MASSACHUSETTS tax collections in April soared 17.1 percent compared with a year ago. But this news, announced yesterday, shouldn’t cause the Legislature to abandon all restraint on spending. The figures largely reflect the strength of the economy last year, before the full impact of the housing loan crisis. And the extra money that flowed to the Department of Revenue is needed for long-term commitments, including education aid and health-insurance expansion.
The House, perhaps sensing the good news, voted Saturday to increase the $28 billion budget proposed by the Ways and Means Committee by $200 million before sending it on to the Senate. A $12.4 million tourism line item in the committee budget ballooned to $34.2 million, thanks to spending on such attractions as the Boston Symphony Orchestra summer home at Tanglewood ($200,000), the Basketball Hall of Fame in Springfield ($300,000), the Grand Army of the Republic Museum in Lynn ($100,000), the Waltham Tourism Council ($100,000), and the Central Square Theater in Cambridge ($100,000). The state has more pressing responsibilities.
The growth in revenue last month probably means that the state will end the 2008 fiscal year without a shortfall. The budget under consideration by the Legislature is for fiscal ’09, which begins July 1, when projections become murky. The Legislature is right to revise the corporate tax code to remove loopholes, but these may not generate all the anticipated money, lottery revenues are uncertain, and the snow-plowing accounts for next winter will no doubt be too low. Health insurance funding is also a concern.
Given these worries, it was disappointing that the House missed a chance to make a long-term improvement in the way the state allocates its resources. It rejected a plan supported by Governor Patrick and the Ways and Means Committee to ask higher-paid state workers to contribute a higher percentage toward their health insurance. The $45 million in savings could have been spent on education or health care for the needy.
Because of the revenue surge, the state income tax rate will be going down slightly, from 5.3 to 5.25 percent, the result of a law intended to blunt voter anger over the Legislature’s decision in 2002 not to drop the rate to 5 percent. Given its commitments, the state can’t afford 5 percent.
But a business-as-usual budget, full of local goodies, invites a voter backlash, and an initiative petition to abolish the income tax is expected to be on the budget this November. The Senate needs to devise a more responsible budget.
