Local lawmakers offer differing views of fiscal cliff

By Jim Morrison, The Sun Chronicle

BOSTON – Two area legislators are taking different views of the impending federal fiscal cliff, with a Republican legislator fearing a big economic hit to the state, while a Democratic senator is confident we can weather any storm.

“It’s going to be pretty draconian, no matter how you look at it,” said state Rep. Jay Barrows, R-Mansfield, who warns that cuts in federal spending that could go into effect Jan. 1 would reduce federal funds into the state by $1 billion.

Meanwhile, state Sen. Jim Timilty, D-Walpole, expects fiscal challenges in the coming year, but believes the state is in better shape than most to handle the double hit of higher taxes and spending cuts.

“We’ve gone through this before,” he said. “We will overcome.”

A budget impasse between President Barack Obama and the U.S. Senate and House last year set a Jan. 1 deadline for the end of tax cuts set during the administration of President George W. Bush.

The measure also includes across-the-board cuts to all non-essential federal programs, along with tax increases totaling $1.2 trillion.
The combination is what some pundits call going over “the fiscal cliff.”

Although the president and Congress have begun negotiations to avoid the so-called cliff, any agreement they may reach will mean some cuts in federal aid to the state and some form of tax increases.

Jay Gonzalez, Massachusetts’ secretary for the Executive Office of Administration Finance, expects that could mean a loss of $300 million in direct federal spending and even more in indirect spending.

“Just about everything state government does will be impacted,” he said.

Since the defense, health care, and university research industries are beneficiaries of federal spending and large players in the Massachusetts economy, there is ample reason for concern in the Bay State.

Barrows points out that the state is already $250 million behind in expected revenue for this fiscal year.

“Shouldn’t we be looking at ways to reduce spending?” he said. “We’ve got to come to grips with entitlement spending. If we go over the cliff, it’s going to slow the economy.”

Timilty acknowledges fiscal challenges in the coming year, but points out that Massachusetts’ $1.652 billion rainy day fund is the third best stabilization fund in the country.”

“Government will do what it can do, but our very best resource is the people,” he said.

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