Patrick Administration Warns Against Leaders' Revenue Plan

Gov. Deval Patrick's administration warned on Wednesday of state budget cuts and significant increases in transportation charges if legislators are unwilling to embrace a larger tax hike than the one being offered by leaders of both branches.

In a memo to other top-level state officials, Secretary of Administration and Finance Glen Shor said the lawmakers' plan, if adopted by the full Legislature, could prompt the need for $783 million in cuts to non-transportation programs from the governor's original budget proposal in January, including $362 million in new education initiatives.

House Speaker Robert DeLeo and Senate President Therese Murray on Tuesday proposed raising about $500 million in new revenue through a combination of higher taxes on gasoline and tobacco products, and changes in some business taxes. The funds would be dedicated to upgrading the state's aging transportation infrastructure and eliminating the MBTA's annual operating deficit.

The House is scheduled to vote on the plan next week and leaders say they expect no further tax increases will be added to the state budget that takes effect July 1.

Patrick is seeking nearly $2 billion in new revenues, including a hike in the state income tax rate from 5.25 percent to 6.25 percent, to support investments in transportation and education.

The governor was tempered in his public remarks on Wednesday, saying he was still open to compromise and negotiation with the Legislature.

"But I think there is such a thing as too small," he said of the tax hike proposed by lawmakers.

Shor, in his memo, warned that the lawmakers' plan would fail to adequately close a projected $1.5 billion gap in the fiscal 2014 spending plan and lead to a variety of potential cuts, including reductions in elder home care services, elimination of a state police academy class and the closing of a state prison.

In a separate memo Wednesday, Secretary of Transportation Richard Davey told the governor that while the legislative proposal makes progress toward closing the transportation funding gap, it showed an "an alarming lack of support for fixing our roads, bridges, and trains" and amounted to a "short-term band-aid," one that would "fail to adequately address our long-term needs for a safe, modern and efficient transportation system."

The plan would not provide funding for projects such as an extension of commuter rail to the SouthCoast region or the expansion of the MBTA's Green Line, Davey wrote, jeopardizing the state's ability to secure matching federal funds for the latter.

He also warned that it would guarantee future fare hikes for public transit users, higher tolls for motorists and increased Registry of Motor Vehicle fees. The state might also be forced to close registry branches and impose new weight restrictions on bridges if the revenue gap were not addressed, Davey added.

Patrick spoke to reporters after urging members of Stand for Children, an educational advocacy group, to lobby lawmakers on behalf of his education initiatives. He is seeking additional funds to eliminate an early education waitlist for 30,000 children, provide for a longer school day in struggling urban school districts, and increase funding for scholarships and the University of Massachusetts.

In total, the Patrick had called for $900 million in new education spending, but legislative leaders said they would not raise any new funding for those initiatives.

“Thirty thousand 3- and 4-year-olds get told by Beacon Hill, we can’t do anything for you, we can’t do anything to make your future brighter, to help you reach your potential," the governor said. "We tell young people in middle schools that are under-performing that we can’t afford to do what’s necessary to help prepare you for the workforce.

"Members of the Legislature get it. They get that this is real important," Patrick acknowledged. "The hard part...is asking people to sacrifice in order to make those aspects of our commonwealth better and stronger."

Legislative leaders say a tax hike of the scope sought by the governor could slow Massachusetts' economic recovery and put the state's strong bond rating at risk. Several business groups have also objected to Patrick's proposal to raise income taxes.

The governor said he would have a full response to the legislative plan on Thursday.

With reporting by the WBUR Newsroom and The Associated Press