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- The Beacon
| Spring 2009 | Summer 2009 - Sponsor the Beacon
State's Fiscal Problems Far From Over
- ~ FY 2010 9C Cuts Possible
- ~ FY 2011 Expected To Be Worse than FY 2010
(Posted 8-19-2009 - From ADDP [http:/www.addp.org]) Just in case you felt like nothing could be worse than this past year's budget battle, get ready for another rocky season. According to most budget watchers and legislative analysts, FY 2011 may make the FY 2010 debate seem like the good old days.
State House News reported this week:
"Broadly speaking, cost control and revenue generation are themes for the fall as state government, having exhausted many of its budget-balancing tools over the past year and facing predictions of a weak recovery, rising unemployment, and evaporating federal stimulus funds, begins searching for ways to plug what's likely to be a multi-billion dollar revenue-expenses gap in fiscal 2011. Extensive tax increases, rainy day fund draws, and budget cuts have been deployed, but a new slate of budget fixes is still needed to head off a phenomenon that budget analysts call the cliff effect, as in the budget is about to fall off one unless major corrections are made."
The impact on disability programs remains to be seen, however ADDP is particularly concerned about the recent decision of the Governor and the Legislature use of enhanced Medicaid to "plug state budget holes" in the FY 2010 budget. By using the bulk of enhanced Medicaid for programs outside human service programs, the state may have solved its 2010 fiscal problems, but may have set itself up for a worse budget crisis in FY 2011 and FY 2012. Once the additional $2.5 to $3 Billion in enhanced Medicaid runs out, the state will be forced to either dramatically cut its budget or find additional revenue. ADDP remains concerned that dollars meant to protect human service programs were diverted to address other state budget problems.
Making the situation even more grave are recent reports that monthly state receipts continue to lag behind expected projections. In fact, the Department of Revenue reports July 2009 tax receipts came in $24 million under its expected benchmark, reflecting an 8.2% drop from the previous July.
If these negative trends continue, the pressure and fiscal triggers may continue to grow that will require the Governor to implement 9C cuts. The disability community (already suffering from years of cuts, underfunding and rate freezes and reductions) is expected to stand united in opposition to any further community erosion.
As the budget crisis nears the cliff, it may become even clearer to members of the legislature and the general public that the Commonwealth cannot continue to fund a dual (some say triple) delivery system. The State is expected to close Fernald Developmental Center in FY 2010. Certainly an expedited closure schedule for the closing of the other four state institutions should be considered as the state grapples with its continuing fiscal problems. ADDP members will work with the Administration and legislature to help implement an expedited closure schedule.
ADDP will be calling on our legislative supporters and the Governor to protect community programs from any further 9C or FY 11 cuts - noting the devastating cuts that have already caused havoc within the provider community.