This Budget Monitor examines the House Ways and Means Committee’s state budget proposal for Fiscal Year 2017. The proposal would generally maintain existing service levels while making small targeted new investments in several areas including housing, education, and substance abuse prevention and treatment.These relatively small investments to important programs will have significant benefits, but like the Governor's proposal and the budgets of recent years, it does not propose significant new funding to make progress on some of the big challenges our Commonwealth faces.
The Governor’s Fiscal Year (FY) 2018 budget includes proposals that strengthen the capacity of the MassHealth program to meet the healthcare needs of people in Massachusetts and address fiscal challenges caused by a decline in employer-provided health insurance coverage for private sector employees. As with past budget proposals, the Governor’s FY 2018 budget does not propose significant new funding to make progress on some of the big challenges our Commonwealth faces. But as this detailed examination of the Governor’s budget proposals for major state programs shows, the health care strategies are the major reasons the Governor is able to propose a budget that significantly reduces reliance on temporary revenue and savings to achieve balance.
This preview examines both the challenges revenue gap facing the FY 2018 budget and two budget transparency reforms that could help avoid mid-year budget cuts and other unpleasant budget surprises in the future.
Massachusetts’ taxes rank in the middle of the pack, compared to other states. Where then does the label “Taxachusetts” come from? The answer has much more to do with history than reality.
With the release this week of new American Community Survey (ACS) data from the U.S. Census Bureau, it is clear that working families nationwide and here in Massachusetts made some important gains. While much of this is welcome news, the data also show that poverty rates remain well above pre-recession levels and median incomes remain below pre-recession peaks. Not everyone is sharing fully in the benefits of a growing economy. The ACS data also point the way toward other policy improvements that can lead to broadly shared prosperity.
This Budget Monitor describes the funding decisions in each major section of the state budget for Fiscal Year 2017. It compares proposed funding levels with current and, in some cases, historic funding. It identifies a few bright spots and examines policy changes incorporated in various budget provisions. While vetoes and overrides are noted, the focus is on important budget items and the bigger picture in another difficult year. Earlier versions of the Budget Monitor previewed the budget and tracked its progress at each stage.
The state’s Earned Income Tax Credit (EITC) aims to improve the economic security of lower income working families by increasing their after-tax earnings. A growing body of research has found that raising the incomes of lower-income families provides benefits through the life-cycle: improving the health of children and mothers; boosting school performance; and increasing long-term earnings. MassBudget’s updated fact sheet examines a proposal from the Senate Ways and Means Committee to reform and increase the state EITC.
How did the Legislature balance the budget in the face of a sudden $750 million shortfall? The revenue decline did not all translate into budget cuts. This Budget Monitor outlines the budget-balancing measures and offers an analysis of each major section of the state budget with comparisons to Fiscal Year 2016 and historic funding levels. It describes both where lawmakers were able to preserve or build upon programs, and where programs were cut or eliminated.
The budget enacted by the Legislature today represents both compromises between the House and Senate proposals, and new solutions to address the challenges caused by updated revenue estimates that project $750 million less in tax revenue than was previously anticipated. As a result, this budget funds most items at the lower of the House and Senate recommendations and a number of items below either the House or Senate recommendations. The budget also relies more on temporary budget-balancing solutions than the versions previously approved by the House and Senate: payments for some MassHealth costs will be shifted from FY 2017 to FY 2018; several accounts are funded significantly below the levels of known costs; and the budget counts on $100 million less in spending than the amount appropriated and that money being used to balance the budget rather than to build reserves. The budget will not make any deposit into the state’s Rainy Day Fund.
While the budget doesn’t make significant progress towards addressing the big challenges our Commonwealth faces, such as rebuilding our transportation infrastructure, making college affordable, or expanding access to high-quality education for all of our children, it does include some small new investments and initiatives. Listed below are descriptions of selected important items in the Legislature’s budget.