BOSTON—Gov. Deval Patrick has enacted a $27.6 billion budget that will cut state aid to cities, towns and schools for the new fiscal year that begins Thursday, at the same time vetoing $457 million in spending, much of it anticipated federal dollars that Congress has yet to approve.
Patrick signed the spending plan Wednesday during a ceremony in his Statehouse office. He said the budget amounts to less than half a percent increase in spending over the 2010 fiscal year budget.
The budget includes a 4 percent cut in state aid to cities and towns and a 3 percent cut to school spending. Patrick had originally hoped to avoid reducing spending in both accounts, but said that the cuts were needed to balance the budget.
"For the fourth consecutive year, our budget is balanced, responsible and on time, not something many other states can say," Patrick said.
There are no new taxes in the budget. Administration officials said the cuts included in the spending plan could lead to the layoffs of up to 1,000 state workers. That's on top of 2,600 state jobs already eliminated since the recession began, officials said.
The spending plan also relies on diverting nearly $200 million from the state's rapidly dwindling rainy day savings account.
Although Patrick said the budget is balanced, it depends on a $300 million debt-restructuring plan that the Legislature has yet to pass. That plan awaits a final vote in the Senate.
While that leaves the budget out of balance, the governor says he expects the Senate to approve the plan in the next few days. He said budgets are always balanced using anticipated revenues.
Patrick said his budget also partially restores funding for a health care program for 24,000 legal immigrants in Massachusetts.
The legislature had cut the $56 million program, but Patrick's plan would restore funding for the next six months, in part by using excess funds from the state's cigarette tax, his top budget official said.
Both lawmakers and Patrick built into their budget projections for the 2011 fiscal year on an anticipated $687 million in additional federal Medicaid dollars. Democrats in Congress supported the measure, but a GOP filibuster in the U.S. Senate blocked it.
That forced state lawmakers to draft two versions of the budget -- one anticipating that Congress eventually approves the money, the other assuming it won't be approved. Patrick chose to sign the lower budget, assuming the money isn't coming.
That decision accounted for $372 million of the $457 million in cuts, according to Patrick's Secretary of Administration and Finance Jay Gonzalez. He said additional cuts include a $20 million reduction to programs for developmentally disabled children and other cuts to health services.
Patrick said he made some of the additional targeted cuts, in part to guard against having to shut down a state prison.
The budget quickly drew fire from Republicans, including Charles Baker, the GOP candidate challenging Patrick for the governor's office.
Baker held a press conference on the steps of the Statehouse before Patrick signed the budget. Baker said that if he were governor, he would send the spending document back to lawmakers and give them two months to draft a new budget.
Although he wouldn't specify which programs he would cut, Baker said he would urge lawmakers to adopt changes to state government that he is recommending. Baker said those changes, including additional changes to the state pension system and the consolidation of state agencies, could ultimately save $1 billion.
"This budget will lead to higher taxes and fewer jobs next year and the year after," Baker said of Patrick's budget. "This is not the time to kick the can, this is the time for leadership."
Patrick dismissed Baker's criticism, saying his plan would lead to a "calamity" for the state.
Treasurer Timothy Cahill, the independent candidate for governor, also faulted Patrick for failing to force the state to live within its means.
GOP leaders in the House and Senate, including North Reading Rep. Brad Jones and Baker's running mate Sen. Richard Tisei of Wakefield, faulted Patrick's budget for relying too heavily on one-time funds including federal stimulus dollars, and for including the $300 million from the debt restructuring plan still waiting a final Senate vote.
"The governor has simply pushed off the day of reckoning and has failed to address the serious financial crisis Massachusetts is now facing," they said in a statement.
Patrick, who's had to grapple with plummeting state revenue throughout his first term, said he remains upbeat about the state's fiscal future.
"We can see light at the end of a long dark tunnel," he said.