Officials in Massachusetts and Rhode Island expect to have their fiscal 1993 budgets in place by Friday.

The states have been operating under emergency legislation since Wednesday, the beginning of the new fiscal year, when the budgets were due.

In Massachusetts, a special committee comprised of three senators and three assemblymen are working on a compromise measure, according to a legislative spokesman.

In Rhode Island, the placement of new video lottery machines, designed to generate $17 million in revenues in fiscal 1993, has slowed the progress of the state's proposed $1.4 billion budget. But a spokesman for the governor and a state senator say the budget should be approved by Friday.

Gene Caputo, a spokesman for Massachusetts House minority leader Peter Forman, said Gov. William Weld's initial budget totaled $14.1 billion, the House's proposal was $14.8 billion, and the Senate's proposal was $14.4 billion.

Mr. Caputo said the final budget package should total approximately $14.5 billion. Both houses of the legislature end their holiday weekend and return to session today.

Mr. Caputo said it appears the budget will reach the governor's office by the end of the week and should be approved.

Jeffrey Newman, a spokesman in Gov. Weld's office, said the governor is pleased with the legislature's progress and will most likely approve the budget by Friday.

One significant item in the budget is the reversal of the state's so-called "death tax," Mr. Caputo said.

"The law says that any estate over $200,000 can be taxed by the state," he said. "Consequently, many older residents have left the state, taking their estates with them to protect their heirs."

Mr. Caputo said the repeal of the tax, proposed by Gov. Weld, will encourage elderly taxpayers to remain in-state and broaden the tax base.

Representatives of Fitch Investors Service, Moody's Investors Service, and Standard & Poor's Corp. said they had no comment on the budget until it was approved.

Meanwhile, the Rhode Island legislature is putting the finishing touches on its proposed video poker program as it wraps up the budget. The machines are projected to raise $17 million in the first year and at least $22 million in subsequent years, according to Michael Cabral, spokesman for Gov. Bruce G. Sundlun, and state Senate majority leader John J. Bevilacqua.

"The governor has made it very clear that the only places he would allow the betting machines would be at the Newport Jai-alai Center and the Lincoln Downs Racetrack," Mr. Cabral said. "Both of those locations already have legalized betting, and the governor has stated that he will veto the entire budget if those machines are to be placed anywhere else."

Mr. Cabral said he hopes to have a final package on the governor's desk by week's end.

"The budget is sitting in the Senate," Mr. Cabral said. "I expect that when the both houses return Tuesday, they will be working to get it done by Friday."

Sen. Bevilacqua said yesterday he expected the $1.4 billion budget to be through the legislature and approved by Friday.

Included in the proposed budget is a tax increase for those who earn more than $100,000 per year. According to a governor's representative, the extra would generate more than $16.8 million per year.

Although the legislature's final budget is about $50 million higher than the governor's original proposal, Mr. Cabral said he expects the governor to sign it.

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