State’s fiscal freefall could jeopardize local aid

Those of you who picked up the Boston Globe this morning (yep — it’s still there!) might have noticed the downright scary article by Matt Viser about how the revenue free fall in recent months may leave Massachusetts in a hole that it takes us years to climb out of. According  to the piece: 

“Several economic specialists who testified advised state officials to prepare for at least four years of budget problems, foreshadowed by dire records: State revenues declined 35 percent this April over last year, the worst ever. The fall in state revenues for this year, projected to be $3 billion less than budgeted, will probably also be the steepest in state history.”

Even more worrisome for Belmont (and this was a topic of discussion at last night’s School Committee meeting), the drop off in revenue could have the state reducing local aid payments in FY 2010, or even missing a local aid payment due in June. 

State payroll is about $268 million per month, according to (State Treasurer Timothy) Cahill. He said the state could end up having to drain the $1.3 billion left in the state’s rainy day fund to make a $1.2 billion local aid payment due June 30.

Given the roller coaster ride we’ve all been on trying to hammer out a budget and factor in both federal and state monies in recent months, this news couldn’t come at a worse time, and I can’t help recalling the string of articles in the Globe about how slow this last legislative session was to get started, with weeks spent with no activity on Beacon Hill, or bogus ceremonial votes. Thanks guys.

It seems to me that the State (and many communities, including Belmont) are facing a day of reckoning, and that lawmakers’ blinkered approach to finding new revenue sources doesn’t bode well. As it stands, lawmakers in the House are refusing to consider raising income taxes on the wealthy households, an increased gas tax, or exploring liquor taxes to start factoring in the social cost of an activity that lies behind a huge percentage of emergency room visits, accidental injuries and other violent acts. Senate President Therese Murray has ruled out any income tax hike, though its unclear if she and the Senate will be able to hold that point. 

Faced with the prospect of decimating social services for the poor and vulnerable, health care, and education for our future leaders, the 30 year old mantra of “no new taxes” just doesn’t have the same ring. Given how tortured our school budgeting is now — fully counting on a healthy chunk of local aid from Beacon Hill — I can’t even imagine what it would look like next year in the absence of local aid, or with a much reduced local aid contribution from the state.