Dukakis Faces Budget Deficit On Return to Mass. Duties

Although he missed his opportunity to cut the federal budget deficit, Gov. Michael S. Dukakis now must balance the Massachusetts budget, as he returns to the State House upon his presidential defeat.

After a year on the campaign trail and away from state politics, Dukakis must assert his legitimacy as governor. Observers say the return will not be an easy one, as the Governor faces a large budget deficit, a divided staff and problems from establishing universal state health insurance.

"He should expect headaches, lots of headaches," said Jack Flood, a Democratic state representative, who is expected to run for governor in 1990.

"It's going to be a difficult spring--we're going to be in deficit and it will be awfully hard to balance the budget by cutting because we've already spent a lot," said Flood. "We're going to have to come back and face reality now."

Most observers agreed that the state deficit will be the most important obstacle for the governor, but several other problems must be addressed.

Dukakis "has to make major decisions about staff, the budget and how he fulfills his commitment to universal health insurance," said Lieutenant Governor Evelyn Murphy.

Because Dukakis had a good showing in the state polls--he won nearly 59 percent of the popular vote--observers said yesterday that his state mandate would not be deminished by his presidential loss.

"If his margin here is strong, I don't think it's going to have a big effect on his ability as governor," said Olivia Golden '76, a lecturer in public policy at the Kennedy School of Government, before the election.

"After all he carried the state," said Martin Linsky, a lecturer in public policy at the Kennedy School. "He's been a popular governor."

In his concession speech last night, Dukakis said that he would return to state issues immediately. He indicated that he would run again in 1990, but he did state any definite plans.

"I think he's probably very anxious to dive into some real governing," Senator John Carey said, adding that the state budget should be Dukakis' top priority.