Today’s Globe has some good news and some bad news on the local economy. The good news is that in February, for the first time in nearly two years, the MA economy added jobs, and the unemployment rate didn’t rise.
The state’s labor market showed signs of stabilizing last month as Massachusetts employers added jobs for the first time in nearly two years and the state unemployment rate held steady, breaking a 22-month streak of increases. Led by gains in education and health services, Massachusetts firms increased payrolls by 1,500 jobs in February, after revised data showed that overall employment remained flat in January, the state Executive Office of Labor and Workforce Development reported yesterday. It was the first monthly gain since July 2008.
The state unemployment rate, meanwhile, was unchanged from January, holding at the nearly 34-year high of 9.5 percent. It’s the first time since March 2008 that the rate hasn’t increased.
Here, for the visually inclined, is a helpful graph, also from the Globe. Obviously, last month’s very modest job growth doesn’t mean we’re out of the woods. But, better to be heading in that direction than in the other one.
The bad news, of course, is that new projections of further revenue shortfalls may necessitate additional cuts before the end of the fiscal year.
Massachusetts is potentially facing a new budget gap of up to $295 million this year, a grim forecast that state officials said could spell yet another round of painful cuts before the fiscal year ends in June.
The administration’s take is this:
Patrick administration officials blamed the gap on rising demand for the joint state and federal health care program for low-income residents known as MassHealth [which pre-dates the health reform law], increasing demand for homeless shelters, and on below-projected revenue from state fees and federal aid.
Sen. Steve Panagiotakos (not exactly a flaming liberal) agreed, rejecting Tim Cahill’s attempt to blame this on health care reform:
Steven C. Panagiotakos, a Lowell Democrat and Senate chairman of the Ways and Means Committee, agreed with [Sec. of A&F Jay] Gonzalez that the cost of the state’s universal health care law is unrelated to the latest budget crisis. He said the latest shortfall is being driven by between $150 million and $200 million in rising costs for MassHealth, a program that predates the universal health care law.
The huge MassHealth program, 60 percent of which is paid for by the federal government, costs the state about $10 billion out of its $27 billion annual budget. “For us to really control our budget, we have to be able to stabilize MassHealth expenditures,” Panagiotakos said. “It’s a huge chunk of our state revenues.”
He said it was too soon to know if cuts will be needed this year and said the extent of the cuts will depend, in part, on how deeply lawmakers decide to dip into the state’s $675 million reserve fund.
“This new one is certainly troubling,” he said, “but we’ve managed through them before. We’re getting used to it.”
Charlie Baker, for his part, predictably jumped all over the news as evidence of “incompetence.” More on that in a separate post.
