Mass. Gov. urges lawmakers to OK tax hike

BOSTON (AP) - Gov. Deval Patrick is again urging lawmakers to adopt his plan to raise taxes by nearly $2 billion dollars to pay for improvements in education and transportation, dismissing proposals to raise the gas tax instead as insufficient and unfair.

Patrick testified at a public hearing Friday that the extra money in his plan is needed to ensure the state's long-term economic prosperity, in part by guaranteeing Massachusetts students access to early education and affordable college.

He said his proposal will turn out the workers needed to fill the jobs in the state's increasingly high tech economy, pointing out that about 30,000 children are currently on waiting lists for early education programs in Massachusetts. Patrick also said the state must also lower the financial barriers to higher education.

"Brainpower is our signature economic edge, and failing to invest in that in Massachusetts would be like Texas failing to support the oil industry or Iowa their corn farmers," Patrick told lawmakers. "If we want growth, we need investment. That new investment will require new revenue."

Patrick's proposal would hike the state income tax from 5.25 percent to 6.25 percent, while lowering the sales tax from 6.25 to 4.5 percent. He said under his plan families earning less than $62,000 a year would pay essentially the same or less in taxes.

The proposal has met with skepticism on Beacon Hill.

On Thursday, House Speaker Robert DeLeo called for a much smaller tax package, saying he wants to address critical needs while avoiding any "collateral damage" to the state's economy.

DeLeo told the Greater Boston Chamber of Commerce that he shares Patrick's top two priorities - transportation and education - but is worried the administration's proposal would put too heavy a burden on working families and businesses.

"If we are to pass a new revenue package, I believe it should be far more narrow in scope and of a significantly smaller size," DeLeo said.

One proposal that has been kicked around - raising the gas tax - alone won't fix the problem, Patrick said.

Patrick said the current 21-cents per gallon tax would have to be tripled to pay for his proposal, something he would oppose.

He said he'd also oppose a narrower 15-cents per gallon increase if the extra funds were targeted to stabilize the MBTA. Patrick said that would be unfair because it would require drivers from across the state to pay for a metropolitan Boston program.

MBTA officials have warned that the public transit system is facing a projected $140 million deficit in the fiscal year starting July 1. Without additional funding, they said, riders in the Boston area could face fare increases of up to 33 percent, or dramatic reductions in service.

Under one scenario, bus fares would rise from $1.50 to $2, and subway fares from $2 to $2.60.

Patrick said he's not opposed to some increase in the gas tax, which hasn't been raised in more than two decades, but says it has to be part of a larger tax package.

DeLeo also said a gas tax may be less palatable given the recent spike in gas prices.

"What once seemed like a feasible possibility now seems a little more difficult," DeLeo said Monday.

The public appears split on Patrick's proposal.

A UMass Lowell-Boston Herald poll released Wednesday found nearly 48 percent of voters strongly or somewhat support Patrick's tax plan while nearly 46 percent strongly or somewhat oppose it. That's within the poll's margin of error of plus or minus 4 percentage points.

About 6 percent were unsure. The telephone poll of 600 Massachusetts voters took place from March 2-5.

The budget debate now heads to the House, which must debate and approve its budget plan. The Senate will then come up with their version of the spending bill.

The two chambers must agree on a final compromise to send to Patrick for his signature before the end of the fiscal year on June 30.

Cox Media Group