BOSTON—Massachusetts government should make internal reforms before asking its taxpayers for more revenue to close a widening budget gap, said Senate President Therese Murray to the Great Boston Chamber of Commerce this morning.
Because of growing revenue shortfalls, federal stimulus money will not be enough to meet the bottom line, and tax revenues will need to be adjusted, said Murray.
Tax revenues have already fallen $2 billion short this fiscal year, and revenues are $157 million below the benchmark for the rest of the year and will continue falling, said Murray. Next year’s budget is projected to have a $4 billion gap, she said.
“For all the good the federal stimulus will do, it’s not the cure for our economic problems,” said Murray. “We don’t want to create an expectation that is unattainable when the stimulus money runs out.”
The Senate’s transportation reform bill will be submitted today to Gov. Deval Patrick, and a Senate commission on pension reform will submit a bill by Sept. 1 this year, said Murray. The transportation reform bill will consolidate transit agencies into a single authority to save a predicted $6.5 billion over 20 years, she said. The Senate version of the bill requires more reform and cuts than the House version, said Murray.
“Our transportation system is failing,” said Murray. “It needs to be fixed before we ask taxpayers for more money. We addressed the MBTA because it’s a huge problem.”
Murray said the House and Senate are also working on a municipal relief package that will support more local options, such as giving cities and towns more authority to tax. The Senate is pushing for municipalities to change their workers’ healthcare coverage to Group Insurance Commission (GIC) because it is cheaper than the current system, and city employees are older and sicker than state employees, Murray said.
“It’s an understanding that we can’t put further burdens on people who have already lost their jobs and their cars,” said Murray. “Tackling hard reforms now will create a leaner, stronger, more efficient and trustworthy government for our future.”
The Senate will also create a bill to legalize gambling in the fall because Massachusetts casinos could gather at least $7 million in revenue from residents who travel to Connecticut and Rhode Island to gamble, said Murray.
“My staff is going to hate me for doing this, but cha-ching!” said Murray when the audience asked her about casinos.
Though Murray said she has been behind legalizing gambling since last year, the state first must manage its debt and pay mandated costs, then establish a safety net for low-income residents who rely on the state, she said.
“It’s depressing to see how much we have to cut in services, but we can’t print money,” she said. “We can’t skip on things for economic development. We need to market the Commonwealth.”
Massachusetts will be ahead of many other states in implementing federally funded reforms like healthcare and renewable energy because the state has already allotted funds and research to these areas, said Murray. The federal government will contribute five times the amount states have spent in sectors such as electronic health records and renewable energy, she said.
Massachusetts has spent $15 million to control costs of healthcare by researching electronic record systems, and the state will help doctors and hospitals choose the highest quality systems, said Murray. The federal government will invest an additional $90 million for the project to match the funds already spent, and Massachusetts will receive $500 million in stimulus money for healthcare providers as an incentive to implement electronic records, she said.
The federal government aims to convert all medical records in the country to electronic format by 2014, said Murray.
The state has also received $482 million in grants for energy renewal, and some municipalities have already started evaluating the environmental status of their public facilities because of the Green Community Act, she said.
New investments in Massachusetts are a sign that the state can recover, said Murray. She cited two movie studios being built in Plymouth and Weymouth and two research centers creating new jobs, EMD Sorono in Cambridge and the Massachusetts Life Sciences Center.
“We have a history of facing adversity and rising above circumstances to make Massachusetts a better place,” said Murray. “Each economic downturn we’ve encountered has only provided us with a stronger platform to bounce back.”
Melissa Walsh, chief operating officer of Massachusetts Life Science Center, said wise investments in science and research are important to help the state recover, and Murray’s speech showed strong support for the Center’s approach.
The Center’s investment of $10 million in the Marine Biology Lab in Woods Hole could create 200 construction jobs and 50 biotech jobs, according to Murray’s speech.
Bill Rennie, vice president of the Retail Association of Massachusetts, said Murray’s leadership is needed during the financial crisis, and he supports her reform initiatives.
“We need to rebuild the public confidence in state government,” Rennie said. “People and businesses want to see the government get their own house in order before they ask for revenue.”
Murray did not reveal enough about how taxes will be affected as the Senate tries to close the budget gap, said Mary Jo Meisner, vice president of The Boston Foundation, which manages donations to Boston non-profits. Still, Meisner said she agrees with Murray’s advocacy for local options taxes and moving employees to GIC healthcare.
“She’s taken on issues that haven’t been talked about,” Meisner said. “They’ve been around for a long time, but there’s been an unwillingness to tackle the hard issues.”
At the end of her speech, Murray told the Chamber of Commerce there were not enough women leading their firms. She said that only 13 of the Fortune 500 companies have female CEOs, and only 26 percent of the Massachusetts legislature is female, though the state is 52 percent female.
“We can do better,” she said. “When I come back next year, I’m sure there will be some changes.”
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