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Low-income tax credit expansion part of Senate’s $41.4B budget

  • Senate Ways and Means Chairwoman Karen Spilka called attention to the cover artwork on her committee’s fiscal 2019 budget bill, painted by children in the Department of Youth Services Arts Education program. [Photo: Sam Doran/SHNS]



State House News Service
Thursday, May 10, 2018

The Senate Ways and Means Committee on Thursday unanimously approved a $41.42 billion fiscal year 2019 budget proposal, touting the spending plan’s “robust and critical investments” in education, an “innovative approach to drug pricing” and a focus on children.

The fiscal 2019 budget plan represents a 3 percent increase in state spending over the current year’s budget and is based on the consensus revenue agreement that state tax revenue will grow by 3.5 percent in fiscal 2019, significantly less than tax revenue growth so far this fiscal year.

Senate Ways and Means Chairwoman Karen Spilka, who is expected to ascend to the Senate presidency in July, said the budget plan recognizes “that when all people in the Commonwealth are given the opportunities to participate in Massachusetts’ economy — as well as the tools to succeed — we all benefit.”

“Massachusetts has long been a leader in so many areas, from education and health care, to economic innovation and protecting the vulnerable. Our budget continues in this long tradition and invests in our strengths, while confronting obstacles to continued success,” Spilka said. “We boost funding for school districts and empower regions across the state to provide local services. We provide tools to support full engagement in the economy, recognizing that access to opportunities and support services benefit our people and our Commonwealth as a whole.”

The release of the Senate budget, which will be debated beginning May 22, comes at a point when it appears the state is more flush with cash than in the past two fiscal years. Since the passage of federal tax reform in November, tax collections have spiked, leaving the state with $809 million more this fiscal year than it had anticipated. The size of a potential state budget surplus, and of supplemental spending needs, remains unclear.

Spilka said the budget represents “a cautiously optimistic approach” to spending given the state’s fiscal picture.

The Senate’s budget includes about $61 million more in spending than Gov. Charlie Baker’s budget plan and $97 million less in spending than the budget amended and adopted by the House. The Senate’s budget plan calls for $1.1 billion in unrestricted local aid, matching proposals from the governor and the House.

“I think at the basic values level it’s very similar to the House budget, there’s a focus on expanding opportunity, particularly for kids. There are trade-offs; the Senate put some more money into K-12 public schools, the House put more money into early education,” Noah Berger, president of the Massachusetts Budget and Policy Center, said. “They’re both working very much within the same tight revenue box, so if you do a little bit more on one thing it means doing a little less in the other.”

Senate Minority Leader Bruce Tarr called the Ways and Means Committee budget proposal “a reasonable starting point for the work the Senate must do to chart a proper course for the coming year.” But he also cautioned that maintaining fiscal health and discipline will require government reforms, of which there seldom few in the House or Senate budgets.

“Eluding new taxes and budget shortfalls in the future, however, will require not only fiscal discipline, but also intensive efforts today to undertake reforms and capture effectiveness that will produce consistently balanced budgets in the years ahead,” Tarr said.