The Massachusetts Legislature approved a $27.4 billion budget last Friday that makes steep government service cuts and raises taxes.
Gov. Deval Patrick immediately threatened to veto a 25 percent sales tax hike included in the budget unless lawmakers first approve a final version of an ethics reform bill.
The House voted 110-46 to support the bare-bones spending plan. All 16 Republicans opposed it, as did more than two dozen Democrats.
Moments later, the Senate also approved the plan in a 31-8 vote, with three Democrats joining all five Senate Republicans to oppose it.
The budget is to take effect at the start of the new fiscal year on July 1.
Patrick has previously pledged to veto the sale tax increase unless lawmakers approved bills overhauling the state’s ethics, pension and transportation systems. He signed a pension bill and is studying a transportation bill, but is still awaiting a final ethics bill.
“The fact that we have not been able to pass a strong ethics reform bill — despite the clear need to restore the public’s trust — threatens all the progress we have made,” Patrick said in a statement.
The budget closes a $1.5 billion deficit by slashing state aid to cities and towns up to 15 percent. It also includes service cuts, including closing up to 12 Registry of Motor Vehicles branches.
And the agreement calls for hiking the state sales and meals taxes from 5 percent to 6.25 percent, expanding hotel taxes and adding a 5 percent satellite television tax.
Commuters will benefit, though, from $275 million used to avoid planned increases in Turnpike tolls and MBTA fares.
“I would suggest to you there are some victories in this document, and there’s certainly some losses,” state Rep. Charles Murphy, chairman of the House Ways and Means Committee, said in launching the debate.
“But I would suggest it sets us up to be in a position to move forward in the future when things do come back — and they will,” added Murphy, D-Burlington.
State Rep. George Peterson, R-Grafton, criticized the budget, in large part because of its hasty presentation. It was not filed with the House clerk’s office until 8:52 p.m. last Thursday — nearly an hour after a deadline for any bill being debated the next day.
A Republican colleague, state Rep. Vinny deMacedo of Plymouth, complained about the tax increases.
“As we continue to chip away at the little disposable income our constituents have, the slower our economy will recover,” deMacedo said. “Taking more away from them is unjust.”
Reflecting the state and national recessions, the budget eliminates 50 line items, consolidates another 160 and eliminates more than 800 earmarks used previously to fund lawmaker pet projects.
The $27.4 billion bottom line is nearly 3 percent less than the $28.2 billion budget approved a year ago. It includes $199 million from the state’s rainy-day fund, leaving it with a balance of about $600 million. A year ago, the fund contained $2 billion.
Lawmakers hope to rebuild it through a budget provision requiring that half of all future growth in the state’s capital gains tax collections be automatically set aside in the rainy-day fund. Financial experts have argued the state is being forced to make dramatic budget cuts now because it unreasonably expanded spending while capital gains tax collections grew amid a stock market boom.
“When the economy comes back — and it will — it’s going to go down again, and we’re going to need that money,” Murphy told his colleagues.
AFL-CIO of Massachusetts President Bob Haynes said the budget “disproportionately hurts” working people and the most vulnerable by slashing safety net programs.
The Massachusetts Package Stores Association said it was “deeply disappointed” by the decision to eliminate the exemption for alcohol from the sales tax.
In other areas, the budget:
• Dramatically reduces “Quinn Bill” pay for police officers who earn associate, bachelor’s and master’s degrees. The state had been financing the $50 million tab, but it is cutting its payment to $10 million and ending the benefit for new officers. Cities and towns may have to pick up the difference, depending on whether their union contracts require the payment.
• Eliminated $3 million in funding for the Commonwealth Corps volunteer program started by Patrick, one sign of tension between the executive and legislative branches.
• Eliminated $450,000 in funding for the state’s Washington, D.C., office. Patrick had argued the office helped him maintain contact on pivotal issues, but critics questioned the need given his close relationship with President Barack Obama, a fellow Democrat, as well as Democratic control of Congress and an all-Democratic state congressional delegation.
• Allows Massachusetts to participate in the multistate Powerball lottery game.
• Raises health care contributions for state employees 5 percent. The existing payment varies from 15 percent to 20 percent, depending on the date of hire.