Gov. Baker agrees to major spending increase in his final budget

Signing his eighth and final budget as the state's chief executive, Gov. Charlie Baker on Thursday agreed to a major increase in state spending as he approved the vast majority of a $52.7 billion annual budget, vetoed less than half a million dollars of outlays, and returned 41 sections to the Legislature with proposed amendments.

The fiscal year 2023 budget represents an increase of $5.1 billion or 10.7% over the $47.6 billion annual budget passed for fiscal 2022. It is also represents an increase of $14.6 billion or 38.3% over the first budget that Baker signed, a $38.1 billion spending plan for fiscal year 2016.

During a signing ceremony in his State House office and in a press release from his administration, Baker focused almost entirely on the parts of the budget that he supported and signed, and had a lot of good to say about the spending plan, including that it is "affordable" and "appropriate" given the steep rise in state tax collections over the last two years.

"We're pleased to be signing the Fiscal Year 2023 budget, which supports tax relief efforts and delivers investments in a variety of key areas of state government including significant increases in education funding in both the K through 12 and higher ed level, child care investments, and big increases in local aid to our cities and towns," Baker, who will leave office about halfway through the budget year, said Thursday morning.

"Over the past seven years, we've always spent less than we raised in taxes and that's made a big difference in getting our budget structurally balanced. When we took office, we started with a budget deficit of varying proportions, depending upon how you do the math, and the Rainy Day Fund had somewhere around a billion dollars in it. At this point in time, the Rainy Day Fund has almost $7 billion in it and we've been in structural balance now for the past four or five years," he added.

The budget fully funds the ongoing implementation of the Student Opportunity Act school financing law and makes "record investments" in early education and child care, housing and homeownership, college financial aid, economic and workforce development, behavioral health care and local aid, Baker said.

It provides 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, and doubles the minimum Chapter 70 aid per pupil from $30 to $60. And there's $110 million for a one-year extension of free school meals for all students.

It also dedicates 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.

The fiscal 2023 budget works towards the recommendations of the Special Legislative Early Education and Care Economic Review Commission 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, and $31.5 million in grants to Head Start programs across the state.

Built on an upgraded tax revenue forecast of $39.576 billion, an increase of $2.66 billion over the consensus tax projection the administration and lawmakers agreed to in January, the budget includes one-time measures to put $266 million in a reserve to support MBTA safety and workforce initiatives, $175 million transferred to a new trust fund dedicated to supporting high-quality early education and care, $150 million transferred to the Student Opportunity Act Investment Fund, and $100 million transfers to both the Pension Liability Fund and State Retiree Benefits Trust Fund.

Secretary of Administration and Finance Michael Heffernan said the budget includes deposits to bring the Rainy Day Fund to yet another record high of roughly $8.4 billion by the end of fiscal 2023.

In total, Baker used his veto pen to trim just $475,000 from a budget that represents one of the largest spending increases in recent years. The money that Baker vetoed had been planned for the Department of Public Utilities ($25,000), a recycling and solid waste program ($200,000), the Division of Fisheries and Wildlife ($100,000), Department of Correction facility earmarks ($125,000) and the Department of Telecommunications and Cable ($25,000). Baker said he was limiting vetoes to "problematic line items."

The governor signed 153 of the Legislature's policy sections, approving provisions including a ban on child marriage in Massachusetts.

But he also returned an amendment that would borrow a tactic from the Legislature by proposing to require the Health Connector to study, rather than implement, a two-year pilot program that lawmakers said "significantly expands" ConnectorCare, the state's subsidized insurance program, to an estimated 37,000 additional Massachusetts residents.

"While I agree with the goal of providing individuals and families with affordable coverage options, there are significant variables and factors that need to be considered before such a pilot can be implemented. The potential impact on carriers and enrollees, availability of federal funding and subsidies, and Connector systems changes that would need to be implemented to support such a program are all critical factors that would need to be fully understood prior to implementation in order to minimize market disruption and ensure fiscal and operational viability," the governor wrote in his amendment letter. "In addition, there are a significant number of people who are currently eligible for subsidized health plans through the Connector but who have not taken advantage of those options, and I believe maximizing the uptake of those currently eligible should be a priority."

Amy Rosenthal, executive director of Health Care For All, urged the Legislature on Thursday to reject the governor's amendment and pass the ConnectorCare expansion.

"At a time when Massachusetts residents are struggling under the weight of the rapidly rising cost of living, we are deeply disappointed that Governor Baker blocked a provision that would have helped tens of thousands of individuals and families afford their health care. We will continue to work with the legislature to deliver badly needed relief to help people see their doctors and access the health care they need," she said.

Another of Baker's amendments would give the city of Boston a seat on the MBTA Board of Directors subject to existing nomination processes and background requirements. "Boston is the center of the MBTA as well as the largest city and economic hub in the Commonwealth, and I think there is great value in including Boston in the ongoing management of the MBTA," he said.

Part of the Legislature's plan to establish statewide standards for pre-hospital care of stroke patients and to charge the Department of Public Health with developing criteria for designating hospitals into a tiered system based on their ability to treat strokes at different severity levels was also sent back by Baker.

The governor said he supports most parts of what he called "an important effort to ensure that all stroke patients in Massachusetts are able to get to a hospital that can provide them with timely, appropriate treatment." But he said he is not OK with the directive that DPH develop and assign hospitals to a tiered system.

"This requirement may result in unnecessary routing of stroke patients, which would produce an unmanageable burden for certain hospitals and unreasonable delays in accessing care for certain patients," he wrote. "DPH, in consultation with the expert advisory group created by Section 42, should be free to promulgate regulations that reflect a Massachusetts-specific model of care."

Also among Baker's amendments is to attach what his office says are "the most important provisions" of the governor's dangerousness bill that the Legislature recently spiked. Baker lashed his amendment onto the budget section that would provide free phone calls to inmates. He said Thursday that what he returned was a "narrow" version of his original bill, which his administration had proposed to lawmakers in recent days.