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Legislative leaders unveil budget that will raise taxes, cut services

E-mail|Link|Comments () June 18, 2009 09:55 PM

By Matt Viser and Noah Bierman, Globe Staff

House and Senate leaders tonight unveiled a state budget for next fiscal year that slashes services in nearly every area of Massachusetts government and calls for additional sales, meals, and alcohol taxes.

The $27.4 billion plan, which the Legislature is expected to vote on Friday, would make dramatic spending reductions that lawmakers have been forecasting for months as state revenue projections have worsened severely on account of the national recession.

Legislative leaders said that the budget eliminates 50 separate line items and 800 earmarks. Some communities could see up to a 15 percent cut in local aid, they said, and a dozen Registry of Motor Vehicles branches would be closed.

"It was just a litany of bad choices that we had before us," said state Representative Charles Murphy, chairman of the House Ways and Means Committee. "There's going to be a lot of pain and there's going to be a lot people who aren't terribly happy."

Under the proposal, the sales tax would increase from 5 percent to 6.25 percent, which is estimated to bring in an additional $900 million annually, roughly a third of which would be earmarked for the transportation system.

The budget would also boost taxes on meals by 1.25 percentage points statewide, estimated to raise $108 million. Cities and towns would be allowed to raise the meals tax by an additional 0.75 percent.

In addition, the budget would eliminate an exemption on alcohol taxes for items sold in retail stores, and allow communities to raise the local hotels tax by 2 percentage points.

In a move sure to draw fire from police unions, the budget proposal would also slash by about 80 percent funding for the Quinn Bill, a controversial program that awards bonuses for police officers who hold college degrees.

The budget agreement capped a frenzied day on Beacon Hill. Hours before, lawmakers defied angry union leaders and approved, by a veto-proof majority, a long-awaited transportation overhaul that would reconfigure the confusing array of agencies that operate roads, rail, and bridges in Massachusetts.