MASSPORT DENIES DEAL ON FUNDING STATE TOURISM

MASSPORT DENIES DEAL ON FUNDING STATE TOURISM

The Massachusetts Port Authority confirmed that it had agreed to assume some state costs for tourism promotion at the request of Gov. Michael S. Dukakis but denied it had paid "blackmail" to head off more costly funding plans passed by the state Senate last year.

Massport's agreement to support a $1 million state fund for international tourism promotion represents the third time in less than two years that the authority has chipped in to help offset state budget shortfalls following

pressure from the Legislature and Dukakis budget planners."It's Massport stepping in to pick up money that the state cut," said Thomas Champion, special assistant to David W. Davis, Massport executive director. But Mr. Champion denied the payments were part of a deal to avoid funding $15 million in state programs as required by the Senate's 1990 budget last June.

"The amounts have grown over time but they cannot be characterized as blackmail payments," he said. "You can't say that there was a deal done or even a formal compromise between Massport and the Legislature."

Jonathan Hyde, acting deputy director of the state's Office of Travel and Tourism, said Massport's pledge of $500,000 along with "at least $100,000"

from TWA and Northwest Airlines would boost the state's overseas tourism marketing efforts despite a cut in the office's budget from $9.5 million last year to $6.9 million this year.

"What Massport is really doing is adding to our funds," Mr. Hyde said.

Massport fought last year's Senate plan, which called for the authority to assume all state costs for trade, tourism and film-making promotion, arguing that diversion of its revenues for those purposes would violate its trust agreement with bondholders.

Standard & Poor's Ratings Group reacted by placing Massport debt on credit watch, and the plan then died in a legislative conference committee.

In September, however, Massport disclosed that it had agreed to spend $500,000 to support Gov. Dukakis' new Export 90s trade promotion program. Nothing was said at the time about the additional $500,000 commitment for tourism.

In both cases, the funds were requested by Gov. Dukakis and approved by Massport's board of directors, Mr. Champion indicated.

In the previous year, Massport also agreed to pay $5 million to the state after the administration demanded a $17.9 million payment on a seaport bond debt that the authority argued it did not owe.

Mr. Champion defended the apparent switch in Massport's position on state tourism funding, noting that its support for international tourism is consistent with past efforts in that area since 1983.

The Senate plan also would have required Massport to pay for domestic tourism promotion, which is less closely linked to revenues at Logan International Airport, he said.

In the past, both S&P's and Moody's Investors Service in New York have said that the pattern of state budget pressure on Massachusetts authorities raises concerns for their bond ratings. But officials at both agencies said Thursday that any judgment would be premature in light of the relatively small sums involved.

Massport's bond rating is scheduled for an annual review early next month, said Joan Dougherty, an assistant vice president at Moody's.

Massport's resources and its ability to help the state out of its budget bind have received renewed attention in recent weeks with the release of budget proposals by Lt. Gov. Evelyn Murphy and a Senate committee study on public authority actions in New York.

Ms. Murphy, a candidate for governor, has proposed freeing up $55 million in bond reserves by rewriting authority trust agreements.

The Senate panel has recommended further study of New York's plan to recover $250 million from its authorities through a variety of refunding and other schemes for possible use in Massachusetts.