In the opening salvo of the annual state budget debate, Gov. Charlie Baker is proposing to hike spending next fiscal year 1.5 percent over current levels.
The governor on Wednesday outlined his plan for the state to spend $42.7 billion during the fiscal year that begins on July 1.
The Republican's ideas for revamping the 26-year-old public school funding formula, and a companion bill addressing education policies themselves, will likely get the most scrutiny by lawmakers and advocates.
Overall, the administration says restoring structural balance in previous budgets, as well as managing the growth of MassHealth spending, allow the state to make investments in local aid, education, substance abuse, housing, environment and transportation. The governor is also recommending putting $297 million more into the state's rainy day fund, which would bring it to a total of $2.8 billion.
The Baker budget would expand state education funding by $200 million in Chapter 70 funding, and increase the so-called foundation budget by over $1 billion [over seven years] — which, with inflation and other increases, would rise to $3.3 billion by fiscal year 2026.
He's also filing a separate education reform bill that would strengthen the state education commissioner's authority to approve turnaround plans for under-performing schools, and establish a new School Turnaround Trust Fund that would enable the commissioner to stimulate change in under-performing schools.
"Today, alongside our budget proposal," Baker said, "we're filing a multi-year school finance reform initiative, which will increase funding for school districts to invest in a quality education for every child, regardless of their ZIP code, including a significant increase in funding for communities with the highest need."
School funding has long been on the radar of education advocates. Attempts to address the foundation budget formula during the last legislative session fell short, when negotiators for the House and Senate could not come up with an agreement before formal sessions came to an end.
The advocates say the funding formula, which was set in 1993, has not kept pace with actual costs of educating students. Those discrepancies, they argue, may have contributed to an achievement gap between urban and suburban school districts.
In 2015, the Foundation Budget Review Commission found the formula underestimates the cost of education in Massachusetts by $1 billion to $2 billion a year. The commission was formed by the Legislature in 2014 to examine how education is funded in Massachusetts, and has since issued a series of recommendations for revamping the formula. The Baker administration claims this budget will implement the recommendations of the commission.
Baker began releasing details about other parts of his budget proposal last week.
On Friday he proposed what he called a "modest" 0.2 percent increase in a deeds tax that is levied when a piece of property changes hands. Baker, who says he's loathe to support tax increases, says the hike will provide $1 billion over the next 10 years, which could be used for infrastructure projects to help cities and towns be more resilient to the effects of climate change.
The administration also is recommending unrestricted state aid to cities and towns be increased by $30 million, to a total of $1.129 billion.
Baker is also proposing expanding the Medicare Savings Program, which is a partnership with the federal government. The state would make a $10 million investment for its share of costs for Medicare Parts A & B, and in return the feds would send back more than $100 million in Medicare prescription drug subsidies for eligible seniors. Baker says more than 40,000 low-income seniors would be helped by the change.
Other budget highlights include:
-- sales tax modernization to better collect sales tax from internet sales;
-- the legalization of sports wagering with revenue deposited in a Gaming Local Aid Fund (the administration estimates sports gambling will bring in $35 million in fiscal year 2020);
-- expanding the cigarette excise tax to vaping products, which is expected to net the state $6 million;
-- $266 million in funding for substance abuse treatment and services, including a tax on gross receipts of opioid manufacturers from the sale of their opioid products.
"The [opioid] manufacturers have a lot to do with creating the crisis that we all are paying for every day, and creating a mechanism where they put something in that helps pay for the carnage they have created is, I think, important," Baker said.
In the area of housing and homelessness, the governor is proposing $8 million for its Housing Choice Initiative, a $3 million increase over the current budget. The money would fund grants and technical assistance to cities and towns that meet housing production goals.
In transportation, the budget contains a $1.3 billion operating budget to support the MBTA, an additional $127 million over current operating funds.
State budget watchers are eager to dive deeper into the details of Baker’s budget. On the surface, there are things that please Eileen McAnneny, president of the Massachusetts Taxpayers Foundation (MTF).
“There are several things that the [MTF] has been a proponent for a long time — things like increasing the stabilization fund balance, reducing the structural deficit, and moderating the growth in the MassHealth program,” she said.
But as for the governor’s education funding proposals, McAnneny is cautious. "What we will really look at and make sure [is] that any education funding proposal is very clear on the goals that they are trying to achieve — that there are explicit metrics that they’ll use to measure that progress, and that we review it in time to make sure that we can make corrections and revise and revamp as necessary."
With the governor's budget now filed, the next moves are up to the Legislature. After a series of hearings in February and March, the House will put out its version of the budget in April and the Senate will follow suit in May. Both the House and Senate versions will be reconciled into a final budget scheduled sometime in June.
In a statement, Senate President Karen Spilka, a Democrat, said she's "encouraged to see so many of the Senate's shared priorities included in the Governor's budget proposal."
There's an extra challenge this year, as there are currently vacancies in both chairmanships of the House and Senate Ways and Means committees, meaning the chief budget writers in both branches will be rookies in their new positions.
Spilka and House Speaker Robert DeLeo, who both previously held the chairmanships of their branch's respective Ways and Means committees, are expected to appoint new chairs sometime in the near future.
This article was originally published on January 23, 2019.
This segment aired on January 24, 2019.