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(2011-07-29)
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Massachusetts Treasurer Steve Grossman
If a deal is not struck in Washington by Tuesday to raise the federal debt ceiling , Beacon Hill is unlikely to feel much impact at least not right away.. Massachusetts State Treasurer Steve Grossman says the state is expecting 850 million dollars in federal reimbursements in August, but in a worse case scenario, should none of that money come in, the state could pay its bills, because it has 2 point 2 billion dollars in cash on hand.
What would happen in September is the big unknown.
Grossman and the top finance people in the Patrick Administration have been meeting daily to talk about contingency plans, which include borrowing and going into the state's rainy day fund, which has 785 million dollars.
Massachusetts is due about a billion dollars from the federal government in September and without it, the state could be hard pressed to make a scheduled local aid payment to cities and towns, according to Michael Widmer , President of the Massachusetts Taxpayers Foundation.
Michael Goodman, a public policy professor at UMass Dartmouth and editor of MassBenchmarks, the journal of the Massachusetts economy, says the state's hospitals, universities, technology firms and defense contractors could all be hurt if the federal government suddenly stops sending out checks next week.
Treasurer Grossman says the growth of both jobs and tax collections in Massachusetts has contributed to a positive outlook by credit rating agencies, which means the state should still be able to borrow money at favorable terms.
Grossman said he is not concerned about the impact on the state's 51 billion dollar pension fund.
The pension fund's investment return of 22 point 3 percent in the last fiscal year was its best performance since the mid 1980s
Reporting from WAMC's Pioneer Valley Bureau on the campus of Western New England University, I'm Paul Tuthill..
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