If It's Not Raining, It's At Least Drizzling

If you're expecting the state to come up with more dollars for your favorite programs next year, think again.

In fact, the state will probably have to dip into the so-called "Rainy Day Fund" to pay its bills. As a spokesperson for the Governor told me this week, "It's raining." Thanks to the economic downturn we've experienced, both before and after September 11.

Unlike ten years ago, when the state also found itself in a state of economic decline, we're a bit better prepared. In addition to the $1.7-billion in the Rainy Day Fund, we have another $2.8-billion in the unemployment insurance fund. (I mention the latter because we had to go to the bank and borrow money to play unemployment benefits in the last recession.)

Expenses have to decrease, because tax receipts are taking a serious slide. Just one example: a decrease of 40 to 50 percent in capital gains taxes is predicted.

Although the legislature has yet to approve the Fiscal Year 2002 budget (which we should have done before July first), cities and towns, as well as state agencies, have all been warned not to expect any increases for FY 2003. In fact, there may be cuts in many areas.

Wait a minute, you say, how about public safety? And education? And health care? They're all priorities of the Governor!

Okay, there may be some exceptions. Like the $26-million appropriated by the House this week for anti-terrorism, or public safety, activities.

Specifically, $516,000 for the National Guard to protect the Bourne and Sagamore Bridges from September 24 to January 31. Another $810,000 overtime costs for State Police for just 22 days, September 11-22. Some $909,000 for the Guard to presence at Quabbin and Wachusett reservoirs for 18 weeks. And, stuff like gas masks and protective gloves.

Even, improvements to State House security. Which Lord knows we could use.

Education might get a three percent increase. And probably seven percent for health care, thanks to extra Medicaid costs.

But, with economic uncertainty, when the future is anybody's guess, we have to get ready to face what well could be a serious financial situation.

Other states have already faced the crisis. Some had to contend with midyear revenue shortfalls (Massachusetts had a surplus). Some have already tapped into reserves, cut spending, increased taxes, delayed expenditures and used tobacco settlement money to pay the bills.

Here, everything's on the table-although I would like to exempt tax increases. And, because our budget hasn't been approved, any line item could take a hit. The Governor's office predicts cuts at least in the $300 million to $400 million range and, at the very least, they want to take the lowest number between House and Senate appropriations.

We're doing short, two week, budgets now. And, already facing shortfalls in just about everything from road salt to welfare.

Cities and towns have been notified not to expect miracles. Agencies and departments have been asked to look for every possible economy and not to expect increases. There have been layoffs, well publicized layoffs, at Massport. We're struggling to pay for the infamous Big Dig. We have to increase Medicaid reimbursements. And, we haven't even ratified the $38-million in negotiated salaries for college professors.

But, it's time to tighten our belts. We're watching growth slowing and unemployment rising. We're watching stock market values decline. Capital gains windfalls are disappearing. Tourism, financial services, manufacturing, technology sectors are all hurting.

I've been in the House for seven budget seasons. I've seen the budget increase by at least $6-billion in that time. We've had a decade of good years, increasing revenues, increasing expenses.

Now, we have to get used to saying "no."

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