The state budget is the foundation for responsible government spending. It has a wide-ranging and far-reaching impact on the well-being of the citizens of the Commonwealth. It is the vehicle through which we as a citizenry make investments together for the benefit of us all - investments for the "Commonwealth." Serving as a blueprint for the activities and obligations of the year, the budget reflects our collective judgment about the state's role in our society, obligations to serve its people and strategic investments to secure its future prosperity. Each line item represents a critical service, program or responsibility that the state will provide throughout fiscal year 2010.
The Patrick-Murray Administration's fiscal year 2010 budget is a balanced, responsible budget that reflects the tremendous financial challenges confronting the Commonwealth during a time of international economic uncertainty. Today, the nation faces the greatest economic downturn since the Great Depression, and the Commonwealth is experiencing unprecedented challenges as a result. State and national economists believe this economic downturn will be the deepest and longest the country faces since World War II. This Administration's budget reflects that difficult reality.
The Administration submits its fiscal year 2010 budget proposal amidst continued economic challenges that have required two rounds of mid-year budget solutions to be implemented in fiscal year 2009 totaling more than $2.5 billion. Given the magnitude of this fiscal crisis, the aggressive level of investment in priorities that the Administration and Legislature made over the last two years must be dramatically slowed. Simply to maintain our current level of commitment to existing services and programs would require an additional $1.2 billion more (after factoring in the first round of budget cuts) in fiscal year 2010 than in fiscal year 2009. Exacerbating that challenge is a decline in tax revenues of nearly $1.9 billion in fiscal year 2009 with no real growth in fiscal year 2010. In addition, we continue to grapple with a longstanding structural deficit caused by a reliance on one-time revenue sources to fund recurring expenses.
In combination, sharply declining tax revenues and a recurring structural budget deficit have posed an unprecedented fiscal challenge for the Commonwealth. Within just five months, the Administration has had to wrestle with closing projected budget deficits totaling approximately $6 billion over two fiscal years (fiscal years 2009 and 2010).
In times of recession, additional pressure is created as counter-cyclical needs emerge. The demand for government-supported services increases as revenues decrease and our resources are strained. This gap has required the Administration to make difficult decisions. While the Administration continues to seek out savings and efficiencies wherever possible, the magnitude of our economic challenges will require us this year to make difficult cuts to programs and services. Cuts and savings will make up almost half of our approach to solving our budget problem. Reductions in programs, administrative budgets and local aid were necessary to cover the most basic and vital services. To the extent possible, the Administration's budget maintains critical investments in key areas like health care, education and public safety that help secure our safety net, help stimulate economic growth and opportunity and position the Commonwealth to emerge strong and competitive when the nation cycles out of the current downturn.
The following sections describe the challenges faced by the Administration and the process that was used to develop the Governor's Emergency Recovery Plan for the fiscal years 2009 and 2010. Also included is a "Resource" section which contains a user guide and glossary to assist in navigating this budget document.