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Patrick signs $28.1B budget; vetoes $122M

STEVE LEBLANC

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.

“It’s a good first step, but it’s highly likely that the governor is going to need to use these emergency powers to make cuts later this year to avoid draining all of the state’s cash reserve funds,” said foundation president Michael Widmer.

The group had 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 U.S. 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.

(Associated Press)