Fall casino debate promised with $4B shortfall looming

LYNN – State Sen. Thomas M. McGee warned Wednesday that any plan aimed at erasing the state’s sizeable revenue shortfalls must have popular support, especially plans to raise the state income tax.”Where do we raise the support?” McGee asked labor union leaders Wednesday morning.McGee and fellow legislators said public enthusiasm for boosting the state income tax or the gasoline tax is tempered by mounting unemployment and home foreclosure rates.”Not one of us has got a ‘raise our taxes’ e-mail (from constituents),” said state Rep. Steven Walsh.In the wake of steep state spending cuts made during the winter, Gov. Deval Patrick this week said hundreds of more state workers will be laid off and others will be required to take unpaid furlough days to bring state expenses more in line with shrinking revenues.A $3 billion-to-$4 billion gap between money raised through taxes and other sources and state expenses is driving the budget cuts. A similar gap is already forecast, McGee said, for the state spending year that starts July 1.Massachusetts and other states are looking to federal stimulus spending to help cover their budget gaps, but McGee warned federal money is “nowhere near enough to solve this problem.”The president of the state Senate this week revived the notion of turning to casinos to enhance state revenue. Patrick’s similar proposal last year died in the Legislature but Therese Murray said she, the governor and House Speaker Robert DeLeo had agreed that a bill expanding gambling in Massachusetts would be debated in the fall. Murray said the legislation would aim to capture some of the $900 million that flows from Massachusetts residents to Connecticut resort casinos each year. “Even if we pick up $700 million of that, we would all take that,” she said, adding that she supported a gambling bill last session, although it died in the House, which was led at the time by gambling opponent Speaker Salvatore DiMasi. “There was an appetite last time but there’s a bigger appetite this time.” But Murray said no gambling revenues would be included in the fiscal 2010 budget and that revenues would likely not materialize until fiscal 2011.Labor leaders supported Patrick’s plan last year as a job creation mechanism. They urged McGee, Walsh and state Reps. Robert Fennell, Mark Falzone, John Keegan and Lori Ehrlich Wednesday to fight state proposals to cut costs by stripping public employee pension and health insurance benefits.Lynn Teachers Union President Alice Gunning singled out a proposal to keep health insurance off limits from collective bargaining as an especially objectionable proposal.”Unions would have nothing to say about health care. We have good (health) plans but we have historically given up a lot in collective bargaining to get those plans,” Gunning said.Gunning and School Committee member Donna Coppola told legislators local schools need financial help, including stimulus money, to offset local cuts triggered by state spending reductions.”We have many classrooms with 34 students. We are regressing,” Coppola said.During her speech to business leaders, Murray warned about overreliance on federal education dollars flowing to states through the $787 billion stimulus law. “We need to be careful about how additional money for schools affects our Chapter 70 formula,” she said, referring to the section of the law that doles out state education aid to cities and towns. “We don’t want to create an expectation that is unattainable when the stimulus money runs out, leading to more cutbacks and layoffs in our schools.”