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Article published Jan 28, 2010

Gov. proposes spending hike

Patrick’s $28.2B budget cuts programs, level-funds schools

By John J. Monahan TELEGRAM & GAZETTE STAFF

jmonahan@telegram.com

BOSTON — Gov. Deval L. Patrick yesterday proposed a budget for the next fiscal year that level-funds schools, dips into the
state’s reserves and imposes deep cuts in human service programs.

The $28.2 billion budget plan, which calls for a 3 percent increase in spending, relies on $70 million in proposed new
taxes on candy, soda, cigars and aircraft and aircraft parts previously exempted from the state sales tax.

Mr. Patrick said he is also counting on $800 million from the previously approved federal stimulus program and an
additional $600 million in new federal funding for state Medicaid programs he expects to be included in a new federal
stimulus, jobs or health care bill.

Michael J. Widmer, president of the Massachusetts Taxpayers Foundation, said that federal funding will be the key to the
governor’s plan to level-fund local aid. Without that additional $600 million in federal aid to the state, he said, “There is
absolutely no way,” aid to cities and towns could be maintained at current levels.

The governor, who is seeking a second term, said so far he has dealt with $9 billion in budget fixes to cope with the steep
drop in state tax revenues during the recession, including $2.7 billion in potential deficits addressed in the new budget
plan.

Mr. Patrick said the state will do more with less, and his budget decisions are aimed at minimizing impacts on people and
maximizing the state’s chances to emerge sooner from the recession.

“Despite the challenges and tough choices we face, our budget keeps faith, as best as possible with our commitment to
help the people in Massachusetts weather these hard times and build a lasting economy,” Mr. Patrick said.

Many groups facing reduced state support complained yesterday.

Michael D. Weekes, president and chief executive officer of the Massachusetts Council of Human Service Providers Inc.,
said cuts in human service programs would eliminate services to individuals with disabilities, children at risk of abuse and
those seeking work-force support. He argued cuts should come from other areas.

The National Federation of Independent Businesses said the state would divert funds for job training programs to other
spending needs and the American Association of Retired Persons said the state would not restore Prescription Advantage
funds for senior drugs to previous levels. The Massachusetts Dental Society said cuts for dental benefits for low-income
residents are short-sighted.

The governor’s spending plan calls for $797 million in cuts to existing programs, including a 3 percent reduction in
payments to contractors that provide services to the state. Cuts also include $56 million from adult dental services through
MassHealth; $5 million in state funds for the Quinn Bill for police; and $9 million from state welfare-to-work programs.

While the state has eliminated 2,100 positions since October 2008, Administration and Finance Secretary Jay Gonzalez
said the proposed budget would cut hundreds of additional state positions.

The governor said he will push for legislative approval of budget provisions to maintain record high local aid funding for
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public schools, state colleges and universities, because he believes all children deserve a quality education, “even during
a recession.”

The proposed budget, which utilizes $175 million from the state’s reserves, avoids cutbacks in support of universal health
care subsidies, and keeps local aid to municipal operations at the same level as the current year, which is 28 percent
lower than the level of state aid delivered to cities and towns two years ago.

It also calls for revenue increases of $20 million from an expanded bottle bill; $15 million from expansion of tobacco taxes
to cover cigars; $15 million from expansion of tobacco taxes on chewing tobacco, and $51.7 million from expansion of
sales taxes to cover soda and candy.

The governor would also curtail tax breaks for movie makers and life science industries, although some of the tax credits
for those industries would continue. The governor would save $75 million from film tax credit reductions and $5 million in
cuts in the state’s life science tax credits.

State Rep. Stephen L. DiNatale, D-Fitchburg, said he was pleased the governor believes local aid levels can be level
funded, but he is worried the funds to support that aid may not materialize if tax revenues don’t increase.

“Believe me, I hope we can, but I think it is kind of early to be making those kind of statements,” Mr. DiNatale said, noting
local aid may have to subsequently be cut if revenues fall.

He also questioned reductions in tax credits for the film and life science industries because it could hurt job creation. Mr.
DiNatale said he has questions about planned cuts in funding for state one-stop career centers that provide job and job
training leads for the unemployed.

“We can do more,” to help create jobs, Mr. DiNatale said. “I would rather see more tax breaks for small businesses.”

State Treasurer Timothy P. Cahill, who is running against Mr. Patrick as an independent, said he is worried state revenues,
including lottery money that funds local aid, will not be sufficient to support the spending plan.

“I don’t know if we can pay for it. It’s an increase of $1 billion,” Mr. Cahill said.

“The president is talking about a freeze and we are talking about an increase of a billion dollars,” Mr. Cahill said. “He is
speaking to people reliant on government to either keep their programs or keep their jobs in government,” Mr. Cahill said.
“What he is not seeing and I am seeing is people who are hurting in the middle class who have lost the jobs they were in,
or are fearful they are going to lose their jobs, or haven’t gotten a raise in three years and we are spending a billion dollars
more to fund government.”

The budget also calls for a transfer of the state’s criminal probation operations from the courts to the state Department of
Public Safety.

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