Long Term Fiscal Policy Framework (One Response)

The Patrick administration, in collaboration with the legislature, has been doing a good job focusing on long-term financial issues.

Click here for the state’s long-term financial model.

In a nutshell, the model says that if we can get health costs under control and the economy continues to recover, we will be able to sustain our current programs for the next five year. However, even with those favorable assumptions, we need additional resources to address our maintenance backlog in the transportation system and in other areas.

The currently proposed state budget drafts are responsible within this framework of assumptions — both the House and Senate budgets leave reserves at the end of Fiscal 2013 at roughly $1 billion. The model suggests that this is a high relative level, given that we have not yet fully recovered from the recession. The model assumes continuing recovery, although it does not assume recovery to the pre-recession trendline.

  1. [...] and policy makers are forecasting continuing moderate growth for the Massachusetts economy.  The state’s long term projection contemplates a growth of per-capita state product at an inflation-adjusted rate of 1.6%.  If this [...]

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