Introduction

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 residents 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 government’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 2011.

The Patrick-Murray Administration’s fiscal year 2011 budget is a balanced, responsible budget that reflects the continuing financial challenges confronting the Commonwealth during a time of international economic uncertainty. Nationally, state revenue collections have seen a severe decline in every tax category since fiscal year 2009.  State and national economists predict revenue growth as the economy recovers but that the revenue growth will begin to reverse in the second half of this fiscal year, albeit slowly. The Commonwealth continues to experience significant challenges as a result. This Administration’s budget reflects the difficult choices made in response to this challenging reality.

The Administration submits its fiscal year 2011 budget proposal amidst continued economic challenges that have already required mid-year solutions to be implemented to close a $600 million gap in fiscal year 2010. Even after accounting for $590 million in projected growth in tax revenues, the Administration has to close a $2.7 billion budget shortfall simply to maintain our current level of commitment to existing services and programs. In addition, we continue to grapple with a longstanding structural deficit caused by a reliance on one-time revenue sources to fund recurring expenses.  One time resources such as State “Rainy Day” fund and Federal ARRA funds have allowed us to maintain vital programs and services during an unprecedented global recession; however, reduced amounts will be available to utilize in the budget for fiscal year 2011.

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 reforms, savings and efficiencies wherever possible, the magnitude of our economic challenges will require us to continue making difficult cuts to programs and services. This budget relies on Federal stimulus funds and uses a balanced approach of cuts, revenues, and one time resources to solve the budget gap.  It makes key investments in education, health care, and cities and towns that are critical to strengthening our economy in the short-term and long-term.

The following sections describe the challenges faced by the Administration and the process that was used to develop the Governor’s budget recommendations for fiscal year 2011. Also included within this document is a user guide and glossary to assist in navigating this budget document.