Boston (AP) -- Gov. Deval Patrick was cheered by business leaders Wednesday when he announced that the new federal stimulus law would funnel between $6 billion and $9 billion to Massachusetts, but he was quick to caution it "was not a panacea" for lingering state financial ills.
Patrick said the package signed into law by President Barack Obama a day earlier includes $1 billion for infrastructure work, including $400 million for highways and $300 million for mass transit, which would double transportation spending when coupled with planned state bonding.
Much of the other money, though, will flow directly to the state, its communities and individuals over the next two-plus years, either as direct subsidies for social services or tax credits.
The state will get the money as it tries to close a $1.1 billion deficit in its current budget and a $3.5 billion cut in projected spending for the budget beginning July 1.
"These funds will certainly help, but this stimulus package will not be a panacea," Patrick told 600 people attending a breakfast meeting of the Greater Boston Chamber of Commerce. "We will continue to face serious challenges to our operating budget and our overall economic health."
Patrick said he was especially happy for $800 million in federal education assistance expected during the same period. He said it would allow the state to maintain programming that, since a state education overhaul in 1993, has allowed Massachusetts fourth- and eighth-graders to lead the nation in assessment tests.
"You know, second graders get their chance at second grade now," he said. "They don't get to sit out the recession until we can afford enough teachers or materials to make second grade meaningful."
Patrick also said he would announce a proposed overhaul of the state's transportation system on Friday.
The governor had been scheduled to outline the plan before the Chamber, according to a draft of the proposal obtained by The Associated Press. He and his staff decided to change the focus of his speech after Obama signed the stimulus law and talk of a possible 27-cents-per-gallon gasoline tax increase triggered criticism.
Such a hike would boost the state tax to 50.5 cents per gallon, the highest in the nation.
Patrick told the Chamber he had "a menu" of proposals still before him, and he had not settled on the size of a proposed gas tax increase. But he said either a 4-cent tax hike or a doubling of some tolls would be the minimum necessary to address funding problems at the Massachusetts Turnpike Authority.
The toll proposal has triggered outrage in the state, especially among MetroWest and North Shore commuters who rely on the Turnpike and Boston Harbor tunnels.
A larger gas tax increase, Patrick said, would give the state money to address larger problems such as a $5 billion debt at the Massachusetts Bay Transportation Authority, a $2.2 billion Turnpike debt and a projected $20 billion tab to maintain the existing transportation infrastructure during the next 20 years.
He also said it would have to be accompanied by a comprehensive set of transportation reforms. The draft called for a streamlined bureaucracy around four divisions: Highway, Rail and Transit, Aviation and Ports and Registry of Motor Vehicles.
"I am unwilling to support any new revenue stream unless we get radical simplification of our transportation bureaucracy and a more focused and aligned way to develop and implement transportation strategy," the governor said.
"I will not support a gas tax and a toll increase," he added. "One needs to substitute for the other."
An audience show of hands showed overwhelming support for the gas tax rather than the toll hike, something Patrick later said didn't surprise him given the composition of the audience, which tends to be relatively affluent and civic minded.
"We don't have the choice to do neither," he said sternly. "Believe me, nobody runs for governor to raise tolls or gas taxes. It's not like this is a happy choice, but we don't have the choice to do nothing."
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