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A wary budget for iffy times
The Boston Globe, Editorial, April 17, 2008

THE 2009 budget released yesterday by the House Ways and Means Committee would spend slightly less money than Governor Patrick's spending plan, but at $28 billion it's hardly bare-bones. The committee tries to fund the many responsibilities of state government while casting a wary eye on the uncertain economy.

Like the governor, the committee would provide nearly $4 billion in education aid to cities and towns, but it would be less generous than Patrick in funding pre-kindergarten and after-school education. At a meeting with Globe writers, House Speaker Salvatore DiMasi acknowledged that he and the committee wanted to spend more on these programs, which constitute the next step in the education-reform movement, but they dare not while a recession threatens. Both programs should be candidates for more money if revenues come in higher than projected.

The committee would fully fund the expansion of health insurance in Massachusetts, a priority of the speaker. Cost projections are uncertain, and if the committee has erred on the low side and on its estimates of Medicaid spending, the Legislature will be under pressure to find new money.

To pay for its spending plan, the Ways and Means Committee would rely on a diversion of over $300 million from the rainy day fund and two sets of tax increases - a $1-a-pack cigarette tax hike and a plan to close corporate tax loopholes in exchange for lowering the corporate income-tax rate. Neither has cleared the Senate. Both probably will, but the changes in corporate taxes may yield less than the committee anticipates.

If the economy sours, the Legislature will have to do some serious budget cutting. There aren't any immediate fixes that maintain the current level of services.

One logical change that shouldn't affect services is the governor's proposal to increase many state workers' contribution for their health insurance. The Ways and Means Committee supports Patrick's plan to have workers earning $50,000 or more a year contribute 25 percent of the cost of insurance, instead of the current 15 or 20 percent. Some workers earning $35,000 to $50,000 would have to pay more as well.

That's a tough increase for workers to accept, but state employees generally pay a lower percentage of their coverage than private-sector ones, and the state can no longer routinely absorb huge increases in health costs. DiMasi anticipates a floor fight here. He and the Ways and Means Committee may have to revisit other budget items if the economy worsens, but this item is worth keeping in any event to save $51 million in fiscal 2009 - and to share the burden of health insurance costs in later years.

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