State revenues down 12.3% during February

by Daniel J. Fitzgibbons, Chronicle staff

tate revenues continued a downward trend in February, falling $112 million or 12.3 percent from a year ago, state officials announced last week.

     According to Revenue Commissioner Alan LeBovidge revenue collections for February totaled $800 million, bringing year-to-date revenue collections to $9.4 billion, down $1 billion or 9.7 percent from last year.

     Administration and Finance Secretary Kevin Sullivan said the February drop widened this year's budget gap to $455 million.

     The ongoing slide in tax revenues came amid news reports that a legislative budget leader floated a list of 16 possible tax hikes that could be used to close a state deficit that could balloon to between $2 billion and $3 billion over the next fiscal year.

     In a letter circulated to members of the House of Representatives, Rep. John H. Rogers (D-Norwood), chairman of the House Ways and Means Committee, outlined a series of politically unpopular steps to offset the budget gap.

     Rogers outlined the options as a prelude to a House debate this month. He did not endorse any of the proposed tax increases, which range from hiking the income tax rate to 5.6 percent to eliminating charitable deductions and rental deductions. The entire package would generate $1.977 billion.

     The Rogers letter also marks the first time legislators have discussed raising the income tax, which is due to drop to 5 percent next year under the terms of a referendum approved by voters two years ago. In recent weeks, most debate has centered on freezing the current 5.3 percent rate.

     Any effort to raise taxes would require a two-thirds majority in both the House and Senate since Acting Gov. Jane Swift has promised to veto such steps to address the budget gap. Instead, Swift is still holding out for tapping the state's "rainy day" fund and spending $134 million in pension fund payments.

     In a largely symbolic gesture, House Speaker Thomas Finneran last week asked representatives to take voluntary pay cuts for the remainder of this fiscal year. If all 157 representatives took eight unpaid days, the savings would total $310,000.

     Finneran's proposal was praised by trial court employees, who last month were asked to work eight days without pay to save about $10 million. The trial court staff have been pressing judges to join the cost-savings effort.

     Other state employees, including some at the University and the welfare department, are taking voluntary unpaid leaves to help save money. Last week, Swift said she is also considering taking a symbolic pay cut.

     Holyoke Community College President David M. Bartley jumped on the bandwagon by turning down a $17,805 raise previously approved by the school's board of trustees.

Senate passes capital bond bill

     The state Senate last week passed a $628.5 million capital improvement bond bill that includes $10 million for the Pioneer Valley Life Sciences Initiative and $77 million for facilities improvements across the University system.

     The life sciences initiative is a $92 million project involving the University and Baystate Medical Center. The state funding would complement federal and private funds to build new biotechnology research facilities in Amherst and Springfield. The state has already earmarked $5 million for the project.

     The bill also allocates $100 million to the Board of Higher Education for improvements at state and community colleges.

     The measure must still be approved by the House.