Speaker pushing sales tax of 6.25%

He wants to dedicate about $275 million to transportation - a maneuver designed to avoid increasing the state's gas tax, as Governor Deval Patrick has proposed, according to a State House source briefed on the plan and a briefing document obtained by the Globe.

Patrick has proposed a 19-cent increase in the gas tax, which would raise nearly double the amount for transportation that DeLeo's plan would.

DeLeo also wants to dedicate $200 million to restoring cuts in local aid.

DeLeo and his leadership team began polling House lawmakers yesterday afternoon in an effort to gauge support. House Democrats plan to hold a caucus this morning to further lay out their strategy.

State Representative Martha Walz, a Boston Democrat, said she supports the proposal and believes consensus is building in the House for the increase.

"There are certainly some number who want a zero percent increase, and some would go as high as 2 percent," Walz said yesterday. "But even with a 1.25 percent increase, there are going to be significant budget cuts. This is not a cure-all."

But state Representative John Binienda, a Worcester Democrat and former chairman of the revenue committee, said he was opposed. "Our economy is in bad shape right now, and I just think that by increasing the sales tax, it's just another drawing card to New Hampshire."

DeLeo, through a spokesman, declined to comment yesterday.

The move to increase the sales tax will pit DeLeo and top House lawmakers against the state's business community.

Jon Hurst, president of the Retailers Association of Massachusetts, called the proposed sales-tax increase "a stake through the heart of Main Street," saying the sales tax is already too high.

Raising the tax, he said, will drive consumers to the Internet and to tax-free New Hampshire, and "put at risk thousands of small-business jobs."

The move also sets up a potential battle with Patrick, who has expressed deep reservations about increasing the state's sales tax. The governor has not said whether he would veto such a proposal, but has expressed frustration that the Legislature has avoided his proposals for smaller, more targeted tax increases.

A spokesman for Patrick declined to comment yesterday.

In January, Patrick released a budget that included a host of tax increases, on commodities ranging from candy and soft drinks to alcohol and hotel rooms. Lawmakers have resisted his approach, saying that increasing a variety of taxes by small increments could cause a greater political backlash than if one broad-based tax were raised.

DeLeo wants to dedicate three-eighths of a percent to transportation, which he estimates would bring in $275 million as an alternative to Patrick's transportation funding plan.

DeLeo's plan "doesn't come close to solving the transportation problems," said Michael J. Widmer, president of the Massachusetts Taxpayers Foundation, which supported a 25-cent increase in the gas tax.

The transportation funding that would come from the proposed sales tax increase would bring in about the same amount of revenue as a 10-cent increase in the gas tax, he said. That would be enough to offset toll hikes and some of the funding issues at the MBTA, but would not cover road and bridge repairs, Widmer said.

The House will begin debate on its $27.4 billion budget proposal today, with dozens of amendments on raising new revenue expected. House Democrats are planning to huddle this morning to decide which approach to take.

A group of advocates for schools, workers unions, and municipalities are planning to hold an event at noon today to encourage lawmakers to raise new revenues to offset some of the budget cuts.

House Republicans are planning to hold a press conference this morning to blast the sales tax proposal. They will be joined by business groups, including the retailers association and the National Federal of Independent Business. Chambers of commerce from across the state have also been lobbying against the proposal.

House Minority Leader Bradley H. Jones Jr. said no tax increase should be considered until reform measures are passed into law. He called a higher sales tax regressive, and said Republicans would be offering up to $350 million in proposed cuts and cost-saving measures.

Jones also expressed frustration that expanded gambling proposals were taking a back seat to tax hikes.

"If you think there's need for revenue, why are you taking revenue ideas off the table?" said Jones, of North Reading, adding that border states with lower tax rates would benefit most.

However, Robert P. Spellane, a Democrat from Worcester, said the sales tax increase is "more responsible" than a higher gas tax.

"I don't think anybody wants to increase taxes; it's clearly the last resort," he said. "Generally speaking, more of my colleagues have seemed accepting of a slight increase in the sales tax."

If the House approves a sales tax increase, it would have to be accepted by the Senate, and by the governor unless lawmakers garner the two-thirds vote it would take to override a veto.

DeLeo, Senate President Therese Murray, and the chairmen of both the House and Senate ways and means committees began discussions of the topic in late February and early March.

Murray, who could not be reached for comment yesterday, has since said "everything is on the table," except for raising the state's income tax.