State Begins Fiscal Year Borrowing $1.2 Billion

BOSTON--As lawmakers appeared deadlocked in trying to solve the state's fiscal disaster, officials opened the new bookkeeping year Monday by beginning to borrow $1.2 billion to help the government pay its bills.

The 1990 fiscal year ended Saturday, leaving Massachusetts with a deficit exceeding $1 billion. To help wash out this red ink, the Legislature has been trying to raise taxes, but lawmakers have been unable to agree on a method.

A conference committee attempting to devise a compromise tax package entered its third week of negotiations yesterday. The main sticking point has been a Senate proposal to extend the five percent sales tax to professional services, including legal fees and accounting.

State Sen. Patricia McGovern, D-Lawrence, chairman of the Senate Ways and Means Committee, said she was willing to compromise on structuring the tax on professional services, so lower income groups would not be affected.

"If [the House negotiators] would accept it in concept, I'm sure we could work out the technical way of doing it," she said.

But House Ways and Means Chair Richard Voke (D-Chelsea) said he was willing to compromise on extending the sales tax to other areas--except for professional services.

Voke said such a tax could seriously hurt an already weak economy by adding significant costs to businesses.