Legislators Weigh in on impact of impending state budget cuts to balance a half-billion dollar gap

Daily Hampshire Gazette
Bob Dunn
December 7, 2012

NORTHAMPTON — Shaky economic confidence and fears of falling over the “fiscal cliff” are likely contributors to a half-billion dollar state budget gap, area lawmakers say.

There is both good and bad news in Gov. Deval Patrick’s plan to close that chasm, according two local state representatives.

Patrick announced Tuesday he is implementing cuts that, in this region, affect schools and human service agencies and deal a blow to the Buy Local program that promotes local growers and produce.

State Rep. Stephen Kulik, D-Worthington, said while the cuts will harm existing programs, future local aid from the state remains intact for now. Kulik said the 9C cuts, named for the law involved, only allow the governor to cut spending on agencies or organizations in the executive branch. Local aid and Chapter 70 educational aid are immune unless cuts are authorized by the Legislature.

Area schools may be among the first to feel the impact, Kulik said, due to cuts to items like transportation for homeless students and special education accounts that provide money to schools when costs associated with special needs students exceed three times the amount of average per-pupil costs, Kulik said.

Those cuts are especially frustrating, Kulik said, because the programs were fully funded by the state for the first time this year. One cut Kulik regrets is a $200,000 loss to the Department of Agricultural Resources. That money would have been used to continue to promote the “Buy Local” agricultural program that raises awareness and visibility of the benefits and availability of local produce

“That means a lot to our region,” Kulik said.

Philip Korman, executive director of CISA, Community Involved in Sustaining Agriculture, said the cut will limit his organizatin’s ability to make people aware of the availability and benefits of locally grown produce. While the cuts may be needed to balance the state budget, Korman feels they weren’t made equitably.

“It feels like they did the easy thing without a thoughtful process about it,” Korman said.

“It’s a very small amount for such an important mission,” Korman said. “These cuts affect real people and real businesses.”

Korman said lawmakers have always been supportive of CISA and the Buy Local initiative, but the 9C cuts are made without their input.

The cuts could impact 7,500 farms that depend on the public’s heightened awareness of local produce to help increase their sales, whether at markets, restaurants or schools, all of which have seen increases in the desire for such goods, Korman said.

State Rep. Peter V. Kocot, D-Northampton, said Friday that while cuts are coming for some human service agencies, the salaries for staff at those agencies are not targeted. “That’s good news,” he said.

Clare Higgins, executive director of Community Action and Northampton’s former mayor, said that only about one-third of her agency’s budget comes from state aid, with the remainder from federal money that remains stable pending the outcome of the budget debate in Washington.

“We don’t have a full picture yet,” she said. But at the very least, there shouldn’t be any impact on the agency’s child care services, Higgins said.

Those services include referrals for parents to find appropriate care for their children, and Community Action’s parent-child development center, which provides early education options for children up to age 5.

“Right now we’re going to be all right,” she said. “At this point.”

The potential agreement between the state and the online retail giant Amazon.com could improve the revenue picture. The pact would allow the state to collect its 6.25 percent sales tax on Amazon’s online sales within Massachusetts.

Considering Amazon.com reported worldwide sales of $13.18 billion in the first quarter of 2012, the tax receipts could be a substantial boon, Kocot said.

If new revenue becomes available, the 9C cuts might be restored, Kulik said.

Kulik said the issue of why the budget gap developed will be a topic of conversation next week at a hearing of the Committee on Ways and Means, of which Kulik is vice chairman. “We’re going to be grilling economists about that on Tuesday,” he said. “It’s an inexact science.”

Kulik said the question of additional cuts won’t be taken up until January, when the Legislature returns to session. He sees little enthusiasm among his colleagues to approve reductions in local aid. “It’s a last resort type of thing,” Kulik said.

“At this point, it’s premature to talk about future cuts,” said Kocot.

While Kulik said he’s hopeful the state’s economy will grow, it will probably not be at the 3.5 percent rate earlier forecast.

Kocot said uncertainty related to the federal budget is impairing growth in the state and nation.

“There’s a very big connection between corporate, personal and business spending,” Kocot said. Congressional inaction has a chilling effect, he said.

“If we can just get through the next couple of months, I think we’re going to be OK,” he said of the state’s financial picture.