BOSTON — Former Gov. Michael Dukakis said Tuesday he wasn't surprised by the state's souring tax revenue picture, describing the state as "patching things together" in its budget in the past couple of years.
The Brookline Democrat and Northeastern University professor suggested closing tax "loopholes" could solidify the state's revenues without damaging the business climate.
House and Senate budget negotiators are facing Friday's start of fiscal 2017 with a revenue shortfall approaching $1 billion below what they used to craft roughly $39.5 billion annual spending bills. Those budgets have yet to be reconciled in conference committee.
"We haven't had a really truly balanced budget here for the last two or three years so it doesn't come as a surprise, but both the governor and the Legislature have got to take a good look at this, decide what they're going to do about it," Dukakis told the News Service after attending an event for former Treasurer Robert Crane. "But I think most people think we've really been kind of patching things together for the past couple of years, and we don't have a revenue base that can support what we're trying to do so people are going to have to step up and make some serious decisions."
An opponent of additional taxes, Gov. Charlie Baker has predicted the fiscal 2016 budget will be balanced even as revenues are expected to come in hundreds of millions below benchmark. The governor says his team has managed through a fiscal 2016 revenue shortfall of at least $320 million without affecting core government services.
"People did a tremendous amount of work nipping and tucking all over the place over the course of the last sixty days or so and I feel quite confident that we'll end the year in balance," Baker told reporters Monday.
Baker added, "For the most part, we've done everything we can to protect what I would describe as core services and I think we've done a pretty good job with that."
Dukakis said additional revenue could improve the budget picture.
"I think the state needs additional revenue," Dukakis told the News Service. "I think there are a lot of ways to get it. We've got all kinds of loopholes in our tax laws that ought to be closed and a lot of them could produce plenty of revenue, but somebody has to step up and say that, otherwise we're going to find ourselves dragged down by this thing."
With DeLeo joining Baker this session in rejecting new taxes, the climate for higher levies on Beacon Hill has been chilly and so-called loophole-closing measures have also encountered resistance historically from interests who favor tax credits and incentives.
On a 135-57 vote, House and Senate lawmakers in May advanced a constitutional amendment that would impose a 4 percent surtax on incomes over $1 million, providing an estimated $1.9 billion in new revenue that proponents say would be devoted to education and transportation. The measure, which opponents say will lead to a graduated income tax structure, could appear before voters in 2018 if it receives a second favorable vote by the Legislature in 2017-2018.
The Massachusetts Budget and Policy Center, a liberal-leaning organization where Dukakis serves on the board, offers some proposals that would provide a "fairer tax system" and "not hit the average taxpayer," the former governor said.
The Baker administration on June 14 pegged the revenue shortfall for fiscal 2017 at $450 million to $750 million. The lower estimates were based on volatility and underperformance in the stock market impacting investment related tax collections, officials said. On Monday, Baker assigned a new fiscal 2017 revenue shortfall range of $650 million to $950 million.