HOPES are rising for the future of contemporary art in Massachusetts - and for the economy of one of the state's poorest towns.After months of tug-of-war between arts supporters and a debt-ridden state government, the administration of Gov. William F. Weld has released $688,000 to further the development of a museum of contemporary art - dubbed MASS MoCA - in North Adams, Mass. The mega-museum, a $72 million public-private venture, will be the largest museum of contemporary art in the world, supporters say, and an economic lifesaver to the city and to Berkshire County, which have been severely hit by the state's deep recession. "I'm convinced this is an economic development project and that the spin-off businesses will help stimulate and build the local economy," says Robert Collins, president of Coakley, Pierpan, Dolan, & Collins insurance company in North Adams. The proposed museum would occupy the massive factory complex abandoned by Sprague Electric Co. in 1984 and provide 250,000 square feet of gallery space for large-scale contemporary art. In 1988, the legislature enacted a $35 million bond issue to support the project, and former Democratic Gov. Michael S. Dukakis spent about $2 million on the museum before leaving office. But state support came to a halt with last year's election of Republican Governor Weld, who initially faced a $50 million deficit. "The problem was that the state was bearing the financial burden," says Wing Pepper, chief of staff of the executive office of economic affairs in the Weld administration. "The state was on the hook for another $33 million." A successful museum fundraising drive, however, was "instrumental" in triggering renewed government interest in the project, says Joseph Thompson, director of MASS MoCA. The MASS MoCA Commission, the governing body of the museum, raised more than $1.2 million earlier this year from local businesses and individuals - more than twice its goal. This showed that "the people of Berkshire County would step up to the plate and commit funds," says Mr. Collins, a commission member who directed the drive. "It was certainly a factor in moving the project forward." In late July, the governor called for a new arrangement with museum officials "that would substantially privatize [the project] down the line." After intense negotiations, Weld agreed in September to release $688,000 if museum proponents could raise $12 million in private donations by the end of 1992 and secure a commitment from a private museum to operate MASS MoCA. Mr. Thompson says this "upped the ante" considerably for the commission, which had originally planned to raise $12 million over the next 3 1/2 years. "It's no secret these times are as tough as they can get for the philanthropic dollar, so it's not going to be easy sledding. But it can be done," he says. The Guggenheim Museum in New York is one institution that has expressed interest in operating MASS MoCA, but no official agreement has been reached. With unemployment in North Adams at nearly 12 percent, Mayor John Barrett III says the proposed museum has the potential to create more than 600 jobs and spill-over investment in the downtown area. "I honestly believe it won't be the cure-all, but it will be a very important part of bringing stability to our economy. It's better to use state money in this way than use it for unemployment and welfare claims," he says. Just how much more funding the state will provide is uncertain. "We'd first like to see the [museum supporters] get over these hurdles and prove they can raise money from the private sector," says Mr. Pepper in the Weld administration. "At the end of next year, we'll see where we stand."