Saturday, 2:15 PM
Mass. may face another $1 billion in budget cuts
By Matt Viser, Globe Staff
Governor Deval Patrick said this afternoon that he was preparing for up to $1 billion in additional mid-year budget cuts, raising the specter of possible reductions in local aid to municipalities and additional layoffs of state employees.
"There's a lot of pain, and it's going to have to be spread around," Patrick told reporters during a 30-minute briefing in his State House office. "Nobody's enjoying this. This is incredibly difficult."
The cuts will come on top of his plan just two months ago -- when he announced a solution for a $1.4 billion shortfall through budget cuts, reserve money, and layoffs – and are the result of dramatic reductions in capital gains and retail sales tax collections.
State revenue officials forecast at mid-month that tax revenues had plunged even farther. And Lieutenant Governor Timothy P. Murray signaled that the Patrick administration would not rule out local aid cuts.
Patrick's earlier plan did not include cuts to local aid, but the governor is now saying he may have to cut what is a large funding source in many municipal budgets.
"Everything's on the table," Patrick said, "including local aid."
Patrick said he plans to ask the Legislature to grant him expanded budget-cutting authority when lawmakers return to formal session next week. That authority would allow the governor to unilaterally reduce the amount of money the state gives to municipalities and to school districts.
Patrick said he was looking at several different scenarios on how to make up to $1 billion in cuts, but he deflected several questions about what those scenarios were.
"I don't want to set off a panic," he said.
Aside from making cuts, other options could include raising the gasoline tax or tapping the $1.6 billion in the states reserve account. State officials are also hoping that a stimulus package from the incoming Obama administration could help, although it is unclear what conditions the federal government would put on the spending and whether state officials could use the money to make up current budget shortfalls.
Senate President Therese Murray said in a statement that the state is facing a "serious challenge" during the current recession. She said if the dire revenue predictions prove to be true, "everything, including local aid, will have to be on the table."
"It is my goal to make sure that services Massachusetts residents rely on the most are the least affected as we meet our constitutional obligation to balance the budget," she said.
House Speaker Salvatore F. DiMasi commended the governor for his earlier actions to close the budget gap. If more cuts are needed, he said, "nothing can be off the table." He encouraged cities and towns to prepare for a local aid cut of 5 percent to 10 percent for the next fiscal year and to pursue cost savings.
Matt Viser can be reached at firstname.lastname@example.org