For Immediate Release - January 06, 2010

GOVERNOR PATRICK RESTORES FUNDING FOR SCHOOL TRANSPORTATION, LOW INCOME FAMILIES

FY10 Revenue Estimate Increased by $181 million

With revenue collections to date outpacing earlier estimates, Governor Deval Patrick today announced that he will restore two key programs serving Massachusetts students and low-income families.

The Governor will restore funding to two programs that had been cut as part of his solution to closing an estimated a $600 million revenue shortfall in the current fiscal year. Governor Patrick will restore $14 million to the Department of Transitional Assistance's Transitional Aid to Families with Dependent Children (TAFDC) program and $18 million to regional school transportation.

"The December tax revenue collections are very encouraging, and offer further evidence that our economy is recovering," said Governor Patrick. "I am pleased we can restore funding to help families, students and school districts across the Commonwealth."

TAFDC is a state and federally funded program that provides cash assistance to families with children and pregnant women in the last 120 days of pregnancy, with little or no assets or income. It is operated under the federal Temporary Assistance for Needy Families (TANF) block grant. Participants receive child care and transportation support associated with job assistance and can access a number of supportive referrals to substance abuse and mental health services, and domestic violence specialists.

The Governor announced last week that he would restore Regional School Transportation reimbursements to communities. He will do so using some of the additional tax revenues over the benchmark collected to date.

Since the revenue estimate was revised in October, the state has collected $230 million above the year-to-date benchmark. Based on those collections, Administration and Finance Secretary Jay Gonzalez will revise the Fiscal Year 2010 tax revenue estimate to $18.460 billion, a $181 million increase over the October 15 th estimate. The new estimate will fund the restorations announced today, previous restorations and other spending already accounted for.

"We are seeing positive signs of revenue growth and that is good news for the Commonwealth," said Gonzalez. "However, we must continue to exercise caution as we monitor revenue collections in the months ahead and prepare for a FY11 budget that we know will be challenging."

The new FY10 consensus revenue estimate reflects both tax collections to date as well as assumptions about potential risks in the remaining half of the fiscal year. January and April are traditionally the large months for collections and the revenue estimates for the rest of the fiscal year are based on economic forecasts that predict growth.

The Administration continues to work with legislative leaders to determine the tax revenue estimate for Fiscal Year 2011. Based on testimony from economists during the December consensus tax revenue hearing, the Administration anticipates that revenues will begin to grow slightly as we cycle out of the global economic recession. However, reduced levels of federal stimulus funds and cost inflation will require tough budget decisions in the fiscal year ahead.

 

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