BOSTON - As part of a plan to address an estimated $540 million mid-year budget gap, Gov. Deval Patrick today 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.
“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.
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,” the governor said.