Baker Proposes Spending Cut In Pandemic Recovery Budget

If the fiscal 2021 budget focused on the state's response to the COVID-19 pandemic, the fiscal 2022 budget Gov. Charlie Baker will file Wednesday looks to drive the state's post-pandemic recovery, an administration official said.

The $45.6 billion budget does not include any tax increases on residents and Baker is proposing to cut state spending by about $300 million or 0.7% while state tax revenue is expected to rise 3.5% over the current budget year.

The reduction in spending is due largely to slower-than-expected growth in MassHealth enrollment, officials at the Executive Office of Administration and Finance said. Gross MassHealth spending is budgeted to fall from $18.2 billion this year to $17.6 billion in fiscal 2022, a 3.4% reduction, while all non-MassHealth spending is budgeted to climb 1% from $27.7 billion to $28 billion, the administration said.

As Baker and Lt. Gov. Karyn Polito had previously announced, the fiscal 2022 spending plan recommends increasing the state's $1.13 billion general local aid account by $39.5 million and seeks to fully fund the 2019 school finance reform law that aims to steer $1.5 billion to K-12 schools over seven years.

Baker's seventh budget, which will be known as H 1 once it is filed and accepted by the House of Representatives, would rely on $1.6 billion in one-time revenue all drawn from the state's rainy day fund, the administration said. That draw, on the heels of the administration's planned $1.35 billion withdrawal this fiscal year, would leave the state's piggy bank with a balance of $1.11 billion, compared to just more than $3.5 billion before the pandemic hit, officials said.

If the federal government makes more relief funding available to states or if the tax collection picture brightens, the use of rainy day fund money would be reduced, an administration official said.

The governor's budget incorporates legislation that would legalize betting on professional sports in Massachusetts (and counts on about $35 million in revenue from the activity), doubles the budget for the Massachusetts Emergency Management Agency to $4.1 million to allow the agency to do more in-depth reviews of emergency management plans, boosts Emergency Assistance Family Shelter System funding by 8% to $195.9 million, provides $30 million to address recommendations from the Black Advisory Commission and the Latino Advisory Commission, directs $357.3 million towards efforts around substance misuse, funnels a total of $1.36 billion to the MBTA, and makes $415.3 million available for State Police public safety and crime lab operations.