Matt Murphy of the Sun (and the associated Sentinel and Enterprise) reports that state revenues will come in $150 to $200 million below budget estimates for the month of September. On top of subpar revenues in July, we have to gird ourselves for some real tough actions — and fast.
The State Treasurer and Lowell City Manager are both right to call for one quick, clean cut early in the fiscal year. Murphy paraphrases Lynch as suggesting “he’d rather have the Band-Aid ripped off quickly than endure a slow peel.” Lynch also notes “hopefully the governor will find other savings at the state level.”
He’s right. Our view is that local cannot be the first option, to the point that the legislature should not grant that power to the Governor until a number of the elements in our Countdown to Fiscal Sanity series are implemented. Here are just two:
– Even if the administration eliminated 1,400 positions since October, as outgoing Secretary of ANF Kirwan notes, there have been 7,500 new positions added since 2004. (I’d also like clarification if the 1,400 figure reflects positions left open rather than actual reductions.) If you maintain the 1,100 new safety net positions in order to help the state support folks in need during this recession, still there are still in the range of 5,000 to 6,400 state positions to cut. While that is not a happy suggestion, either the state loses these positions or localities will have to. We prefer that the state do that hard work.
– Repeal the Pacheco Law, or at least increase the exemption threshold to $5 million, in order to allow for the state to deliver services in a less expensive manner.
There is, again, lots more the state can do — see here.
At the same time, the state should recognize that localities have done their share of cutting. As Murphy’s article notes, Mayor Lisa Wong of Fitchburg has shut off streetlights in the city try and save money.
Now, we have to give them tools to deal with skyrocketing benefit costs (see Jeff Jacoby’s piece on that in today’s Globe).
The state should help in that process by making it easy for municipalities to participate in the GIC, or change health insurance plan design; and enact mandatory enrollment of retirees in Medicare. This is like in-kind local aid at a time when it is really needed. In Springfield, these two steps resulted in savings of over $10 million per year. The annual savings for municipalities across the state approaches half a billion dollars. (That’s a B, son…)
The state should prioritize state aid to localities and not keeping passing the buck on the hard choices.