Budget Update 3/9/10

The FY11 budget process began in late January when Governor Patrick released his budget proposal, known as House 2. Revenues are expected to grow only modestly, leaving a $2.75 billion gap. To address this deficit, The Governor proposes level funding for local aid, including Chapter 70 education funding, and recommends $220 million in spending cuts. He relies on new revenues generated by lifting the sales tax exemption on candy, soda, cigars and smokeless tobacco. He proposes capping the film and life sciences tax credits, and relies on a number of other one-time revenues. House and Senate leaders have indicated that there will be no further tax hikes, and disagree with the Governor on the use and reliability of some one-time revenues. As a result, the House and Senate Ways and Means budgets (to be released in April and May, respectively) will likely rely on less revenue than the Governor’s budget and local aid may be subject to cuts.

Despite this news, I will continue to voice my support for level local aid funding and am working on legislation that would provide relief to our cities and towns. I know many of you read the Boston Globe’s recent series on municipal health insurance costs, and almost everyone is concerned about municipal finances. I have been a vocal advocate for a plan that would allow municipalities to reign in health care costs while providing protections from extraordinary and excessive deductibles and out of pocket expenses. I also support the Governor’s plan to allow local retirement systems to avoid significant increases in their pension appropriations by extending the funding schedule in a fiscally responsible manner. I guarantee that I will keep working on these relief issues and update you as there is more information to share.

Many of you have contacted me to voice your opposition to any further cuts in health and human service programs. I share your concerns, and in the Senate I will do what I can to ensure that these vital services do not bear the full brunt of any further cuts. My staff has also taken many phone calls from constituents who have found work in the film industry due to the film tax credit. Taken together, these stories certainly indicate that the credit has benefited job growth in the Commonwealth. I am in the process of learning more about the film industry in Massachusetts and the effects it has had on our economy.

FY10 Budget Documents (Select)