Legislators received this communication from the Patrick Administration on October 15. Most of us feel that cuts are a necessary response to economic conditions. See my piece from earlier this week.
Below, please find the Patrick-Murray Administration Fiscal Management Plan.
PATRICK-MURRAY ADMINISTRATION FISCAL MANAGEMENT PLAN
Fiscal Year 2010
- Despite the best forecasts, tax revenues for the first quarter of this fiscal year are off by $212 million. ANF and DOR have consulted with independent economists and now project FY10 tax revenue at just under $18.3 billion. This means we have to act immediately to bring state spending in line with a $600 million shortfall.
- The private sector economy is beginning to recover. Housing sales and starts and the capital markets are strengthening, business investment is growing, and there has been an uptick in consumer and business confidence. The IT, life sciences, clean energy, health care and education sectors – the very ones this administration has focused on – are leading us to higher ground. As long as so many people need jobs, we will continue to work every day to expand opportunity throughout the Commonwealth.
- At the same time state revenues, which depend on tax receipts, tend to lag. They look back to past economic performance rather than forward to the better times ahead. The choices we are dealing with in state government, just like many of us and our neighbors at home, are unlike anything the Commonwealth has ever had to face. And we have to adjust.
- The challenge facing us in the next fiscal year is just as serious. If we simply maintain spending next year at levels necessary to deliver the same level of services we deliver now, budget watchdog groups have estimated that we will face a further shortfall of as much as $2 to 3 billion.
Governor Patrick announced today a 5-point fiscal management plan to address this shortfall:
- Reduce spending by $600 million
o This may include suspending certain programs or asking outside entities – such as quasi-public agencies, business groups or community advocates — to take on services or programs currently delivered by government.
o The Cabinet will work with the various client groups, vendors, state workers and others affected by these changes to develop new spending plans and to collaborate with them on ways to achieve the necessary savings while doing the least harm to essential services.
- Reduce payroll by up to 2,000 positions
o In order to preserve as many positions as possible and continue to provide services, agencies will implement a second round of furloughs for executive branch managers of up to 9 days, depending on salary level.
o The Governor is also calling on state workers and their unions to work with ANF and Labor & Workforce Development on contract revisions and other ways to share in this sacrifice. If we can reach agreement on a savings plan by October 30th, we can avoid or reduce the number of layoffs. If we cannot, then we will have no choice but to proceed with layoffs.
- Consolidate state agencies and services wherever possible
o In preparation for the FY11 budget as well as to cope with current challenges, has called for a plan from Cabinet Secretaries to consolidate as many different agencies and functions as we can.
§ Examples of consolidation would include Human Resource services; the various agencies that help promote business development and investment, and the like. We have to find cheaper ways to get the job done. This plan might also include such measures as the sale of surplus state property.
- Energy cost savings through joint purchasing
o The Governor is directing all facilities managers in state government to work with the Secretary of Energy and Environmental Affairs and the Secretary of Administration and Finance on a comprehensive plan to save money by making state buildings as energy efficient as possible and by entering into common energy purchase strategies, plans and contract agreements. Today, agencies buy their energy independently and at widely varying rates. By pooling the state’s purchasing power, we can maximize savings.
- Expanded 9C authority
o The Governor will ask the Legislature for expanded 9C authority to spread the pain as broadly as possible and so that no one element of public service bears more than its share.
o The Governor has asked constitutional officers to voluntarily submit a plan to reduce their own spending in the current fiscal year at levels consistent with what I am asking of Executive branch agencies.
o The Governor and Lt. Governor will also continue to push for more municipal relief proposals now pending in the Legislature, which will build on tools we’ve already created such as giving communities the ability to join the GIC or the state pension system.
- For each and every one of us dealing with these challenges is about more than just line items on a spreadsheet. We see all of the people across the state who depend on government in some way.
- As the Governor said, better times will come and there are signs they are not far off. We will continue to make the investments we can in our long-term economic and community strength.
- But right now, for those who look to state government for help or support, we face still more challenges, and we will have to stick together and work together — in the spirit of community — to get through it.