Authorities offer financial help to state
3 agencies provide $69.5m for deficit effort
Gov. Charlie Baker is asking some of the state’s independent authorities for help in balancing the fiscal 2017 budget, but it appears only three have stepped forward.
The Massachusetts Development Finance Agency agreed to provide $17.5 million and the Massachusetts Housing Finance Agency is contributing $5 million, for a total of $22.5 million.
The MBTA is also helping out, swapping nearly $47 million due from a $187 million state appropriation for an equivalent amount of money in state bond funds. The switch has little financial impact on the T, but it allows the Baker administration to use the $47 million to lower the amount of money needed to bring the fiscal 2017 budget into balance.
Officials say the Massachusetts Port Authority was asked if it could help out, but the agency, which operates Logan International Airport, decided it could provide no financial aid to the state this year. The Massachusetts Convention Center Authority, which provided $60 million to help balance last year’s budget, was not asked for money this year.
Baker has shown little nervousness about dealing with the shortfall. Officials say spending cuts, reversions of unspent money at state agencies, and federal funds are expected to close the gap. Final tax revenue figures for fiscal 2017, which ended June 30, are due next week. Baker estimated on Thursday that tax revenues will grow about 1.5 percent in fiscal 2017, far less than the 4.3 percent figure used to develop the budget. The shortfall for the year is expected to top $439 million.
Officials characterized the financial appeals to the state authorities as friendly, an exploration of what each agency could do to help the state without jeopardizing its own finances.
Draft minutes of the MassDevelopment board’s deliberations on the $17.5 million transfer indicate one member of the board voiced opposition to the proposal. The measure was approved on a 7-1 vote.
The draft minutes described Patricia McGovern, a former state senator and hospital executive, as “deeply troubled” by the Baker administration’s request. “She said she is afraid of the precedent this request will set and wondered if the administration is asking $17+ million this year, what might it seek next year,” the minutes said.
Rachel Madden, who represents Kristen Lepore, the secretary of administration and finance, on the MassDevelopment board, said Massachusetts quasi-public agencies were being asked to extend “grants” to the Commonwealth. She said the administration was determined not to touch the state’s stabilization, or rainy day, fund, according to the minutes.When Madden was asked by an unidentified board member to explain what precipitated the state’s shortfall, she said the question is “baffling to the economic experts and others who have suggested that there is no good answer,” according to the minutes. “It is a conundrum because the state’s economy is thriving.”