BOSTON (CBS) – Now that federal lawmakers have finally hammered out a deal to raise the nation’s debt ceiling, what does this mean for taxpayers here in Massachusetts?

About $11 billion of $30.6 billion state budget comes from federal funds, and that money will be cut as a result of the debt deal.

What impact could this have on state government and the state economy?

“I’m concerned. I think we’re seeing the beginning of a lengthy period, how long we don’t know, in which government at the federal, state and local levels are going to have to re-trench,” said Michael Widmer of the Massachusetts Taxpayers Foundation.

Part 1:

“I think the debt deal, as important as it was, is the beginning of a longer term trend over the next decade, and we’re gonna see cutbacks. We don’t know to what extent, but they will have a negative impact on the Massachusetts economy and certainly on the state budget.”

Part 2:

Federal subsidies have helped support Medicare and the state’s universal health care plan, among other programs. If funding to those programs are cut, that could present problems.

“If the feds cut back, and we’re negotiating with them on a new, so-called waiver to support Medicaid and our health reform, if they cut back, that’s gonna open up a major hole in our health reform, to be sure. So, we depend heavily on federal reimbursements in Massachusetts,” said Widmer.

You can listen to Keller At Large on WBZ News Radio every weekday at 7:55 a.m. and 12:25 p.m. You can also watch Jon on WBZ-TV News.

  1. The Owl says:

    When a state or municipality funds a significant portion of its budget with handouts from the next higher level of government, there is going to be pain when the flow of cash stops.

    It was foolhardy for our state and local politicians to think the cash-fairy would continue make deposits into their accounts.

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