Northeast Governors, Legislators Battle Over How to Trim Deficits

NORTHEASTERN state governors, struggling with budget deficits amid a regional recession, are meeting tough legislative battles over their belt-tightening initiatives. Governors - some newly elected - in 10 Northeastern states, have proposed a variety of controversial measures including drastic cutbacks, employee layoffs, and tax increases.

In most states governors are proposing cutbacks and all states, except Massachusetts and New Jersey, are considering some form of tax increase, says Steven Gold, director of the Center for the Study of the States in Albany, N.Y. In most instances, legislatures will have the final say, he says. "The prospect in many states is that the legislature is going to make major changes from what the governor is proposing," Dr. Gold says.

In Massachusetts, things are already starting to heat up only three months after Republican Gov. William Weld took office. Governor Weld, facing a $850 million deficit, has proposed a variety of cost-cutting measures including thousands of employee layoffs, unpaid state employee furloughs, and cuts in state services.

Weld, a fiscal conservative, says he will not raise taxes and favors a leaner, better-managed "entrepreneurial government."

But the governor's downsizing measures are often at odds with the Democratic-controlled legislature. The most recent flare-up is over his refusal to roll back his proposed $85,000 salaries for his 10 cabinet secretaries.

Democrats have cried foul over the issue: How can the governor raise cabinet salaries, they ask, and still push for unpaid furloughs and higher health-care contributions for thousands of state employees?

"We are told the governor cannot fill his cabinet without these huge pay increases," wrote state Speaker of the House Charles Flaherty in a statement. "The thousands of state employees who live from one pay check to the next will not be able to fill their cabinets - their food cabinets - if Governor Weld has his way with them."

Republicans, who say the salary increases amount to only an extra $36,000, brush off the issue as a political ploy engineered by the Democratic leadership.

"I think it's a deliberate attempt to embarrass the governor and try to divide the Republicans," says state minority leader David Locke.

Weld vetoed the salary rollback last month along with other items in the budget-balancing plan passed recently by the legislature. The governor says the legislature's plan falls $176 million short of his original budget proposal for fiscal year 1991. The House of Representatives voted Monday to override the governor's salary veto. The Senate was expected to take up the issue yesterday. A recent poll indicates falling public support for the governor over his handling of the issue.

Other Northeastern state governors are facing similar battles. Unpaid worker furloughs is a particularly controversial issue. Besides Massachusetts, worker furloughs have been proposed by governors in Rhode Island, Vermont, New York, New Hampshire, Maine, and Pennsylvania.

Rhode Island's Gov. Bruce Sundlun (R) has already shut down the government for two days this year due to an estimated $230 million budget deficit. It was the second of 10 days for state employee furloughs planned until June 30.

New York Gov. Mario Cuomo (D) wasn't as successful with his proposed furlough plan, meant to save an estimated $135 million. Instead of the five-day unpaid furloughs he originally proposed last November, the legislature modified the plan so that workers would still go to work but be repaid at a later date.

For this fiscal year, Governor Cuomo is proposing cuts and revenue-raising measures to stave off a potential $6 billion budget deficit. The legislature's deadline to come up with its own budget plan was Monday. At press time, no plan had been submitted, according to Anne Crowley, a Cuomo press spokesperson.

"The legislature hasn't acted on the governor's budget yet nor have [legislators] given any indication what they will do," Ms. Crowley says.

Governor Sundlun has also been the only governor, so far, to have a tax increase approved by the legislature this year. His budget package, passed by the legislature one month after he took office, included a 20 percent state income tax increase.

"He went in, moved in quickly, and got some tax increases passed," says Marcia Howard, acting executive director of the National Association of State Budget Officers.

It hasn't been so easy for Gov. Lowell Weicker (Ind.) of Connecticut. The state is projecting a budget deficit of $2.4 billion for fiscal year 1992. The governor announced Monday he would send layoff notices to 2,600 employees starting yesterday - the first emergency layoffs of state workers since 1975.

Governor Weicker had said layoffs would be a last resort, to be used only if the unions represented by state employees did not agree to $400 million in cuts in benefits and wages.

He has also ordered most state agencies to close their doors on two additional days a month beginning in July.

The plan would save the state about $276 million over the next year. Weicker's budget would impose for the first time a 6 percent flat state income tax.