$27.6 billion budget includes $457 million in line-item vetoes to ensure balance, prevent elimination of critical services
BOSTON — Wednesday, June 30, 2010 – Delivering his fourth responsibly balanced budget, Governor Deval Patrick today signed a $27.6 billion Fiscal Year 2011 spending plan. The budget includes $457 million in cuts to manage a further gap created by Congress’ failure to pass legislation that would have resulted in additional aid for Massachusetts next year.
The budget signed by the Governor today, coupled with the supplemental budget, holds spending to just 0.2% over FY10 estimated spending.
“Today, I am signing a $27.6 billion budget for Fiscal Year 2011, which starts tomorrow. For the fourth consecutive year, our budget is balanced, responsible and on time — not something many other states can say.” said Governor Patrick, “For that achievement, I want to thank the Legislature and my team for effectively responding to challenging and quickly changing circumstances, and doing the hard work required to get this done thoughtfully and on time.”
“The delivery of a responsible and on-time budget reflects Governor Patrick’s leadership as a good fiscal steward as we continue to lead Massachusetts on the road to economic recovery,” said Lieutenant Governor Timothy Murray. “Despite some challenges we may face, our administration remains committed to fulfilling our values, providing quality services and protecting all residents of the Commonwealth.”
Since October 2008, Governor Patrick has worked with the Legislature to address a cumulative budget gap of more than $12.5 billion, including a nearly $3 billion gap in FY11. Due to the global economic recession, the Commonwealth lost $4 billion in annual state tax revenues at its lowest point. To maintain a balanced budget, the Governor has made more than $4.5 billion in cuts, implemented cost-saving reforms and efficiencies, eliminated 2,600 state jobs, and required state employees to contribute through higher health care contributions and wage cuts. These actions and continued proactive budget management have allowed the Commonwealth to maintain its strong, AA bond rating throughout the unprecedented downturn.
The Commonwealth is beginning to see signs of economic recovery. The state has added jobs in each of the last four months, tax revenues reflecting current economic performance continue to outperform expectations, and business confidence remains high. However, because state tax revenues tend to lag behind private sector growth, a full state fiscal recovery will take time. The Governor will continue to exercise the leadership necessary to maintain a balanced budget while protecting, to the greatest extent possible, the core functions of government residents rely on.
Responsible Budget Management
To close the current gap and maintain critical government functions, the budget includes cuts and savings, some additional revenues and modest use of reserves. The Governor issued $457.6 million in line-item vetoes, including $372 million of appropriations funded from the additional federal Medicaid matching funds (FMAP) Congress has not yet approved. Additionally, the Governor vetoed $85.5 million in General Fund line items in order to ensure a balanced budget.
The budget includes $100 million from the state’s Rainy Day fund and an additional $95 million in savings by suspending the statutory carryover of General Fund dollars into the next fiscal year. Even with the use of these reserve funds, the stabilization fund will have $556 million remaining at the end of FY11. The budget also includes $809 million in remaining American Recovery and Reinvestment Act funds.
Additionally, the Governor solved for certain revenues included in the Legislature’s budget he believes can not be relied upon at this time. The Legislature included $54 million in anticipated federal assistance for needy families that has not yet been approved by Congress. Further, the Legislature included an additional $17 million in Lottery funding above earlier projections. The Governor has vetoed funding in the FY11 budget to solve these exposures to ensure the budget is responsibly balanced for the July 1st start of the new fiscal year.
Also, debt service is fully funded, based on updated estimates since the Governor filed House 2 and the limited debt restructuring proposal, and it is within the debt affordability policy the administration has implemented.
And for the second year in a row since the economic downturn, the administration reduced the structural deficit, cutting it by 56% since FY09 when the recession began.
