THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

State will miss budget deadline, leaders say

By Michael Levenson
Globe Staff / June 30, 2011

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Beacon Hill leaders say they will miss tomorrow’s deadline to approve the state’s annual budget, the first time in three years that Massachusetts will not have a spending plan in place by the start of the new fiscal year.

The acknowledgment by top House and Senate leaders underscores the struggle they are facing as they try to plug a $1.9 billion deficit that is largely the result of the loss of $1.5 billion in federal stimulus money.

Their failure to deliver a budget to Governor Deval Patrick by July 1 also deprives him of one of his favorite boasts: that he can work with legislative leaders to craft a balanced budget, on time.

“We’re disappointed that we don’t have it, and we’re hoping that we get it within days so that we’d be in a position to sign it within the first couple of weeks of the fiscal year,’’ Jay Gonzalez, Patrick’s budget chief, said. “But we’re anxiously waiting.’’

Stephen M. Brewer, the Senate budget chief, declined to predict when House and Senate negotiators might finish their work, or to detail what issues are continuing to divide them.

The governor signed a $1.25 billion interim budget on Monday to ensure that state government can continue to operate through July 10.

Meanwhile, the House and Senate are trying to come to an agreement on a permanent $30.5 billion spending plan. Both chambers have approved versions that include deep cuts to social services and divisive plans to trim local health costs by limiting the collective bargaining rights of teachers, firefighters, and other municipal workers.

“There are still some major public policy issues that are working through the process,’’ said Brewer, a Barre Democrat. “We’re working very aggressively and professionally on it.’’

Wall Street credit rating agencies often praise states that consistently deliver on-time budgets and warn investors that states with chronically late budgets may be not be able to capably handle their finances.

“It’s just a bad signal to the bond markets and others that do business with the state,’’ said Gonzalez.

He also said that Patrick is eager to implement several cost-saving measures, including a plan to move homeless people from shelters into permanent housing and to hire more public defenders, reducing the state’s reliance on private lawyers.

House and Senate leaders have been haggling for a month over their competing versions of the budget, and House Speaker Robert A. DeLeo and Senate President Therese Murray have been discussing it with Patrick once a week behind closed doors.

In the past, Patrick has bragged about his record of getting budgets done by the start of the fiscal year. “We have delivered four budgets now that were responsible, balanced, and on time,’’ Patrick said in an April interview on the Tavis Smiley show, crediting his “good, strong, productive working relationships with the leadership in both the House and the Senate.’’

In fact, of the four budgets Patrick has signed, two were on time, and two were slightly late, in 2008 (on July 13) and in 2007 (July 12.)

Budget specialists say that if a budget is approved within a few weeks of the new fiscal year, it will not harm the state.

“It’s an inconvenience, nothing more,’’ said Andrew C. Bagley, director of research and public affairs at the Massachusetts Taxpayers Foundation. “I don’t think it will have any lasting effect.’’

Michael Levenson can be reached at mlevenson@globe.com. Follow him on Twitter @mlevenson.