Deficit swirls around Dukakis's `Massachusetts miracle'. OPPONENTS PREPARE TO POUNCE

By , Staff writer of the Christian Science Monitor

Pledges to avoid new or increased taxes are easy to make, but hard to keep. Nobody knows this better than Michael Dukakis, who has been down that route once before and has no intention of traveling it again. But as confident as the governor is, outwardly at least, that the Massachusetts fiscal ship can stay afloat without a tax boost, there will be no ``lead-pipe guarantee.''

While reaching deeper into taxpayer pockets before year's end is about as likely as Mr. Dukakis's quitting the presidential campaign, it is becoming apparent that the state is living beyond its means, and the day of reckoning could come sometime after next January.

As hard as he may try to play down the budget pinch as ``something that happens every spring,'' Dukakis can take little comfort in the increased attention this is bound to focus on him. In recent years, his biggest fiscal challenge has been one of a surplus, and how best to use it.

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Obviously, much will depend on how successful Dukakis and his aides are in cutting back on state spending between now and the end of the fiscal year June 30. Latest projections from the governor's advisers indicate up to a $77 million deficit, unless substantial economies can be achieved over the next couple of months.

Adding to the budget-balancing dilemma facing the governor are considerably less-than-expected revenue collections last month, 13 percent smaller than April 1987.

Hardly more encouraging to the Dukakis administration are recent somber warnings from the highly respected Massachusetts Taxpayers Foundation that the state could be $500 million in the red by June 1989.

The private watchdog agency suggests that unless this potential crisis is addressed and spending is brought into balance with revenues soon, Massachusetts could face a situation similar to 1975, when the biggest tax boost in state history, $360 million, had to be enacted.

The current Bay State budget woes must be music to the ears of Dukakis foes and critics, including Vice-President George Bush, the expected Republican presidential nominee whom the governor may well face in November.

If nothing else, the state's revenue shortfall will almost certainly force the Dukakis administration to cut some fiscal corners to save what funds it can. It poses a serious challenge to the Dukakis's record as a skilled budget-balancer. In his campaign for the White House, he has done a lot of boasting about how he has kept the state in the black while the national debt was climbing.

To adjust for the likely revenue shortfall, a substantial whittling of state programs may be necessary, including some fairly popular, but less-than-essential ones. A modest trimming of the state's payroll might also be in order.

Hopefully, the state's fiscal jugglers won't resort to practices of earlier administrations and achieve an on-paper budget balance by postponing the payment of bills that are due on or before June 30 until after July 1. Such rollover tactics led to the 1975 crisis, which resulted in the record tax boost, which many Bay Staters remember all too well.

One thing Dukakis can ill afford is even a trace of red ink on the state ledger.

Budget chopping is never popular, since it invariably involves stepping on the toes of one or more special-interest groups. And to suggest that Dukakis or anyone else would come up with cuts that might jeopardize potential political support would be naive.

What appears to be needed is not a stopgap response to balancing the 1988 budget, but a long-range blueprint to head off future deficits.

The $11.98 billion fiscal 1989 budget that the governor filed in January almost certainly will be scaled down by legislators, several of whom have been critical of its apparent imbalance. Contributing to this are several commitments or obligations incurred since then, not the least of which is the state's share of start-up costs for the Universal Health Care Law signed by the governor last month.

Ideally, because revenue growth has been much slower than expected even a few months ago, the governor and his fiscal architects might do state taxpayers and legislators a favor, even at this late date, by shaping a new and more realistic spending package.

George Merry is a longtime observer of the Massachusetts political scene.

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