick this morning outlined a slate of spending cuts and long-term reforms, including dismantling the Massachusetts Turnpike Authority.

With state revenues falling $188 million behind expectations in September, Patrick said his administration would identify "hundreds of millions of dollars" in cuts before Oct. 15. He said the cuts would have an impact on both state services and the state workforce.

“I know that what I have outlined will not be easy,” he told reporters and television cameras in a room next to his corner office. “Behind every one of the cuts we make or reforms we propose is a family, a small business, a nonprofit, or a worthy idea. However, as disruptive as these cuts may be, the circumstances demand action.”

Patrick acknowledged that some of his other long-term initiatives may have to be curtailed, but he also did not rule out reviving his casino gambling legislation as a new source of revenue.

“We’ll have to see,” Patrick said, when asked whether he’ll refile the proposal to license three resort casinos. “It’s a new legislative session coming up in January, and we’re developing that agenda now.”

The Department of Revenue reported today that revenue for the first quarter had come in $223 million below expectations without counting nonrecurring payments. Counting those one-time payments, revenues were lagging $143 million behind what was expected. September was the worst of the three months, with revenues dropping $188 million.

Patrick said he believed the numbers signaled "worse news ahead" during a time when the nation is in an economic downturn, credit is tight, and Wall Street is volatile.

Patrick said he asked State Treasurer Timothy P. Cahill to help develop legislation to overhaul the pension systems of the state and the Massachusetts Bay Transportation Authority. The governor would not provide any cost-saving estimates. He is also putting Lieutenant Governor Timothy Murray in charge of an administration-wide effort to merge offices and consolidate departments.

The governor, following meetings yesterday with all of the state’s top officials, also said he had asked legislative leaders, the chief justice of the state's courts, and the other constitutional officers to trim their budgets.

Patrick, who has been rebuffed by House and Senate lawmakers in his efforts to get expanded budget-cutting authority, said this morning that he may not need the additional powers if there are enough voluntary cuts.

In a show of solidarity, Patrick said he would cut his own department by 7 percent, which amounts to about $600,000.

But in an effort to one-up the governor in spending cuts, House Speaker Salvatore F. DiMasi and Senate President Therese Murray put out a joint statement this afternoon saying they would go beyond the governor’s request for 7 percent cuts. They will give him 10 percent, which amounts to $9.1 million.

“The Legislature agrees with the Governor on the need to make cuts now across state agencies,” read the statement. “…We will cooperate in that effort and in our continuing efforts to find greater savings and efficiencies in state government.”

Meanwhile, Republicans today have started criticizing the governor – as well as the Democrats in the state Legislature -- for not trimming the budget passed in July in anticipation of financial problems ahead.

"Governor Patrick signed a budget increasing spending by $1.4 billion, authorized $16 billion in new borrowing, and has hiked taxes by hundreds of millions of dollars this year,” Barney Keller, spokesman for the state Republican Party, said in a statement.

“The immediate pickle we’re in is because we didn’t tighten our belts earlier in the year with the budget,” Senate Minority Leader Richard Tisei said in an interview.

As the Globe reported this morning, the proposal to abolish the Turnpike Authority is now only a broad concept. The governor announced that he is asking the secretary of transportation, Bernard Cohen, to draft legislation with details as soon as January when the Legislature reconvenes. Cohen was notably absent from the press conference this morning.

There are numerous questions left unanswered, including how much money would be saved by shutting down the agency. While financial benefits might be realized in the future if the Legislature passes the overhaul next year, it does not appear it would ease what officials have said is an urgent need for large toll increases on the turnpike and Big Dig tunnels now.

Cohen has said the administration does not believe toll hikes are necessary, but Patrick and his aides have not outlined how they think increases can be avoided without defaulting on the authority's debt. When asked about raising the gas tax to help alleviate the debt, Patrick said, “That’s not my first choice” and “it’s a crummy time” for such a proposal.

Patrick also this morning did not rule out abolishing tolls on the turnpike, saying “the jury’s still out and we’ll have to see” whether the tolls will stay up as part of his restructuring plan. Such a move could be politically popular, but could also further strap state finances. The state is expected to collect $285 million in tolls this year.

Tolls are the source for paying off bonds that were used to help build the Big Dig. When former Governor Mitt Romney sought to abolish the authority, he was thwarted by a host of legal, financial, and political barriers.

It is unclear how Patrick plans to surmount those hurdles. But he appears to have several advantages over Romney, including a much better working relationship with a Democratic Legislature; a fiscal crisis that lends a sense of urgency to passing a plan that promises long-term cost savings; and a chairman of the Turnpike Authority who is a Patrick appointee. Romney faced resistance from the former chairman, Matthew J. Amorello.