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As Mass. tax collections fall short by $1.4B, what's the impact on next year's budget?

The Massachusetts Executive Office of Administration and Finance sign.
State House News Service

Massachusetts tax collections were $1.4 billion short of projections last month. What's that going to mean for politicians with big plans for tax breaks?

As lawmakers on Beacon Hill continue their budget planning, we finally get a look at the state Senate's proposal.

Chris Lisinksi, State House News Service: Senate Democrats are going to roll out their proposed response to the House's budget on Tuesday. That's going to finally give us a sense of where they stand on a lot of the pressure points in the budget process — like legalizing online lottery sales and just how many people should be eligible for free community college. Obviously, that's something that Senate President Karen Spilka has targeted as a priority. And now we'll finally get a sense of some of the details.

What's less clear is how the overall spending bottom-line picture is going to shape up in the Senate budget, given — as you noted — the really jarring tax revenue figures we saw released in the latest batch of data covering April.

Carrie Healy, NEPM: Right, this follows that downturn in tax collections. And we've got two months remaining in the current fiscal year after learning that the state revenues are running behind. So is this news at all expected, and do we know if those figures have spurred senators to reassess their budgeting?

The clearest explanation I've heard is that state budget writers and budget forecasters expected a slowdown, no doubt, but they expected the slowdown to happen over a months-long period, some of it this fiscal year, some of it next fiscal year.

And they were caught by surprise at just how sharply it all seemed to hit in April. So we don't know yet what that means for the long term arc. We're just going to need to wait to see how May and June revenues come in to get a better handle on that.

In the meantime, senators don't seem particularly, I'd say, "interested" in retreating from previous plans. They are, of course, alarmed by the figures. But state government has been saving quite a lot of money in recent years when tax revenues were just coming in at a blistering pace. State government had more money than it knew what to do with and put a lot of it into savings accounts that, at least in the immediate future, are there to help paper over any gaps.

We know that budgets often include funding for pet projects from lawmakers. Are you getting the sense from this lowered financial picture that lawmakers could be lowering their expectations here?

I don't think we're at that point quite yet. That is, of course, a possibility. But the messaging from the Healey administration — which is the one that collects all of this revenue data — is that they remain confident in the budget bill they first put out, which is still in roughly the same ballpark as what the House and Senate are going to put out, given there's, you know, several hundred millions of dollars more in the Legislative versions.

But I think with that messaging coming from the executive branch, there won't really be all that much hesitation about continuing the practice of earmarks to local projects in districts, because the projections longer-term anticipated some kind of a downturn. And if this is indeed just those conditions arriving sooner rather than later, it might not have all that much impact on fiscal year 2024 as a whole.

And finally, a pivot here, there's a recent report out from the Environment America Research and Policy Center on Pollutants in drinking water in public schools across Massachusetts, where they say lead is still present. Chris, how is this still a thing in 2023?

The infrastructure is just really old. You think about many of our school buildings in Massachusetts are decades old. And it's worth noting that, as dismal as it seems for Massachusetts to get a C- grade in this report, that's actually pretty good compared to the rest of the country. Twenty-seven states got an F, eight others got a D. So we are toward the upper chunk of the pack there.

These environmental advocates are pushing for more changes that they say would actually rocket Massachusetts all the way up to an A grade.

Carrie Healy hosts the local broadcast of "Morning Edition" at NEPM. She also hosts the station’s weekly government and politics segment “Beacon Hill In 5” for broadcast radio and podcast syndication.
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