MA House Outlines Budget

In an unusual move, the Massachusetts House is outlining its budget the same week hearings on the Governor's spending plan are set to begin.

The two proposals differ on some matters. For instance, House Speaker Sal DiMasi's plan to close the $1.3 billion budget gap next year includes more direct cuts than in Governor Deval Patrick's proposal.

But the House does follow the Governor's plan to raise more money from corporations next year...with one key difference. WBUR's Martha Bebinger explains.

Audio for this story will be available on WBUR's web site later today.

TEXT OF STORY:

MARTHA BEBINGER: A few weeks ago, Speaker DiMasi said that asking some corporations to pay higher taxes would send the wrong message during an economic slowdown. But the spending plan he released yesterday includes closing the 2 so-called corporate tax loopholes proposed by Governor Deval Patrick. Unlike the Governor, DiMasi would offset the cost for businesses after three years by phasing in a substantial corporate tax reduction.

HOUSE SPEAKER SAL DIMASI: Obviously this is very difficult fiscal year; we were looking at rev sources while at the same time trying to make the corporate tax reform fair, predictable as well as conform to what the other states are doing.

BEBINGER: Business leaders have pushed for months to make any changes in the corporate tax structure balance out at zero...and they want to have some say in how the tax code is rewritten. But John Regan with Associated Industries of Massachusetts says business leaders will support the house budget plan.

JOHN REGAN: There is some additional revenue from the business community initially, but as long as the rate reduction pc. Comes into play as discussed, It's uh, It's a decent package.

BEBINGER: DiMasi would also freeze the unemployment insurance rate...a move he says would save companies 150-million dollars. DiMasi says the house may vote on that proposal today so that bills going out in the next few weeks can reflect the proposed rate. The urgency of resolving that matter is one reason DiMasi is spelling out his budget priorities now...well in advance of filing the house budget bill in April. He says he wants to give municipalities advance notice that they can expect the same amount for schools, and from the lottery, as the Governor has proposed. But the house will not include money from casino licensing fees, which the Governor does.

DIMASI: This is a more realistic approach, asking cities and towns to fix their budgets based on real revs, not hopeful or imagined revenues that are non existing right now.

BEBINGER: Instead of casino revenue, the house plans to include a cigarette tax hike. It would make Massachusetts the most expensive place in NE to buy cigarettes...almost $1.50 more than the lowest priced state, New Hampshire.

(cash register/store sound)

At Beacon Hill Variety, just down the street from the State House, owner James Meau takes a break at the cash register to vent his frustration.

JAMES MEAU: I think the state's going to suffer. Other people are going to go to New Hampshire, maybe not my customers but other people's customers will go; they're already talking about it.

BEBINGER: Senate President Therese Murray says she is also considering a cigarette tax hike to help fund rising costs of covering the uninsured in Massachusetts. Governor Patrick would not say yesterday whether he supports that idea...or whether he thinks the house corporate tax reductions go too far.

GOVERNOR DEVAL PATRICK: What we owe the people of MA is engaging on these issues. We put a lot of ideas on the table. The Speaker and the house have responded to some of them. That's what we're here for.

BEBINGER: House leaders say they'll decide where to cut 100-million dollars in state spending after a series of hearings that begin tomorrow. The house would use $427 million that is already on reserve...or scheduled to go into that fund to balance the coming budget.

For WBUR, I'm Martha Bebinger at the State House.