April 15, 2009 — Today the House Ways and Means Committee released the following preliminary budget.
Quote from the Executive Summary:
Faced with a rapid and substantial decrease in tax collections, the Committee chose to balance the budget through a careful analysis of the Commonwealth’s core programs and services. This document outlines a balanced budget reliant on existing tax revenue streams and will not further encumber the citizens of the Commonwealth with increased spending levels.
Although the loss of revenue has led to many difficult choices, the Committee felt it fiscally prudent to refrain from utilizing reserve funds. Although the state projects to close out Fiscal Year 2009 with a relatively strong Stabilization Fund balance of $1.3B, there is still reason for concern. To finish Fiscal Year 2009 in balance, the Commonwealth is likely to draw on close to $1 billion from the state’s “rainy day fund.” This fact, coupled with the state’s projected reliance on funding made available through the American Recovery and Reinvestment Act, will lead to a structurally imbalanced state budget. To account for this, the Committee has resisted the “quick fix” solution of tapping reserves, and has realigned spending to more sustainable levels, consistent with the amount of revenue the state expects to collect. The balance of the state’s “rainy day” fund will be useful to minimize further budget cuts in Fiscal Years 2011 and 2012.
