BOSTON (State House News Service) – Gov. Deval Patrick in the next two weeks will present a plan to trim $325 million in spending from the $36.5 billion state budget.
Two days after the election, Patrick administration officials on Thursday held a briefing to disclose the gap, which they say is forming in part due to the likelihood of a legally required reduction in the income tax rate in January from 5.2 percent to 5.15 percent.
In mid-October, Patrick’s team stuck by its fiscal 2015 revenue estimate while flagging areas where the state faced revenue exposures.
Administration officials said Thursday their plan would also address a projected $175 million shortfall in non-tax revenues, such as fees.
Secretary of Administration and Finance Glen Shor briefed the media on the plans two days after voters affirmed the state’s commitment to expanded gambling, protecting $95 million in assumed revenue from casinos for the current budget.
Patrick has about two months left in office. Voters on Tuesday elected Republican Charlie Baker, a former secretary of administration and finance under former Gov. William Weld, to succeed Patrick. Shor said the budget gap should be solved before Baker takes charge in January.
Shor said the administration does not plan to propose a draw from the rainy day fund to fill the budget shortfall, which was attributed to the assumed loss of $70 million in income taxes, the projected $175 million shortfall in non-tax revenues, and $80 million in costs associated with an economic development law approved over the summer.
Though tax revenues through October are currently trending $32 million below benchmarks for the year, Shor said budget analysts believe taxes would have met the benchmarks assumed in the state’s $36.5 billion budget for fiscal 2015 if not for the income tax reduction.