Protecting Critical Public Safety Services
Continuing his commitment to public safety, the budget preserves funding for the Department of Corrections and the Massachusetts State Police. The Governor’s proposal restores $13 million for the DOC to help address underfunding in FY11. Additionally, the Governor called on the Legislature to pass sentencing reform legislation currently pending before a conference committee, as well as energy management reform. Each proposal would generate more than $6 million in savings next year. Together, the additional funding and reforms are necessary to prevent prison closings and increased levels of overcrowding.
The Governor also proposes to restore approximately $6 million for the State Police. The additional funds will prevent the curtailment of special police units including gang and drug-related teams. The additional funds for the DOC and State Police are included in the supplemental budget the Governor filed with the FY11 budget today.
Maintaining our Commitment to Health Care
Without the extension of FMAP, the budget passed by the Legislature eliminates health care coverage for nearly 24,000 legal immigrants living and working in Massachusetts. The Governor has called on his Administration and the Connector to develop a plan using available resources and savings initiatives to continue coverage for those residents for at least the next six months. If Congress approves additional federal stimulus aid, those residents would be covered for the remainder of the fiscal year.
In addition to supporting the Bridge Program, the budget signed today maintains eligibility for the state’s subsidized health insurance programs, unlike in previous administrations, where eligibility and benefits were limited during challenging economic times.
Continuing the Reform Agenda
The budget fully funds the state’s pension liability, and includes pension reforms similar to those proposed by the Governor earlier this year like capping pension amounts. The budget also includes a number of the Governor’s reform proposals, including: capital gains reform to decrease the state’s reliance on volatile revenue sources; prohibiting the use of state funds to pay for lobbyists; tax credit transparency; and the elimination of Suffolk County holidays as state employee holidays.
The Impact of Congress’s Inaction on Extended FMAP
In developing their budgets for Fiscal Year 2011, the Governor and the state Legislature assumed the Commonwealth would receive up to $687 million in additional federal stimulus funds. This assumption was based on actions in Washington, DC over the last few months when both branches of Congress passed an extension of FMAP in separate bills and President Obama included the funds in his budget proposal. Based on this action at the federal level, 29 other states also included additional FMAP in their own spending plans.
After the state Legislature’s passage of its final budget last week, actions taken by the U.S. Senate made clear that the Commonwealth can no longer rely on receiving additional federal stimulus funds. If Congress does ultimately act, there is no guarantee the Commonwealth would receive the same level of funding the Governor and the Legislature had budgeted for.
While the Governor’s original budget reflected his commitment to Local Aid, Chapter 70 education funding, Higher Education and safety net programs, the budget signed today requir
es reductions in those and other areas that will have real and painful impacts for people and communities across the Commonwealth.“Without FMAP, families and businesses across the Commonwealth will not be able to rely on the level of services from the state that they once could,” said Administration and Finance Secretary Jay Gonzalez. “But, we must live within our means, and this budget responsibly reflects that reality.”
The full budget can be viewed at http://www.mass.gov/bb/gaa/fy2…
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that signed an unbalanced budget?
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p>It is so fake for a governor to take credit for a balanced budget. Unlike the federal budget, the Massachusetts law requires the budget be balanced. If Mickey Mouse was governor we would have a balanced budget. The proposed house budget and senate budget was balanced and the legislature provided him a balanced budget to sign.
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p>No kudos for the governor for that. Sorry David.
A number of mandatory items are underfunded, and will require supplemental budgets in FY11 just like they did this year. Underfunding to look “balanced” while knowing more money will have to be scrounged up and supplied later is, of course, a fiction – ergo, “a smoke and mirrors balanced budget” which, if the issue of the so-called “Tax Expenditure Budget” of money not collected, and exemptions were addressed – maybe there could be an honest budget rather than a “legal fiction” budget.
about the financial crisis we’re in then have the nerve to share a Republican ad as if voting Republican will solve the problem.
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p>PEOPLE LIKE YOU ARE THE PROBLEM! NOISY & CLUELESS.
