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Unformatted text preview: cademic exercise, but also a visceral part of the welfare experience. The civic harms associated with returning power to the states cannot be disregarded as historically contingent. Such harms persist today. 11 | P a g e States CP Aff BDL Massachusetts Spending DA – Shell [____] A. Massachusetts budget is tight – no room to expand transportation infrastructure spending Boston Herald, 2012 (May 10, 2012, Boston Herald, “Long Term Budget Out of Balance,” A new long-term revenue and expenditure forecast released earlier this week by the Patrick administration suggests that Massachusetts faces some difficult fiscal choices. It builds on a positive but little recognized achievement of our state government: For many, many years, governors of both parties have worked with the legislative leadership and outside economists to prepare — and agree on — revenue estimates prepared without regard to politics or partisanship. Based on these estimates, Gov. Deval Patrick, his Republican predecessors and the legislative leadership have been more cautious than their counterparts in other states about using one -time revenues and have on the whole been prudent in setting aside funds in good years. Patrick’s long-term projections can add a new dimension to this cooperation by looking at the outlook not for one year but for 10. (Full disclosure: I was one of the outside economists — with colleagues both liberal and conservative — who worked with the governor’s staff on this project.) The report provides a helpful check on the use of one-time funds to balance next year’s budget. Specifically, it’s fiscally prudent to use one -time revenues if and only if the spending they support is in line with revenues the economy will generate when it eventually returns to full employment. The governor proposes to use one -time revenues of $446 million — just under half the billion dollar gap next year between actual and full -employment revenues. Looking ahead a few years, however, we face some hard choices. Because of the longterm impact of the Great Recession, state and national output and employment (and therefore state tax revenues) are not going to grow over the next decade at rates comparable to the last period of extended economic growth — the years from 1990 to 2000. Prepared before major European economies entered recession, the Patrick outlook assumes somewhat stronger revenue growth over the next two years. But after this period of recovery, revenue growth slows and falls behind the expected growth in spending. In economists’ jargon, by 2016 we’ll have a structural deficit — the long-term growth in spending will not be supported by the long-term growth in revenues. Over the last year, Massachusetts has seen surprisingly low growth in insurance costs for government health programs. Barring structural change, this can’t continue. Absent major reforms, the Patrick projections are somewhat optimist...
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This document was uploaded on 02/06/2014.

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