Governor's Mid Year Cuts Are Here- Local Aid as Well

The Governor today announced his mid-year budget cuts in response to the revenue shortfalls being experienced by the state. They are below, and they include a 1% cut to unrestricted local aid. The Governor also tapped the rainy day fund for $200 million, which leaves a balance of $1.2 billion. That cut in local aid would translate for some of our local communities as follows.

Methuen $45,988

Lawrence $166,073

Haverhill $83,129

North Andover $17,334

Summary of Budgetary Reductions and Solutions

$225 million or about 1% in the aggregate in spending reductions through 9C cuts in Executive Branch agencies. After accounting for reduced federal revenue related to such reductions, the net amount of the budgetary savings from their cuts is $157 million.

As a result of the hiring controls the Administration imposed in October, over 700 of the new positions that were originally planned and funded in FY13 are being eliminated and will not be filled, resulting in a savings of approximately $20 million. This will result in the total state workforce having more than 6,000 less positions at the end of FY13 than it did before the recession

A number of new investments for projects and programs in FY13 have been reduced or eliminated, including limiting new or restored funding for investments across a range of government services.

$200 million from the Rainy Day Fund, bringing the total draw to $550 million in FY13 – leaving a balance of $1.2 billion, one of the highest in the country.

$25 million from a 1% reduction in the budgets of the Judiciary, Constitutional Officers and other non-executive departments.

$98 million in additional federal revenues in support of safety net programs operated by the state on behalf low-income residents.

$20 million from a total of $113 million in savings in state borrowing and health care reform costs. The remainder of this funding will be used to offset some unavoidable deficiencies which must be funded this fiscal year.

$20 million from a reduction in the amount of sales tax revenues that will automatically be transferred to the Massachusetts School Building Authority to support local school building costs.
$11 million from certain reserve fund surpluses.

$9 million from a 1% across the board reduction to unrestricted local aid. The Governor has filed legislation that ensures if lottery profits exceed the $1.026 billion amount currently budgeted in FY13, all of such excess proceeds be committed to increasing the amount of unrestricted local aid.

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