EagleTribune.com, North Andover, MA

December 4, 2012

Patrick cuts spending $225M, to seek power to cut local aid

By Michael Norton and Matt Murphy, State House News Service
The Eagle-Tribune

---- — BOSTON - As part of a plan to address an estimated $540 million mid-year budget gap, Gov. Deval Patrick yesterday slashed spending by $225 million and asked the Legislature to allow him to unilaterally reduce unrestricted local aid to cities and towns by 1 percent.

Unrestricted local aid pays for local services, such as public safety budgets, and is delivered separately from state aid to fund local education spending, which is not targeted for cuts under Patrick’s plan.

“I don’t think this is Draconian. Obviously every city and town worries about an impact on their local aid, but as I say, this is relatively modest. We are spreading the pain as broadly as possible and sensible and we have a solution for closing that gap in unrestricted local aid if the Lottery continues to help,” Patrick said.

The spending cuts ordered by the governor will hit nursing homes, special education funding, school transportation for the homeless and reimbursement rates for hospitals that treat low-income patients.

Patrick is asking to trim local aid by $9 million, and said if Lottery revenue exceeds expectations the surplus would be used to restore the reduced funding at the end of the year.

Senate budget chief Stephen Brewer told the News Service on Monday that he did not sense an appetite within the Legislature to grant the governor local aid-cutting powers. Lawmakers are scheduled to return to Beacon Hill in January, when the governor’s proposal will await their attention.

Patrick used his existing budget management powers to reduce $225 million in spending through so-called 9C cuts, a 1 percent reduction to the total state budget that will result in the defunding of 700 positions in state government and, according to the governor, affect services to the state’s “most vulnerable” residents.

Patrick is also calling for $200 million to be drawn from the state’s $1.65 billion rainy day account to plug holes and prevent deeper spending cuts amid a weak economic recovery.

Patrick called on Congress to address the “fiscal cliff” this year, blaming uncertainty over scheduled tax hikes and spending cuts for private sector angst about expanding and the future of the economy.

“By all accounts that uncertainty and the resulting slowdown in economic growth is the direct cause of our budget challenges. Economists agree that the fiscal cliff is keeping a tremendous amount of capital on the sidelines,” Patrick said.

Patrick said $300 million this fiscal year and $1 billion in the next fiscal year is at risk for state budget writers depending on the outcome of negotiations between President Obama and Congressional leaders. “The cost of inaction is immense,” he said.

The state budget is also facing significant and still unknown costs associated with an evidence tampering debacle that has forced public officials to revisit thousands of drug cases previously thought to be settled.