The House finalized its Fiscal Year 2024 State budget proposal Wednesday evening after considering amendments to the House Ways and Means proposal. The final House version of the budget, at $56.2 billion, is $154 million larger than the Governor’s proposal, a difference made possible because the House proposes tax cuts that would be phased in more slowly than the Governor’s.
The relative size of this budget proposal is smaller than it may seem at first glance. On the one hand, it is the largest-ever single budget proposal, though not the largest relative to the size of the Massachusetts economy. When adjusted for inflation, the House budget is 3.2 percent larger than the initial budget for Fiscal Year (FY) 2023 budget, last year’s General Appropriations Act (GAA). However, multiple supplemental budgets in FY 2023 subsequently added over $6 billion to the initial budget. Compared to the current FY 2023 GAA and the supplemental spending approved by the legislature for FY 2023 spending, the House proposal represents a 3.9 percent reduction in spending. After adjusting for inflation, the House proposal is 7.4 percent smaller. Later in FY 2024 the legislature could enact a supplemental budget if revenues are available, though this is uncertain and revenues have been slowing.
The full House amendment process would increase spending by $130 million over the earlier House Ways and Means Committee proposal. There were some notable amendments:
- One amendment would enable standardized collection of demographic information across state agencies and expand the racial and ethnic categories for more fine-grained analysis. This could help facilitate more comprehensive examination of the impact of state programs, perhaps assisting the Governor’s commitment to conduct equity audits for all agencies.
- The HomeBASE program would allow families that are already receiving assistance to remain eligible for services for up to 12 months as they work to increase their income. This change recognizes the need for stability in helping families transition out of receiving assistance, so long as they meet the requirements of their housing stabilization plan.
- The House also reaffirmed its support for exempting voter-approved Fair Share surtax revenue from the 62F tax limitation law. This is an important step that protects valuable revenue and respects the will of the voters for these funds to be used solely for education and transportation.
Both the House and the Governor’s budget proposals choose to make important investments that would help the Commonwealth. The need to choose between these investments is compounded by large tax cuts proposed alongside both budgets. The House proposed approximately $440 million in permanent regressive tax cuts that exacerbate racial and economic inequality by mostly benefitting the wealthiest families in the Commonwealth. These cuts undermine our ability to invest in our communities, including investments that make our economy more competitive.
The budget process now moves to the Senate, which will release its proposed version of the Fiscal Year 2024 state budget in May.
MassBudget will update our Budget Browser in the coming days to include numbers from the House budget proposal for all spending items. The Browser allows users to view the effect of inflation on each item, which is important because any spending item that does not keep up with inflation is effectively a cut in support. The Budget Browser also adjusts for intragovernmental transfers and tuition remission back to the Commonwealth by public colleges and universities.