Massachusetts Gov. Deval Patrick last week announced the state could face an additional $556 million deficit by June 30, the end of fiscal 2009, and plans to close the gap through federal recovery funds, spending cuts, and layoffs and furloughs.
Officials currently estimate a $156 million budget gap and expect that shortfall to increase by $400 million by the end of fiscal 2009, due to underperforming revenues. The state collected $13.41 billion of total revenue from July 1 through March, $117 million below estimates and $979 million less than the same period last year, according to the Department of Revenue.
To address the immediate $156 million deficit, the governor said he will eliminate 750 state positions, implement furloughs before July 1 for employees earning $50,000 or more, and use $128 million of additional federal stimulus funds.
“The historic downturn is hitting state government especially hard, leaving us with tough choices among miserable options,” said Patrick said in a press release. “We must take these painful but necessary steps today if we are going to position Massachusetts for recovery and long-term economic success.”
Officials may close the expected $400 million budget gap by also tapping the state’s rainy-day fund. Earlier this year they closed a $3 billion budget shortfall through $1.2 billion of expenditure cuts, $236 million of new revenue, $806 million of new federal Medicaid funds, $527 million of rainy-day funds, and slashing the state’s workforce by 1,000 jobs.
In late January, Patrick released his $27.9 billion fiscal 2010 budget proposal, which aims to close a $3.5 billion deficit through federal funds, spending reductions, tax increases, and rainy-day funds.
