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House and Senate lawmakers on Friday voted to approve a $40.2 billion compromise state budget plan for fiscal year 2018 that avoids tax increases and mainly holds spending flat.
The proposal reflects a revenue shortfall that's become increasingly clear. The measure filed Friday — seven days into the fiscal year — uses a revenue forecast that is $733 million less than what budget writers used in the spring.
Senate Ways and Means Chair Karen Spilka (D-Ashland) told reporters the compromise budget is "not without pain."
"It's clear the state is facing a shortfall in revenue that will have an impact on real people's lives and there are cuts throughout this budget," she said.
"These reductions are never easy and they're certainly difficult choices," said House Ways and Means Chair Brian Dempsey (D-Haverhill). "But again, I think it's important to point out that in most cases, the accounts will still be above FY 17 numbers."
Budget negotiators did not cut local aid from the level that cities and towns had been anticipating, with $4.75 billion scheduled to be delivered to schools and $1.06 billion appropriated in unrestricted local aid.
Spilka said the budget rejects a proposal unveiled last month by Republican Gov. Charlie Baker to rein in Medicaid costs, saying it doesn't have what she called "necessary transparency."
The budget does, however, include a proposal by Baker to create a temporary employer contribution to help ease the cost of public coverage for workers, Spilka said. That plan calls for a two-tiered approach that builds off of the existing employer medical assistance contribution and would help bring in $200 million in new revenue during the 2018 fiscal year.
Baker now has 10 days to review and sign the budget and issue any line-item vetoes.
The state has been running on an interim budget that lasts through the end of the month.
With reporting by WBUR's Steve Brown, State House News Service and The Associated Press.
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