Our annual report with sections analyzing jobs, wages, income, education trends, and the strength of the Massachusetts economy. Among the findings, Massachusetts’ labor force has grown faster than any other state in 2017 – increasing 3.2 percent. Massachusetts has added close to 300,000 jobs since the start of the Great Recession in 2007, representing 9 percent job growth – among the highest rates of job growth in the country over that time. While our economy is growing, job gains are still not translating into strong, broad-based wage growth, though gains have been made over the past two years among low-income workers.
There has been a widening gap between workers with bachelor’s degrees and those without, especially among the highest-paid 10 percent of workers with bachelor’s degrees. The report shows that states where a higher portion of the workforce holds a college degree also have higher median wages — a pattern mirrored in differences between cities within Massachusetts as well. The ever-strengthening link between education and wages has benefited Massachusetts, where the share of workers with bachelor’s degrees increased more than in any other state from 1979 to 2016. Last year (2016) became the first state ever in which a majority of the labor force held a four-year degree.
At this point, the Fiscal Year 2018 (FY 2018) state budget looks a lot like the FY 2017 budget. After adjusting for inflation, the proposed spending amount falls below FY 2017 levels and we see essentially status-quo funding levels in each major category. One major area of the budget remains in limbo: MassHealth.
The Legislature enacted a Fiscal Year 2018 (FY 2018) budget that assumes less revenue will be available than initially projected and accordingly provides less in funding than the budgets approved by both the House and Senate. This overview provide a brief summary of significant elements of the budget.
Massachusetts ranks 2nd for health in the national KIDS COUNT rankings of the states. But health care achievements and future progress could be at risk if Massachusetts loses funding from the federal government that has been crucial to Massachusetts’ successes. The federal government provides critical funding for health insurance, as well as for a wide range of public and behavioral health programs. More than $10.4 billion of the state’s $44.6 billion budget comes from the federal government to help pay for health care. These funds provide essential health insurance, nutritional support for pregnant mothers and babies, crucial prevention and treatment for substance use disorders, and other protections to keep children healthy. Proposed repeal of the Affordable Care Act, dramatic cuts to Medicaid, and other proposals in the President’s budget could cut several billion dollars from the state budget within several years, and could profoundly affect Massachusetts’ ability to ensure that every child in the Commonwealth grows up healthy.
For Families Raising Children in Challenging Circumstances Federal Budget Cuts Could Make Conditions Worse
Massachusetts ranks 7th in family and community conditions for children in the national KIDS COUNT rankings of the states. Recent victories and future progress could be at risk if Massachusetts loses federal funding that has been crucial to Massachusetts for building strong and healthy family communities and shaping our children’s physical and social environments.
Massachusetts ranks 1st in education in the national KIDS COUNT rankings of the states. Recent victories and future progress could be at risk if Massachusetts loses funding from the federal government that has been crucial to Massachusetts’ successes. A large portion of the $2.5 billion in federal grant money that comes to Massachusetts outside of the state budget supports education. The President’s proposed budget that cuts federal funding could affect Massachusetts’ ability to ensure that every child in the Commonwealth grows up ready and able to learn, and that our classrooms are able to provide high-quality education on the road to college and success in life.
Economic Conditions of Families Better Than in Most States; At Risk From Proposed Federal Budget Cuts
Massachusetts ranks 13th for the economic well-being of children in the national KIDS COUNT rankings of the states, but continued progress could be at risk if Massachusetts loses federal funding that has been crucial to some of Massachusetts’ successes. Cuts to federally-funded poverty reduction programs such as SNAP (“food stamps”), cash assistance (TANF), housing assistance, as well as other cuts proposed in the President’s budget to employment and economic development programs could limit access to income support programs, could limit families’ access to meaningful work, and could create budget challenges at the state level. Together, these circumstances could have a measurable impact on children’s economic well-being.
Recent state and federal tax reform debates have highlighted the taxation of S-corporations (S-corps). Like other “pass-through” entities, S-corps are not required to pay the corporate income tax, and instead their owners pay personal income taxes on the profits of the corporation after costs have been deducted. In Massachusetts, some owners of pass-through entities like S-corps have voiced concerns about the fact that a proposed additional four percentage point tax on incomes over one million dollars a year would include very high-income owners of pass-through businesses. The fact sheet reviews how these entities are taxed in Massachusetts and other states with higher rates for very high income earners. Based on national data, over 98 percent of owners of S-corps and other pass through entities would not be affected by this reform.
With a Conference Committee of three Representatives and three Senators meeting on Monday to meld the proposals of the two branches into a final budget to present to the Governor, we are entering the final stages of the annual budget debate. The House and Senate proposals have a lot in common, but also significant differences that will need to be worked out. MassBudget’s new Budget Monitor describes the major amendments adopted during the Senate budget debate and examines the differences between the House and Senate proposals.