BOSTON -- Gov. Deval Patrick signed a $28.1 billion budget for the new fiscal year Sunday, vetoing $122.5 million from the Legislature's spending plan and asking lawmakers for expanded authority to make additional cuts if the economy worsens.
The cuts come at a time when the state is looking at soaring energy prices and higher than expects costs associated with the state's landmark 2006 health care law. Patrick is asking businesses, insurers and hospitals for another $130 million to help pay for the law.
Patrick said the vetoes -- and the authority that would allow him to make midyear cuts across state government instead of just in the executive branch -- will help insulate the state if the economy takes a dramatic slide.
"I believe we've got to prepare now for economic trouble ahead," Patrick told reporters.
Many of the cuts were aimed at so-called "earmarks" or individual pet projects inserted into the budget by lawmakers -- from $100,000 for an invasive weed control project on the Charles River in Waltham to $1,150,000 for the Boston, Cambridge and Everett Fire Department Hazardous Material Response Teams.
He also cut $5 million of the money the Legislature set aside for water and sewer rate relief, bringing the line item down to $15 million.
Patrick said his cuts were driven by a need to ensure the state is living within its means.
"While there is merit to many of the budget items that I have eliminated or reduced, our present fiscal challenges simply demand increased restraint," Patrick said.
House Ways and Means chairman Rep. Robert DeLeo, D-Winthrop, said he was pleased that Patrick lent his support to "99 percent of the appropriations the Legislature approved." DeLeo gave no indication which vetoes may be overturned by lawmakers.
"As is the case each year, we will evaluate any vetoes in the context of the priorities the Legislature set forth and the fiscal realities we face," DeLeo said in a written statement.
The budget relies in part on an estimated $174 million from a new $1 per pack cigarette tax increase and $285 million in new revenues from closing so-called corporate tax "loopholes."
Patrick said he wants $100 million of an estimated $145 million surplus from the fiscal year that ended on June 30 to go back into the state's rainy day savings fund to help replenish some of the $401 million drawn out of the account to balance the 2009 budget.
Patrick wants another $20 million of the surplus to go into a program to help the state's poorest citizens cover energy costs this winter.
Paying for the 2006 health care law is also proving difficult given higher than anticipated enrollment in state subsidized plans.
Patrick is asking lawmakers for changes to require employers, insurers and health care providers to kick in an additional $130 million to help shore up funding for the health care law.
Under the proposal, employers would shoulder an additional $33 million while insurance companies would agree to a one-time $33 million assessment and health care providers would be tapped for another one-time $20 million assessment.
The state would make up the rest by transferring up to $35 million from a fund designed to cover health insurance payments for those receiving unemployment benefits.
Those changes -- and the expanded emergency veto powers -- would require the approval of lawmakers.
Patrick's cuts fall short of those recommended by the business-backed Massachusetts Taxpayers Foundation, which said the budget plan is at least $1 billion out of balance.
The group warned of a potentially sharp drop in capital gains tax collections that accounted for almost $2 billion in the last fiscal year.
The state's revenues are also threatened by an extended period of economic turbulence, a housing slump, volatile financial markets, a widespread credit crunch, soaring energy costs, and declining consumer confidence, the group said.
Lawmakers can decide to override any of the vetoes by a two-thirds vote in both chambers, but Leslie Kirwan, Patrick's secretary of administration and finance, said she hopes they look at the state's fiscal reality and think twice.
"They have shown some restraint in the use of rainy day funds," Kirwan said.
Also key to the budget is whether the state can be successful in pressing federal officials to quickly renew a Medicaid waiver program that is vital to keeping the health insurance program on track.
Patrick said he met with US Health and Human Services Secretary Mike Leavitt over the weekend to press the state's case.
"He continues to be encouraging," Patrick said. "We have his attention."
Patrick also amended an outside section to the budget that would increase pensions for retired teachers and state employees that will provide an average $10-per-month increase in their retirement benefits.
Patrick's amendment would limit the increased benefit to retirees with annual pensions of $40,000 or less.
The budget also provides $935 million in local aid promised to cities and towns, making up a $124 million shortfall caused by lagging lottery revenues of $811 million -- and allots $3.95 billion in education funding, a $223 million increase over last year.
(Copyright 2008 by The Associated Press. All Rights Reserved.)
