The House and Senate approved a $39.1 billion budget Thursday under what Senate President Stanley Rosenberg, D-Amherst, called “extraordinarily unusual” circumstances, managing to beat the end-of-year deadline and cut $413 million in spending, despite an expected nearly $1 billion revenue shortfall.
The last-minute budget manages to increase unrestricted aid to cities and towns by $42 million, as promised, and also boost Chapter 70 school aid by $116 million — reflecting $40 million more than the governor’s recommendation. It also increases regional school transportation funding by $2 million.
The University of Massachusetts will see a 1.4 percent increase in its budget.
The budget was approved one day after a conference committee resolved differences between the two chambers and managed to make up $750 million of the anticipated revenue with a set of bookkeeping adjustments. It now heads to the desk of Gov. Charlie Baker, who despite today’s start of the fiscal year can take a full 10 days to review the spending plan, having signed a temporary $5.3 billion budget on Monday to carry through July.
The budget is built on $1.1 billion in expected new revenues but had to reflect two downgrades in revenue projections primarily because of reduced capital gains revenues.
The bulk of expected revenue loss was made up by budgetary maneuvering such as canceling a projected $200 million deposit into the state’s reserve funds due to lower than anticipated capital gains taxes, $100 million in savings through “procurement efficiencies” by the administration and doing away with an expected reduction in the income tax rate from 5.1 percent to 5.05 percent that would have been triggered in January if the economic benchmarks were stronger. That savings for the state would be another $79 million.
Along with deferred Medicaid payments until the next fiscal year and more expected revenue from fees, budget makers saw a combined $60 million in savings that would have gone to the state’s school building authority and the Massachusetts Bay Transportation Authority, because of slower sales tax revenue growth.
The new budget is built on $677 million in new revenues instead of the $1.1 billion, says Rep. Stephen Kulik, D-Worthington, who as vice chairman of the House Ways and Means Committee was part of the conference committee that worked to reconcile the versions.
“The real winner were the local aid accounts: unrestricted local aid, Chapter 70 school aid and regional school transportation,” said Kulik. There also is a boost in spending — from $23.6 million to $139.2 million — for programs designed to fight the state’s opioid abuse epidemic, including supports for 125 new residential treatment beds.
Rosenberg said that despite the effort to protect school funding, there were small cuts made to a special education circuit breaker and a charter school reimbursement accounts.
Rosenberg has said repeatedly the state needs to find ways to increase revenue sources to support the government programming and capital infrastructure improvements that the public expects. But both the governor and House Speaker Robert DeLeo have adamantly refused to consider new taxes.
“The governor says no new revenues, and the House would have to go first if there were a legislative will to do it,” he said. “The House is not going to do that.”
You can reach Richie Davis at: rdavis@recorder.com
or 413-772-0261, ext. 269