Yesterday, the legislature held its annual revenue estimate hearings.
Here are some of the highlights:
- We are coming out of the recession — revenue is running above expectations in the current fiscal year (2011) and will continue to rise next fiscal year (2012).
- Health care spending in the Medicaid program — is also rising dramatically and will consume most of the gains in the current fiscal year.
- Revenue growth in FY2012 is not sufficient to close the gap opened by (a) loss of federal stimulus funding; (b) continued cost increases.
- The budget gap is in FY2012 is expected to be $2 billion — large enough on an already depleted state budget of $30 billion, that cuts will feel substantial.
- From a long term perspective, although there will be further revenue recovery in 2013 and beyond, the trend line has fallen to a lower level — we cannot expect to return services to their pre-recession levels.
For good resources on these issues see:
- Globe coverage of the emerging numbers.
- Briefing materials from the state Department of Revenue
- Testimony and analysis from the Massachusetts Taxpayers Foundation.