The Boston Business Journal reports that downtown law firm Foley Hoag has laid off 32 lawyers and staffers - about 6% of its workforce.

Mayor Tom Menino tonight called on city unions to accept a wage freeze or face "painful, painful" layoffs as the city grapples with declining revenue.

In his state of the city address, Menino said the city is facing a $140 million shortfall in its annual budget, due to declining tax revenues and anticipated cuts in state aid. The city has already saved $30 million by refinancing debt, but "we cannot tighten our belts out of the situation," he said. Rather than cutting deep into core city services, he said he will try to convince municipal unions to accept a one-year freeze on wages. With that, "I can protect core services for residents."

"$140 million means cuts in core services, it means cuts in core services, we're talking about real pain for working families. I don't want that. ... We have to work together to move our city forward. The state of the city is in our hands and for that reason, I know the state of our city is strong."

Also, Menino gave a strong hint he'll be running for re-election this year, concluding his speech by saying he would work tirelessly to improve Boston "this year and in the years ahead."

John Keith, who sells real estate, notices the National Association of Realtors wants the government to subsidize mortgages by paying a point or so of the cost of each mortgage. But Keith writes that if the NAR is really that concerned about the sluggish housing market, it should put its money where its mouth is:

... Your typical real estate agent makes 5-6% in commission on a home sale. (This amount is split, 50-50, between buyer's agent and seller's agent, and the agents' companies get a big chunk of this, but ignore that for now).

What the National Association of Realtors should do is ask each of its one million members to kick in 1 percentage point from their commissions toward lower loan rates for every one of their clients. ...

Dave Daniels posts photos of an almost completely empty Cambridgeside Galleria the Saturday after Thanksgiving:

... It was totally DEAD in there. Totally. Dead. We were in there wandering around for almost an hour before we saw another person in there, and that included some of the staff at a few stores. ...

On Blue Mass. Group, NoPolitician argues that if the state has to cut aid to cities and towns by 10%, it spare some communities and increase the cuts for others. The basic argument: A 10% cut to a city like Lowell, which relies on state aid for 68% of its budget, would hurt a lot more than a 10% cut to a town like Bolton, which mostly relies on property taxes. Plus: Cities like Lowell simply need the money more:

... [P]overty is expensive to a community. It requires more policing. It requires more educational spending. It requires more code enforcement on absentee landlords. It requires more fire department responses due to people trying to eke a few extra degrees out of a space heater.
...

Rose to 5% in October, compared to 3.9% in October, 2007, the Boston Business Journal reports.

Philip Greenspun goes to a packed Costco, grabs a hot dog and shares a table with a college student who's taken a job at a Dunkin' Donuts to try to make ends meet:

... But business is slow. We'll probably have to close if things continue like this. ...

The Globe reports on efforts by Tom Menino to deal with shrinking investment income and cuts in state aid (hmm, the story doesn't mention it, but you gotta think revenue from the auto excise tax is also dropping).

In addition to a hiring freeze, the city is looking at scaling back $120 million in planned capital improvements over the next year - such as repairs and upgrades to parks, schools and sidewalks. Also on the potential chopping block: The proposed move of City Hall to the South Boston waterfront, for which the city had budgeted several hundred thousand dollars this year just in planning costs.

In an effort to jumpstart the local economy, Menino also asked the BRA to speed up its approval for $1.9 billion worth of construction projects in the Back Bay, near South Station and Downtown Crossing, the Globe reports.

Think taxes on capital gains, CommonWealth Unbound explains:

... The downturn in the market is a nightmare for state budget officials who have become addicted to growing capital gains tax revenues. Between 2002 and 2006, according to MassINC research, capital gains tax revenues accounted for 54 percent of the state's growth in tax revenues. ...