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Better choices for the budget
The Boston Globe, Editorial, January 13, 2008

As Governor Patrick prepares to release his second budget later this month, he and legislative leaders have agreed on revenue estimates that portend grim news for the state and its local governments. He has a duty to present an austere budget proposal, but he also ought to lay out more optimistic scenarios to show what would be possible if the Legislature were to authorize his proposals for more revenue to pay for essential governmental services.

The consensus revenue estimate for fiscal 2009, which begins July 1, is $21 billion, an impressive amount that would represent a $762 million increase over the current year. The state, however, has collective-bargaining, Medicaid, health reform, local aid, and debt-service commitments that will increase by at least $1.5 billion next year. Filling that gap, without starving parks, early-childhood education, public health, and other important programs, will be a huge challenge.

But the state does have reasonable, if controversial, options to avoid a crunch. Last year, for example, Patrick wanted to close corporate tax loopholes worth perhaps $300 million. The Legislature refused to go along. The governor should make clear just how beneficial the extra money would be. While Patrick's formal budget bill should be cautious, he should offer two alternative plans.

One would illustrate the benefits of closing the tax loopholes. An extra $300 million would go a long way. For example, it could provide early education for 30,000 additional 3- and 4-year-olds, offer $1,000 in property tax relief to 300,000 homeowners, or provide Commonwealth Care health coverage to 70,000 previously uninsured people.

Patrick should present a second alternative that reflects the fiscal benefits of his destination casino plan. The governor is already thinking of including money from this revenue source in his budget bill even though the Legislature is far from approving casino gambling in the state. In fact, Massachusetts could reap perhaps $800 million in upcoming years in casino licensing fees and continuing revenues subsequently. The governor would be unwise to assume the money is available without legislative approval, but he ought to show legislators just how much the state could do if the money were available.

Without new revenues, the governor and Legislature will be tempted to dip into the rainy day fund, which stands at $2.3 billion. A modest drawdown is appropriate. But most of the money ought to be reserved for a full-blown recession - a real possibility next year.
No matter what, next year's budget will not be overflowing with largesse. Yet it could better protect the healthcare, education, local aid, and other programs that make Massachusetts livable if the Legislature raised revenues to a sustainable figure.

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