THE GOVERNOR’S PLAN TO CLOSE THE FY 2010 BUDGET GAP

Budget Brief: The Governor’s Plan to Close the FY 2010 Budget Gap 

 Thursday, October 29, 2009

 Governor Patrick today announced his plan to close the $600 million gap caused by declining tax revenue and bring the FY 2010 budget back into balance. The plan relies primarily on budget cuts across state government, but also includes some additional revenues, including the use of federal stimulus funds from the American Recovery and Reinvestment Act (ARRA), and a small surplus of funds that remained unspent at the end of FY 2009. Altogether, the Governor calls for $352 million in cuts. This includes $277 million in savings from 9C cuts to executive agencies, as well as reductions in debt service, Quinn Bill funding and state employee costs, and a request for permission from the Legislature to make another $75 million in cuts in areas of government where the Governor does not have unilateral authority to make cuts (such as in the courts or to other constitutional offices). Among the largest cuts are a $15.8 million cut to Transitional Aid to Families with Dependent Children that will be achieved by changing eligibility rules, $18 million from the funding for transportation of students in regional school districts, $11.6 million in funding for child care, and $7.1 million in funding in the Department of Mental Health. Other major cuts are described below, and a complete list is available at this link. In addition to spending cuts, the Governor’s plan relies on approximately $166 million in temporary revenues. This includes $60 million from the FY 2009 surplus, $20 million from a new tax amnesty program, and $24 million from the development of surplus land and from a surplus in the Smart Growth Housing Trust Fund. Finally, the plan relies on $82 million in enhanced departmental revenues.

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