Duke Calls for State Aid Hike

BOSTON--One day before unveiling his new budget proposal, Gov. Michael S. Dukakis called yesterday for increasing state aid to cities and towns by $120 million in the coming fiscal year, if he gets the new taxes he is seeking.

"Clearly, our ability to finance this program of aid to cities and towns will depend on having the revenue," Dukakis said at a Statehouse press conference flanked by Boston Mayor Raymond L. Flynn and other municipal officials.

Dukakis said the uncertainty about state finances may also delay the recent tradition of having the Legislature vote on a local aid resolution in late February to let cities and towns know how much aid they can count on before the municipal budgeting season begins.

"Obviously, it's going to have to be a joint decision. The Legislature is going to have to play a major role in this," Dukakis said.

House Ways and Means Chair Richard A. Voke (D-Chelsea), who will play a key role in the debate over local aid, taxes and the new budget, immediately put Dukakis on notice that he considered the local aid proposal overly generous in light of available revenues.

Voke also faulted local officials for being willing to accept the local aid increase while they are unwilling to fully endorse the governor's tax package--which calls for raising $131 million the rest of this fiscal year and $604 million annually after that.

"They can endorse this money if they want to accept it. I'm just saying, how do you pay for it?" Voke said.

Voke also said pointedly that if Dukakis' goal was to "buy off" the cities and towns with generous amounts of local aid, his tactic did not work because legislators are not hearing calls from local officials to support the tax package.

Flynn Qualifies Support

Flynn, who endorsed the tax plan in general terms, stopped short of supporting each element in the package, which would raise taxes on investments, gasoline, cigarettes, alcohol, interstate telephone calls and other areas.

"If taxes are necessary to provide services for the most needy...then count me in," Flynn said.

Sheila Cheimets, executive director of the Massachusetts Municipal Association, which represents the state's 351 cities and towns, called the $120 million proposed increase "essential" and praised Dukakis for his "serious commitment" to local government.

She also warned cities and towns to be "extremely prudent" in drafting their new budgets and said it would be "devastating" if the Legislature delayed a vote on local aid past March 1.

House Minority Leader Steven D. Pierce (R-Hampden) called the local aid plan "political blackmail and little more." He said the governor should cut state spending in other areas, rather than raise taxes, to provide funds for local aid.

At his news conference, Dukakis denied that he was attempting to put a gun to the Legislature's head by proposing a generous local aid increase, which is politically popular on Beacon Hill, linked to his tax package, which is politically unpopular.

Dukakis also acknowledged that the Legislature may decide to cut local aid and other rather programs rather than raise taxes.

"Every part of the budget is vulnerable," Dukakis said. "Of course. If you don't have sufficient revenues, then you have to make a decision on where to cut."

The governor's local aid proposal includes $120 million in direct state aid to local governments, which they may use as they please. It also includes another $73 million in restricted aid, for a total increase of $193 million.