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p>Those taxes on the middle/working class that are shown in that video are a direct result of tax cuts for the wealthy. That would be a Republican and DLC Democratic principle. A Republican will do nothing but perpetuate and probably enhance that very problem.
NT
We can debate this all day. I’m most comfortable with looking at income relatively – as I do below – and I guess basic income and asset tests are reasonable too. But that is largely semantics and irrelevant.
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p>The fact is that, overall, the Massachusetts tax system is regressive. Lower and middle income people pay a larger share of their income in taxes than do higher income people. This is primarily due to the sales tax, which is too high, and an income tax rate that is to low and too flat.
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p>Since income tax is the most progressive, the reduction in the income tax rate (from 5.95% to 5.3%) was the biggest hit to the state’s revenue base, costing well over $1 billion annually.
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p>Even without a graduated income tax, the “wealthy” (top 5% of income in the state) pay much more and a higher percentage of income in income taxes than everyone else. This income tax rate reduction alone is a huge “tax cut for the wealthy” and a major reason for the “need” to raise other taxes/fees.
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p>Also, the tax rate on dividend/interest income was reduced from 12% to the standard 5.3%, costing $720 million. And from 1994 – 2002 the state imposed large capital gains tax cuts, costing about $1 billion annually.
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p>That’s what we mean by “tax cuts for the wealthy.”
I’m not arguing that no taxes have been raised. I’m also not arguing that I’m thrilled about the increases in college fees, sales tax, or nursing home fees.
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p>But, let’s be clear:
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p>1. Taxes are not the same as fees. They’re fundamentally not the same. Much of that list are fees, and they’re related to the actual cost of providing the service. And on that note, had we run this video when Governor Willard Romney was in office, we’d have had to go widescreen to show all the fees he raised.
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p>2. It’s amazing to me that Republicans are all about local control, except when local control allows the local government to make decisions that Republicans don’t like — ranging from gun control to taxation. Half of the taxes listed on that video are local options taxes — each community is free to not raise ’em. I would think that the Republicans would prefer more local control, especially when granted by a Democratic governor. I’d think wrong when that control resulted in policy the Republican didn’t like; perhaps it’s not about philosophy after all.
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p>3. Did you look at those taxes? Given that the economic downturn has slashed receipts, are you really going to the mat for those crucial issues like the telephone pole tax and the sat TV tax? Really? You’re opposed to telephone companies paying their fair share of property tax? You’re worried that in this recession folks won’t be able to afford their constitutionally protected satellite television?
Fees are taxes and Romney raised fees in a big way. I know because my professional fees doubled. FYI, not a Romney fan on any level.
A fee is a specific charge for a specific service, designed to cover up to (but no more than) 100% of the cost of offering that specific service. If one doesn’t use that specific service, one does not pay that specific fee.
I think you are wrong but that’s old news. Enjoy your weekend.
to pay for government services is taxation.
We could put fees on all people who use government services. Why charge for public college, but not high school? We could charge everyone who calls the police or fire departments. Elections are expensive. Should we institute a poll tax? Oops, fee.
If we charged people when they called the fire dept instead of funding the depts through taxes, they would indeed be fees. We don’t. Why not? Having a functioning fire department is a public good for everyone all the time, s owe choose to fund it not as a function of the transaction one has with the FD, but through taxes.
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p>Public college tuition isn’t a tax. It’s a fee. Now, we also pay for some portion of the public college system with taxes, to be sure — since our MA income tax is revenue, and the state budget allocates some of that money to the public colleges. The tuition portion isn’t a tax though — it’s a fee.
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p>Raising revenues to pay for government services is not taxation. It could come in the form of taxation. Or fees. Or the sale of assets like land. Or the leasing/renting of assets like real estate. Of in the form of fines like moving or parking violations. Those are some of the ways we raise revenue — they’re not all “taxation”. Taxation has a particular meaning, and it doesn’t mean “money flow from private to public coffer.”
