Lawmakers, governor to slice own budgets

Deeper cuts, layoffs loom in next round

Governor Deval Patrick, with Leslie Kirwan, administration and finance secretary, announces the Legislature's budget cuts of $9.1 million and his own office cuts of $600,000 at the State House yesterday. (GEORGE RIZER/GLOBE STAFF)

Top lawmakers pledged to snip 10 percent from the budget for the Legislature yesterday while Governor Deval Patrick vowed to trim his office budget by 7 percent, politically significant but relatively small gestures that served as a harbinger of far greater cuts.

The Legislature's budget will be reduced by $9.1 million, and the governor's office budget will shrink by just $600,000 - minor trims compared to the "hundreds of millions" of dollars in layoffs and budget chopping that Patrick said yesterday he expects to impose before Oct. 15.

"They are symbolic cuts," said State Treasurer Timothy P. Cahill, who planned to meet with his staff today to determine how to trim 7 percent from his own budget. "They're important to make. But at the end of the day, people want to see us balance the budget. We're not going to spin our way out of this."

Meanwhile, neither Patrick nor House Speaker Salvatore DiMasi was ruling out a return to the debate over licensing casinos, which Patrick has said could generate hundreds of millions of dollars for the state.

Beacon Hill leaders are responding to the damage inflicted on state coffers by the national financial crisis, which is shrinking tax revenues and has hobbled credit markets, making it very difficult for the state to borrow. A new Wall Street bill in the US House is expected to ease credit markets - if it passes.

Cahill earlier this week delayed floating a $750 million revenue bond until next week, when he is hoping markets will calm. "We're treading water," he said. "I want next week to be normal."

The Department of Revenue reported yesterday that revenue for the first quarter had come in $223 million below expectations without counting nonrecurring payments. Counting those one-time payments, revenues were lagging $143 million behind what was expected. September was the worst of the three months, with revenues dropping $188 million.

Nearly every type of state tax collection is down - including corporate, sales and excise

While he did not provide details of where he would make the bigger cuts, Patrick warned yesterday that the "road ahead will be rough."

"I know that what I have outlined will not be easy," he told reporters and television cameras in a packed room.

Patrick acknowledged that some of his other long-term spending initiatives and campaign promises lingering from 2006 might have to be curtailed. And tellingly, he did not rule out reviving his casino gambling legislation to raise money. Patrick had projected licensing three casinos would generate at least $600 million in one-time fees and huge sums in ongoing gaming taxes.

"We'll have to see," Patrick said, when asked whether he'll refile the proposal to license three resort casinos. "You know, it's a new legislative session coming up in January, and we're developing that agenda now."

DiMasi, who led the effort to kill Patrick's casino initiative last spring, blanched when the topic of legalized casino gambling came up later in the day - but he did not quash the idea.

"The casino issue is an issue I don't think will go away, and it depends whether the governor wants to reintroduce it or not," he told reporters in his office. "If he reintroduces it, I'll have to deal with it."

When told by a reporter that it appears that the fiscal downturn might make his arguments against casinos harder to make, he said, "Thank you for reminding me about that."

As expected, Patrick announced his plan to shut down the Massachusetts Turnpike Authority and merge its operation with other state agencies - a move that would not produce any near-term financial benefits but could save money in coming years.

When former Governor Mitt Romney sought to abolish the authority, he was thwarted by a host of legal, financial, and political barriers. But lawmakers yesterday appeared more amenable to a plan put forward by a fellow Democrat.

"The circumstances have changed," DiMasi said, when asked why the plan could succeed this time. "With a Democratic governor it's a lot easier for us to agree with him on the fact that he has to change these things. It's out of necessity."

Republicans yesterday criticized the governor - as well as the Democrat-controlled Legislature - for not passing a smaller budget in July.

"Governor Patrick signed a budget increasing spending by $1.4 billion, authorized $16 billion in new borrowing, and has hiked taxes by hundreds of millions of dollars this year," Barney Keller, spokesman for the state Republican Party, said in a statement.

"The immediate pickle we're in is because we didn't tighten our belts earlier in the year," Senate minority leader Richard Tisei said in an interview.

Matt Viser can be reached at maviser@globe.com