Western Mass. Lawmakers Weigh In On State Budget Gap
Governor Charlie Baker says an agency-by-agency review has found a mid-fiscal year budget gap totaling $765 million, but is yet to detail exactly how he will address it. Since taking over for Democrat Deval Patrick in January, Baker, a Republican, has said the problem is state spending, not revenue, meaning cuts are how he plans to close the gap. The administration says the major contributor is a projected $230 million shortfall in Medicaid tied to the failure of the state's health connector website last year. State Senator Ben Downing, a Pittsfield Democrat, says he spoke with the state’s new Secretary of Health and Human Services Marylou Sudders about potential cuts to the Health Connector.
“By all accounts they believe that most of the costs have been accounted for at this point and that these are not costs that are inherent in the new system, but rather that they are costs in small part of the transition and in large part the mismanagement of the transition,” Downing said. “So I think taken together we shouldn’t expect to see overruns like this again in the future.”
Downing says cost overruns such as legal defense and snow and ice costs were expected and should’ve been budgeted for in this mid-year deficit. Democratic State Representative Smitty Pignatelli of Lenox says everything in the state’s roughly $36 billion budget is on the table.
“We’ve had issues with [Department of] Children and Families the last couple of years, we need to try to protect that and enhance those,” Pignatelli said. “He [Gov. Baker] wants to protect local aid. We have to do things to protect the most vulnerable citizens of Massachusetts. When we start protecting certain categories, it makes that number which is large to begin with even larger for what’s remaining.”
Pignatelli says dipping into the state’s roughly $1.1 billion rainy day fund could lessen the blow of immediate cuts.
“If we can identify a one-time unexpected bump in our revenue stream, which has caused this problem, to dip into it for maybe a couple hundred million dollars to lessen that blow on whatever cuts do have to be made,” Pignatelli said. “I think that would be a smart move politically. I think we should strategize with our bond holders, that give us the highest bond rating in the history of Massachusetts currently, that if we dipped into that as a onetime thing would that hurt our bond rating because we have to be very careful of that.”
Downing is not in favor of using the current rainy day fund since Massachusetts used $140 million from it to craft the 2015 fiscal budget. He says revenues are growing, just not keeping pace with spending.
“Governor Baker has highlighted maybe a onetime exemption for use of capital gains funds,” Downing said. “Under current law any amount above and beyond $1 billion in a single year that’s collected in new capital gains receipts has to go to the rainy day fund. Simply removing that for one year would provide us with at least $200 million to solve part of this.”
Pignatelli questions the legality of cuts to regional school transportation former Governor Patrick made before leaving office and Downing hopes those funds can be restored. Although Baker and legislative leaders have ruled out cuts to local aid, Pignatelli says whatever is cut needs to be outlined sooner rather than later so municipalities can plan.
“There are certain things that the governor can do within his executive powers,” Pignatelli said. “Previous governors, Governor Romney, a Republican, Governor Patrick, a Democrat, in my tenure have asked for expanded 9-C powers to cut things outside of their administration. And in the past we’ve granted that permission. So that may be part of the solution as well.”
After November’s election, Patrick’s administration said the state was facing was a $329 million budget gap. A month later, the Massachusetts Taxpayers Foundation estimated the budget gap was $750 million, a number strongly refuted by the Patrick administration. On top of agency reviews, Governor Baker instituted a state government hiring freeze earlier this month.