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$52.7 billion state budget heads to Baker's desk

The House and Senate both unanimously approved a compromise $52.7 billion annual budget for fiscal year 2023, which began on July 1. Gov. Charlie Baker will have up to 10 days to review it and send back amendments and vetoes.

Knowing that fiscal year 2022 was about to generate a surplus in the neighborhood of $3 billion, that the state's primary savings account is already poised for a record high and that billions of dollars of federal money remains to be spent, the budget conference committee marked up the fiscal 2023 tax revenue estimate by $2.66 billion to $39.575 billion and then put the additional revenue to use throughout the budget.

The bill contemplates a $1.46 billion deposit to the state's stabilization fund, which would bring it to another record high balance of $7.35 billion at the end of the budget year.

Combined with about $14 billion in federal reimbursements and other sources, the bill lists the "grand total" of funds available for the budget at $54.87 billion.

"This budget builds off of the successes of the last few years and it prioritizes our residents. By reinvesting in the people of the commonwealth, we will continue to assist those recovering from this pandemic while making our economy stronger and more equitable for years to come," House Ways and Means Chairman Aaron Michlewitz said. "We remain mindful of the economic uncertainty on the horizon, but the commonwealth is in a stronger fiscal position to weather the storms ahead."

The conference committee report, which was filed Sunday evening and made Massachusetts the last state in the nation to put a budget in place for fiscal 2023, represents an increase of $5.1 billion or 10.7 percent over the $47.6 billion annual budget for fiscal 2022. Much of that new money is targeted for spending or savings, with lawmakers on pace to also enact $500 million in one-time rebates and $500 million in permanent tax relief.

"We have taken the long view here in the commonwealth because I think we are doomed for failure if we do not embrace sustainability in the budgets that we present to the people of the state of Massachusetts," Rep. Todd Smola, the Warren Republican who represented the House minority caucus on the six-person conference committee, said. "And we do that by investing in those quality programs that matter most to the people in our cities and towns."

When faced with differing House- and Senate-approved spending levels, the six-person negotiating team showed a strong inclination to adopt the higher of the two proposed spending levels. In some instances that reveal the priorities of House and Senate leadership, the conferees sometimes even agreed to a higher spend than was adopted by either branch.

The line item for regionalization incentive grants in the Executive Office of Administration and Finance serves as a dramatic example: The House budget called for $15,145,600 while the Senate plan was for $5,555,000. The conference committee decided to go with $20,675,600 in the final budget, a 272 percent increase from what the Senate approved and a 36.5 percent increase from what the House adopted.

The conference committee also went above and beyond approved spending levels for the University of Massachusetts system, Executive Office of Energy and Environmental Affairs administration, climate change adaptation and preparedness, veterans' outreach centers, state parks and recreational areas, the Safe and Successful Youth Initiative, MassHealth administration, local public safety program grants, the Department of Public Health, substance addiction treatment, children's mental health services, and more.

In at least one case, the budget conference committee created a spending initiative out of whole cloth — $266.29 million for an MBTA Safety/Workforce reserve that also includes language requiring the Department of Transportation to report monthly on "the status of the department's progress toward responding to each finding and required action as issued by the Federal Transit Administration," which undertook a nearly unprecedented investigation of safety at the T.

While that account that was not funded in either the House or Senate budgets, safety and workforce problems at the T have been an increasingly urgent area of focus for the Legislature and the Joint Committee on Transportation is holding an oversight hearing related to MBTA safety on Monday. At that hearing, MBTA General Manager Steve Poftak estimated that addressing the FTA's directives will cost about $300 million and said Baker is likely to file for more money in a fiscal year 2022 close-out.

Local aid was no exception to the conference committee's general rule for adopting the higher of two proposed spending levels. The final budget went with the Senate's approach, dedicating a total of $1.23 billion for unrestricted general government aid to cities and towns — a $63.1 million increase that was a priority for the Massachusetts Municipal Association.

"With property taxes tightly capped by Proposition 2½, cities and towns rely on adequate state revenue sharing to provide municipal and school services, ensure safe streets and neighborhoods, and maintain vital infrastructure. These services are fundamental to our state's economic recovery, success and competitiveness," the MMA wrote to lawmakers as they began to piece together a compromise budget. "This is a very high priority for municipalities throughout the state, as these funds will all be devoted to balancing local budgets and maintaining the local programs and services that residents rely on every day."

Senate officials said the final budget keeps Massachusetts "well positioned to deliver on the promise of high-quality public education" by providing almost $6 billion in Chapter 70 local school funding, a $495 million increase over fiscal 2022 that keeps the state on track to fully implement the Student Opportunity Act by fiscal year 2027. The budget also doubles the minimum Chapter 70 aid per pupil from $30 to $60.

The budget also makes significant investments in early childhood education and care, a sector that's importance and vulnerabilities came into sharp focus when the pandemic closed schools and child care centers, upending the work routines of many parents. The Special Legislative Early Education and Care Economic Review Commission estimated this year that $1.5 billion in investments are needed to stabilize the early education and care system and help it meet the needs of families.

