The Commonwealth of Massachusetts continues its budgetary free fall, with Governor Patrick indicating yesterday that he will, for the third time in the FY2009 budget, be forced to downgrade his revenue estimates and impose further cuts in the state budget. The Governor estimated a budget shortfall of over $400 million, with $156 million being the immediate shortfall. The Governor proposed forced furloughs for 5000 executive branch employees of up to a week, laid off 750 additional state workers, and asked A&F Secretary Leslie Kirwan to begin negotiating concessions from state unions. The Governor’s proposals, for FY2009, would not even put a dent in this years deficit. He indicated that further proposals to close the FY2009 gap require legislative action, and he would not identify what proposals he would make. He also refused to identify what concessions he would seek from labor. As we are now in the middle of April it is highly unlikely that the Governor will be able to close this gap without a massive hit to the State’s rainy day fund.

The Governor has ratcheted up his criticism of the legislature, including direct criticism of their non-action on the FY2009 deficit. The Governor filed a bill that would have raised revenues via immediate tax hikes (soda, beverage alcohol, etc) over thirty days ago to try to offset some of the FY2009 shortfall, but that bill has been shunted aside by the Legislature. It is now simply too late to make meaningful reductions to the FY2009 budget, and that failure by all parties concerned will only worsen the FY2010 budgetary armageddon we now face. Revenue estimates downgraded three times in one year? Michael Widmer, at the begining of this budget cycle, correctly predicted that the Governor’s revenue number was off by over a billion dollars, and that was before the downturn. Widmer is already calling the Governor’s 2010 budget filing revenue estimate way off, and frankly that makes House 1 not worth the paper it is written on. As the House prepares to unveil its budget today the failure to act in Boston will become evident in the starkest of terms. I will post the ugly details, as well as further postings on impacts to Methuen, in the coming days.