Governor Deval L. Patrick
Fiscal Action Plan Announced
October 2, 2008
As Delivered

On Thursday, October 2, 2008, responding to a softening local economy, Governor Deval Patrick announced he will cut spending and implement a series of cost-savings reforms, as part of a five-point Fiscal Action Plan, to address fiscal challenges confronting the Commonwealth.


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Governor Patrick

Good morning. As you all know, the national economy -- and the financial system on which the economy relies -- is under significant stress. As the impact spreads to local businesses and families, it has now spread to the state budget.

By the end of September last month, state revenues for the first quarter of this fiscal year are $223 million below benchmark, excluding non-recurring receipts; when you count those one-time receipts, we are off $143 million. While these numbers reflect only the first three months of the fiscal year, and are only a fraction of a percent of our total budget, I believe they signal worse news ahead. The national economic downturn, tightening credit and its impact on business activity and consumer spending, market volatility and its effect on capital gains all require us to take further steps now to assure a balanced budget.

So, I have directed the Secretary of Administration and Finance by October 15 th to revise the consensus revenue estimates for the rest of the fiscal year based on current economic data. Once I have those revenue revisions to revenue, I will cut spending on the parts of the budget where I have the authority to do so under section 9C, the emergency powers granted to the governor under law. I anticipate that these measures will affect both services and the state workforce.

Second, I have asked the Legislative Leaders, the Chief Justice, and the other Constitutional Officers - whose respective budgets I do not control - to reduce their spending voluntarily. As a benchmark, we will reduce the budget in the Executive Office of the Governor by 7%. Each of our partners in state government has without hesitation expressed a willingness to work with us and to contribute all they can.

Third, I have directed the Secretary of Transportation to prepare legislation to dismantle the Turnpike Authority, merge the remaining transportation agencies, and restructure the "Big Dig" debt.

In that same vein of further streamlining state government, I have directed the Secretaries of Health and Human Services and Housing and Economic Development, under the oversight of the Lieutenant Governor, to accelerate their efforts to merge agency offices and consolidate departments, wherever that is feasible.

Fourth, I have asked the Treasurer to work with us to prepare legislation to reform the state and the MBTA pension systems.

Fifth, I have directed the Secretaries of Health and Human Services and of Administration and Finance to accelerate their plans to contain and ultimately reduce health care costs in the Commonwealth.

I know that what I have just outlined is not easy. So do you. But behind every one of the cuts we make or reforms we propose is a family, a small business, a non-profit or a worthy idea. However, as disruptive as these actions may be, the circumstances demand action.

At the same time, we will make every possible effort to maintain our commitments in education, health care, local aid, and services essential to the health and well being of our citizens, now and over the long term. We will continue to market Massachusetts as a home for the green and high tech industries and for the life sciences, as well as a leader in education. And we will continue to invest in our infrastructure as long as the market for our long-term bonds remains accessible.

In other words, though the road ahead will be rough, we will keep going. The responsibility we have and the commitment we make is to govern for tomorrow, not just today. Now, more than ever, we will lean on the sense of community and shared responsibility that I have always believed is critical to assuring a better future for us all.

Thank you all for coming. I'm happy to take your questions.