Emergency Recovery Plan

The Patrick-Murray Administration’s Emergency Recovery Plan is a multi-pronged strategy, including a FY2009 budget solve, the FY2010 budget, and a number of cost-saving reforms and proposals, all of which will help stabilize and position the Commonwealth for long-term economic success.

Video and a full transcript will be available here soon.

The Patrick-Murray Administration 
Emergency Recovery Plan

An Unprecendented Recession

The unprecedented nationwide recession has complicated an already difficult budget process, with a second $1 billion budget gap to fill in FY 2009 and further challenges ahead. Over the last five months, the Administration has had to solve a budget deficit of approximately $6 billion from fiscal year 2009 and fiscal year 2010.

The Emergency Recovery Plan

To address these shortfalls, Governor Patrick has put forward a multi-pronged solution including (1) a fix to the FY09 budget gap, (2) filing the new FY10 budget, (3) proposing a series of cost-savings reforms for state and local government, and (4) identifying new revenue sources.

1. FY09 FIX: In October, the Administration solved a $1.4 billion budget gap with spending controls, a draw on reserves, cuts and other reforms. To close an additional $1.1 billion gap, the Governor is making an additional $191 million in 9C cuts; filing an Emergency Recovery Bill that includes $68 million in additional revenues and $327 million in Rainy Day Funds, and using $533 million in anticipated federal Medicaid funds.
   • Learn more on the FY09 9C listing page.
     
   
   
2. FY10 BUDGET PROPOSAL: The FY10 budget proposal is lean, but reflects a commitment to maintaining core services. It is in line Governor Patrick’s change agenda and is focused on priorities in education, public safety, health care and employment. Additional cuts are also necessary including:
   • $220 million, or a 4.2 percent reduction, in aid to cities and towns, accounting for adoption of a 1-cent increase in the statewide meals and hotel taxes. Without the new revenues, the cut would be $375 million, or a 7 percent, reduction.
   • You can acess a more detailed list of local aid reductions.
   • Learn more about how Governor Patrick is protecting Local Aid. 
   • View the Governor's FY 2010 budget recommendation at www.mass.gov/budget/governor
     
   
   
3. OPPORTUNITY FOR REFORMS: With great challenges also come great opportunity, and the Governor has put forward a number of cost-savings proposals at the state and local level including:
   • Reform the way the state accounts for capital gains tax revenues to insulate the budget from the state’s most volatile revenue source.
   • Consolidating agencies and operations around homelessness services, information technology, energy management and county sheriff departments.
   • Filing a second Municipal Partnership Act bill with reform tools to help communities better manage their bottom lines that encourage regionalization of services and enrollment into the state’s Group Insurance Commission (GIC) to contain health care costs.
   • Re-introducing a plan to save $60 million by reforming state employee health insurance and salary structure.
   • Learn more about the legislation filed.
     
   
   
4. NEW REVENUE SOURCES: Reforms will help save the Commonwealth money, but they aren’t enough to close the budget gap. The Administration has proposed a series of new revenue proposals to help protect key priorities and provide a more stable and sustainable funding base in the long-term. These proposals include:
   • Meals and Hotel Taxes: $150 million from a 1-cent statewide increase dedicated to reducing local aid cuts; and $200 million for an additional 1-cent increase at local option.
   • Commonwealth Wellness Fund: $121.5 million from eliminating sales tax exemption on alcohol, candy and sweetened beverages dedicated to public health programs.
   • Bottle Bill: $20 million from expanding the 5-cent recycle deposit to include plain and flavored water, coffee-based drinks, juices and sports drinks dedicated largely to recycling and water and sewer rate relief.
   • RMV fees: $74.5 million from updated and consolidated Registry of Motor Vehicle (RMV) fees dedicated to the state Highway Fund.