Patrick's $34.8b budget details tax hikes, plans for new spending
Gov. Deval Patrick on Wednesday proposed a $34.8 billion state budget for next year that would boost aid to cities and towns and affirms his calls for massive new spending on transportation and education – all fueled by new taxes.
Schools would see $226 million more Chapter 70 education aid in fiscal 2014, which begins in July. The plan guarantees an increase of at least $25 per pupil in every district, for a total of $4.4 billion.
“That’s a commitment, no question about it,” said Tom Scott, executive director of the Massachusetts Association of School Superintendents.
While holding the main form of local aid level, the governor surprised some observers by proposing a new stream of municipal aid that would boost state assistance to cities and towns about $31 million next year. Local aid would total about $930 million.
That’s a step toward reversing local aid cuts that began around 2001, said Noah Berger, president of the Massachusetts Budget and Policy Center.
“To begin to restore that sends a positive signal, I think, to local communities,” he said.
Still, Scott hopes to revisit the formula for distributing Chapter 70 aid, which has not been substantially updated in 20 years. Geoff Beckwith, executive director of the Massachusetts Municipal Association, said Patrick’s proposal still leaves towns and cities with nearly $400 million less aid than five years ago.
Overall, Patrick’s budget would boost spending $2.3 billion next July, a 6.9 percent increase. That includes $553 million additional funding for education and $269 million for transportation.
Patrick called his plan “a growth budget” for the state. “If we want growth, then we’re going to have to invest in it,” he said.
To fund these increases, Patrick relies on a bevy of tax hikes and reforms. Newly announced on Wednesday were plans to end sales tax exemptions for candy and soda and raise the cigarette excise tax another dollar, to $3.51 per pack.
Patrick proposed similar measures in the past¸ but the Legislature has rejected them. Likewise, the governor again revived a plan to expand bottle deposits to bottled water and sports drinks.
Earlier in the month, Patrick announced plans to raise the state income tax rate from 5.25 percent to 6.25 percent, while doubling the personal exemption to $8,800, and to cut the sales tax from 6.25 percent to 4.5 percent.
He also hopes to tie the gasoline tax to inflation and schedule regular transit fare and toll increases. Patrick also has proposed eliminating some 45 personal tax exemptions and deductions and three corporate tax breaks.
Still, this budget would put Massachusetts “in the middle of the pack” in terms of state tax burdens and create a “simpler and fairer” tax code, he said. Residents who earn less than $37,523 will see their overall tax burden reduced, the budget says.
Michael Widmer, president of the Massachusetts Taxpayers Foundation, said the question is how many investments, however important, to make at one time.
Patrick’s plan would make the state’s personal income tax burden the top in the nation, while its sales tax already is comparatively low, he said.
“It’s an aggressive budget in that it depends on a large tax increase, a major revamping of the state tax code and heavy use of one-time money,” Widmer said.
Lawmakers now begin the long process of developing their own budget proposals.
Other key features of Patrick’s budget include:
- Taking $400 million from the state’s rainy day fund, leaving a balance of about $1 billion;
- New education spending includes $131 million to expand and improve early childhood education; $152 million for higher education, including student grants; $11 million for initiatives in schools in the state’s older Gateway cities; and $5 million for longer school days in high-needs districts;
- Ending the MBTA’s operating deficit and making modest service improvements, such as restoring some weekend services;
- Several new initiatives, such as plans to create high-speed, all-electronic tolling on state highways and to re-examine how the state’s sheriffs are funded.
(David Riley can be reached at 508-626-4424 or email@example.com.)