Patrick proposes rainy day deposit

By Noah Bierman
Globe Staff / August 26, 2011

E-mail this article

Invalid E-mail address
Invalid E-mail address

Sending your article

Your article has been sent.

Text size +

In a sign the state’s finances are recovering from the recession, Governor Deval Patrick announced a plan yesterday to sock away an additional $300 million from last year’s surplus to bolster the Massachusetts rainy day fund.

If lawmakers agree, the fund would have more than $1 billion, giving Massachusetts a larger emergency kitty than all but three other states. It would also be the largest sum in the fund since June 2008.

Before the recession, in June 2007, the emergency fund had hit a high mark of $2.3 billion.

The overall surplus from the recent budget year, which ended June 30, was $460 million.

Patrick also proposed spending some of that money this year, much of it on adult education, summer jobs programs, and other workforce training services. And he has set aside $35 million for a ministimulus package, what he is calling “shovel-ready infrastructure projects.’’ The proposal includes another $16.2 million to reimburse cities and towns for expenses related to the June 1 tornadoes and the December 2008 ice storm.

Only New York, Texas, and Alaska have more than $1 billion in their rainy day funds, according to state Treasurer Steven Grossman.

Patrick’s budget chief, Jay Gonzalez, and the governor himself both touted the state’s “strong fiscal management,’’ an idea echoed by Grossman and Michael Widmer, president of the Massachusetts Taxpayers Foundation.

“This singular accomplishment would send a powerful message to the bond rating agencies that judge our financial standing, as well as to the investor and business communities at a time of economic and fiscal challenge,’’ Grossman said in a statement.

Widmer said the decision to deposit most of the surplus into the emergency fund “reflects the positive way that the governor and Legislature have handled our fiscal crisis.’’

He called it a good starting point, but cautioned against complacency, stressing that the state must continue to bolster the fund.

“If we have a double-dip recession, this will not begin to be adequate,’’ Widmer said. “We’re not out of the woods. We’re in better shape than most other states.’’

Noah Bierman can be reached at