Digging deep to bail out irresponsible state governments

The problems are expected to be so widespread, the solutions so elusive, that the state may have to rethink the size of its commitment to big-ticket programs such as its landmark healthcare coverage plan, aid to cities and towns, and education funding, the specialists said at an emergency budget hearing convened yesterday by members of the state Senate.

Several economic specialists who testified advised state officials to prepare for at least four years of budget problems, foreshadowed by dire records: State revenues declined 35 percent this April over last year, the worst ever. The fall in state revenues for this year, projected to be $3 billion less than budgeted, will probably also be the steepest in state history.

"This is going to be the worst fiscal crisis in the state's history," said Michael J. Widmer, president of the Massachusetts Taxpayers Foundation. "I think it's fair to say it's a catastrophe. That's not an overstatement."

Widmer projects that state tax collections will not return to 2008 levels until at least 2014, as state revenues lag behind a slowly rebuilding economy.