In a sign that Massachusetts finances are recovering modestly from the Great Recession, the state Senate released a $32.3 billion budget proposal Wednesday that would cut some social services, but increase spending on local government and education without raising taxes or fees.
The budget plan is similar to one approved by the House on April 26. Though senators continue to talk about the strain on state finances as a result of the economic downturn, they still would increase overall spending by 3.7 percent.
Senate President Therese Murray said the spending plan would close a projected $1.4 billion gap in the budget year that begins July 1, the smallest shortfall in five years, in part by taking nearly $300 million from the state’s Rainy Day Fund. The Senate plans to debate its budget next week before reconciling any differences with the House and sending a final bill to Governor Deval Patrick.
Senators said most of the service reductions would come from programs that would not get funding increases needed to keep up with inflation. Some programs, however, would see actual cuts, a reflection of how lawmakers are resigned to a long and grinding slog back from the depths of the recession three years ago.
“In past recoveries, the state has been able to restore spending cuts that took place in the prior recession and then often reach a new high-water mark,’’ said Michael J. Widmer, president of the Massachusetts Taxpayers Foundation, a business-funded budget watchdog group. “That era is over.’’
Senatorswere quick to trumpet the areas that would see spending increases.
Their budget would give $16 million more than the House plan to elementary and secondary schools, even as it would cut $11.3 million that the House had devoted to help cities and towns transport homeless children to school. Funding for special education would increase by $20 million over the House plan.
Local aid, which pays for municipal services such as police officers and firefighters, would see a $275 million increase over the current budget year, the same bump that the House approved.
Geoffrey Beckwith - executive director of the Massachusetts Municipal Association, which represents local officials - called it a “very strong, favorable budget for cities and towns.’’
But not everyone was pleased.
The Association of Developmental Disabilities Providers said the Senate budget included “stunning reversals for key disability programs’’and no annual raise for direct support professionals, despite assurances from Murray, “who earlier pledged to do everything within her power to help.’’
“This budget is as shocking as it is devastating,’’ said Gary Blumenthal, the association’s chief executive. “We are going to do everything within our power to ensure these crucial cuts are restored and important programs are spared.’’
David Falcone, a Murray spokesman, said the Senate president hopes that if the state’s finances improve during the year, lawmakers will be able to restore money to programs that have been trimmed.
For now, the cuts include a $4.5 million reduction in family support services, which means 4,400 of the 9,000 families who currently receive an average yearly stipend of $2,000 to help them hire in-home care or buy specialized equipment will lose that benefit, according to The Arc of Massachusetts, which advocates for the developmentally disabled.
In addition, the budget would trim the number of hours provided for a home care program for developmentally disabled adults from six per day to five per day. That program serves more than 6,900 adults.
“We’re surprised and upset that they would go this far,’’ said Leo V. Sarkissian, executive director of The Arc, who argued that the cuts would upend the lives of developmentally disabled adults and their caregivers.
The Senate plan would keep open Taunton State Hospital, which would close under budgets proposed by Patrick and approved by the House. But the hospital would have a reduced capacity for patients, 45 beds instead of its current 169.
“Some of these efficiencies aren’t pleasant,’’ said Senator Stephen M. Brewer, Democrat of Barre, chairman of the Senate’s budget committee.
But Brewer contrasted relatively stable state finances with the tumultuous budget debate in California and other states. During a committee meeting to unveil the budget, he held up a news article about California’s struggles. “Shortfall in California swells to $16 billion,’’ he said, referring to the news account. “Not in Massachusetts.’’
Republicans, who hold just four of 40 seats in the Senate, praised their Democratic colleagues for retaining the safety net without raising taxes.
“Make no mistake about it. Massachusetts has been positioned in such a way that it is in a stronger frame than other states,’’ said Senator Michael R. Knapik, a Westfield Republican who sits on the budget committee.
But Knapik said the state needs to seek more long-term budget solutions while the fiscal situation remains uncertain.
“This is the fifth year of the situation, and we go month to month: Are the jobs going to improve? Are the revenues going to improve?’’ Knapik asked.
To help prop up the budget without raising taxes, the Senate would also pluck $290 million from the Rainy Day Fund, which was designed for use in a budgetary emergency.That is $110 million less than the withdrawal proposed by the governor and approved the House. The fund, which has been tapped repeatedly in recent years, is projected to reach $1.2 billion by July 2013, a relatively healthy balance.
Senators also responded to pressure to crack down on welfare fraud. Following a burst of public outrage and a series of high-profile arrests for the abuse of Electronic Benefit Transfer cards, the Senate budget would create a State Police unit devoted solely to rooting out welfare crimes, at a cost of $750,000.
The Senate, however, rejected a House crackdown that would have banned the use of the cards at jewelers, bars, and cruise ships and would have increased the penalties for misuse. Representative Shaunna O’Connell, a Taunton Republican who has been one of the sharpest critics of the program, blasted the Senate changes as “very weak.’’
Brewer said the Senate wanted to tackle fraud but did not want to go too far in banning specific uses for the cards, which he likened to a slippery slope that could lead to dictating “which hair color’’ recipients could use.