In The News: Budget

Massachusetts is due about a billion dollars from the federal government in September and without it, the state could be hard pressed to make a scheduled local aid payment to cities and towns, according to Michael Widmer , President of the Massachusetts Taxpayers Foundation.

Michael J. Widmer, president of the Massachusetts Taxpayers Foundation, said that the debt ceiling is an “enormously potent’’ situation and that voters will have to judge afterward how their elected officials handled it.

Michael Widmer, president of the Massachusetts Taxpayers Foundation, says total state spending reached $32 billion in the fiscal year that just ended, compared with $30.3 billion in the prior year and $31 billion in the one before that.

Widmer says the data showing an increase in state jobs can be a little misleading. He says most state agencies actually have seen their staffs shrink in the last four years, while an increasing number of residents turned to the state’s Medicaid program for insurance.

Massachusetts Taxpayers Foundation President Michael Widmer said yesterday the collections make it likely the tax cut will take effect and said he believes the reduced tax rate should not be blocked. Voters more than a decade ago ordered a 5 percent income tax but lawmakers froze the rate cut in 2002.

The state should hold off, at least for now, on restoring spending cuts or reducing taxes, Widmer said, and should instead commit the bulk of the added revenue to rebuilding the state's reserve fund that has been tapped repeatedly in recent years.

"It's not a true surplus," argued Michael Widmer, president of the nonpartisan Massachusetts Taxpayers Foundation. "What it means is that we are losing less money, if you will ... but it doesn't mean that we are somehow taking in more money than we are spending," he said.

Under a 2002 state law, the state’s 5.3 percent personal income tax will likely drop to 5.25 percent on Jan. 1, said Michael J. Widmer, president of the Massachusetts Taxpayers Foundation.

Tax collections for fiscal 2011, scheduled to be reported this week, are expected to be $700 million more than projections, Widmer said. "It's a responsible budget," Widmer said. "It resists the temptation, with increased tax revenues, to add to the bottomline."

“That’s half of the annual salary of someone who has probably been laid off during this fiscal crisis,” said Michael Widmer, president of the Massachusetts Taxpayers Foundation.