Gov. Michael S. Dukakis, facing falling tax revenue, a soaring budget deficit and massive public anger, conceded that the "Massachusetts miracle" he cited during his presidential campaign last year is over but said prospects for the 1990s are bright.
"The miracle of the '80s may be over, but the fundamental strengths that made it happen are still here," said Dukakis, who based his presidential bid on the state's white-hot economic growth and the implication that he could duplicate it on the national level.But major retrenchment in the private high-technology sector and a sharp plunge in sales tax receipts has fueled a year-long budget crisis that has seen spending fall almost as far as Dukakis' popularity.
"We are, in a very real sense, the victims of our own expectations," he said. "We had it so good for so long that 4 1/2 percent unemployment feels like a disaster," he said.
In a speech to business executives, Dukakis blamed the miracle's end on the manufacturing job drain from the Northeast, lost economic momentum in areas that traditionally failed to share good times, the shortage of skilled workers, a real estate slump and the plunge in tax revenues once used to prime the pump.
"The problems are serious and we ignore them at our peril," said Dukakis, who has been accused of ignoring the dropoff in revenues that left the fiscal 1988 and 1989 budgets out of kilter and pose a $720 million problem this fiscal year.
"But if the economic leaders I've been meeting with have told me one thing, it is that the Massachusetts economy has plenty of life in it and that it is ripe with potential for new and exciting growth," he said.
Leading the way, he declared, is the fledgling biotechnology industry that many analysts suggest is poised for rapid growth similar to that enjoyed by the computer industry in the 1970s.
"We're going to make Massachusetts the world's pre-eminent center for biomedical research, development and manufacturing," he said, cautioning that goal is based on "mega-projects" designed to improve the state's transportation network.