BOSTON — A top Senate panel unveiled a $32.3 billion Massachusetts budget Wednesday that calls for no new taxes or fees, creates a new state police unit to investigate welfare fraud and keeps partially open a state psychiatric hospital pegged for closure by Gov. Deval Patrick.
The proposed budget, approved unanimously by the Senate Ways and Committee, would increase overall state spending in the fiscal year starting July 1 by 3.7 percent over current year levels, according to Sen. Stephen Brewer, D-Barre, the panel's chairman.
The plan calls for one-time revenues and some spending cuts to close a projected $1.4 billion gap between spending and revenues in the next fiscal year, and would tap the state's reserve fund — commonly known as the "rainy day" fund, for $290 million.
"You can't be all things to all people all the time in this budget," said Brewer. "It's not possible. We're not entertaining new revenues, we're not entertaining new fees."
The Republican leader of the Senate, Bruce Tarr, praised the spending plan for boosting local aid and minimizing the amount to be withdrawn from the rainy day fund.
"Nevertheless, the budget increases overall spending significantly compared to this year, and contributes to a concerning trend of spending increases that are unlikely to be sustainable," Tarr, of Gloucester, said in a statement.
The budget will be debated by the full Senate later this month. In April, the House of Representatives passed a spending plan that also included no new taxes and called for a larger withdrawal of $400 million from the rainy day fund.
Patrick proposed a budget earlier this year that sought increases in taxes on cigarettes and other tobacco products and a sales tax on soda and candy.
Brewer said Massachusetts had been able to withstand the economic downturn better than most other states because of the strong fiscal discipline it had exercised. He pointed to the state's historically strong bond rating and noted that even after withdrawing from the rainy day fund Massachusetts would remain one of only three states with more than $1 billion in reserve.
"We're Massachusetts and we don't kick the can down the road, and we address issues as they come," Brewer said, contrasting the state with California, which is facing an estimated $16 billion deficit.
Like the House, the Senate's proposed budget seeks a crackdown on alleged misuse of Electronic Benefit Transfer cards by welfare recipients, but takes a different approach.
The Senate would appropriate $750,000 for a new public benefit fraud unit in the state police. The unit would probe suspected cases in which welfare or food stamp benefits were being misused.
The Senate budget bill would also add tattoo parlors, strip clubs and gambling to the list of banned EBT purchases, but it does not include many of the other restrictions that were included in a House budget amendment, including cosmetics.
"I think it's important not to get on a slippery slope of trying to define which hair color, which food or which soap or whatever it is," Brewer said.
The Senate also proposes, for the first time, to impose criminal penalties on people who try to sell or transfer their food stamps.
Patrick's administration had proposed the complete shutdown of the 169-bed Taunton State Hospital and the transfer of most patients from the aging facility to a new state psychiatric hospital in Worcester. The plan, backed by the House, had been strongly criticized by families of patients, advocates for the mentally ill and lawmakers from southeastern Massachusetts.
The Senate budget would keep 45 beds at the Taunton hospital, but it was not immediately clear how much that would cost.
Geoffrey Beckwith, executive director of the Massachusetts Municipal Association, said the spending plan was a "very strong, favorable budget" for cities and towns. Like the House, the Senate plan fully funds unrestricted local aid and also hikes state aid to public school districts.
The Senate plan does not, however, include about $11 million contained in the House budget to pay for transportation for homeless school children. Beckwith said he expected municipal officials would try to restore the money when the budget reaches the Senate floor.
After the full Senate acts on the budget, a six-member House-Senate conference committee will be appointed to reconcile differences between the House and Senate versions.