Governor Patrick signs state budget, includes cuts for towns

Governor Patrick signs state budget, includes cuts for towns

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Gov. Deval Patrick signed a $27.6 billion fiscal 2011 budget Wednesday, June 30, one day before the start of the new fiscal year; the new budget relies heavily on onetime revenues to boost spending 0.2 percent above this year’s expected bottom line, lowers aid to cities and towns by 4 percent, and provoked swift criticism from his campaign rivals for not retooling state government more thoroughly.

The governor announced he planned to restore six months’ worth of funding for 24,000 legal immigrants to receive subsidized health care, and said he would continue lobbying Washington for the additional aid. Mr. Patrick approved a codification of what he said are current practices of barring illegal immigrants from public services, a measure lawmakers had scaled back from a stricter crackdown.

Mr. Patrick vetoed $457.6 million. He said $372 million of those cancellations were made to offset part of a $687 billion funding shortfall created by federal refusal to authorize Federal Medical Assistance Percentages Assistance (FMAP), money the Legislature had marked to use to establish a contingency budget, if Washington delivered the funds. The remaining $85.5 million, officials said, were general line-item vetoes tied to unreliable estimates of lottery revenues and federal assistance for the needy.

Extending into next year the structural deficit woes, the budget drains another $100 million from the state’s rainy-day fund and blocks a statutory $95 million payment into that fund, which the administration believes will have a $556 million balance a year from now at the end of fiscal 2011. The budget spends $809 million in remaining federal stimulus law funds, setting up the next legislature and governor for difficult decisions over how to make fiscal ends meet in the absence of substantial one-time revenue supports.

Mr. Patrick called the budget “balanced, responsible, and on time,” and said the state was in better economic shape than others, while acknowledging, “The pain is widespread.”

During a budget-signing press conference in his crowded third-floor office, Mr. Patrick said, “We can see the light at the end of a long, dark tunnel.”

Republican Charles Baker staged a press conference outside the state house an hour before Mr. Patrick’s budget-signing to slam the governor’s strategy as insufficiently reform-minded.

Mr. Baker said that if he were governor, he’d send the budget back to the legislature and request a better budget by Labor Day. Mr. Baker’s declaration drew a swift retort from House budget chief Charles Murphy, who called Baker’s assertions “disingenuous.”

Mr. Baker declined to specify spending authorizations he would cut from the budget, emphasizing instead his call for reforms in areas like unemployment insurance, municipal health care, and privatization of government services.

“This is a big missed opportunity, frankly,” said Mr. Baker, who said legislative proposals he favors could save state government $1 billion. Mr. Baker suggested structural budget problems would persist under the new budget.

“It’s all been set up to sort of kick the can through the next election,” said Mr. Baker, who has closed the gap between him and Mr. Patrick in recent polls.

Independent treasurer Timothy Cahill, running third, released a statement blasting the spending bill.

“The Governor ran on hope and change in 2006, and today’s budget was built on that same hope — hope that the federal government would come through and bail out his reckless spending,” Mr. Cahill said. “The Administration’s inability to live within its means, rising health insurance costs, and our dependency on borrowing continues to put our state at great financial risk. Even more disturbing was the irresponsible practice of using potential revenue sources with no guarantee for payment and draining stimulus funding intended to last three years.”

Mr. Patrick took pains to stave off the inevitable charges of poor fiscal policy, telling reporters the budget had shrunk since the start of the recession, driven by the need to solve a cumulative $12.5 billion budget gap since Oct. 2008, and that he had closed a structural deficit by 56 percent.

Mr. Patrick filed a supplemental spending bill Wednesday that would effectively restore funding for cuts the legislature made that would have led to “at least one prison closing,” and curtailed drug and gang state police units.

Lawmakers in conference agreed to pension reforms that Mr. Patrick signed, including anti-spiking language and capping payouts to retirees at $156,000 annually, a figure that will rise in accordance with a federal formula.

In order for the budget to balance, the Senate needs to enact a debt-refinancing bill that postpones $300 million in debt payments. Mr. Patrick said he was confident he would sign the plan.

In a briefing with reporters, Secretary of Administration and Finance Jay Gonzalez said the governor’s push to fund health care for 24,000 legal immigrants, cut out by the Legislature, would be funded for six months, largely with tobacco tax revenue that officials predict could range from $15 million to $25 million.

Those immigrants were identified because they have been in the country for fewer than five years, making them ineligible for federal reimbursement for their health care coverage. That is slated to change in 2014, when a national health care law provides for 50 percent reimbursement for the cost of their coverage.

Mr. Gonzalez said cuts in the budget in MassHealth programs will have a “significant impact” and could result in 2,000 disabled residents losing their primary care attendants, cuts to dental benefits for MassHealth recipients, and rate cuts for hospitals.

He said he would be surprised if fewer than 1,000 state employees lost their jobs, citing the absence of FMAP aid still being debated in Washington. Without those funds, residents with developmental disabilities could lose beds in state-funded facilities, officials said.

Mr. Gonzalez said the budget was balanced using $1.36 billion in onetime revenues, including $809 million in federal stimulus funds, $106 million in rainy-day funds and interest, the suspension of a $96 million “statutory carry-forward,” $160 million in yet-to-be-received federal social security reimbursements, and various other trust funds.

Mr. Gonzalez said the federal government acknowledges it owes states social security funds, and that various bills in Congress would speed the delivery of those funds.

Lawmakers have until July 31 to override Mr. Patrick’s vetoes.

Mr. Patrick also signed an amendment conditioning state funding for Boston public libraries on keeping open branches targeted for closure.

State tax revenues have declined from a peak of $20.88 billion in fiscal 2008 to a projected $18.46 billion haul for the fiscal year that ends at midnight Wednesday, below fiscal 2006 collections. Assuming 3.2 percent revenue growth, Mr. Patrick and lawmakers agreed to bank on $19.05 billion during fiscal 2011.

Murphy, who stood near the rear of a pack gathered for Baker’s capitol steps presser, said, “There are many state leaders who can’t agree on what time it is in their state capitols and they can’t pass a budget.

“We have a budget done on time,” Mr. Murphy said. “It’s balanced. They made a lot of tough decisions and bad decisions, quite frankly, because people are going to be hurting and we understand that, but it comes with the territory when we’re tasked with balancing a budget on time.”

Citing approved transportation, pension and ethics reforms, Mr. Murphy said the state’s elected officials are always a target of critics, “The cost of doing business up here is always being criticized for not doing enough and I’m okay with that. But the fact is I can point to a litany of things that we have done that I would suggest are successes.”

Asked about Mr. Baker’s reluctance to specify cuts, Mr. Murphy said, “He didn’t give any details. He keeps falling back on reforms and things of that nature.”