Revere rep calls on federal government to help out state

REVERE – With state revenue in a freefall, top legislative budget crafter and local Rep. Robert DeLeo said the federal government must step in to help Massachusetts in “caring for the needy.”In a letter to the state’s congressional delegation, DeLeo asked that “direct and unrestricted aid be part of a forthcoming federal economic stimulus package.””There can be no effective economic recovery legislation if the states are forced to make draconian cuts to their human service budgets,” DeLeo wrote, adding that the Legislature has taken steps by building its reserve fund and changing tax code to prepare for economic recession.He made his request in the wake of grim news about state spending and the economy.Since September, when state documents said the state’s cash balance was on pace to hit a “dangerously low” point in December, the state’s tax revenue picture has deteriorated further, with year-to-date tax collections down 1.2 percent from a year ago.Gov. Deval Patrick last month slashed $900 million in state spending, and the state has raided reserves.November tax collection numbers, released last week, showed monthly collection fell $41 million below the monthly benchmark, which was revised downward in October as the Patrick administration forecast the state would collect $1.1 billion less this fiscal year than it expected in July.Total revenues for the state Lottery are now projected to fall more than 4 percent below last year’s record take, likely forcing the Legislature to come up with about $40 million for Lottery assistance to cities and towns or renege on that commitment.For DeLeo, Patrick and key state spending officials, this drop increases the likelihood that state money vital to city and town finances will have to be cut.”If the revenue continues to spiral downward, I think you get to a point you can’t continue to decimate the budgets of the health and human services ? Local aid would have to be looked at, at that point,” he told the State House News Service.A steep decline in state revenues means state budget crafters in the midst of a fiscal crisis are already contemplating more midyear cuts and new tax revenues. State Lottery aid, another source of local money collected by the state, is also declining.In new state finance documents, Lottery officials have lowered their own projection by another $24 million. Of the Lottery’s $1 billion commitment to the budget, roughly $810 million goes to cities and towns.Policymakers are also fearful that the tumbling financial markets will gut capital gains revenues beyond their already grimly revised projections. Investment-related tax revenues had been a major pillar of the state’s economic and budget expansions in recent years.An outstanding $162 million payment from Washington for Big Dig costs has acted as a drag on state cash flow.