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With a little more than five months to go before the start of the new fiscal year, Gov. Deval Patrick is releasing his 2011 budget proposal. The $28.2 billion budget increases spending by 3 percent over the current fiscal year.
The budget maintains education funding and local aid for cities and towns and continues to fund the state's landmark 2006 health care law, including the Commonwealth Care program that provides coverage to 170,000 adults.
"Despite the challenges and tough choices we face," the governor said in a news conference Wednesday, "our budget keeps faith as best as possible with our commitment to help the people of Massachusetts weather the hard times and build a lasting recovery."
To increase revenues, Patrick wants to pull back high-profile tax credits for the state's life sciences and film industries, which were originally intended to draw business to Massachusetts.
Patrick called the credits, both of which he supported, "wildly successful but expensive." The proposed cuts would save $80 million, he said. The plan would also revoke sales tax exemptions for smokeless tobacco products and cigars.
No decisions were easy, the governor said. "We remain clear-eyed and realistic about the seriousness of our challenges," he said. "And we must focus even harder on what has been our priority from day one: creating jobs and opportunity now and for the long term."
The proposal — which also includes cuts to MassHealth adult dental services, state parks and a program that increases pay for police officers who earn college degrees — relies on an additional $600 million in federal dollars that Congress has yet to pass.
Michael Widmer, president of the Massachusetts Taxpayers Foundation, is wary of leaning on that funding. "Too-heavy dependence on one-time money in this budget will simply extend the problems into fiscal 2012, even with an economic recovery," he said.
Widmer also said he was surprised the governor decided to leave education funding and local aid alone.
Listen: Widmer On Patrick's Budget
"It's not a question of whether cities and towns should receive local aid, but the implication is serious in terms of extending the fiscal problems of the state," Widmer said, adding that a reliance on one-time aid infusions, like stimulus money, could also contribute to pushing the state's budget woes into another year.
State Sen. Stephen Brewer (D-Barre), vice chairman of the Senate Ways and Means Committee, said he was troubled by some of the proposed cuts, but he supports maintaining more than $5 billion in local aid funding. "Many of us believe that our local police, our local fire, our education systems, our roads in our communities are the first priority," Brewer said.
The budget also calls on lawmakers to end their reliance on volatile capital gains taxes, but that rule most likely will not go into effect until next year. Ultimately, Patrick wants to use capital gains taxes to replenish the rainy day fund.
There is one bright spot in all of this that both Patrick and Widmer agree on. Relative to other states, Massachusetts is in manageable fiscal shape.
Patrick and the Legislature "have done a better job producing budgets that are realistic and on time," Widmer said. "We read the stories of other states, states that have struggled with more difficulties than we have. That's one of the positives in this otherwise incredibly bleak period that we are going through."
Gov. Patrick's proposal now heads to the Legislature.
The Associated Press contributed to this report.
This program aired on January 27, 2010. The audio for this program is not available.
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