The fiscal year 2023 budget works towards that goal with $250 million in Commonwealth Cares for Children stabilization grants, $60 million for a rate reserve to increase salaries for teachers and others at subsidized providers, $31.5 million in grants to Head Start programs across the state and $175 million for a new High-Quality Education and Care Affordability Fund that will help fund the implementation of recommendations from the review commission. In a separate bill, the House is proposing to bring in $200 million a year for early education by authorizing online Lottery sales.

"Extension of the C3 Stabilization Grant Program, coupled with an investment in salary increases for early educators serving lower-income children, will be critical for retaining early educators and keeping classrooms open for children and families," Lauren Kennedy, co-president of the Boston early education nonprofit Neighborhood Villages, said. "Moreover, ensuring that state reimbursement for child care subsidies is now tied to enrollment of children, rather than attendance, marks an important change in policy, one that will help to strengthen and build the capacity of the early education and care sector."

Beacon Hill Democrats have advanced their tax relief plans in a separate bill, but a Senate summary of the conference budget highlights calls attention to a smattering of budget provisions that officials said are meant to help families that are struggling with the high (and rising) cost of living in Massachusetts: a 10 percent increase to Transitional Aid to Families with Dependent Children and Emergency Aid to the Elderly, Disabled and Children benefits, and increasing the annual child clothing allowance to $400 per child for eligible families.

Rep. Andy Vargas took to Twitter on Sunday night to celebrate that budget negotiators preserved one of his priorities, universal free school meals for all school children across Massachusetts at a cost of about $115 million. "A huge win that provides economic relief for public school parents, removal of social stigma, and most importantly — less hungry kids and better academic outcomes! So hyped and grateful," the Haverhill Democrat tweeted.

Senate officials said the universal free school meals provision will provide "immediate relief to working families by saving them up to $1,200 every year."

Health Care for All was happy to see that lawmakers included in the final budget a two-year pilot program that "significantly expands" ConnectorCare, the state's subsidized insurance program, to an estimated 37,000 additional Massachusetts residents. The pilot will provide access to coverage with reduced premiums, co-pays, and deductibles for individuals and families up to 500 percent of the federal poverty level — about $68,000 a year for an individual or $139,000 for a family of four.

"We hear every day on our HelpLine from people who desperately need access to care but can not afford it. Instead, they delay care or face difficult choices in deciding whether to see a doctor or pay their rent. We are grateful for the legislature's support in ensuring that more Massachusetts residents will have access to the affordable, subsidized, high-quality health insurance program," Health Care For All Executive Director Amy Rosenthal said.

The ConnectorCare expansion pilot, the organization said, will be one of the largest expansions of coverage in the Bay State since the implementation of the Affordable Care Act in 2014.

With the conference budget, the House and Senate are also hoping to expand access to behavioral health care, including $8.2 million to support student behavioral health services at the University of Massachusetts, state universities and community colleges.

The budget bill would also create a new Behavioral Health Access and Crisis Intervention Trust Fund to support "a statewide, payor-agnostic community behavioral health crisis system including ... a behavioral health access line to connect individuals to behavioral health services, including clinical assessment and triage; and a statewide system to deliver behavioral health crisis intervention services 24 hours per day and 7 days per week in mobile and community-based settings, available to all residents without regard to insurance."

The conference committee budget includes $2 million in grants intended to make improvements to reproductive health access, infrastructure, and safety, and more than $2.75 million in funding for LGBTQ initiatives that ensure access to gender-affirming health care, youth-at-risk programming, and stable housing.

The bill also includes a Senate-backed provision establishing a veteran equality review board to ensure that veterans dishonorably discharged under the "Don't Ask Don't Tell" policy receive state-based veterans' benefits.

In the realm of criminal justice, the budget would eliminate probation and parole fees, expand a pilot for medically-assisted treatment of opioid use disorder from five sheriff's departments to each of the state's 14 sheriff's departments, and would require the Department of Correction, sheriffs and the Department of Youth Services to make phone calls, video calls and other electronic communications available free of charge.

Together with a new requirement that correctional facilities limit the prices of commissary items such as food or hygiene products to no more than three percent over the initial purchase cost, the Senate said the budget provisions "will ensure that correctional facilities do not unjustly profit off the basic needs of incarcerated persons."

Massachusetts Communities Action Network said that the compromise budget includes "significant increases" for reentry programs that help formerly incarcerated people find jobs, enroll in job training, secure housing, access health care and more. There is $20 million for the Community Empowerment and Reinvestment Grant Fund (up from $15 million in previous years), $13.1 million for residential reentry programs (up from $11.1 million last year) and $3.75 million for job training for formerly incarcerated individuals (up from $2.5 million).

Between the budget and American Rescue Plan Act outlays, MCAN said the Legislature has recently approved $21.75 million in new funding for reentry programs.

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