Revenues Rise, but Governor's Budget Stays Cautious

By Sarah Birnbaum

June 13, 2012

deval patrick state of the state 2012
Gov. Deval Patrick delivers the 2012 State of the State address. (Steven Senna/AP)

BOSTON — A national survey of governors' budgets released on June 12 shows Massachusetts tax revenues are finally projected to hit pre-recession levels in the fiscal year that starts in July. But Gov. Deval Patrick is still taking a tight-fisted approach to budgeting.
The Fiscal Survey of States is published twice annually by the National Association of State Budget Officers (NASBO) and the National Governors Association. It shows that Massachusetts is one of 25 states in which, despite more robust revenue growth, the executive branch isn't ramping up spending to match. Tax revenues are expected to go up by 3.1 percent in Massachusetts next year but Patrick is only proposed raising spending by 2.9 percent.
Scott Pattison of NASBO said Patrick seems to be taking a conservative approach to budgeting because of uncertainty in the European and U.S. economies. Pattison said that's in keeping with the national trend: "Governors have been very cautious fiscally, and I believe prudent, to be providing a cushion and prepared for a rather tepid growth."
Even though the economy is improving in Massachusetts, the survey authors said big challenges still loom. The federal government is scheduled to make another round of deep budget cuts in January 2013. If those cuts go forward, they would directly hit the state budget in the form of reductions in grant programs.
And even though there’s some revenue growth and some spending growth, the rate is very slow. At the same time, there’s no political appetite for tax hikes. So, the study concludes, state revenue improvement since the recession hasn’t been enough to meet the rise in demand for state services and spending over the past 2 years.

Spring 2012 Fiscal Survey of States
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