Financial Crisis in Massachusetts Exposed

 

 

Massachusetts has a total state debt of approximately $102 billion when including the total of outstanding official debt, pension and other post-employment benefits / liabilities, Unemployment Trust Fund loans, and the FY 2013 state budget gap. The Fiscal Year starts on July 1, and the debt increased by $4.3 billion from FY 2102 to FY 2013....and it continues with no end in sight. In FY 2013, just 5 months into the new budget year, Governor Deval Patrick announced a $540 million shortfall. This clearly shows not only the lack of budget planning, but the total irresponsibility in budgeting and use of taxpayer money. Further, no surprise, Patrick and the Legislature seem to almost always overestimate revenue (It is easy to "balance" that way) and there was $235 million LESS income than expected. And this was less than half way through the
new budget year! In still another step that shows gross incompetence in budgeting, Patrick had to raid the "Rainy Day Fund" for another $200 million.

This is what happens when you have an out of control one party state. While the people of Massachusetts are seemingly asleep, what is most alarming is that the media and the Republican leadership in our state fail to inform people about what is going on! Extremely heavy debt that continues to increase, out of control spending, and irresponsible budgeting. Somebody should be sounding the alarm.

And this leads to the FY 2014 budget. Although drowning in debt Patrick proposed In January of 2013 a budget of $34.8 billion, a 6.9% increase over the previous year! In announcing this outrageous budget he also wanted to raise taxes by $1.9 billion. (Are you still sleeping?) So along comes our one party state Legislature to the rescue, they were going to bring things into control. What they did is battle Patrick over which tax increases to impose and then this ended up in a "compromise". The final budget is $34.06 billion, ONLY an increase of $1.5 billion and a 4.5% increase. (Phew, what a relief!) In achieving this a few tricks were used. The "balancing" came about by a "one time" spending of 723 million that includes dipping AGAIN into the "Rainy Day Fund" to the tune of $350 million. And, Oh yes, did you know that about 31.5% of our state budget income comes from the federal government. (It is a good thing that Patrick is friends with President Obama...that really helps!)

Here is what you can count on:

1) Massachusetts will be driven deeper into debt with no end in sight.

2) It will be discovered early on that revenue / income will be less than expected, and action will be necessary...Patrick to the rescue.

3) About mid way through the 2014 Fiscal Year Patrick will announce still another budget shortfall. Another raid on the "Rainy Day Fund" will be necessary, as well as other measures.

4) Perhaps not Fiscal Year 2014, but soon, a domino affect will occur where there will be a total collapse of Massachusetts' financial condition. Since we are largely dependent upon the federal government for 31.5% of our income, and the fact that the federal government is close to $17 trillion in debt headed rapidly to over $20 trillion...sooner or later this condition is going to end abruptly. When it does, this will be an economic disaster for our state and have an extreme detrimental impact on all Massachusetts citizens. Unfortunately, then they will wake up.

Where is the media on this? Where is the Republican Party Leadership? Where is the Massachusetts Taxpayer Foundation? All are absent in their responsibility in bringing out the facts and truth to the people of Massachusetts and exposing the current and impending financial crisis that exists in our state.