Massachusetts Fiscal Forecasts

The Massachusetts Taxpayers Foundation, following the consensus revenue hearings on Beacon Hill, has released a primer on the outlook for the next fiscal cycle in Massachusetts, with the forecast looking less than rosy. The outlook is cloudy despite a pretty good growth rate in state revenue of almost $1 billion dollars. With the loss of federal stimulus, the drop in the rainy day fund to about $600 million, and a massive increase in medicaid spending gobbling up that billion and more, it looks like a bleak year for Massachusetts, with local aid cuts on the horizon again. From the MTF Report:

“Despite almost a billion dollars in revenue growth, the state faces a fiscal 2012 shortfall of approximately $2 billion with no federal stimulus dollars and limited state reserves,” Mr.
Widmer said. “The 2012 budget will require yet another round of cuts in local aid, human
services, higher education, and almost all other state programs.”

The estimated $2 billion structural gap in 2012 is driven by the use of $2.1 billion of one-time
funds in the 2011 budget and at least $1 billion in increased spending on obligatory accounts
such as Medicaid, pensions and debt service. The improving revenue picture in fiscal 2011 will
not make a meaningful dent in the 2012 deficit because the higher tax collections will be needed
to make up for shortfalls in non-tax revenues and to fund deficiencies, principally in Medicaid, in
the 2011 budget.

I have submitted, and City Council has approved, the tax classification factor for Methuen. I will do a separate post on that, but Rep. Linda Campbell came to the hearing and warned of those impending state aid cuts. I have attached the Mass Taxpayers document below.

The Tribune editorial on this subject is here.


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3 Responses to Massachusetts Fiscal Forecasts

  1. Jules Gordon says:

    Now Your Honor,

    I just don’t understand your bellyaching. Here it is Christmas and as you reflect on your greatest dream come true–you remember if only I had more of my friends…–you just seem ungrateful.

    Let me count your blessings;
    1. You have your own “lefty” blog.

    2. The state is awash in democrats, your friends,in all the elected and hack positions. And in spite of the miserable way the state is managed (no Republicans to mess things up) your tax and spend party more than survived the drubbing the rest of the country gave your friends elsewhere. We now stand ready to face further financial burdens such as continuing reduction in financial aid from the Democrat federal government. May sound ominous, but, your honor, it turns out no one cares. How great is that. Now all you got to do is figure out what you are going to tell all your constituents why their electric rates are going up under mandates from the Patrick regime, and to your small business owners who stayed loyal to Methuen and Massachusetts when hit with the sales tax increase, as to why they should stay south of the border when their rates go up even more than the homeowner. But, it’s Christmas in all probability they won’t care.

    4. How about the blessings of a Democrat President, Senate and House with their sparkling leadership to push through all those democratic causes that warm the cockles of your heart, Obamacare, Tax and Trade, DREAM Act etc.

    5.Now take me. I get to finance all the errors made by your friends which is like getting a lump of coal.

    Now why would you have anything to complain about?



  2. Bill Manzi says:


    Merry Christmas! Don’t agree that being a Democrat means that you can’t count. As I have said repeatedly the lack of counting ability is on both sides of the aisle.



  3. Jules Gordon says:

    Ahhh Your Honor,

    As far as Massachusetts and Washington are concerned, there have only been one party in control since Obama and Deval Patrick are concerned. Up to next month, anyway.

    Anyway Merry Christmas to you and yours. And a Happy New Year.



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