By Matt Murphy and Michael Norton

STATE HOUSE NEWS SERVICE

STATE HOUSE, BOSTON -- Gov. Deval Patrick on Wednesday presented his eighth and final budget proposal before he leaves office, filing a $36.4 billion spending plan for the next fiscal year that includes a $205 million increase in public education funding and investments in the life sciences, dental care for the poor, and caregivers who assist the state's neediest residents.

After cancelling his annual address to the state on Tuesday night due to snow, the governor outlined his spending priorities for fiscal 2015 in a budget document that he often says is more than just numbers, but a statement of his administration's values.

The proposal for fiscal 2015 has a heavy emphasis on education, including a new $15 million investment in early education that the governor estimates will provide new 1,700 children with access to programs and a $3.1 million increase in spending designed to expand full-day kindergarten programs. It also includes $141 million in increased funding for transportation.

"This is a balanced, responsible budget that supports economic growth and investing in education, innovation and infrastructure. As in the past, this budget emphasizes the growth of jobs and opportunity in both the near-term and the long-term," Patrick said.

Early Education and Care Commissioner Tom Weber said the funding would help reduce the waiting list of 25,000 infants, toddlers and pre-schoolers under 5 and help toward the state's goal of improving third-grade reading proficiency.

"We can really work with these kids to put them in a better position to succeed if we start before kindergarten," Weber told the News Service.

Patrick's budget, which the Legislature will likely significantly rewrite, also proposes a $100 million increase in Chapter 70 education aid that would guarantee a $25 per pupil bump in spending for every school district and raise aid under that program to a record $4.4 billion.

The governor wants to level fund unrestricted local aid to cities and towns at $921 million, part of an overall local aid package totaling $5.6 billion. Within the local aid accounts, Patrick has also proposed level funding for special education, regional school transportation, charter school reimbursements and the school food services program.

Geoffrey Beckwith, executive director of the Massachusetts Municipal Association, called the budget "disappointing" because it would leave unrestricted local aid at a level $400 million lower than it was in 2008 before the recession.

"It's actually a very difficult and painful budget for cities and towns...," Beckwith said. "Overall, this budget would force cities and towns to reduce the services that they provide and increases their reliance on the property tax to balance their budget. We look forward to working with the Legislature to make the kinds of investments that are necessary to protect municipal services, service that are important to our economic progress in Massachusetts."

Patrick's recommendation for $1.1 billion in higher education funding includes $68.4 million in new funding that he said should ensure the University of Massachusetts and other public colleges and university can freeze tuition rates and fees for another year.

"We do so because education is our calling card around the world and because that's the single best way to prepare our people for work and for life," Patrick said.

Unlike last year, when Patrick proposed a radical tax reform plan that would have generated $1.2 billion in new revenue for the fiscal 2014 budget, his fiscal 2015 proposal includes more modest and familiar revenue proposals. 

"This is largely a steady as you go, straight-forward, no-frills budget," said Massachusetts Taxpayers Foundation President Michael Widmer, who said the bulk of revenue increases for fiscal 2015 would go toward Medicaid, debt service and pensions. He said he was "pleased" to see the administration accelerate by four years the state pension funding schedule and reduce its reliance on one-time revenue.

Patrick budgeted $57 million in new tax revenue derived by lifting the sales tax exemption on candy and soda and $40 million from applying the corporate tax to insurance subsidiaries and a room occupancy taxes on marked-up hotel rooms sold by online travel websites like Expedia, as well as vacation rentals and bed and breakfasts.

Though the governor admitted to considering another go at tax reform to generate the level of new revenue he proposed last year, which was scaled back by the Legislature, he ultimately decided that it was a battle best left to the next inhabitant of his office, if they so choose.

"I'm proud of this budget. It's a good budget. It's a sensible budget," Patrick said. "But remember that last year the Legislature did raise taxes and I don't think you can come back year after year asking for significant tax increase so I think what we have is what we have for the next little while and eventually the people of the Commonwealth are going to have to consider whether this combination of resources funds the right combination of services."

Republican gubernatorial candidate Charlie Baker immediately said as governor he would take a different approach to budgeting that does not rely on new taxes or "rainy day" funds to improve education and grow the economy.

