Wallace: "It's starting to get a little bit scary" Widmer: "The battle has just begun"

Matt Visor's good article in today's Globe tells the story. Everyone inside and outside the State House is paying strict attention to the the gap between FY 09 estimated revenues and estimated expenditures.

Rep Brain Wallace (D) from South Boston

"It's starting to get a little bit scary," said Representative Brian Wallace, a South Boston Democrat. "It's creeping in everyone's conversations about what we do from here. The numbers aren't adding up and the numbers aren't looking good. There's a lot of indecision."

Mike Widmer from the Mass Taxpayers Foundation - a business funded policy think tank.

"The battle has just begun," Widmer said. "I don't know when it officially becomes a crisis. But we're getting close to that, where it's not just adjustments but a full-blown crisis. . . . We're going to be on a wild roller coaster ride for a while."

Meanwhile the Executive Office of Administration and Finance is warning health and human service providers not to spend some of their hard won expansions because they may be taken away via the Governor's 9-C powers.

For an explantion of 9-C cuts from the Public Policy's Insider Budget Briefing see below. A small group of advocates for a wide variety of public programs from social services to public safty to public education, to health and human services are already talking about ways to avoid 9-C cut now and in the future. Those interested in learning more and participating in these discussion should email us at info@onemassachusetts.org

What is 9(C)?

Section 9(C) of Chapter 29 of the General Laws requires the Governor to reduce spending whenever his administration determines that there will not be enough revenue to pay for the spending authorized in the budget.

How Does 9(C) Work?

When does the Administration decide whether to make 9(C) cuts?

Technically the administration can announce 9(C) cuts at any time that they determine that revenue is likely to be insufficient to pay for all authorized spending. But there are also specific times when the administration is required to update its revenue estimates. The next such time is October 15th. If that new estimate projects a significant decline in revenues below the level assumed when the budget was adopted, then the 9(C) process would likely begin.

What can be cut and what can’t be cut?

The Governor can only use 9(C) powers to cut funding in parts of the government that are under his control – the executive branch agencies that run and fund most of state government. This power can not, however, be used to cut local aid, the courts, the legislature, or other constitutional offices. The Governor filed legislation seeking expanded powers to spread cuts to these areas of Government as well, but that legislation has not been enacted.

Are there any options other than cuts?

Yes. The Governor can also request that the legislature appropriate money from the stabilization fund or raise additional revenue.

Is it likely that there will be 9(C) cuts this year?

The administration has made some preliminary estimates that suggest revenue may be less than the amount needed to fund the spending authorized in the budget. If those estimates are accurate, 9(C) cuts are likely. In the first two months of the fiscal year tax revenues did not fail to meet the benchmarks. But there are some indications that the September numbers will be significantly weaker. If they are, it is likely that 9(C) cuts would be announced in October.