With the national economy still struggling to recover from the Great Recession, for the sixth year in a row Massachusetts starts the budget process facing a substantial gap between ongoing revenue and the cost of maintaining current services and commitments. As the FY 2015 Budget process begins, that gap now stands at approximately $514 million. Read More
While the weakness of the national economy is the major short term cause of the state’s fiscal difficulties, two longer term causes remain at the root of our state’s fiscal difficulties: a series of expensive tax cuts adopted between 1998 and 2002 and many years over which health care costs grew faster than the overall economy. While health care cost growth has moderated in recent years, keeping that growth in line with growth in the overall economy will remain a significant challenge for the Commonwealth in the years ahead. The tax cuts of 1998-2002 continue to cost the state over $3 billion a yearand are at the root of the long term budget cuts the state has enacted in local aid, early education and higher education, public health, and throughout much of the rest of state government.