BOSTON -- The Massachusetts House of Representatives will begin debate on a $16.3 billion budget plan next week that could radically change the state's welfare system.

Under the plan, finalized Wednesday night by the House Ways and Means Committee, welfare recipients would see their benefits slashed by 5.5% and welfare mothers would not get increased benefits if they had more children.

The House bill is a response to the budget proposed last January by Gov. William F. Weld for fiscal 1995, which begins on July 1, 1994.

The Weld budget called for the state to lower its income tax rate to 5.85% from 5.95%, increase the personal tax exemption by $500 and the family tax exemption to as much as $1,500, and exempt from state taxation military pay for career soldiers.

The governor's plan also would have cut about $300 million in taxes.

The House plan, written by Ways and Means Chairman Thomas M. Finneran, D-Mattapan, does not include the tax cuts, and increases the budget to $16.3 billion from Weld's proposed $16.1 billion.

Further, the House plan rejects Weld's plan to bring gambling to the state. The governor's budget had $120 million in added revenues for the state from three floating casinos and 1,500 slot machines at each of the state's four dog and horse tracks.

Another of the elements of the House plan would challenge the controversial Proposition 2 1/2, a constitutional amendment in effect since 1982.

Proposition 2 1/2 says that no municipality in the state can raise local property taxes by more than 2 1/2% per year. The House budget proposal would allow municipalities to raise their taxes by the inflation level.

The new budget would also increase the amount of state relief for water and sewer rates to $40 million from this year's $30 million.

This relief would help offset the cost of the cleanup of the Boston Harbor and the construction of the Deer Island sewage treatment plant.

In the governor's budget, the state would increase spending for education by about $215 million. The House plan would increase it by $180 million.

But the House's decision to address the problems in the state's welfare system drew the most attention. If fully implemented, the plan would restrict welfare recipients to two years' worth of benefits, would not allow a woman under the age of 18 with children to get welfare unless she were living with an adult family member, and would reduce the size of a recipient's monthly check.

If the plan is implemented, the average welfare family of three would receive $28 less a month in benefits.

The House plan does not change the governor's debt service or bond issuance program.

Massachusetts is rated A-plus by Standard & Poor's Corp. and Fitch Investors Service, and A by Moody's Investors Service.

During the past year, the state established a $12 billion, five-year capital spending plan that the governor said will help keep debt service manageable.

Weld said that control of debt service costs is particularly important because Massachusetts is still paying $275 million per year in debt service from the 1990 sale of deficit bonds.

The House budget will be debated next week and then sent to the Senate. After the Senate finishes debate, the budget will be sent to Weld for his signature.

A spokeswoman for Gov. Weld said that he is still analyzing the House budget proposal. She said that the governor was disappointed that the House had removed the tax relief portion of his budget.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.