The Senate dropped their proposed supplemental budget for this year, late last week. Senators are advancing a $1.8 billion spending plan that differs from the House plan on surtax allocations, MBTA funding and tax policy. State House News Service reporter Sam Drysdale explains what the key contrasts between the two approaches are, and what the differences reveal about each branch's priorities.
Sam Drysdale, SHNS: Of the $1.8 billion bill, about $1.3 billion comes from surplus funds from the surtax on high earners. Those dollars are specifically earmarked for transportation and education. The House and Senate chose to divvy them up differently.
The House spending leans more heavily towards transportation and specifically towards the MBTA (the T). The Senate splits the surtax funds 60/40, still more heavily towards transportation, but dedicates only $535 million to the T.
The Senate budget chair, Michael Rodrigues says that they're more focused on regional equity and Senators also include $95 million for regional transit authorities and $100 million for cities and towns to pay for snow and ice deficits and to repair roads after this harsh winter.
The Senate also chose to not give any additional public dollars to the FIFA World Cup. The chair says that they've given enough money to the World Cup matches playing in Massachusetts this summer.
Carrie Healy, NEPM: Senators will hold a hearing and vote on this this week… with reconciliation between House and Senate plans next. Do you expect the federal tax code changes to be a major point of contention?
Definitely! There were tax code changes in the federal budget bill President Donald Trump signed last year that could cause a $400 million revenue shortfall in the state's budget.
The Legislature is contemplating delaying the implementation of certain business tax cuts in that federal bill to slowly adjust for the decreased revenue, and they're also bracing, at the same time, to possibly have (fewer) dollars to spend next year if a ballot measure passes to cut the state's income tax from 5 to 4%.
The House says that they'll permanently decouple from those federal tax cuts if the ballot question passes, meaning the state will no longer follow those federal changes to prevent a double loss of revenue.
But the Senate doesn't make the implementation of the tax code changes contingent on the ballot question measure. So, that's going to be a big conversation and issue for them to work out in negotiations.
Moving on this week, lawmakers will consider a proposal from Northampton State Rep. Lindsay Sabadosa which aims to fix damage caused by the Supreme Court's opinion in City of Grants Pass v. Johnson. The justices said rules about camping on public land don't break the Constitution, even though the Eighth Amendment is supposed to protect people from cruel and unusual punishment. Criminal justice reform is one of Sabadosa’s priorities. What should we know about how this could affect people with nowhere else to go in Massachusetts?
Yeah, well, the Supreme Court decided the Eighth Amendment doesn't stop cities from punishing people for being homeless. This bill would make fines, fees and legal consequences simply for the act of being homeless illegal under Massachusetts state law.
Unless the government can prove it offered the person a specific, high quality indoor alternative, this could change the legal landscape for the roughly 29,000 people experiencing homelessness in Massachusetts, and grant them a so-called right to exist in public spaces.
Ahead of the hearing. Is there any known opposition to this proposal, Sam?
There isn't any specific known opposition as of yet, but I think we could anticipate certain sources of pushback. The most common objection to bills like this often comes from local governments who try to clear encampments, citing public health and safety. Small towns and cash strapped cities also tend to oppose bills that force them to provide services like shelter without providing money to pay for them. So, we might see some of those arguments at the hearing on Tuesday.
So, today's the sixth. As we approach April 15th, the tax filing deadline, what information can budget writers glean from income tax payments and apply to future fiscal budget building?
The tax filing deadline is a good temperature check on the state economy and workforce, and it has an indirect impact on future fiscal years.
One way that lawmakers can use it, is as a way to check on the revenues collected from the 4% income surtax on those who earn over $1 million a year. They will be especially attuned to that this year as they're budgeting for fiscal year 2027 right now.
And they're also bracing for the potential income tax cut that goes before voters in November. That would shakeup the financial picture next year, and that might make the state more reliant on the surtax revenue stream. So, they'll be paying attention to that this April.
For the ‘right now’: if the Tax Day revenues fall short (and we find that out in early May) how might Governor Maura Healey respond to keep the current budget on track?
The governor's office has a lot of levers it can pull. If revenues come up short, chief among them is what we call 9 C cuts. These are budget cuts that Governor Healey could make across executive branch agencies, and those make up roughly 55 to 60% of the budget.
Budget cuts can't impact local aid to cities and towns. But they could affect state run housing programs, health and human services, environmental projects and other spending like that.
