Q&A #6: Stimulus And Budget

"Lynne" asks:

(In your opinion) do you think that the Obama stimulus will a) have enough state aid in the first round and b) come on time to help with the next fiscal year's budget, which is slated to come in a couple billion short in revenues?

C'mon, don't you have any questions about hats?

First of all, the powers that be want you to refer to it as "recovery," not "stimulus", and secondly I think Massachusetts is going to make out pretty well in the bill. How much will go to the state to be distributed by the governor, how much will go directly to cities and agencies, and so forth, is beyond my (vast and much-envied) powers of prognostication.

There is an increasing sense that it will include some direct aid to supplement for the massive cuts being made in state budgets -- non-construction-related education money, for example.

That could help offset some of the huge gaps that states like Massachusetts will face in their 2010 FY budgets -- and I can tell you that almost everybody believes that the agreed-upon revenue figure recently announced for the FY10 Massachusetts budget will probably need to be adjusted downward, probably even before the budget is finalized in June.

I also think that the "recovery" bill spending will be designed to have more long-term effect than short-term, from a budgetary standpoint -- it takes a while for shovels in the ground to become state capital gains revenue. So, no, it will not be on time to significantly help the '10 state budget.