How would you cut the Massachusetts budget by $12.6 billion?

If Question 1 passes in November, Governor Deval Patrick and the Legislature will have to figure out how to cut out nearly 40% of the state's revenue

The binding referendum, when fully phased in, would cut taxes by $12.6 billion per year, which amounts to just under 40 percent of the state budget and nearly 60 percent of tax revenue (the budget is also funded by federal revenue and fees). The state budget is how we spend our tax dollars -- on education, health care, environmental protection, public safety, and other public services. How would you choose to balance the state budget if we lost $12.6 billion in state revenue?
Information contained in this game has been compiled by the Massachusetts Budget and Policy Center, which provides independent, nonpartisan research and analysis of state budget and tax policies.

Methodology

When a player chooses to cut a subcategory within a category, this game assumes that across-the-board cuts will be made for programs within that subcategory with proportional reduction in services.

While the game describes these across-the-board cuts as what “would” occur, these are only general descriptions of what is funded within each program and what the effects would be if services were reduced at the same rate as funding. The actual process state agencies would go through in making cuts would involve many more specific decisions at a finer level of detail and would likely lead to some areas being cut more than others.

In order to allow players to simulate the full effects of the elimination of the income tax, this game examines how this year’s budget would be affected by the $12.6 billion reduction in revenue. While Question 1 would not eliminate the income tax until January of 2010, we don’t yet know what that year’s budget and tax data will look like, so they can’t be used in this simulation.

When a player chooses to cut the budget for a subcategory, the total state savings from that choice may not be as large as the amount cut for that program. This is because many state programs receive revenue through state fees and fines as well as federal money that the state could lose if funding is cut.

To illustrate this point, the two spending charts to the right show state spending with and without federal revenues.

Many state programs get funding from other sources of revenue such as state fees and fines and federal funds. For example, the federal government pays about 50 cents of every dollar we spend on Medicaid. If the Medicaid budget is cut by a dollar, the state will lose 50 cents from the federal government, and will only save 50 cents in state tax dollars. In general, the game assumes that departments would attempt to retain as much federal revenue as possible when making cuts. For both welfare and Medicaid, more complex assumptions about federal revenue were made in arriving at the total state savings. Please click on MORE in each of these subcategories for more information.

In a few cases the game limits cuts that can be made within a subcategory. For instance, the game will limit cuts for departments that bring in more revenue than they spend. In other cases, federal laws or the state constitution prohibit the state from making certain budget cuts.

In several areas of the state budget, such as debt service and education funding, the state is legally restricted in terms of the cuts that can be made. This game also takes into account department revenues that could be lost with budget cuts. These lost revenues are also accounted for in the amount of tax dollars saved for each cut. In cases like the Registry of Motor Vehicles, where revenues far exceed spending, the simulation limits budget cuts. In cases where budget cuts are restricted, the game provides an explanation and the options are adjusted accordingly.

Players interested in seeing how much is spent on each of the 814 line items in the state budget -- and how each has changed over time -- can visit the Massachusetts Budget and Policy Center's interactive budget database.

Information contained in this game has been compiled by the Massachusetts Budget and Policy Center, which provides independent, nonpartisan research and analysis of state budget and tax policies.

Revenue sources

Pie chart of Massachusetts state revenue sources

State Spending (with Federal Revenues)


State Spending (without Federal Revenues)