It’s February school vacation in Massachusetts, and it’s the first full week that legislative committees have membership and chairs.
The new chairs of the Ways and Means Committees in the House and Senate will also be working on the budget
Carrie Healy, NEPR: How concerning is it to be starting the budget season now, six or seven weeks into the legislative session? And there are new Ways and Means chairs?
Matt Murphy, State House News Service: They're certainly behind the eight ball. This is not abnormal, although it does feel like it's taken a long time to get to this point where we have these new chairs. The speaker and the Senate president are taking their time, as they often do, at the beginning of the start of a two-year session. The difference, of course, being that both of them had to name new budget committee chairs, and both of them will be starting from scratch.
More pressing in the House is that they have about 10 weeks to digest the governor's budget and put together a plan that the House can debate in April, which is the timeframe that they’re operating under. So the new chairman, Aaron Michlewitz, from the North End of Boston, said on Thursday last week that he is ready to get to work. The Speaker [of the House] says committee hearings will need to start immediately on the governor's budget, and I think that's the first order of business that we're likely to see get scheduled and underway.
The Ways and Means Committee chairs, Senator Rodrigues and Representative Michlewitz — when it comes to looking at the economy, Michlewitz has said that the state has “a diverse economy” and there are “emerging segments of the economy.” Are they on the same page?
Michlewitz is saying that his number one priority is to keep the Massachusetts economy moving — but you have to understand that Michlewitz is coming out of a role that he's played in the House for the past several sessions — as chair of the Financial Services Committee, where he's been dealing with things like regulating and taxing Uber and Lyft rides.
So he's beenconcentrating on figuring out how to both foster growth in these new innovation sectors, but also make sure that consumers are protected. So that's where he's coming from, and where he's approaching this, and there's certainly new and emerging fields that are going to have to be looked at by lawmakers in the future.
And he is, you know, someone who has been at the forefront here, on Beacon Hill, of trying to strike that balance between allowing these industries to grow, but also not letting them just kind of run wild, leaving consumers unprotected.
Right now, revenues — more than halfway through our current fiscal year — seem to be running below expectations by about $400 million. What measure are lawmakers using to kind of take the temperature of the state's fiscal situation and look forward?
Revenues did decline, both December and January were disappointing months. The new chairs of the Budget Committee are saying that they're watching, and of course there are some big months to come, particularly April, that could turn around the finances.
And also the administration is not too concerned at this point. A lot of this has to do with overestimating what would be the withholding taxes, some of these changes were difficult to guess in the first year after the Federal Tax Reform law kind of changed how much these states are collecting in these income taxes and the withholding taxes. So a lot of states are going through this as their estimates have been a bit off.
But the administration is saying that when you look at the total picture, less than one percent of the total state budget now is this deficit that they hope that they can manage through — particularly if it comes in the area of capital gains, and these other investment type taxes that they have budgeted high amounts for — but that would typically just get funneled into the state's reserve account.
So it's not really affecting total spending if they come up a little short there. It will just lower the amount they can save at the end of this fiscal year. So, right now, Governor Baker's administration’s saying they think they can manage through this.
It's been a few days since lawmakers were named to committees. Did you see any expressing surprise or disappointment by those committee appointments? Were any of them a shock to you?
No, not yet. It may actually be a little surprising how well-received some of these were. Particularly in the Senate, an interesting choice by Karen Spilka to go with Senator Mike Rodrigues, a moderate. And you know, as the Senate in particular has moved to the left, a lot of new liberal members appointed. It's interesting Spilka would go with someone who is a moderate, particularly as the state is getting ready for a big debate over revenue, and how to invest money in education, transportation and other fields.
But, both of the new chairs are saying that they're open. They're not foreclosing the idea of new revenues or taxes. But you know, if you're reading the tea leaves, it's going to take something to get a major bill done. Except of course if we're talking probably about the millionaire's tax, which would still be about four years down the line, but something still broadly popular here on Beacon Hill.
