Massachusetts lawmakers late Thursday passed a $39.1 billion fiscal 2017 budget to which legislative negotiators hammered out deepening revenue gap projections.
The House of Representatives and Senate, both controlled by Democrats, approved the budget bill by 150-3 and 38-1 votes, respectively. The new fiscal year began Friday.
Gov. Charlie Baker, a Republican, said he would study the spending plan over the three-day holiday weekend. "I'm glad to be getting it before the end of the fiscal year," he told reporters at the State House in Boston.
By law, Baker has 10 days to sign or veto the bill.
On Wednesday, a conference panel of three members from each branch said they would close an estimated $750 revenue shortfall by canceling a $200 million deposit into the commonwealth's rainy-day fund and by conducting a series of budget maneuvers.
They include revised assumptions, deferral of some Medicaid payments to the following fiscal year and the reduction of automatic payments from sales taxes to the Massachusetts School Building Authority and the Massachusetts Bay Transportation Authority by roughly $30 million each.
State budget leaders twice in June lowered tax-collection revenue estimates, citing market turmoil.
In a June 27 note to investors, Secretary of Administration and Finance Kristen Lepore projected the fiscal 2017 shortfall to run from $650 million to $950 million below Baker's January benchmark forecast of $25.8 billion.
"This year's budget conference committee faced plummeting tax revenue estimates and few good options," the business-backed Massachusetts Taxpayers Foundation said in a statement, adding that the proposed solutions "still leave the state in a precarious financial position."
Many of the cuts, said the watchdog organization, come from reducing the assumed caseload for entitlement programs, meaning that if the caseload exceeds expectations, the savings will not materialize.
S&P Global Ratings during the week had urged Massachusetts to provide "more clarity" on its budget picture.
S&P rates the commonwealth's general obligation bonds AA-plus with a negative outlook. Fitch Ratings, which also assigns AA-plus, assigns a stable outlook. Moody's Investors Service rates the commonwealth Aa1 and stable.