Massachusetts lawmakers send late budget to governor

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Massachusetts lawmakers, 18 days into the new fiscal year, sent a $41.9 billion budget to Gov. Charlie Baker.

Baker has 10 days to review the plan, under which spending would rise by 2.4% above what Baker had proposed in January and 1.9% over what the commonwealth spent in FY18. Lawmakers, citing increased tax revenue, added $340 million to the final version.

Massachusetts is the only state without a finalized budget.

The new plan includes an additional $271 million deposit to the state's stabilization, or rainy day fund, pushing its balance above $2 billion.

By state law, a concurrence panel House of Representatives and Senate leaders reconciled their versions. Differences focused less on the numbers than on policy riders.

The House and Senate adopted the concurrence bill by 143-6 and 36-1 votes, respectively. The bill deleted provisions backed by the more liberal Senate that would have strengthened protection for immigrants without legal status. Baker has said he would have vetoed that measure.

Policy items consumed much of the back-and-forth, House Ways and Means Chairman Jeffrey Sanchez, D-Boston, told reporters Wednesday.

"If you look at the policy pieces, all were pretty substantive and deserved conversation,” he said.

The budget boosts funding for mental health and other care for low-income persons, and for elementary and secondary school education. It involves no new taxes or fees, while assuming roughly $60 million in recreational marijuana taxes and nearly $100 million from gambling revenues.

Lawmakers are still weighing regulations and taxes on so-called fantasy sports betting.

The budget would also subject the embattled State Police to greater scrutiny, amid allegations of overtime abuse and the revelation that the agency fudged an arrest report for a judge's daughter.

The commonwealth is operating on a a $5 billion interim budget that runs through July 31,

S&P Global Ratings rates Massachusetts' general obligation bonds AA, while Moody’s Investors Service and Fitch Ratings rate them Aa1 and AA-plus, respectively. All three assign stable outlooks.

Moody's does not expect late budgets to affect credit quality in Massachusetts and South Carolina, the only two states to pass spending plans after July 1. South Carolina lawmakers adopted theirs shortly after the start of the fiscal year.

"Late budget adoption is not new to Massachusetts and we do not view its lack of a full-year budget as a particular credit challenge," Moody's said.

By state law, a committee of House of Representatives and Senate leaders reconcile their budget versions in private, The secrecy -- and the commonwealth's longstanding practice of attaching policy-related riders to the budget bill -- prompted calls for change.

"The budget holdup is yet another example of the need for more transparency on Beacon Hill," Helen Chin said in a commentary on the website of free-market think tank Pioneer Institute in Boston.

"If budget discussions [were] indeed at an impasse because of outside sections, the practice should be changed. To do so would allow legislators the freedom to focus solely on revenue and expenses in the short term."

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State budgets State and local finance Infrastructure Charlie Baker Commonwealth of Massachusetts Massachusetts