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p>Is this just semantics? Nope. A fee is a technical term. Not only does it refer to optional transactions, but the fee may not be higher than the cost of providing the service — distinctly different from taxation, where an individual’s tax payments may be substantially more or substantially less than the sum total cost of government services he receives. Deciding which government services should be funded by taxes and which by fees is an important discussion and one worth having — but you can’t even have it until you understand what the dang words mean.
Shouldn’t those programs be funded with tax revenues vs the hundreds in fees that folks like me pay every year? Why don’t urban parents pay these fees? Since urban areas don’t have athletic user fees yet have athletics how come tax revenue supports those urban programs and not the same programs in the suburbs?
defined “fees” when Gov Romney increased/created them. I like fees since it costs the people who actually use the service but when it is effectively a “required fee” then it is a tax.
$1,250 out of pocket for me last year to pay athletic user fees at Swampscott HS. A common practice in the suburbs. Those activities in urban areas are paid for by taxes. So I guess its a fee when I support HS athletics but when a kid plays baseball in Fall River its a tax that supports the activity. A deductible tax.
and sums up Republicans in a nutshell. Every tax break or benefit MUST benefit them directly or they will cry and complain until you can’t stand listening to them anymore.
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p>Do you itemize your taxes? If you own a home and still pay mortgage then you probably do. Let’s say for example that a person cannot afford a house, would they complain that why do you get to write off a portion of your taxes and interest on your house. Why can’t they write off a portion of their rent federally?
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p>What happens when you do pass that threshold to itemize? Well, you can start adding a whole sh**load of items to deduct. Well, why can you deduct a donation of cloths but they can’t? Why David? Do they piss and moan about it?
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p>Do you get any dividends? Well, why are they only taxed at 10%?
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p>Listen, you are able to write off thousands in addition to your exemption, others cannot. Why is out tax system that way?
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p>Whaaaaaa whaaaaaaa whaaaaaaa ….
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p>Someone didn’t have to pay an $100 fee to play baseball but it didn’t directly help you. That’s your argument?
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p>Different policies help different people. That’s the way it is. Sorry that you are not able to write off thousands more than you already do.
instead of academics OR intramural programs which would benefit the entire school vs. the small percent of students who make the team. WHat is the average HS budget for the football team (including buses, coaches, fields…)?
Should they be funded through tax revenue? Dunno. My point is simply that they are a fee, not a tax. The policy discussion can only come after the understanding of the vocabulary.
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p>The two words have different meanings, and no amount of simplistic run-of-the-mill TEA nonsense changes the fact that while they have something in common (revenue to the gov’t), they are not the same thing.
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p>I think the discussion of which gov’t services should have fees is a great one, worthy of it’s own diary. I just hope that when(!) you start it, you do so understanding the difference between a tax and a fee.
I just pointed out how the same program, HS athletics, is paid for by fees in one instance and taxes in another. Is it the suburban vs. urban distinction that bothers you so? Or is it your unwillingness to understand the contradictions of public policy that gets you so pissed? Regardles, you failed to listen to a reasoned point of view simply because you are too much of a know it all to understand that someone may disagree with you. You respond with:
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p>My point is valid and your dismissal of my point is more about your dissatisfaction with me than what I had to say. If you don’t like what I have to say, cool. If you disagree, cool. How about taking a large breath of fresh air and get your head out of your ass.
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p>Happy July 4th.
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Go back up to my post which began this sub-thread:
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p>by: stomv @ Thu Jul 01, 2010 at 07:03:35 AM EDT
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p>The entire claim was that tax and fee are different. That is the only position I have taken on this sub-thread, and it’s a position you initially claimed was wrong (that they were equal) but not seem to not want to acknowledge one way or the other, instead intent on making this about how much you pay for your kid to be on the baseball team. I’m happy to discuss the public policy arguments for using fees (suburb sports) or taxes (urban sports), as I wrote before your detour into the fees you pay… just not on this thread. I’m not dismissing your “point” (though I’m not at all sure what it is), I’m just not interested in hanging it in the margins off of a thread about vocabulary, s’all.
