FY2010 BUDGET UPDATE
June 29: Governor Deval Patrick signed a $27.046 billion budget for fiscal year 2010, which included $147 million in line item vetoes of what some legislators call core programs while adding new taxes on meals, hotel rooms, alcohol, and satellite dishes.
“This is without question an austere, in some respects painful, budget," the governor told reporters at an afternoon press conference. "It contains many unavoidable spending cuts and they, many of them, will have a painful impact.”
State workers will have to pay an additional 5 percent towards their health insurance premiums while the sales tax will increase from 5 percent to 6.25 percent. The latter effort will help avoid a turnpike toll increase that was due July 1. It is estimated the sales tax increase will generate $900 million in the 12 months of FY2010. Of that, $275 million will go to transportation projects.
Veto overrides will no doubt be taken up by the Legislature the week after the 4th of July holiday.
Patrick told reporters a sales tax holiday, which has in recent years become a summer tradition for retailers, was unlikely given the state’s economy.
Some of the Governor’s vetoes included:
-- $25 million for MassHealth senior care;
-- $23.37 million for MassHealth "fee for service";
-- $20.9 million for "consolidated" long-term debt service;
-- $9 million for the commissioner of probation;
-- $7.65 million for the trial courts;
-- $7 million for snow and ice control;
-- $4 million for the Commonwealth Zoological Corporation;
-- $3.87 million for MassHealth managed care;
-- $3.5 million for the "foundation reserve";
-- $2.8 million in housing authority subsidies;
-- $2.5 million for services for children and families;
-- $2.5 million for the Department of Fire Services;
-- $2.3 million for the Children's Behavioral Health Initiative;
-- $2.25 million for regional library aid;
-- $1.94 for family residential assistance;
-- $1.5 million for local tourist councils;
-- $1.5 million for UMass;
-- $1.16 million for health promotion and disease prevention;
-- $1.1 million for the Women's, Infants and Children program;
-- $1 million for special education residential;
-- $1 million for kindergarten expansion grants;
-- $1 million for emergency food assistance;
-- $1 million for a substance abuse family intervention and care pilot;
-- $996,269 for the so-called accelerated bridge program;
-- $449,000 for tuition and fee waivers for National Guard members;
-- $435,854 for regional transit authorities;
-- $400,000 for a loan forgiveness program for primary care doctors;
-- $363,636 for the wage enforcement program;
-- $250,000 for State House park rangers.
------------------------------------------------------------------
Like many other states in the country, the Commonwealth of Massachusetts is in the midst of a dire financial situation. To address this reality, I am proud to say that on Friday, June 19, the Senate and House passed a balanced budget of $27.4 billion for fiscal year 2010, which is now on the Governor’s desk waiting to be signed.
Locally and nationally, 2009 has seen unprecedented decreases in collected revenues. State-funded core services have already been hit, with layoffs in mental health providers, cancelled classes for public safety personnel, and teacher layoffs.
To offset these ominous financials for 2009-2010, the conference budget contains a sales tax increase from 5 percent to 6.25 percent that will generate an anticipated $759 million in new revenues, $275 million of which will be guaranteed for transportation spending. That effort will prevent increases in MBTA fares and a toll hike that was to take effect July 1.
Sales tax revenues will help restore important services that were already cut, including $10 million for Prescription Advantage, $6.5 million for youth violence prevention grants, and $4 million for universal pre-K.
In addition, the budget includes $1.5 billion in one-time federal stimulus dollars, about $2.4 billion in spending cuts and cost control efforts, and $199 million from the rainy day fund. This fund’s balance is now down to $600 million – compared to $2 billion just a year ago.
“There’s going to be a lot of pain, there’s going to be a lot of people who aren’t terribly happy with the result but, again, that’s what we’re up against,” said my colleague, State Rep. Charles Murphy, Chair of the House Ways and Means Committee. Rep. Murphy described the budget as honest and realistic and called the 15 percent cut to local aid a “victory” because the cuts weren’t deeper.
The Senate had previously approved additional tax hikes in new areas, such as levies on lodging, meals, satellite TV, telecommunications, and alcohol. The alcohol tax itself is expected to generate $80 million, which will restore safety-net services such as substance abuse programs, community health centers, domestic violence prevention, elder care and early intervention programming.
Lawmakers said the budget consolidated 160 line items and abolished 800 earmarks, for a $170 million savings. It also raises the health benefit contributions for all state employees by 5 percent, which will save some $50 million for the Commonwealth.
“The House and Senate have passed a responsible budget that balances the needs of our Commonwealth with the stark fiscal realities plaguing not only state coffers, but the global economy,” House Speaker Robert DeLeo said. “In the face of an unprecedented deficit, we have worked to shield our cities and towns and most needy residents from the pain of the current crisis.”
These are devastating financial times for all of us in both the private and public sector. As chair of the Public Service Committee, I was proud to have just passed a pension reform bill that will eliminate the most egregious abuses in the public retirement system. As a member of the Pension Reform Commission, we are continuing to meet to address more long-term cost savings for the Commonwealth.
The bipartisan Pension Reform Commission’s report is due out in September, 2009. For more information on the 2010 budget, please feel free to contact me at my statehouse office 617.722.2240, my district office 508.799.3948 or via email Rep.RobertSpellane@hou.state.ma.us As always, I look forward to hearing from you.
While things look bleak, I take heart that we will weather this financial storm together.
Please visit this page for more detailed information about the budget. |
