Massachusetts brings its budget across the finish line

Massachusetts legislators finally agreed to terms on a $40.2 billion budget for fiscal 2018 a week late and after more than a month of negotiations.

The legislation won approval on 140-9 and 36-2 votes in the House of Representatives and the Senate, respectively. Gov. Charlie Baker, a Republican who works with a Democratic-controlled legislature, has 10 days to approve or veto the plan.

baker-charlie-mass-bl-20160425
Charles "Charlie" Baker, governor of Massachusetts, speaks during an interview at the Statehouse in Boston, Massachusetts, U.S., on Monday, April 25, 2016. Billions of Medicaid dollars are at stake if Massachusetts fails to convince the federal government it can improve its performance and achieve payment reform, Baker said earlier this month. Photographer: Scott Eisen/Bloomberg *** Local Caption *** Charlie Baker
Scott Eisen/Bloomberg

The new budget cuts spending by $400 million to $500 million from a previously proposed budget plan and takes other measures to make up for a $733 million reduction in anticipated tax revenues for fiscal 2018.

Senate Ways and Means Committee Chairwoman Karen Spilka, D-Ashland, said the budget increases spending on schools and local aid while cutting spending in other areas.

The $40.2 billion plan marks a $1 billion increase from fiscal 2017 that includes a $118.9 million hike in funding for local schools bringing the total to $4.75 billion. The University of Massachusetts system receives $513.5 million and the state’s Department of Children and Families receives a $36 million increase overall.

There are no broad tax increases.

Lawmakers are calling for a $150 million cut to MassHealth, the state’s Medicaid system that covers about 1.9 million residents. This cut is part of the $400 million spending cut. The proposal does include an increase in the Employer Medical Assistance Contribution, a fund employers pay to help cover Medicaid costs.

“This is the harshest state budget since the last recession,” said Senate President Stan Rosenberg, D-Amherst. “We can take some measure of pride in what we were able to do for local aid, children, and veterans, but far too many were left behind.”

House Speaker Robert DeLeo, D-Winthrop, was more optimistic. “In the midst of a tough fiscal climate we’ve delivered a responsible budget that makes targeted investments and protects our most vulnerable citizens.”

The plan projects tax revenue growth at 1.4%, well below the previous estimates of 3.9%. There is also a delayed schedule increase for unemployment insurance. Rates will rise 10% next year instead of the previously scheduled 30%.

It provides $2 million for starting the regulatory structure that will oversee the state’s new marijuana industry after negotiations over the voter-approved ballot measure delayed the passage of a budget.

Marijuana legalization advocates say that number is “far short” of what’s necessary.

For reprint and licensing requests for this article, click here.
Budgets Commonwealth of Massachusetts Massachusetts
MORE FROM BOND BUYER