State surplus eyed for emergency only
Berkshire Eagle 11/05/2012, Page A01
By Dick Lindsay
Berkshire Eagle Staff
Massachusetts has amassed the third largest state surplus in the country — $1.652 billion — funds local state lawmakers want to remain limited to emergency expenditures.
Late last week, state financial officials reported the so-called “Rainy Day Fund” increased from $1.379 billion at the end of fiscal 2011 to $1.652 when fiscal 2012 wrapped up June 30. The additional $ 273 million deposited in the Massachusetts fund was fueled by the $116 million left unspent in the fiscal 2012 budget.
Only Alaska and Texas currently have higher reserve fund balances, mainly due to billions of dollars in oil tax revenues, according to the National Association of State Budget Officers.
The Rainy Day Fund is set up to help cover budget shortfalls, pay for the cleanup and recovery from destructive weather and other unforeseen expenses.
The Berkshire legislative delegation cited how deviating from the fund’s intent could put the state’s financial health at risk.
“Whether a natural disaster or economic crisis, the past five to six years has shown you never have to much money stored away,” said state Sen. Benjamin B. Downing, DPittsfield.
Local state lawmakers noted how the fund helped the Springfield area rebuild from last year’s tornado and helped the state weather the “Great Recession” by avoiding cuts in local aid.
“Taxpayers should feel really good about the state’s ability to manage its finances,” said state Rep. Tricia Farley-Bouvier, DPittsfield.
Tempting as it may be to spend the surplus on nonemergency situations, area legislators say the state is already bracing for several unexpected costs.
“If there is a significant cut in Medicaid from the federal government, that will have a big impact on our budget,” Downing said.
“ We have no idea what Congress is going to do after the election,” added state Rep. Paul W. Mark, D-Peru. “We are doing the right thing with the fund.”
Mark noted how state funds may be needed to deal with the fallout from the deadly outbreak of fungal meningitis linked to a Framingham pharmaceutical company. New England Compounding Co. distributed vials of epidural steroid injections to 23 states that resulted in 29 deaths and more than 400 people becoming ill.
“The governor is looking for $30 million for costs associated with the laboratory catastrophe,” he said. A healthy reserve fund balance also saves taxpayers money, when it comes time for the state to borrow money, according to state Rep. William “Smitty” Pignatelli.
“ The state continuing to show a surplus should sit well with Moody’s and Standard & Poor’s in regards to our bond rating,” Pignatelli said.
To reach Dick Lindsay: email@example.com, or (413) 496-6233.