BOSTON–Wednesday, January 28, 2009 – Amid a deep national recession and unprecedented fiscal crisis, Governor Deval Patrick today submitted his Fiscal Year 2010 budget proposal and an emergency plan for closing a $1.1 billion budget gap in the current fiscal year. Both are key components of the Patrick-Murray Administration’s Emergency Recovery Plan that will help stabilize and position the Commonwealth for long-term economic success. The Governor will also file legislation to help municipalities increase revenue to offset local aid cuts.
«The national recession is inflicting serious pain across Massachusetts, from household budgets to the state’s balance sheets, and like many residents throughout the Commonwealth, we have to make do with less,» said Governor Patrick. «At the same time, we also have opportunities. The Economic Recovery Plan leverages reforms and responsible budgeting that could help alleviate the mounting pressure on our communities now and in the future.»
The $27.97 billion FY10 budget proposal is a balanced and responsible plan, preserving core functions of government, while reflecting Governor Patrick’s commitment to protecting safety-net services, assisting cities and towns and supporting education and public safety.
The budget includes difficult, yet necessary cuts to address a significant loss of revenue and unavoidable increases in health care costs and debt service obligations. Governor Patrick has not spared his own priorities, applying cuts to priorities such as the Commonwealth Corps and slowing investments in education reform and life sciences.
The budget is part of Governor Patrick’s Emergency Recovery Plan, which will help manage the immediate impacts of the current economic crisis and lay a foundation for future economic growth. The emergency plan also proposes solutions to close the FY09 budget gap and seizes the opportunity to implement a number of state and local government reforms.
Both the FY10 budget and FY09 emergency plans will account for anticipated federal stimulus aid. Governor Patrick has been a close partner with President Obama’s team and the state’s congressional delegation to help secure this funding.
Closing BUDGET Gap FOR Fy 2009
The unprecedented nationwide recession has complicated an already difficult budget process, with a second $1 billion budget gap to fill in FY 2009. Over the last five months, the Administration has had to solve a budget deficit of approximately $6 billion from fiscal year 2009 and fiscal year 2010.
In October, the Governor closed a $1.4 billion budget gap by issuing $1.053 billion in 9C cuts and spending controls, identifying $168 million in additional revenues and withdrawing $200 million from the state’s Rainy Day Fund. Those solutions came on top of preparations made earlier in the year as the economy began to soften.
The Administration has now identified an additional $1.1 billion gap as the national economy continues to decline. To close this gap, the Governor is making an additional $191 million in 9C cuts; filing an Emergency Recovery Bill that includes $68 million in additional revenues and $327 million in Rainy Day Funds, and using $533 million in anticipated enhanced federal Medicaid funds.
Last week, the Governor announced he will make $128 million in cuts to Local Aid in FY09. In October, the Governor avoided reductions to Local Aid during the first round of cuts by making deeper cuts in other parts of the budget.
The Governor has protected the record high level of Chapter 70 education aid for FY09, and maintains that funding in FY10. The Governor has cut another $63 million from the Exec