Bad budget times just got worse (updated)

Posted by Jeremy Shulkin

This week’s news story (which is an expansion of this blog post) talks about what happens when $687 million written into drafts of the state’s budget disappears.

There was hope that that money would come in if the US Senate voted for a bill that would extend Medicaid and unemployment benefits, but last night the measure failed by one vote after a Republican filibuster, 59-40, largely along party lines (Maine’s Republicans, Olympia Snowe and Susan Collins, were the only two to break ranks from the GOP, while Democratic Sen. Ben Nelson of Nebraska voted opposite of his party).

Massachusetts Senator Scott Brown voted against the bill, but early yesterday morning he and George Voinovich (R-Ohio) proposed their own bill that would extend these benefits using money from already allocated but as-yet unspent stimulus funding. That version of the bill wasn’t picked up, and no word yet on whether or not that would’ve sent less money to states.  We’re waiting for a call back from Brown’s press secretary for more information. Update (7/2): We haven’t heard anything from Brown’s office, but it looks like the reasoning for not picking up the Brown/Voinovich idea, according to Sen. Debbie Stabenow (D-MI), is “Those are dollars being used to create jobs in construction and manufacturing incentives and alternative energy. To take money from job creation to fund unemployment benefits makes no sense.” (From The Washington Post‘s Ezra Klein.)

So what happens now? The state will have to put into play the budget that cuts out an additional $687 million. Here’s where they cut or what they shuffled around:

-$100 million comes out of the state’s Stabilization fund (or rainy day fund), bringing it down to $500 million–about as empty as it can be to keep an AA Bond rating
-Suspending the state’s Statutory Carry forward requirement, which reserves 1/2 of 1% of tax revenue for the next fiscal year
-Saving $160 million by going back through the line items and taking the lowest appropriation number for funding (exceptions did occur)
-Cutting out health care coverage for aliens with special status (immigrants who are here legally). Saves $56 million
-MassHealth and Elder Affairs loses $93.5 million
-$7.4 million from child care
-$6.3 million from snow and ice reserves from the 2008 storm
-Suspending 100 new state auditor jobs
-Using up new revenue and fund surpluses, totaling $107 million

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2 Comments

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2 responses to “Bad budget times just got worse (updated)

  1. Well, I’m certainly glad Senator Brown is looking out for the interests of Massachusetts in the Senate.

  2. “Those are dollars being used to create jobs in construction and manufacturing incentives and alternative energy. To take money from job creation to fund unemployment benefits makes no sense.” (From The Washington Post‘s Ezra Klein.)

    Translation: Those dollars will be used to fund the unions.

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