Governor Deval Patrick proposed a $32.3 billion annual spending plan yesterday that would eliminate 240,000 free and subsidized lunches for senior citizens, apply the sales tax to candy and soda, and close a prison in Norfolk while boosting spending on education to unprecedented levels.
His budget would also cut 300 state jobs and slash funding for the Registry of Motor Vehicles by $15 million, a move that elicited assurances from the administration yesterday that lines would not grow.
Though Massachusetts has emerged from the depths of the recession on stronger footing than most other states, Patrick and his budget chief warned that the Bay State is far from flush with cash. Despite a proposed 3 percent growth in spending for the budget year that begins July 1, the state will have to reduce many services because health costs and negotiated union salaries continue to grow at a faster clip than taxes are coming in.
“More people are getting back to work, which is great news,’’ Patrick said. “But we still have unprecedented needs to meet on health care, emergency housing, and other essential services because of the numbers of people whose lives have been turned upside down by the global economic collapse.’’
Patrick’s budget chief, Jay Gonzalez, would not quantify the budget gap for the coming year, but offered an even bleaker assessment. He said the state will never again be able to pay for the level of services it provided before the recession, citing long-term debts, including $40 billion in unfunded liability for current and future state and municipal retiree health benefits.
“The impacts of the recession have been unprecedented and significant,’’ he said, adding that he has been inundated with requests in recent weeks from service providers who assumed the state was on sounder financial footing. Many left disappointed.
Still, this year’s spending plan lacked some of the more draconian cuts that have marked budgets in recent years, and Patrick said the state is making concerted effort to invest in targeted areas.
He proposed a $145 million increase in K-12 education aid for local communities, $10 million more for community colleges, and $11 million more for veterans services.
“We chose to grow our way out of this recession, and you can’t grow without a growth strategy,’’ the governor said. “That is why we have invested significantly in education, innovation, and in infrastructure and why we propose to do so again in the coming fiscal year.’’
To balance the budget, Patrick said, he would pull $400 million from the state’s rainy day fund. He included $260 million in new revenue proposals, including taxes on candy and soda, a tax increase on cigarettes, and a new deposit requirement for bottled water.
The governor is also hoping to curb the growth of health costs by $730 million, through changes that include renegotiating contracts with health care providers for low-income residents.
The House and Senate will each propose their own spending plans over the next four months. The chambers must agree on a final product before getting it to Patrick’s desk for a signature in time for the next budget year, which begins July 1.
Michael J. Widmer, president of the Massachusetts Taxpayers Foundation, said Patrick’s budget is responsible, but is balanced based on two ambitious premises.
“The Legislature has to decide, first, are they going to do new taxes in an election year? And are the savings realistic?’’ Widmer said.
Lawmakers have already said no in recent years to Patrick’s call for removing the sales tax exemption on candy and soda, with the $61.5 million in proceeds going to boost public health programs. This week, the House waylaid a separate proposal to expand the bottle bill.
Other would-be savings in Patrick’s spending plan - closing a prison and merging the Parole Board with the Probation Department - were also rejected last year.
Senator Stephen M. Brewer, a Barre Democrat who leads the Senate budget committee, said the state has “gotten through the very worst of times by not having tax increases.’’
“I would suspect that we would be inclined not to do those measures,’’ he said of the tax and fee hikes.
House minority leader Bradley H. Jones Jr., who last week said Patrick had a “sweet tooth for tax increases,’’ said yesterday that the budget fails to deliver fiscal responsibility.
“These recommendations come at a severe cost to the taxpayer,’’ Jones, a North Reading Republican, said in a prepared statement. “In these dire economic times, we must explore and exhaust all other potential avenues before we consider raising taxes and fees.’’
But Patrick portrayed the tax measures as modest.
“Altogether, these new revenues amount to less than 1 percent of this budget,’’ Patrick said. “They are not new. They are still sensible, still widely supported in the general public, in most cases, and still necessary.’’
Many of the overall cuts, he said, are cost-savers that would also make government more efficient.Closing the 330-bed Bay State Correctional Facility in Norfolk, for example, would save the state $8.9 million. Gonzalez said space for the facility’s inmates would become available in other prisons if lawmakers embrace Patrick’s plan to reduce sentences for nonviolent drug offenders.
Asked about cuts to the state Registry of Motor Vehicles, the governor encouraged motorists to take advantage of online services whenever possible.
“We have to start doing things differently in a whole host of areas, and that is not just government doing things differently,’’ Patrick said. “It is asking citizens to interact with their government differently, not less, but just differently.’’
Social services advocates said the proposed budget does not reflect a state economy that the governor contends is growing faster than those in other states. The budget trims funding for low-income child-care vouchers, a cut that could swell the waiting list by 5,000 families. It eliminates grant funding that pays for school nurses in 105 private schools and two public schools.
Leo Sarkissian - executive director of The Arc of Massachusetts, a statewide disability advocacy agency - has been urging Patrick to restore to 2009 levels the funding for programs that help families care for disabled children and adults with intellectual and developmental disabilities. Instead, the governor is proposing further cuts of $5.5 million. Additional cuts would target a program for students who turn 22 and age out of special education but do not qualify for adult services.
“These families are struggling,’’ Sarkissian said. “They have additional responsibilities compared to the average person.’’
Not everyone felt the sting. Aimee Coolidge, director of community and government relations for the Pine Street Inn, was thrilled to see the governor propose an increase of about $1.1 million in programs that serve homeless individuals, as well as additional money for long-term housing.
“This is the first time we’re seeing some new resources here in a decade, so we’re saying, ‘Yippee!’ ’’ said Coolidge.Martin Finucane of the Globe staff contributed to this report. Bierman can be reached at firstname.lastname@example.org. Follow him on Twitter @noahbierman. Ebbert can be reached at Ebbert@globe.com. Follow her on Twitter @stephanieebbert.