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May 21, 2013

Governor restoring $20.8 million in aid cuts

BOSTON — In light of stronger than anticipated tax collections through April and under pressure from lawmakers, the Patrick administration has announced it would restore $20.8 million in spending to the fiscal 2013 budget, including outlays that cover special education costs and reimbursements to cities and towns for regional and homeless student transportation.

Secretary of Administration and Finance Glen Shor said the administration felt comfortable restoring the spending with just over one month left in the fiscal year because tax collections through April have exceeded benchmarks by $510 million. Gov. Patrick had cut the funds last December when tax collections were trailing estimates.

The restored spending amounts to less than 10 percent of the $225 million cut by Patrick in December. Shor said cuts were reversed in areas where the administration saw a “pressing need” and felt confident the money could be spent before the end of the fiscal year on June 30.

Shor repeated his caution that the strong performance of tax revenue sources over the past five months has been due largely to growth in capital gains and one-time settlements, a “majority” of which is earmarked by law for the state’s “rainy day” fund.

“Fiscal restraint remains imperative,” Shor said, noting that actions by investors taken late last year before federal tax increases went into effect have helped “swell coffers” but might not carry over into fiscal 2014.

Shor also said the administration needed to be cautious when restoring spending to ensure that there is enough money available should expenses arise over the next month and half for collective bargaining agreements, settlements or caseload driven social services.

The administration is restoring $11.5 million in special education reimbursements, $5.25 million for homeless student transportation and $1 million for regional school transportation reimbursements. Shor said the funds could give cities and towns “flexibility” in their budgets for this year and next.

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