NEW YORK (Reuters) - Massachusetts officials have begun identifying emergency cuts to make to the fiscal year 2010 budget after the state’s September tax revenue collections missed their target, Governor Deval Patrick said on Friday.
“Our cabinet has effectively managed through a $7 billion gap already” with spending cuts, layoffs and other measures, Patrick said. “But today’s news means we have more to do.”
September’s monthly tax collection totaled $1.766 billion, an estimated $243 million below its target, highlighting the state’s struggling finances in the midst of the recession.
Massachusetts began fiscal year 2010 with a nearly $19 billion revenue estimate.
Tax collections for the first quarter of the fiscal year totaled $4.313 billion, $212 million below the year-to-date benchmark and $477 million, or 10 percent, below those of a year ago, the Department of Revenue said.
State Treasurer Timothy Cahill, who is running against Patrick in November’s gubernatorial contest, said Massachusetts is set to spend around $30 billion for fiscal 2010 and collect more than $18.5 billion.
Cahill blamed the overall shortfall primarily on the rising cost of universal healthcare in the state.
“I don’t know if we can sustain this healthcare bill that Massachusetts embarked on in 2006,” Cahill said.
Massachusetts was in a similar circumstance last year but was able to balance the budget with “one-time revenues,” mostly from the federal government and the state’s rainy-day fund, said Cahill.
But with only around $500 million left in the fund, compared with $2.3 billion at the beginning of last fiscal year, the state is running out of options.
“We’re not going to be able to balance the budget with one-timers unless Washington comes in and saves us again.”
Governor Patrick said that over the next three weeks his cabinet will revise the state’s tax revenue estimates for the rest of the fiscal year and after that announce measures to close the gap.
Reporting by Tom Ryan; Editing by Padraic Cassidy