IT WAS a battle of fiscal philosophy this week on Beacon Hill.
Before Governor Deval Patrick had even approved this year’s budget, Republican rival Charlie Baker came to the State House to attack. The governor and his Democratic allies, Baker charged, had neglected needed reforms while offering a spending plan that would soon lead to tax hikes.
Taking pen in hand an hour later to sign that budget, Patrick portrayed the fiscal blueprint as a responsible effort to weather turbulent times while minimizing pain — and said Baker’s tax-cut plans would lead to disaster.
So let’s sort through charge and counter-charge.
In highlighting neglected reforms, the Republican gubernatorial candidate called for letting cities and towns modify health plan copayments and deductibles for municipal employees. Giving them the power to do that — or to join the state’s Group Insurance Commission without making concessions to win union approval — could save municipalities $100 million in year one and $2.5 billion annually after a decade. Baker also advocated repealing the Pacheco Law, which effectively prevents the state from pursuing savings by contracting out with private firms.
He’s right on both counts. Although Patrick and the Legislature have made a solid start on reforms, they haven’t done enough on those two issues. Indeed, when pressed, Charles Murphy, the House Ways and Means chairman, grudgingly conceded as much, but added: “Give us some time.’’ Baker is also correct in saying that Beacon Hill hasn’t moved forward with stage two of pension reform or done enough to streamline state government.
But does this year’s budget mean a tax hike looms on the not-so-distant horizon? Baker’s reasoning: The Massachusetts Taxpayers Foundation says that with one-time federal money gone, the budget for fiscal year 2012, which begins next July, will have a gap of at least $2 billion between available revenue and the spending necessary to maintain services and programs at current levels. Because this year’s budget doesn’t alter that fundamental reality, Baker claimed that it “will lead to higher taxes . . . next year and the year after.’’
Patrick’s response: “I don’t have any plans for broad-based tax increases, and I think it is a really tough time right now to be asking people for that,’’ a comment that stops short of sounding like a firmly slammed door. As voters contemplate that back-and-forth, they should bear in mind this reality check from Mike Widmer, president of the Taxpayers Foundation: Without additional revenue, spending in fiscal year 2012 will have to be at least $500 million less than this year’s bottom line. That will be true no matter who is governor next year.
For his part, Patrick fired back at his rival by noting that this budget increases spending by only two tenths of one percent, while budgets had grown by 4 to 5 percent annually during Baker’s years as fiscal chief. That’s true, though it’s worth noting that Baker’s tenure came during healthier fiscal times. However, a similar fairness requires noting that our real problem now isn’t a spendthrift governor, but rather a recession-driven revenue collapse.
The Democratic incumbent added this jab. “If we follow the proposals that he’s trying to sell out there, it will be a calamity.’’ That’s a reference to Baker’s support for rolling both the income tax and the sales tax back to 5 percent. On a yearly basis, that would mean $1.5 billion less in revenue.
When I queried Baker about that, the candidate, who has said he would press for those tax cuts on day one, made it clear there was wiggle room in his timeline.
“You can’t get all the tax cuts at once, but the tax cuts ought to be the fundamental objective down the road,’’ he said.
But that formulation doesn’t change the fact that Baker is promising large tax cuts without outlining nearly enough reforms or budget cuts to offset them.
“Reforms are critical, but no reforms anyone has put forward or could put forward could close the existing gap of $2 billion, never mind $2 billion plus tax cuts of $1.5 billion,’’ says Widmer. Point to Patrick.
My conclusion? It won’t satisfy the partisans on either side, but the skirmish left me longing for a candidate who would combine Baker’s reform resolve with Patrick’s revenue realism. I’d buy that hybrid in a second.
Scot Lehigh can be reached at lehigh@globe.com. 
