The Boston Globe
Tuesday, April 27, 1999
House panel to release budget plus a warning
By Brian MacQuarrie
The House Ways and Means Committee today will unveil a $20.77 billion
budget, a record spending plan with a foreboding caveat that now is the time for
Massachusetts to prepare for an economic downturn.
The proposal, heavy with capital spending and education initiatives,
allocates $386 million more than Governor Paul Cellucci's budget because it does not
divert revenue from the national tobacco settlement to existing programs.
According to highlights of the document obtained by the Globe, the
House would channel $103 million to maintenance and repair of schools, buildings, bridges,
and roads; $71 million to early-childhood education; and $14 million to help retire the
short-term debt of the Massachusetts Bay Transportation Authority, which Ways and Means
chairman Paul R. Haley wants to make an independent agency funded by a dedicated portion
of the state sales tax.
In addition, sources said the budget could give as much as $10
million to the Clean Election Law, which would provide a large, unprecedented supply of
funding for state political campaigns.
The budget introduction, written by Haley, warns Massachusetts
residents that the economic boom of the 1990s cannot last indefinitely and that steps must
be taken now to promote fiscal health.
"The continuing good economic news is feeding soaring
expectations for embracing new spending initiatives," wrote Haley, a Weymouth
Democrat. "This exuberance is based on a misunderstanding of the complete fiscal
condition of the Commonwealth."
Although a generous revenue stream has helped the state make capital
improvements, increase the Rainy Day Fund to $1.3 billion, and reduce income taxes, Haley
said that "the Commonwealth's assets are in disrepair."
After the budget is introduced today, legislators in the House will
have one week to study the document before debate begins. The Senate also will introduce a
spending plan soon. The differences between the two proposals will be hammered out in
conference committee before a final budget is approved by both chambers. The new fiscal
year begins July 1.
According to Haley, the list of serious, unmet capital needs is
growing because of the financial appetite of the Big Dig. Borrowing to make those
improvements would jeopardize the state's bond rating, the chairman continued, because
Massachusetts is at its debt ceiling.
"We have identified nearly $800 million of maintenance needs
that have been deferred for too long," Haley wrote. As a result, the state will
conduct a $2 million inventory of all state facilities.
"Nearly every state agency that has testified before the
committee has described the need to repair their facilities as their No. 1 priority,"
Haley said. Many state agencies would receive direct funding under the budget to make
Surplus revenue, which could reach hundreds of millions of dollars
this fiscal year, would be used aggressively to pay down pensions and for technology
improvements, road resurfacing, and other ongoing costs, Haley said.
Local road projects, which have been funded by bond issues, would
become a regular part of the budget. The fiscal 2000 budget would provide $50 million for
Besides bricks and mortar, the budget calls for new human-services
spending. In addition to expansive early-education programs announced last week, the
budget would increase the prescription-drug benefit to $1,000 per year for senior citizens
within 150 percent of the federal poverty level. Currently, the benefit is $750. The plan
also would be available to seniors within 400 percent of the poverty level who spend more
than 5 percent of their annual income on prescription drugs.
The US poverty standard is $14,378 for a family of two, and $21,710
for a family of four.
In another initiative announced yesterday, the budget would provide
$5.5 million to raise the income eligibility for family shelters, and $1.4 million to
provide more transitional beds at YMCAs and YWCAs for homeless people.
The early-education proposals, touted as a priority by Speaker Thomas
M. Finneran last week, include $25 million to promote full-day kindergarten and $24
million for early-childhood care and education, primarily in low-income areas.
Unlike Cellucci's budget, the House proposal calls for none of the
money from the tobacco settlement, of which about $360 million is expected in
Massachusetts through fiscal 2000, to be used for existing health programs. That
settlement, $7.6 billion for Massachusetts over 25 years, would be placed in a 21st
Century Fund "to generate interest earnings year after year in perpetuity" for
tobacco control and health-care expansion, the budget document states.
The House plan also recommends that the state be placed on a two-year
budget to "require agencies to be more accountable in their spending," Haley
Other proposals for restructuring the budget process include
instituting a "pay-as-you-go" system for building, road, and bridge maintenance;
and reserving spending increases for "citizens least able to care for