The budget counts on $53.5 million in gaming license fees and $20 million in tax revenues expected to be generated during the last half of the fiscal year when a slot parlor is expected to be operational. The slots license is expected to be issued before licenses for casinos.

As he has in past year, Patrick also budgeted $24.2 million from an expanded bottle redemption law - the Legislature has repeatedly resisted an updated bottle bill but activists appear committed to bringing the proposal to a vote on the November 2014 ballot.

Patrick aides estimated his spending plan, if approved by the Legislature, would boost state spending by the same amount as tax revenues are projected to rise - 4.9 percent. To afford that level of spending, Patrick wants to drain $175 million from the state's rainy day fund, which would leave that account with $1.2 billion in reserve cash. The governor's proposal is backstopped by $334 million in one-time revenues, down from $667 million this year.

The rainy day account's balance, even after the use of $175 million, would still be among the highest of any state in the country, due in part to spending cuts and tax increases implemented in recent years as state officials used a multi-faceted approach to budget management during the severe recession and sluggish economic recovery.

House Minority Leader Brad Jones said the proposal highlighted the governor's "lame duck status," criticizing the inclusion of new revenues and reliance on reserves to balance the bottom line.

"Once again, the Governor is treating the taxpayers of Massachusetts as an endless revenue stream, proposing to hit them again for revenue in the form of new statewide taxes. This approach has not garnered support from taxpayers in the past, and it will once again fall flat," Jones said in a statement.

Serving in his eighth and final year in office, the governor continues to show a willingness to shell out taxpayer funds to boost the life sciences, a sector targeted for special treatment in recent years. Patrick is asking that $25 million in surplus fiscal 2014 funds be allocated for grants and loans to researchers and early stage companies.

Patrick is proposing a $32.6 million increase in funding at the Department of Children and Families, which has come under fire recently for falling short in its mission of protecting abused and neglected children. The increase includes $9.2 million that will be used to address staffing levels at the agency per an agreement reached last year to limit caseloads to an average of 15 per social worker. The budget also increases the budget for the Office of the Child Advocate by $185,000 to $500,000.

The union representing social workers applauded the investments, but even with the proposed budget increase the Children's League of Massachusetts bemoaned the fact that the proposed spending would still fall nearly $26 million short of restoring DCF to its pre-recession fiscal 2009 funding levels.

"We owe it to our children to dedicate the resources that will keep them safe and help them thrive," said Maria Zoe Mossaides, the chair of the Children's League of Massachusetts and executive director of Cambridge Family and Children's Service.

In the area of criminal justice, Patrick proposes a small $2.1 million increase in spending that he says will help former inmates to more successfully reintegrate into society, as well as $7 million for a "social innovation" program to reduce juvenile recidivism.

In a proposal likely to win support from groups that care for the state's most vulnerable residents, a sector that the Patrick administration says employs nearly 200,000 people, Patrick is calling for a $163 million spending increase "to recognize human service providers for the work that they do."

While he called the budget "tight," Patrick's spending plan aims to expand spending in some areas where activists have clamored for investments. It includes a $16.9 investment that the administration says will eliminate a wait list for the statewide elder home care program and expands a supportive housing program from 31 sites to 41 sites.

The spending plan also retains coverage for dental fillings for adult members in MassHealth, which was restored in this year's budget, and restores coverage for dentures in the second half of the fiscal year, or starting Jan. 1, 2015.

In addition to his spending proposals, Patrick is calling for passage of enhanced verification methods to prevent fraudulent eligibility claims, a facilities management plan to reduce state building operating costs; and changes to ensure the state is "more strategic in selecting, procuring and implementing IT projects."

Patrick on Wednesday also filed a $126 million supplemental budget for fiscal 2014, which ends on June 30, that includes $45 million for hotel and motel shelters for the homeless, and additional funding for youth violence prevention, collective bargaining agreements and DCF. After revising the revenue estimate for the year upward by $403 million, Secretary of Administration and Finance Glen Shor said the cushion will be needed by the end of the year for items like snow and ice removal and the Committee for Public Counsel Services, accounts that have historically been underfunded in the annual budget process and required additional midyear appropriations.