LYNN – Massachusetts House Speaker Robert DeLeo on Thursday said vital state tax dollars cities and towns rely on to pay for schools, police and other services could face cuts by December, maybe sooner.His warning to local business leaders and in an Item interview preceded Gov. Deval Patrick’s somber confirmation that the state budget is hundreds of millions of dollars in the red. DeLeo anticipates Patrick’s response to the bad budget news will be to ask state legislators to give him the authority to cut state tax dollars flowing to communities.”I’m giving a reality check of what might be ahead. The next month or two could be rough. Our concern is any further dissolution of local aid and Chapter 70 (school assistance),” DeLeo said.Lynn and other cities and towns saw local aid cut, on average, by 15 percent during the last year as the state battled its way out of a $5 billion deficit. Cuts in funding to state agencies and a hike in the state sales tax helped erase the deficit with some of the tax revenue going to communities.But DeLeo warned Thursday there is no appetite for tax hikes this year and said economic development and job creation are the keys to sending state tax revenues back into the black.He said legislators will begin reviewing in January a proposal to expand gaming in Massachusetts that will include an outline for bringing resort casinos to the state and introducing slot machines. The bill will include language aimed at ensuring casinos do not become crime magnets but he said the choice of casino locations will probably be left to a special commission created in the legislation.Mindful of the public debate over Patrick’s resort casino plan that ended in the proposal’s defeat, DeLeo said legislators will move slowly on crafting a new plan.”Let’s try and get it right the first time. I’ve always been a supporter of slots at racetracks and I believe in resort casinos in Massachusetts. Will it save us from every financial ill? No, but it’s another resource, an economic engine we can use.”The speaker said he will pair the expanded gaming proposal with an economic incentive bill intended to position Massachusetts ahead of other states once the nation’s economic recovery accelerates.He told Lynn Business Partnership members he views extending rapid transit to Lynn as “a means of economic development” and offered to set up a meeting with extension advocates and top state transportation officials.DeLeo, a self-described workaholic, sits atop a pinnacle of political power. The 59-year-old former Winthrop selectman represents his hometown and Revere in the House where he ascended to the speaker’s seat in January.He made ethics reform an initial priority for his leadership team, assigning state Rep. Steven Walsh key responsibilities for crafting reform proposals. The product of that work includes tighter reins on lobbyist and contributions to elected officials. Elements of the reform proposal are still being fine-tuned.”I want to err on the side of being overzealous,” he said.Funding is DeLeo’s chief concern when it comes to proposals advocating expansion of charter schools.”The only issue I have at the end of the day is how can it work financially? What is the fairest funding mechanism? I don’t want to get into a situation where we are creating such a dichotomy that we are hurting public schools.”DeLeo also said he expects the Legislature to debate eliminating the Electoral College’s role in deciding presidential elections. Legislatures or assemblies in every state must vote on the elimination proposal before it becomes law. Supporters, including DeLeo, view the plan as a way to end the disproportional role big states play in picking presidents.