THE BAKER ADMINISTRATION, which just cobbled together enough money to close a $765 million shortfall in this year’s budget, is now preparing to pare back spending by another $1 billion next year, according to sources.
Administration officials are reluctant to put a dollar amount on what they need to cut, but they acknowledge a structural deficit exists that needs to be closed. Baker has said he will not raise taxes, so spending cuts and fare or fee increases would appear to be his only options. Cabinet officials are in the midst of putting together their budgets for next year and insiders say just about every program is under review. The Baker budget is due to the Legislature March 4.
Dominick Ianno, the chief of staff to Secretary of Administration and Finance Kristen Lepore, declined to confirm the billion-plus number. “It just depends,” he said. “I can’t really give out numbers. It’s tentatively a big number.”
The billion-plus number is in line with figures developed by outside budget analysts. The Massachusetts Budget and Policy Center, in its preview of the FY2016 budget, projected a funding gap of nearly $1.1 billion. The center said state revenue is expected to grow by $955 million next year, after accounting for about $116 million in personal income and corporate tax cuts. But the cost to just maintain state services at existing levels without using one-time revenue fixes will rise by more than $2 billion, leaving the Baker administration with a billion-dollar hole to fill.
The Massachusetts Taxpayers Foundation is projecting an even bigger shortfall. Eileen McAnneny, president of the foundation, told Masslive that the fiscal 2016 gap between revenues and spending needed to maintain current services could be $1.5 billion.
Even after all the cuts made during the current fiscal year, Ianno said, spending will still increase 7.7 percent over the previous year. “That’s just not sustainable,” he said. “There’s definitely a structural problem for 2016 to address.”
The Baker administration is now turning to the fiscal year 2016 budget after winning approval in the Legislature of a plan to closed the existing shortfall in this year’s budget. The Senate passed the measure on a voice vote Thursday, agreeing with the House to eliminate a provision that would have given Baker the ability to restructure benefits for Medicaid recipients. Otherwise, the measure hews closely to Baker’s proposal, which included a tax amnesty program for Massachusetts businesses and diverts tax funds slated to go into the rainy day fund.