Thursday, January 28, 2010

The Patrick Budget: Reckless and Irresponsible

Governor Patrick released his FY11 budget proposal yesterday and now that we’ve had a chance to digest it, there are only two words to describe it – reckless and irresponsible! Here are some highlights from the Governor’s budget.

• Governor’s budget actually expands government spending 4%; from last year’s $27.14 billion to $28.2 billion

• While the state’s revenue collection remains volatile, Governor Patrick’s budget has a 3.2% increase in revenue projection; up to $19.05 billion from last year’s $18.46 billion

• $100 million in new taxes including: candy tax, soft drink tax, cigars and smokeless tobacco tax, expansion of the bottle bill and the repeal of sales tax exemption on aircraft sales (these new taxes are in addition to the $1.5 billion in tax increases the Governor has facilitated since taking office)

• Medicaid increase of $600 million; paid for with Federal Stimulus extension that has not yet been approved by Congress

• Governor requests expanded 9C Authority in budget, a sign that the Administration knows this budget is out of balance

• $1.9 billion in one-time revenues (structural deficit)

• Relies on $30 million in cash from quasi-authorities

• No initiative to lower property taxes

• Plans to refinance $200 million in the FY10 supplemental budget - by refinancing the $200 million in principal we will have a smaller debt service payment for 2011 but will increase debt payments starting in 2014. This is a perfect example of stealing from Peter to pay Paul.

• Grows size of state workforce from 66,483 in 2007 to a project 66,702 in 2011.

This is Governor Patrick’s fourth budget – but hopefully it will be his last.

What is especially disheartening is the fact that there have been so many missed opportunities. While the Governor appears to be jumping on the Republican bandwagon offering ideas such as the expedited sale of surplus state land, Governor Patrick continues to reject solid, cost saving ideas.

For example, Republican lawmakers offered a whole host of budget amendments last year that would have saved the Commonwealth millions upon millions of dollars. Though Governor Patrick tries to paint us as the party of no, one could make the argument that he is the Governor of no as he says not to all of our ideas – that is until it’s political convenient for him to do otherwise.

Two ideas in particular that could save the state a lot of money are shifting all MassHealth members to managed care plans and raising or better yet eliminating the anti-privatization Pacheco Law. Those two ideas alone have the potential to save the Commonwealth $200-$300 million annually.

Hopefully, the Governor and the Beacon Hill Democrats wills adopt these ideas in the upcoming budget season because we will continue proposing these initiatives and others like them. Raising taxes and relying on federal aid is a quick fix, not a long term solution. Not only are our proposals good long term solutions, but they also offer relief sooner rather than later.