By Matt Murphy

STATE HOUSE, BOSTON, DEC. 7, 2016…The sudden clash over budgeting between Gov. Charlie Baker and Democratic leaders on Beacon Hill appears poised to spill into the new year after House Speaker Robert DeLeo said Wednesday he would look to restore the programs cut by the governor.

“It is my hope that if we can continue to either hold steady or show a rise in tax revenues that we’d be prepared to take up a supplemental budget to, at the very least, restore partially some of these cuts that are being made that I believe are going to hurt people,” DeLeo told the News Service in an interview Wednesday from Amherst where he was attending a retreat for new legislators.

DeLeo said the response from senior members of the Legislature has been “anger” toward the cuts, which many Democrats were calling an overreaction by Baker to sluggish tax collections that trail estimates by about $20 million and support a budget that totals $39.25 billion.

The governor on Wednesday opened the door to restoring programs he eliminated if revenues “dramatically” improve, but it’s far from guaranteed that leaders will be able to agree on a safe level of revenues to justify restoring spending.

Baker on Tuesday said his cuts would free up money to pay for fixed costs in programs and services he said were underfunded in the Legislature’s budget.

Baker said Wednesday he engaged in a back-and-forth with legislative leaders at the time he signed the budget in July and vetoed $265 million, but could not convince them to sustain the bulk of those spending reductions.

“We said fine. We’ll take a break from this and we’ll see what happens in the first four or five months of this year and if it turns out that revenue comes in above expectations then we’ll be perfectly happy to defer to you on this. Well, we’re five months into the fiscal year. Revenue has not come in above expectations,” Baker told reporters Wednesday after speaking at the Massachusetts Investors Conference at the Boston Convention and Exhibition Center.

Legislative leaders say Baker slashed funding for important programs prematurely, citing revenues that are tracking closely to budget benchmarks. The governor countered by arguing that his actions preserved key investments in local aid, K-12 education and opioid abuse prevention while trimming only two-thousandths of a percent from the budget.

Some of the cuts hit areas like parks and recreation, senior care, a postpartum depression pilot program, a Down Syndrome clinic and a suicide prevention account. “Obviously these are not things that in the grand scheme of things we would choose to do, but the bottom line is the budget’s got to be balanced,” Baker said.

DeLeo said he was concerned after his initial review of Baker’s cuts that the governor targeted legislative priorities, while leaving his own initiatives relatively unscathed. Among the reductions, the governor slashed $67 million in earmarks to achieve a net savings of $53 million, including funding for many local projects and programs inserted into the budget by lawmakers.

“I will tell you I had a number of legislators who have already approached me stating that all, if not all, of their items they were interested in were cut so I think it’s probably a lot worse than I thought it would be,” DeLeo said.

The Winthrop Democrat said he views earmarks as “another form of local aid.” “Without certain funds, these items don’t get done, whether it’s repairs to parks or lights or whatever it may be in a community. Local officials won’t be too pleased,” DeLeo said.

House Minority Leader Brad Jones defended the governor decision to act early.

“I understand there’s never a fun time to do this. I think the governor was deferential in October when legislative leaders asked him to hold off, but we haven’t seen a change in the numbers,” Jones said.

The North Reading Republican also called it “mind-boggling” that some Democrats, including the speaker, would accuse the governor of acting out of desire to advance his own policies over those favored by the Legislature.

“The governor’s really trying to achieve only one policy objective and that’s a constitutionally-required balanced budget,” Jones said.

DeLeo said he spoke with House Ways and Means Chairman Brian Dempsey on Wednesday morning and the two were in agreement about trying to restore as many of the reduced services and programs as revenues in December, and possibly January, will allow.

“I quite frankly think that we’re as pretty close to balanced as you can possibly get out of a 40 billion dollar budget and I still don’t understand it,” DeLeo said.

Dempsey declined an interview request, but said in a statement that he shared DeLeo’s concerns that the governor’s cuts were “premature,” and noted that the “most statistically significant revenue collection months” fall during the second half of the fiscal year.

With revenue collections just two-tenths of a percent off the pace needed to cover spending, Dempsey said, “We continue to see positive economic data in terms of unemployment, market performance and business confidence. Balancing a budget is a year round exercise, and we will continue to monitor revenue collections and be prepared to respond as needed.”

Sen. Jamie Eldridge, an Acton Democrat, called the cuts “outrageous and immoral” at a time when the state has handed over $120 million in incentives to General Electric to bring its headquarters and 800 jobs to Boston.

Senate President Stanley Rosenberg said he was open to putting money cut by Baker back into the budget. “I look forward to working with @SpeakerDeLeo on restoring funds to programs which support our neediest,” the Amherst Democrat wrote on Twitter in response to DeLeo.

Baker suggested cutting the budget now would help ensure it’s balanced come June, but said he would be flexible if revenue growth strengthened. Tax collections are up only 2.2 percent this fiscal year, which has been a roller coaster of ups and downs forcing budget leaders to react month-to-month to fluctuating revenue performances.

“And by the way, if it turns out that revenue suddenly turns the corner and gets dramatically better we can always reverse the 9c cuts at some point later in the year, but we believe it would be irresponsible at this point in time, given what we know about the fiscal situation, given what we know about revenue given, what we heard from the experts about revenue for next year for us not to take this move at this time,” Baker said.

In addition to $98 million in new budget exposures identified by the administration for MassHealth, sheriffs and prisons, mental health services and other areas, the governor said additional funding is likely to be needed for indigent defense counsel, emergency assistance and snow and ice removal.

Many of those accounts are routinely underfunded by the Legislature in the initial state budget, and DeLeo said the state typically adjusts the budget later in the fiscal year to cover known expenses in those areas.

Jones said he too would like to see some of the programs restored, including money for prostate cancer research, but said lawmakers will have the advantage over the governor come January or February of knowing more about revenues and caseloads in programs like MassHealth. Asked how he would respond to a spending bill in the new year, Jones asked, “What are the numbers?”

Marlene Warner, executive director of the Massachusetts Council for Compulsive Gambling, said a $500,000 cut to her organization’s $1.5 million compulsive behavior treatment programs would wind up hurting veterans, elders and low-income families.

“This cut would force us to shut our doors and cease critical services for people struggling with mental illness and addiction. We are hopeful that the legislature will restore these funds to assist the thousands of families who are dealing with the very real and harmful effects of gambling addiction,” Warner said.

Groups like the Environmental League of Massachusetts and the AIDS Action Committee also voiced concerns about the impact of the emergency budget cuts.

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