The fiscal survey of states is published twice annually by the National Association of State Budget Officers or NASBO and the National Governor’s Association. It shows that Massachusetts is one of 25 states in which, despite more robust revenue growth, the executive branch isn’t ramping up spending to match.
Tax revenues are expected to go up by 3.1 percent in Massachusetts next year, but Governor Patrick has only proposed raising spending by 2.9%. Scott Pattison of NASBO says Patrick seems to be taking a conservative approach to budgeting because of uncertainty in the European and American economies. Pattison says that’s in keeping with the national trend:
“Governors have been very cautious fiscally and I believe prudent to be providing a cushion and prepared for a rather tepid growth.”
Even though the economy is improving in Massachusetts, the survey authors say there are still big challenges looming. The federal government is scheduled to make another round of deep budget cuts in January 2013. If those cuts go forward, they would directly hit the state budget in the form of reductions in grant programs.
And even though there’s some revenue growth and some spending growth, they’re going up at a very slow rate. At the same time, there’s no political appetite for tax hikes. So the study concludes, state revenue improvement since the recession hasn’t been strong enough to meet the rise in demand for state services and spending over the past two years.