`Spend or save' stirs political pot; Polito vs. Grossman for treasurer.

• Position: NEWS

Byline: Shaun Sutner

State Rep. Karyn E. Polito, R-Shrewsbury, and her potential rival for state treasurer, Democrat Steven Grossman, have had their first big dustup.

Ms. Polito, the GOP nominee for treasurer, last week called on lawmakers to return for a rare summer formal session to vote on $655 million in federal funds, declaring the money should be put in the state's reserve fund and not spent.

Meanwhile, Mr. Grossman, a Somerville businessman and former state and national Democratic Party chairman, countered that the money should be used for health care and public schools, its intended uses, and charged that Ms. Polito's plan would hurt local communities.

Mr. Grossman is the frontrunner in his race against Boston City Councilor Stephen J. Murphy in the Democratic primary.

Ms. Polito originally said the expected $655 million should immediately be put in the state's rainy day fund, but she has since acknowledged that the money has to be spent on Medicaid and education programs.

She is now saying that $655 million should be taken out of the budget and put in reserves if the federal money is released to better prepare the state for another budget shortfall anticipated for next year.

The Shrewsbury lawmaker said the disagreement highlights the policy differences between her and Mr. Grossman.

"My opponent is a big spender," she said. "I'm not. There will be a very clear choice for voters in the race for treasurer, whether they'll want someone like me who is a fiscal conservative or someone who is a spender and wants to grow the size of government."

Mr. Grossman, who spent yesterday campaigning in Worcester, characterized Ms. Polito's position as a direct assault on communities.

"She obviously is comfortable with every city and town in Worcester County having less money and having...