By Bob Katzen
Governor Baker filed a revised version of the fiscal 2021 state budget with a price tag of $45.5 million which is 3.8 percent more than the original budget he filed in January. Since the beginning of the fiscal year began on July 1, the state has been operating on interim monthly budgets approved by the Legislature and signed by the governor.
The administration says the increased spending was driven mostly by growth in the state’s MassHealth program, the state’s Medicaid program that provides health care for low-income and disabled persons. To close the growing gap between declining tax revenues and rising spending levels, the new budget relies heavily on one-time revenues, including $1.35 billion from the state’s $3.5 billion Rainy Day Fund and some $1.8 billion in federal funds.
“Pretty neat trick, huh?” Baker said, when asked about his development of a budget that proposes to increase spending by 3.8 percent, while also making up for the loss of billions in tax revenue.
“Thanks to our careful fiscal management over the last five years, the commonwealth is well-positioned to address the budget challenges associated with this pandemic,” said Baker. “This responsibly balanced budget protects local aid funding for cities and towns across the commonwealth, recognizes record investments in Massachusetts students, recommends over $100 million in additional funding for economic and small business recovery efforts and sustains eligibility and benefit levels in social safety net programs. We look forward to working quickly with the Legislature to adopt a full spending plan for fiscal year 2021.”
Marie-Frances Rivera, president of the Massachusetts Budget and Policy Center disagrees. “While the administration has expressed its commitment to preventing cuts for core services, its budget fails to … make the swift and at-scale policy solutions needed to support the hundreds of thousands of families in our state that can’t afford to put food on their table or keep their families safe and housed,” said Rivera.
The budget is based on the administration’s forecast that tax revenues will plummet by an estimated $3.6 billion from the original estimates when the first version of the budget was filed in January. Baker said that if Congress and President Trump come through with additional stimulus funding for states, the administration would consider reducing the amount of the withdrawal from the Rainy Day Fund.
Baker said he hopes the Legislature can hammer out a budget before Thanksgiving. But the road ahead is a long one that in the past has always taken months before a budget is signed by the governor. The House will draft its own version of the budget followed by the Senate which will propose yet another version. A House-Senate conference committee will eventually craft a plan that will be presented to the House and Senate for consideration and sent to the governor.
The Senate’s chief budget writer, Ways and Means chair Sen. Mike Rodrigues (D-Westport), said the governor’s proposal is “good blueprint” from which to build. “I think the governor put out a very good, responsible budget,” said Rodrigues. “I am sure the Legislature will put its fingerprints on it.” He also added an old Beacon Hill adage: “The governor proposes, the Legislature disposes.”