Dismal economic news weighed heavily on Beacon Hill's top
lawmakers and acting Gov. Jane Swift yesterday as they met to discuss a lingering budget impasse.
A decline in state revenue collections for August, coupled
with eroding business confidence, dampened the first State House meeting between Swift, House Speaker Thomas M.
Finneran, and Senate President Thomas F. Birmingham since last April.
Finneran and Birmingham emerged cordially from the 90-minute
meeting in the governor's office, but were unable to predict when a new budget, now 66 days late, would be
completed.
They disagreed on the meaning of Department of Revenue data
showing August revenues -- in both income and corporate tax collections -- were $35 million below projections. In the
first two months of fiscal 2002, total tax collections were $2.1 billion, a drop of $73 million
from last year.
Finneran noted that budget revenues have declined in consecutive months for the first time
since the early 1990s.
"Speaking for the House budget proposal, as prudent as we
tried to be, we may not have been cautious enough, if this is a precursor of what lies ahead," said
Finneran.
Birmingham suggested that August revenues would have matched
those of the prior year if not for taxes lost through the Question 4 income tax reduction.
"So I don't know what that is an indicator of," said Birmingham. "Absent the tax cut
championed by this administration the numbers would be almost the same as last
year."
Swift declined to comment. But an administration official
said that the budget impasse may provide lawmakers an opportunity to confront the declining revenues.
When House and Senate budgets were passed in May, they were
looking at a $500 million budget surplus from fiscal 2001.
"There's still a chance for them to act fiscally responsible," said the official.
Officials said September collections will be particularly
telling because income and business tax quarterly payments are due. An overall tax revenue increase of at least 4 percent is
required to fund the lowest projections for the next budget.
The only bright spot was the August sales tax revenue, up
8.1 percent to $328 million, but an administration official dismissed it as "a blip."
Further clouding the economic outlook was another drop in
the business confidence index, to 44.2, the lowest level since 1992, according to Associated Industries of Massachusetts.
Birmingham pinned the blame on President George W. Bush,
saying, "When the president is taking a Chicken Little approach for months on end, saying the sky is falling, that becomes a
self-fulfilling prediction."
Finneran and Birmingham also disagreed on Swift's $2.05
billion interim budget released last Friday. The latest interim budget -- containing school funding and Lottery distributions
to towns and cities -- was twice the size of prior interim budgets.
After opposing the release of Clean Elections funds in an
interim budget two weeks ago, Finneran questioned the release of school funds.
The budget, he said, "is completely incoherent if you pick
and choose certain topics or targets."
But Birmingham said, "We'd entertain something if it made
sense, if we could reach agreement on the matters that are already largely substantively without disagreement in the
conference process."
Birmingham said the budget talks "are not amenable to a
timeline" but that he hopes they do not extend into November, as was the case in 1999.
"Everyone is frustrated -- we would have preferred to have
it done yesterday," said Birmingham.
