Massachusetts Governor Plans to Cut Welfare and 6,000 State Jobs

LESS than a month after taking office, Massachusetts Gov. William Weld (R) is wasting no time tackling the state's budget crisis. In his first major initiative, the newly elected governor announced a comprehensive spending plan last week that includes thousands of employee layoffs and sweeping cuts in state services. The plan also calls for increases in mass-transit fares, higher tuition for state universities and colleges, refinancing of state debt, and cuts of 6,000 state employee positions over the next 18 months. In addition, the governor's fiscal 1991 plan calls for 10-day, unpaid employee furloughs, saving an estimated $90 million.

Other proposals include repeal of the state's universal health-care law, repeal of the business-services tax passed last summer, and a 10-percent reduction of local aid funding for fiscal year 1992. The plan has yet to be approved by the Democrat-controlled state legislature.

For more than two years Massachusetts, which has the lowest state bond rating in the country, has been struggling with a deficit crisis. According to the governor's estimate, the deficit is currently at $850 million, although critics say the figure is inflated. Mr. Weld, a fiscal conservative and the first Republican governor since 1974, has called for a leaner, better-managed ``entrepreneurial government.'' He stresses spending cuts over raising new taxes.

``I think it's important to send the message that the budget debt for fiscal '91 and '92 is going to be dealt with differently than they have been in the past few years,'' Weld said at a press conference last week. ``During the past few years, we have reached ... for new tax programs as a way to bridge those gaps, and I think that has had a definite negative impact on the economy of the commonwealth.''

Weld tried to downplay human-service cuts, saying that the ``safety net is intact.'' Although he plans to carve $618 million out of the state's human-services budget in 1992, he says funding for certain preventive programs - such as teen pregnancy prevention and family health programs - will be increased.

But critics are not convinced all the cuts are necessary. James Braude, executive director of Equity Alliance for Massachusetts, says Weld should raise revenue through the business service tax instead of cutting local aid and increasing mass transit fares. ``Virtually none of these [cuts] were included in candidate Weld's prescriptive cures for Massachusetts'' during the campaign, Mr. Braude says.

When questioned about his decision to cut back on state programs rather than support the business service tax for the extra revenue, Weld said businesses could not bear the burden without cutting back. ``The loss of jobs is the cruelest withdrawal of benefits of all,'' he said. The states unemployment rate jumped to 8.6 percent last month, its highest level since 1982.

Other Northeastern states are faced with budget shortfalls as well. Last week, Rhode Island Gov. Bruce Sundlun (R) proposed a 20 percent state income tax increase to help bridge the state's $200 million budget gap. Connecticut is struggling with an estimated $2.2 billion deficit for fiscal year 1992, and Gov. Lowell Weicker is considering an income tax. Connecticut is one of a handful of states without such a tax.

Some observers say states are just spending too much. ``The budget difficulties in the states are not just because of the recession. ... State spending is increasing so fast, especially for Medicaid and prisons,'' says Steve Gold, director of the Center of the Study of the States, at the Rockefeller Institute of Government in Albany, N.Y. In fiscal 1992, he says, ``there are going to be lot more tax increases.''