DiMasi: House budget "cautious and austere"

BOSTON—House leaders will unveil a "cautious and austere" state budget plan Wednesday that spends less than Gov. Deval Patrick's proposal while making investments in higher education, public safety and local aid, House Speaker Salvatore DiMasi said Tuesday.

The spending plan features several Patrick initiatives, including a downpayment for his $1 billion, 10-year life sciences plan, $10 million to help end homelessness, and a proposal to make public employees shoulder more of their health care costs.

But DiMasi also said the House budget makes $109 million in cuts, caps spending in dozens of other areas and overall spends about $180 million less than Patrick's budget.

"Our budget is as straightforward, as fiscally responsible, as conservative a budget as I have seen in a number of years," DiMasi told reporters, conceding tight fiscal times have made it tough to make major new investments.

"There's nothing spectacular about any new initiatives because we can't afford to do that at this time," he said. "We did what we could afford to do."

The budget includes a $223 million increase in state aid to cities and towns and would spend $24 million more than Patrick for higher education.

DiMasi said the House balanced the budget by cutting spending, dipping into the state's "rainy day" fund for $429 million, and approving $390 million from a dollar hike in the tax on a pack of cigarette and closing of so-called business tax loopholes.

Secretary of Administration and Finance Leslie Kirwan, said the administration was pleased the House adopted many of Patrick's reforms.

"We will continue to work with the Speaker and Senate President throughout the budget process to ensure the final budget maintains a balance between targeted investments in our long-term growth and an appropriate level of fiscal restraint," Kirwan said in a statement.

DiMasi said the House's hands were tied by a $1.3 billion budget shortfall and a looming national recession. He invited state Treasurer Timothy Cahill to brief legislators on the economy.

Cahill said he cautioned lawmakers from locking the state into big new spending plans or borrowing too heavily because of the fiscally uncertain future.

He said he anticipated relatively strong revenues in April but said that doesn't mean the state should go on a spending spree.

"I wouldn't draw too many conclusions if the revenues are strong," Cahill said. "I wouldn't say we are out of the woods if we have a strong April."

House Republicans have said Democratic leaders are exaggerating the extent of the state's fiscal situation. They point out that the state has already collected $372 million over revenue estimates this year.

But Cahill said more than $200 of that came from two one-time payments from large financial institutions. He also said he'd like to see a $2 billion balance kept in the rainy day account to help protect the state's bond rating.

DiMasi said the House plan would leave about a $2 billion balance in the account.

DiMasi said the state is feeling pressure from skyrocketing health care costs, including Massachusetts' landmark health care law, which is signing up more people at a faster clip than anticipated.

He also cautioned that the state may not reach the revenue estimate announced in January of 3.8 percent growth, or $762 million, over the current fiscal year.

One of the reforms adopted from the Governor's plan would boost monthly health premiums for 58,000 of 80,000 state employees and their families -- a move he said would bring the benefits more in line with the private sector.

Most state employees pay 15 percent of their premiums with the state covering the rest. Patrick's plan sets up a three-tiered, sliding scale system based on annual salaries with those earning more being required to pay a higher percentage.

Patrick has said the change could save the state about $50 million and would not affect retirees.

DiMasi said the House plan would include the changes, which have been criticized by union officials representing state employees.

DiMasi said he expected criticism of the House budget.

"Every cut is somebody else's priority," he said. "There are difficult choices in here."

The Senate doesn't release its version of the budget until after the House debates and votes on its version.