Budget Casualty | It's nail-biting time for economic development groups
Budget season is always a stressful time for economic development organizations that get funding from the state. With many of the groups still reeling from cuts brought on by revenue shortfalls during the course of the current fiscal year, the stakes are extra high.
An analysis by the Massachusetts Budget and Policy Center shows funding for economic development down significantly from last year. After adjusting the numbers to account for line items that were moved from one part of the budget to another this year, MassBudget put economic development in the governor’s fiscal 2011 budget at $20.4 million and said the House came in slightly higher at $24.3 million. But the Senate version proposed to spend somewhere in the middle — $22 million — on economic development.
After the House and Senate bills are reconciled, one thing is for sure — spending on economic development will be down. For FY 2010, the state budgeted $32.3 million for economic development and actually spent $38.7 million after getting help from federal stimulus funds.
Not Discouraged
But some leaders of local organizations are cautiously optimistic about the budget process they see playing out.
“We have had encouraging news from both the House and the Senate, and we know that the governor is a strong supporter of tourism,” said Donna J. McCabe, president of the Central Massachusetts Convention & Visitors Bureau.
McCabe said funding for her group was cut 72 percent during FY 2010. The bureau had eight staff members, but is now down to three.
According to the MassBudget analysis, the outlook for tourism in the coming year is mixed. The House budget proposal cuts money for local tourist councils like the bureau by 44 percent as compared to the original FY 2010 budget, but that actually represents an improvement from the status quo, since the line item was cut 50 percent over the course of the year.
Less ambiguously, both the House and governor’s budget make a 69 percent, $4.2 million, cut to the State Office of Travel and Tourism compared with the final FY 2010 numbers.
For Paul Matthews, executive director of the 495/MetroWest Partnership, the past year has been a funding roller coaster. For the first time ever, the FY 2010 budget included a line item for the state’s eight regional economic development councils, including the partnership as well as the North Central Massachusetts Economic Development Council.
As the state struggled to balance its budget, it cut that funding completely, but then returned some limited money to the eight groups. For FY 2011, the Senate budget would fund the economic development councils again at $800,000, while the House would provide $400,000 and the governor would not include any funding for the item.. (Click here to see how the proposed budget differs between them.)
While it waits to see how the budget will finally shake out, the partnership has been making do — cutting costs and using private partnerships to fund some of its activities.
Also making do is the Massachusetts Manufacturing Extension Partnership, which laid off seven of its 21 employees and reduced its programs to support manufacturers this year, according to Director of Operations Jack Healy. Healy said the group is supposed to be funded with equal parts state funds, federal funds and client fees, but the state money has dropped 76 percent since 2009.
Among other things, that means MassMEP has been able to do less pro bono work, Healy said.
The House budget restores some of the money, reversing a $125,000 cut that occurred during the current fiscal year and returning the organization to the FY 2010 budgeted number of $450,000.
Healy is philosophical about the situation. He said he can certainly make a good case for why his group needs the money, but understands the bind of state legislators.
“When they’re reducing funding for child care it’s kind of hard to say I deserve more,” he said.
Editor's Note: This article has been updated since its original publication due to an error. The previous version misstated the funding for regional development councils in the House version of the budget. The House budget includes $400,000 for the groups, compared with $800,000 in the Senate version. It does not eliminate funding for the groups.
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