Warnings Of Deeper Budget Cuts On Beacon Hill

A somber Gov. Deval Patrick said Monday sagging state tax collections will prompt further budget cuts, yet he also criticized two legislative leaders for nixing requested tax increases and passing bills that "don't go far enough" to simplify or reduce spending on the state's transportation system.

Emerging from a Statehouse meeting with Senate President Therese Murray and House Speaker Robert DeLeo, Patrick said the legislative leaders have exacerbated budget cuts he will announce Tuesday by not approving tax increases that would have taken effect April 1.

They included $24 million that would have been generated by lifting the sales tax exemption on candy, soda and alcohol, as well as $18 million that would have come from a package of motor-vehicle fee hikes.

Their inaction came as tax collections fell $117 million below projections from February to March and the deficit for the current fiscal year passed $1.1 billion.

"We, all of us, are going to have to tell the truth to the public about where we are, what the needs are," the governor said. "We've got a ways to go in those House and Senate (transportation) bills before we have shown that we're serious about that simplification and savings."

As for the leaders' reaction, Patrick said: "I think they heard me loud and clear, and we'll see."

Murray responded tartly, portending not only tough negotiations over the transportation overhaul bill, but also over current budget deficit and the spending plan for the fiscal year beginning July 1.

"I think we probably have a difference of opinion on that, and we're going to take a look at what his thoughts are, but actually there were many of the things he thought that we didn't do that we actually did, so I'm a little confused," the Senate president said.

Each of the transportation bills is aimed at streamlining the state's transportation bureaucracy and addressing chronic funding problems that have left the Massachusetts Bay Transportation Authority with an $8 billion debt and the Massachusetts Turnpike Authority with a $2.2 billion debt. A 2007 report also projected the state would need nearly $20 billion during the next 20 years to maintain the current system of highways and mass transit.

Murray suggested the administration leaked a newspaper story last week that said MBTA officials were considering ending night and weekend commuter service if the governor's requested transportation tax package is not approved.

Patrick is seeking a 19-cent increase in the state's gasoline tax, which would give the state the nation's highest fuel tax. Lawmakers have said they will support an increase of no more than 9 cents, and Murray has not ruled out hiking the 5-percent sales tax to address both the state's budget problems and the transportation overhaul.

"Everybody knows that there's got to be new revenues, but to put a scare tactic out saying you're going to cut services without discussing it with people is not the right way to go," she said.

While Patrick would not reveal how he plans to close the current budget gap, Murray told reporters he may be considering another withdrawal from the state's rainy day fund, as well as the reallocation of some expected federal stimulus money.

The governor brought up the transportation issue unprompted, telling reporters, "I appreciate very much that the House and Senate have taken up transportation reforms, but the bills just don't go far enough."

The governor would not personally outline where the House and Senate transportation bills fell short. Administration officials, however, noted Patrick proposed saving $500,000 by reintegrating the State Police Turnpike detachment into the broader force, yet the House bill would keep it independent.

Patrick also proposed forcing all current and retired MBTA employees into the state's group health insurance program. The Senate bill would study the cost-effectiveness of such a shift, while the House would apply it only to current employees - not retirees.

The administration estimates its plan would save $20 million, the House plan only $13 million and the Senate plan would save nothing.