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Patrick warns of 2,000 job cuts

He asks unions for concessions

By Andrea Estes
Globe Staff / October 16, 2009

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As many as 2,000 state jobs could be eliminated, Governor Deval Patrick warned yesterday, unless unions agree to concessions necessary to help close an estimated $600 million budget shortfall that could trigger spending cuts throughout state government.

Executive branch managers will be asked to take an unpaid furlough of up to nine days, Patrick said, and the administration will look at other potential money-savers, including consolidating state agencies, farming out some public programs to private agencies, selling surplus state property, and making other service and program cuts.

“Painful as it is, we have to adjust,’’ said Patrick.

Besides layoffs and furloughs, employees could feel the brunt of the budget crisis in other ways. The head of the state’s Group Insurance Commission, which oversees employee health benefits, said yesterday the agency will consider raising copayments for doctor’s visits, deductibles, or premiums.

“A person would have to be naive not to realize we all have to take a look at our budgets and see what we might have to do,’’ said Dolores Mitchell, the commission’s executive director, who sent a letter to the commissioners this week detailing possible changes. “When the Commonwealth is facing this kind of budget crunch, everything is on the table.’’

It is the fourth time within a year that Patrick has been forced to make emergency cuts because tax revenues came in lower than expected. According to the governor, tax revenues for the first quarter of the fiscal year came in $212 million lower than expected.

The disappointing revenues, despite recent tax increases and a generally improving economy, could hurt Patrick as he heads into next year’s reelection campaign. State officials acknowledged that the budget woes could grow when it comes to formulating the budget for the next fiscal year, because there will be no federal stimulus money to help fill any gaps.

“This is a lot more than line items on a spreadsheet,’’ said Patrick, who made the announcement on the same day that the state’s unemployment rate rose to 9.3 percent, the highest level since the 1970s. “There are no quick fixes, no easy choices, no low hanging fruit.’’

Nothing is off the table, he said, including local aid to cities and towns, which is already down more than $700 million from the level originally approved in the fiscal 2009 budget, which began in July 2008. Patrick said yesterday that he would ask the Legislature to grant him authority to make cuts beyond the executive branch agencies he oversees, which could include possible local aid reductions.

Yesterday wasn’t the first time the administration has appealed to unions for voluntary givebacks. Last spring, just weeks after the administration granted pay raises to tens of thousands of union workers, officials said they would ask for furloughs and other voluntary givebacks to lessen the impact as the recession worsened. So far, officials acknowledged yesterday, the unions have given back nothing.

“In light of the new situation, the governor obviously called again for the unions for make contributions and sacrifices to avoid what is looking like will otherwise be significant layoffs,’’ said state Administration and Finance Secretary Jay Gonzalez.

Mike Grunko of State Employees International Union Local 509, which represents 7,500 social workers, rehabilitation counselors, and other social service workers, said the union is willing to listen to the governor’s plan but has already “taken a very big hit.’’

“We have experienced significant layoffs, which has resulted in significant increases in workloads at agencies that serve people who have fallen to the bottom. Our shoulders will not be broad enough to carry the deficit and leave the state in a recognizable condition.

“We’re a democratic organization,’’ he said. “If we agree to cuts, our members will be given a chance to vote. I don’t think they can take much more, frankly.’’

Massachusetts is not the only state facing a severe budget shortfall. Yesterday, New York Governor David A. Paterson announced plans to cut $3 billion from this year’s budget. The plan, aimed at chipping away at the state’s projected $50 billion deficit over the next 3 1/2 years, included massive cuts to education and health care, as well as a tax amnesty.

Massachusetts lawmakers said they were not surprised by yesterday’s dire revenue forecast or the governor’s plan to seek immediate cuts. But they said they won’t rush to give him emergency powers to cut spending across state government.

“We’re obviously in a fiscal morass, and we’re all going to have to come together to figure out how to get through this,’’ said Senate President Therese Murray. “He’s asking for further power, but we haven’t seen a plan.’’

She said many state agencies duplicate the work of others and should be eliminated or merged. “We’ve been working to try to realize what the 23 economic development agencies, quasis and authorities, do, for example,’’ she said. “Definitely there can be consolidating.’’

House Ways and Means Chairman Charles Murphy said lawmakers are afraid the governor will look to reduce local aid.

“That would be a tough cut, given the circumstances,’’ he said. “Nobody wants to go down that road. But if we have to, so be it. Most people get the fact that taxes aren’t where they should be and cuts will have to be made. It’s just more bad choices.’’

Geoffrey Beckwith, executive director of the Massachusetts Municipal Association, said more local aid cuts would be disastrous to cities and towns. “People need to understand that if local aid is cut, communities will have to eliminate teachers, police officers, and firefighters and cut municipal services even more.’’

Senate Minority Leader Richard Tisei said the administration has taken way too long to confront the state’s worsening budget crisis.

“Basic things like a hiring freeze or a wage freeze, or repeal of the antiprivatizing laws - those would save taxpayers hundreds of millions of dollars,’’ Tisei said. “We’re always behind the eight ball on the budget crisis and can’t get ahead of it. It’s clear from listening to the governor that not only do we have a revenue problem, but we have a management problem in the state.’’

Liz Kowalczyk of the Globe staff contributed to this report.