Dear Baffled,
It really is pretty simple. All of those young brainiacs in the Fiscal affairs Division of the Administration and Finance (who appear younger every year to Hecate) have been burning the midnight oil for weeks doing a fact based analysis of each program and developing a so-called “maintenance” budget for every single state agency.
The Secretary of Administration and Finance adds up all the maintenance budgets and compares that sum to another list of estimated revenues from various taxes and fees submitted by another set of brainiacs and if the total of the maintenance budgets is bigger than the estimated revenues it’s called a structural deficit. Now there are a couple of straight forward ways to address a structural deficit that are similar to what every family does, …….cut expenses (maybe not your program, but somebody elses), draw down various “rainey day funds” (your kids college or your retirement savings accounts), or simply plan on some additional revenue streams (a 2nd or 3rd job).
The Governor will be submitting a budget on January 23 that is based on estimated expenses and revenues. First the House and then the Senate will debate the Governor’s proposals and come up with their own proposals to solve the structural deficit by either by cutting programs, going into savings or passing the Governor’s suggestions for revenue generating measures like gambling, closing corporate loopholes. And yes of course they could come up with their own revenue generating measures. At any rate in the end the Governor has a constitutional obligation to sign a balanced budget.
All of this back and forth can appear to get complex and complicated with at least a dozen ways to explain the same accounting method. You might find it helpful to check out the Mass Budget and Policy Center’s Budget Monitors for a just the facts analysis of the outcome of the process as it goes along.
How about proposing a cost shift in state employee health insurance benefits that maybe could reflect the private sector and resemble something sustainable? It could save many jobs and services. Call it a “Citizen Partnership Act” or “A Realty Test” your choice.
The other issue is “smoke and mirrors” budgeting.
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p>That is, many line items were underfunded in FY 07 [Budgetese for Fiscal Year 2007]. These underfunded items required funding in “supplemental budgets” for the Commonwealth to pay its bills.
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p>If level funding is claimed to be “what was in the budget last year” rather than the actual cost of the line item [which would be what was in the budget plus all supplemental budgets for that same line item] then that so-called “level funding” is a sham, and really a game of smoke and mirrors.
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p>”Real” level funding would be the initial line item funding for each line item with the supplemental funding required for that line item.
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p>Thus, say, for intedepdent contractors such as court-appointed attorneys [line item 0321-1510] where the initial line item was $119 million, but this was underfunded, and the independent contractors went UNPAID for work already done for five months, until $24 million in supplemental funding was passed in a supplemental budget REAL level funding would be $119 + $24 million – NOT $119 million.