September 14, 2009
PUBLIC FINANCE > Budget > FY 2009

Overview of State and Local Finances

In a presentation to business and government leaders, MTF President Michael Widmer described the global recession's enormous impact on state and local finances and the state's dependence on $5 billion of one-time state and federal funds to balance the fiscal 2009 and 2010 budgets. Because of the heavy reliance on one-time funds, which have been mostly depleted, even with an economic recovery the state faces a large structural deficit in 2011 that will require significant additional cuts across state government.The continuing cuts in local aid that are crippling municipal budgets make it essential that the Legislature act to rein in the escalating costs of pension and health care benefits for local employees and retirees. The Legislature's top priority should be to give municipal officials the same powers over health plan design - outside of collective bargaining - that the Group Insurance Commission has for state employees and retirees.

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