Polito's Point of View: February 2008

Budgets and Priorities

It's that time of year again, when the legislature begins the Commonwealth’s budget process. The first step in this process involves the determination of projected revenue for the upcoming fiscal year. State law requires that the Secretary for Administration and Finance shall jointly develop a consensus tax revenue forecast for the budget for the next fiscal year with the House and Senate Committees on Ways and Means on or before January 15. The Fiscal Year 2009 consensus tax revenue estimate is $20.987 billion, representing revenue growth of 3.8% over the Fiscal Year 2008 estimate of $20.225 billion.

The agreed upon 3.8 % growth is a conservative revenue estimate. Notwithstanding an economic outlook dampening consumer and business confidence, in January 2008, our state's Department of Revenue (DOR) collected $2.201 billion, up $148 million or 7.2% from the same monthly period last year. Total tax collections were $87 million above the January monthly estimates, due largely to greater than anticipated income tax estimated payments. Specifically, January 2008 income tax collections totaled $1.659 billion, up $229 million or 16%. This level of revenue may be a positive sign, but also could be aberrational.

With the Governor and legislature both projecting modest revenue growth, now is not the time to fund new programs (as suggested by Governor Patrick) but instead to maintain existing levels of spending and to strengthen the relationship between state and local government. As the Assistant Ranking Minority Member of the House Committee on Ways and Means, I am currently participating in a series of public hearings across the Commonwealth to better understand our state's spending needs. I understand that the new health care insurance requirements will utilize more revenues than anticipated, which we will need to address first and foremost. Health care analysts underestimated the number of uninsured and eligible for free care by $147 million, which we must accommodate for in our Fiscal Year 2009 state budget.

Our FY '09 state budget must also prioritize state aid to cities and towns. I hear time and time again, that without a better state-local partnership, cities and towns are being forced to cut spending to a point where we are compromising our quality of life. I have fought consistently to increase and protect funding for municipalities. As a co-sponsor to House Docket 2632, I am calling for full reimbursement of $450 million in lottery aid to cities and towns, which aid had been diverted to the state general fund. I am also urging legislative leaders to reject Governor Patrick's attempt to use a $124 million cut in local aid to pressure the Legislature into approving his proposal to bring casinos to Massachusetts.

The municipal budget process is underway, and final budgets are being approved at a local level without confirmation of state school funding and local aid numbers, which is wrong. I have continue to advocate for an Early Aid Resolution between the Governor and Legislature to make final state aid figures available to cities and towns earlier in the budget process. A budget is a reflection of our values and priorities as a citizenry. While I applaud Governor Patrick for maintaining a commitment to the newly organized Chapter 70 school aid formula in his budget, which resulted in increases in school aid to both Shrewsbury and Westborough, I do not support funding new programs before fixing current needs, specifically municipal aid. New proposals such as universal Pre-Kindergarten, full-day kindergarten, and free community college may sound good, but we must focus first on adequately funding school aid, special education, and special education transportation, a growing unfunded burden for school districts across the Commonwealth.

I assure you that I will advocate for a reasonable, fair and practical state budget with a strong commitment to our cities and towns. The House Ways and Means Committee will release its budget recommendations in the coming weeks, and official budget debates will likely commence at the end of April. When the House of Representatives concludes its debates, the budget will be sent to the Senate for its deliberations. Any differences between the House and Senate budget recommendations will be resolved by the Conference Committee before being sent to the Governor for his input.

You can expect the legislature to debate corporate taxes and consider other new revenue sources like increasing taxes on cigarettes. In my view, in order to responsibly balance our state budget, we need to establish priorities and control spending. We must use the revenues we anticipate collecting wisely rather than asking our already over-burdened families, seniors and businesses to pay more. Balancing our budgets with restraint and priorities is the most prudent course of action for our state.

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Karyn E. Polito, State Representative- 11th Worcester District