Gov. Deval Patrick announced Wednesday that he will cut Massachusetts’ $28.2 billion fiscal 2009 budget by more than $1 billion and lay off 1,000 state employees to help offset an estimated $1.4 billion deficit.
That shortfall is due to an estimated $1.1 billion of less than anticipated revenue for fiscal 2009 that officials now expect the state must absorb. Along with the cuts, the governor will ask the legislature for an additional $200 million of rainy-day funds.
“As you know the financial turmoil around the world has now hit home here in Massachusetts,” Patrick said at a press conference regarding the current budget. “The tight credit market, the turmoil on Wall Street, and the sharp rise in foreclosures are affecting business activity and consumer confidence. Our economy is slowing down. Just like families all across the commonwealth, state government is feeling the pinch.”
The governor said state aid to local governments and municipalities will remain untouched in an effort to halt potential property tax increases if the commonwealth were to decrease its support for cities and towns.
“Because I think that an increase in the property tax is the last thing we need now, I have not proposed any reductions in local aid or in Chapter 70 support in local schools,” Patrick said.
Wednesday’s announcement did not include scaling back on borrowing, as the governor said he expects to move forward with the state’s capital spending plans, which include roughly $1.6 billion of new-money issuance in fiscal 2009.
“As long as the market for our capital bonds remains available to us, we will continue with our investments in road and bridge repair, broadband expansion, public colleges and universities, affordable housing, and other infrastructure projects consistent with our capital plan,” the governor said.
The more than $1 billion of budgetary cuts will come from programs such as education, life sciences, and clean and alternative energy initiatives. Patrick said he would not cut from veteran, elderly, or disability services and will impose very limited cuts to social programs for health care, homelessness, domestic violence, and hunger programs.