EagleTribune.com, North Andover, MA


March 29, 2013

Dempsey rules out borrowing scheme element of Patrick's budget

BOSTON — The scaled-down House plan to fund the transportation system will not feature a borrowing scheme that Patrick administration officials proposed to begin spending new revenue more quickly than it comes in, according to the House’s budget chief.

“We have always considered the RANs, the revenue anticipation notes, as non-starters here at the committee,” House Ways and Means Chairman Brian Dempsey told the State House News Service. “We have not liked that idea from the very beginning and would not include that at all in our proposal.”

The Haverhill Democrat also said he did not see the logic in drawing money from state reserves at a time when the state would be receiving new revenues, another element of Gov. Deval Patrick’s plan.

“Very simply, if you’re going to raise $2 billion in new revenue, recurring revenue, then you certainly want to lessen your reliance on one-time monies, because it creates a structural problem,” Dempsey said yesterday.

In his budget, Patrick has sought to boost spending on education and transportation through an overhauled tax system that would raise $1.9 billion through an income tax hike and the elimination of deductions, which is coupled with a doubling of the personal income exemption and a sales tax reduction.

In a closed-door meeting with fellow Democrats yesterday, House Speaker Robert DeLeo called Patrick’s plan “fantasy land,” and his House lieutenants have been seeking a pared version that DeLeo has said will include new revenue.

Recent reports by credit rating agencies viewed warily Patrick’s planned use of $400 million from the rainy day fund in fiscal year 2014 and a multi-year short-term borrowing of $400 million that administration officials say would allow the state to ramp up education and transportation investments now with the pledge of anticipated new tax revenues in fiscal 2015 and 2015 to back the borrowing.

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