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p>I have no earthy idea why that gets you so worked up.
Meet the Press, 16 Dec 2007, just a few years back:
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Show me on my phone bill where Verizon gives me a discount because the state doesn’t charge them a personal property tax. New Hampshire actually taxes telephone poles, yet the phone company charges less up there.
Link
How surprising.
and don’t give me the old “waste, fraud and abuse” song ‘n’ dance.
You forgot patronage!
It’s important to my work here that I make you laugh. My work here is now complete. BTW, I gave you a six!
It’s finally official. The five year phase in to 17.5% of foundation budget promise has been broken in spite of Lori Ehrlich’s attempt to amend the budget. For the fifth year in a row Wellesley, Natick, Marblehead, and Lynnfield are treated differently than Swampscott, Saugus, Wakefield, and Andover. Thankfully we are taking care of Lynn, Lawrence, and the other needy urban districts. truely mean that!
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p>Of course, my solution which was to reduce all suburban cummunities that are either at or below 17.5% to 17.2% or whatever it took to equitably treat similar communities was a non starter given the “political realities” of taking money from communities. Imagine! And this after that genius or geniuses, David Linsky (D-Natick), proclaimed that the ch 70 program was a “disaster.”
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p>Enjoy your day in the sun. Promises broken all over the place. Amberpaw is correct BTW!
the financial bill is passed.
Relevance?
and most of the cuts linked will be funded. It is all but inevitable. It passed the house today and will pass the senate after the recess. I was mostly addressing the 4% reduction first statement.
Nt
then yes.
What is your theory in the financial bill’s connection to FMAP dollars?
they are not directly connected.
See how those tax cuts for the wealthy trickle down. Tax cuts for corporations trickle down this way too. Thanks Repubs and corporatist Dems. And thank you to the wealthy and the million/billion dollar corporations. While you hoard the money you recieve through persisting tax cuts, my son’s future in the arts has been sacrificed for your gain. About 55 kids in total in our small town will not have a school-funded band/music program. And since I am already paying out of pocket for his trumpet rental, I really can’t also afford to pay for private lessons, while I also pay my state income taxes, property taxes, excise taxes, the school bus fee, and a host of other taxes and fees that we, the working middle class have to pull out of our meager household budgets. I hear things will be worse next year.
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p>It’s time to get rid of any elected official, Republican or Democrat, who supports Corporate Welfare and the redistribution of wealth from the working/middle class to the wealthy. It’s not about party anymore. We need to change the entire landscape of our government and give it back to the people. I have a feeling I know what that means.
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p>I think my next project is to learn more about the DLC Democrats and whether a party filled with them is the party I originally signed up to support. I took a look at the Green Party Platform
and realized that it is more in line with who I am than the New Democrats are. It’s going to be a summer of change. Change I can believe in.
Budget Browser (in thousands)
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p>FY 07 33,825,826
FY 08 33,399,983
FY 09 33,156,864
FY 10 32,909,325
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p>FY 11 27,600,000*
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p>*Add back FMAP and it’s still 28,000,000
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p>Considerably less spending in an already downward trend. How does another candidate say that Patrick hasn’t tightened spending as people are during these difficult times?
When I go to the link provided it is very clear to see where the numbers for all FYs from FY10 and prior come from. It is also clear that the $27.6 billion for FY11 comes from the article above. However, none of the proposed budgets in the website you provided as a link for all the other numbers has anything even near $27.6 billion for FY11 regardless of which version of the budget you choose. All show mid $32 billion range which is a far cry from $27.6 or $28 billion.
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p>Any help in how to use the tool for all years so that numbers will be consistent from year to year?
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p>Thanks
that should provide the appropriate FY11 for comparisons.
I understand the budget is down year over yr FY10 to FY11 and this will help viewing the multi-year trend.