• February 2005

Governor's 2006 Budget: Continued Lean Times; Medicaid Accounting Change Key to Balance

Governor Romney has proposed minimal spending growth in his state budget for fiscal 2006, reflecting the reality that the Commonwealth will face tight budgets for the foreseeable future. However, fiscal balance in the proposed budget-which would also cut the income tax by $450 million over two fiscal years-relies on hundreds of millions of dollars of questionable Medicaid cost shifting and on business tax increases that threaten to undo the progress Massachusetts made during the 1990s in improving its tax climate.