Increases in State Spending Unlikely

BOSTON--The Legislature's top Democratic budget writers say social activists' efforts to increase state spending will fail, even though tax collections are a bit better than expected.

"The example I'd use for [fiscal year 1992] is we didn't fall over the edge of the cliff, but we're on the edge of the cliff. We are balanced, but it is a very tentative balance," House Ways and Means Committee Chair Thomas Finneran (D-Boston) said in an interview.

His Senate counterpart, Democrat Patricia McGovern of Lawrence, also said that the economy and the state's revenue picture aren't good enough to allow higher spending.

The $13 billion budget for fiscal 1992, which began last July 1, trimmed spending more than $600 million below the previous year. It also included significant cuts in many social service programs, as well as in aid to cities and towns.

"It's hard to hold the line. There are so many people in need, so many cities and towns in need," McGovern said. "On the other hand, if you don't hold the line, you cause those people more pain in the future.

"You take the medicine, you cure the patient. If you don't take the medicine, you feel better at the time, but then you get sicker," she said.

Finneran said higher taxes still are not an option for the Legislature, and not just because of Republican Gov. William F. Weld's opposition to them.

"It's something that most economists would agree. You don't enact significant taxes in the midst of a recession, particularly when there is no horizon on the recession," Finneran said in an interview.

McGovern also agreed the votes just aren't there in the Legislature for a tax increase.

Finneran raised the warnings last week during debate on overriding some of Weld's vetoes in the 1992 fiscal year budget passed June 30.

While supporting the veto overrides, Finneran warned spending advocates that the veto votes weren't a signal the Legislature would return to the tax-and-spend practices of the past.

Finneran said the 1992 budget was balanced in part with one-time revenues, such as the sale of state assets worth $230 million.

Even if that money comes in, and some of it is questionable, it won't be available for next year's budget.

Finneran said he anticipates that tax collections for the bookkeeping year that starts July 1, 1992, will be at essentially the same level as this year.

Weld and Democratic legislative leaders estimated that this year's tax collections would total $8.3 billion.

But collections for July and August, the first two months of the current fiscal year, have come in higher than the Weld administration's most optimistic estimate.

This has prompted advocates such as the Tax Equity Alliance of Massachusetts and the Human Services Coalition to propose restoration of some of the cuts in welfare programs the Legislature made to balance the budget.

But Finneran said that would be a serious budgetary mistake.

"Any revenue growth we do have will be sorely needed to fill the holes when those non-recurring items non-recur," he said.

"Even if we have increased revenues, we need all of that to keep the situation stable," McGovern said.

Finneran and McGovern said there also are no signs that the Massachusetts economy, mired in recession, has started to pick up, nor has the national economy.

The Weld administration also has warned against a return to higher spending.

In a speech Thursday to the Greater Boston Chamber of Commerce, Administration and Finance Secretary Peter Nessen said spending restraint is still needed to keep the state from falling back into a fiscal mess.

Nessen warned that as word gets out that the state is slightly ahead on revenues, advocates will start a "feeding frenzy" trying to scoop up money when there isn't money available.

Finneran said one-time savings and non-tax revenues make up as much as $1 billion of the current budget.

"There's all that uncertainty hanging over FY92, so the extent revenue growth is a little better, I'm delighted to see it," Finneran said.

"We knew if we were going to make an error in revenue projections, we were going to make it on the side of caution," he said.

The chief House budget writer said the projection of $230 million from selling surplus assets is shaky at best and that the Weld administration has a difficult task if it is to achieve the Medicaid savings projected in the budget.

"It's so easy in our business to lose sight of the fact we walk on a road that's a long road," Finneran said. "I try to present a long-term perspective and say, folks, you can't play with fire."

Finneran acknowledged that some critics have accused Democrats of dancing to Weld's tune on budgetary issues, but he said the reason is simple--the state faced, and still faces, a fiscal crisis.

"In times of emergency--and that's what we're in and nobody should be mistaken about that--the differences between people narrow significantly," Finneran said. "This is an emergency and literally the most extreme choices have to be made."

McGovern also predicted continued cooperation among herself, Finneran and Nessen on budget issues.

"All three of us appear to be pretty consistent. I don't see the kind of disagreement that might have existed in the past. We get by it by not overspending, by being very conservative and very cautious," she said.