House Passes State Deficit Bill

BOSTON--The Massachusetts House has approved a $365 million deficit-reduction bill that sets the stage for higher taxes but falls short of wiping out an estimated $721 million state deficit.

House Speaker George Keverian (D-Everett) urged support for the bill Saturday, saying the government has suffered enough cuts. He said new taxes were needed to preserve programs for the poor, the mentally ill, the homeless and those without heat for the winter.

But the House's budget-cutting efforts have disappointed some lawmakers. House Minority Leader Steven D. Pierce (R-Westfield) said new taxes would simply worsen the state's already jittery economy.

The bill now goes to the Senate, which is not expected to begin work on it until after Thanksgiving.

A Senate source, who spoke on the condition of anonymity, said the bill may be worth less than the $365 million Keverian suggested, paving the way for more cuts or even higher tax increases to balance the budget.

The House leadership counted savings steps already taken by the administration of Gov. Michael S. Dukakis as part of its reduction package, according to the source.

Senate Ways and Means Committee Chairman Patricia McGovern (D-Lawrence), who will oversee the Senate's budget-cutting drive, has already said new taxes are inevitable.

"You will have a tax program, rely on it. It will be next. It will fill the gap," Keverian said. "Anyone who understands state government and doesn't support it doesn't want a balanced budget."

Keverian said the package also should be large enough to restore some programs already cut, such as those that provide services to young mentally retarded adults who are leaving the special education system.

But Pierce said the deficit problem could have been avoided if warnings had been heeded two years ago that state spending was out of control.

"A major tax package is still lurking in the hallways to come in here and be the grinch that stole Christmas," Pierce said.

"Higher taxes are a prescription for more disaster, they are a prescription for sending an economy that is showing signs of softness into a real tailspin," Pierce said. "We will go back to a time when we will have 8, 10 or 12 percent unemployment."

Pierce said the state's huge budget deficit was a direct result of Dukakis' presidential bid, saying he and his allies "mortgaged the future of this state for a presidential campaign."

But Keverian said the budgetary woes were not, at least on the part of House Democratic leaders, a result of Dukakis' failed presidential campaign.

"Neither I nor any member of the Democratic leadership would mortgage the future of this state for any presidential campaign," Keverian said.

"Something is going on in this nation. It is called a recession or the beginnings of one, and we are not exempt from the trends that are going on," he said.

Cuts More than $130 Million

The deficit-reduction plan as it now stands cuts more than $130 million for state agency spending and raises additional non-tax revenues, as well as mandates savings in some government programs, including Medicaid.

Keverian said further cuts would not be possible without destroying the programs he said makes Massachusetts a state with a reputation for compassion.