Lawmakers offer dark forecast on finance, influenza

By Nick Grabbe
Staff Writer

Published on October 16, 2009

Two state lawmakers painted a gloomy picture of budget cuts and the H1N1 virus at an Amherst Area Chamber of Commerce breakfast Oct. 9.

State revenues are running $243 million behind projections so far this fiscal year, and the annual shortfall could be as high as $1 billion, said state Sen. Stan Rosenberg, D-Amherst.

"It's an unprecedented situation we're facing," he said.

State Revenue Commissioner Navjeet Bal said at a public hearing Oct. 8 she may recommend the Patrick administration lower its projections for the year by $400 million to $600 million. The warning came after tax collections in September fell $243 million below projections but before an Oct. 15 deadline for an official, revised revenue figure for the fiscal year that began on July 1.

Depending on how much revenue estimates get reduced, Gov. Deval Patrick may go back to lawmakers to ask for the power to make mid-year cuts to the budget. Rosenberg said that could happen in as soon as two weeks, and those cuts will probably include local aid.

Patrick was forced to take similar action last fiscal year as revenues plummeted throughout the year.

With the economy soft and unemployment high, the Legislature has no stomach for any new taxes, Rosenberg said.

Expanded gambling will probably be approved in the next six months, but the state wouldn't see significant revenue from it for at least a year, he said.

With dollars from the federal stimulus available only this fiscal year, the structural deficit next year is projected to be more than $1.5 billion, Rosenberg said.

"Other than that, how did you like the play, Mrs. Lincoln?" he joked darkly.

State Rep. Ellen Story, D-Amherst, described a Department of Public Health hearing she attended recently on the H1N1 virus.

She urged business owners to waive any requirement they have that employees who are out sick for three days provide a doctor's note. And she said anyone charging a fee for an H1N1 shot is engaged in a "scam."

She cited the different experiences of St. Louis and Philadelphia in the 1918 flu pandemic.

In St. Louis, the mayor closed schools and canceled parades celebrating victory in World War I, and was not re-elected even though the flu's impact was minimal.

In Philadelphia, the celebrations went on, followed by massive fatalities, though the mayor there was re-elected, Story said.

Amherst Select Board member Gerry Weiss asked why, if there's talk about expanded gambling, no one's discussing even a 0.5 percent increase in the income tax.

"The Legislature is patting itself on the back and feeling so brave that it increased the sales tax," Story said.

"People are so nervous about even talking about the income tax, they lose consciousness."

Although the latest ballot initiative to eliminate the state income tax was defeated, there is still an undercurrent of fear about jobs, Rosenberg said. Proposed ballot questions to roll back the sales tax and alcohol tax are circulating, he said.

Stephanie O'Keeffe, chairwoman of the Select Board, said Amherst has identified its core programs and services, but a tax override next spring will be necessary to protect them. "This is a terrible time to ask people to raise their taxes," she said. "But if people want to maintain that core, we need more money. This is the reality."