Fiscal Cliff Impact Would Be Dire On Massachusetts Budget
The Patrick Administration’s top budget official warns failure to avert the “fiscal cliff” in Washington will seriously harm the Massachusetts state budget. WAMC’s Pioneer Valley Bureau Chief Paul Tuthill reports
If the country goes over the so-called “ fiscal cliff” Massachusetts could lose $300 million in tax revenue this fiscal year and $1 billion dollars next year. It would also cost the state $200 million in federal funding that helps pay for a variety of programs according to the Massachusetts Secretary of Administration and Finance Jay Gonzalez.
Already, concern about the “ fiscal cliff” is blamed for a slowdown in the economy that has cut into state tax revenue growth. Governor Patrick ordered a round of mid-fiscal year spending cuts totaling $225 million dollars and is taking other steps to close a projected $540 million dollar budget gap.
Speaking,Wednesday, to a luncheon of the Affiliated Chambers of Commerce of Greater Springfield, Gonzalez defended the administration’s call for a one percent across the board cut in local aid to help balance the state’s budget.
Gonzalez said the administration has helped cities and towns offset some of the deep cuts in local aid since the start of the recession by reforming the municipal employee healthcare system and increasing local option taxes on meals and lodging.
For Easthampton Mayor Michael Tautznik the 1% cut in local aid, which has to be authorized by the state legislature, is not as much a concern as the spending cuts the Governor directed at special education and school transportation programs.
In his speech Wednesday in Springfield to the business and government leaders, A and F Secretary Gonzalez said Governor Patrick would be very focused on reforms in the fiscal 2014 budget he’ll file with the legislature early next year. Gonzalez did not say if Patrick will propose any broad based tax increases.
The administration, in early January, has to submit to the legislature a transportation financing plan. Its widely believed Patrick will ask for higher taxes or tolls to reduce projected deficits in the mass transit and highway systems and pay for a back log of repairs estimated in the billions of dollars.
Gonzalez heard calls from business people to reform public employee pensions and the state’s unemployment insurance system.