Massachusetts lawmakers last week passed a $28.2 billion fiscal 2009 budget, a plan that increases spending by $900 million compared to the $27.3 billion fiscal 2008 budget.
The spending plan includes additional funds for municipalities and educational programs. Local governments will receive $935 million of aid and another $3.95 billion will support Chapter 70 funding for school aid, a $223 million increase over last year's allocation, according to a joint press release from the Conference Committee assigned to draft the final version of the fiscal 2009 budget.
The fiscal plan also includes a $1.3 billion structural deficit that officials anticipate addressing, in part, with an estimated $285 million increase in business tax revenues for fiscal 2009.
Gov. Deval Patrick last week signed into law legislation that will close two corporate-tax loopholes to generate new revenue while gradually lowering the current business tax rate of 9.5% each year beginning in 2010 to reach 8% in 2012.
"This law both eliminates unintended gaps in our corporate tax code that some large, mostly out-of-state companies have used to beat the system, and reduces the corporate tax rate, a real help for smaller companies," Patrick said in a press release. "I want to thank my partners in the legislature for their work in passing this important legislation."
Legislators failed to pass the fiscal 2009 budget by the June 30 deadline. On June 25, Patrick signed a $1 billion spending plan to keep the commonwealth running through the first two weeks of July.
"Upcoming debt service payments are included in the spending amount, along with an extension of capital spending authorization so that projects can continue after June 30, in the event the final enacted budget has not been adopted by the beginning of the new fiscal year, on July 1," according to a Moody's Investors Service report released last week.