State spending news from today’s Boston Globe:
[Administration and Finance Secretary ] Kirwan downplayed the significance of the short-term borrowing…But she said the factors that led to the increased borrowing - like a shortfall in lottery revenues - could mean the state has to use reserves to balance the books at the end of the year. She would not predict how much may have to be taken from the state's rainy day fund…
Michael Widmer, president of the Massachusetts Taxpayers Foundation, one of the state's leading fiscal watchdogs, yesterday predicted the state will have to use $300 million to $700 million in reserves to balance the budget at the end of the year because of increased health and pension costs and declining lottery revenues. Next year, he said, the shortfall could skyrocket to $1.5 billion because of built-in, escalating expenses.
Widmer’s estimate of drawing $300-700M from reserves compares with last year when the Patrick Administration drew $225M from reserves, including $175M from the “rainy day fund”.
Of course the “rain” of an economic downturn hasn’t even started. But does anybody need a new Gazebo this year?