$2 B Budget Gap Looms; Major Cuts Anticipated

By Sarah Birnbaum

Dec. 14, 2010

BOSTON — The state Legislature may be out of session – but a looming $2 billion budget gap  for the next fiscal year is worrying lawmakers and interest groups across Beacon Hill, who will be talking dollars during State House hearings on Tuesday.

Legislators say the magnitude of the budget gap means reductions in state programs and local aid are inevitable.

That worries people like Susan Nadworney, whose 20-year-old son James has severe mental disabilities. Along with dozens of disabled individuals and their advocates, she urged officials to preserve funding for health services at hearing Monday.

She explained James’ need for round-the-clock care led her to rely heavily on the Department of Developmental Services – and it has been working. “The DDS program has been essential to getting our son to a point right now that he is able to be in the community, participate in the community, ” Nadworney said.

Steve Bernard, the CFO for the Department of Health and Human Services, says that as the Patrick administration looks to close next year’s budget gap, it doesn’t want to cut programs for the needy and disabled.

But it may be the only place left to cut.
"You know, it’s just a fact that after 3 or 4 years, tough challenging years, we’ve eliminated all the areas of savings that do not impact direct client services,” Bernard said.

To close this budget gap, he said, the state may be looking at more dramatic cuts. “We’ve certainly in the past looked at across the board type of strategies, but typically, those aren't so effective in closing the type of gap, the magnitude of the gap we’re facing this year."

Why all the drama? Unlike past years, when state reserve funds and federal stimulus dollars were used to save state programs, this year is different. Senate Ways and Means Chair Steven Panagiotakos, says those sources are either gone or nearly gone.

"We don’t have federal funds to fill that gap,” Panagiotakis said. A national focus on deficit reduction makes it unlikely that the U.S. government will provide any additional stimulus dollars to Massachusetts. 

The state’s rainy-day fund is depleted to about $600 million – less than half of the gap – but legislators don’t want to look there for answers, either. “You really need to keep that kind of free for insurance during the fiscal year in case something goes wrong."

Meanwhile lawmakers such as Panagiotakos say that state’s costs are going up – the Medicaid program, for example,  is growing as more people lose their jobs and turn to the government for insurance coverage.

"It’s the budget-buster,” Panagiotakos said. “You know you try to get your arms around it, and we think we’re making some headway, but it just continues forward…so it’s difficult.”

The Governor is expected to release his proposed budget in January.

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