The idea sounds simple: Massachusetts should spend less than the amount of revenue it takes in. Gov. Charlie Baker’s new budget proposal aims to do just that, but finding a balanced budget among countless spending demands is a tall order even for our towering governor.
One of the factors causing Baker’s drive for belt-tightening is a drop in the state income tax that could leave state coffers short $150 million. Add to that headache the fact that health care costs keep going, which can’t be good as Massachusetts Baby Boomers age and MassHealth rolls ramp up.
Baker says he needs to close a $635 million gap between what the state’s going to take in versus what it’s going to spend.
“Getting state spending under control to the point where state spending grows at a rate that’s similar to the rate of the economy is essential to the state’s economic health going forward,” Baker said.
The $39.5 billion budget request is 3.5 percent more than last year’s spending, but less than the rate our economy’s growing.
“This budget makes great progress in our effort to bring the deficit that’s been beleaguering the Commonwealth for the past few years into balance,” Baker said at a press conference Wednesday introducing his plan.
There are increases in spending in key areas Baker sees as priorities. Baker’s “House 2” budget, as it’s called in State House lingo, continues Baker’s trend of increased aid to cities and towns. There’s $40 million for substance abuse treatment and another $30 million to hire more child welfare workers for the troubled Department of Children and Families.
Democrats are pushing back on Baker’s level of funding for schools, something he ran on in 2014. In response to Baker’s plan to add $72.1 million to Chapter 70 education funding, Sen. Sonia Chang-Diaz, the Senate chair of the Education Committee, called the move “disappointing,” after campaign materials said he’d provide school aid at the same rate as revenue growth.
“That would have been a 4.3% increase this year. Yet despite finding room to expand an ineffective corporate tax credit, his budget includes only a 1.6% increase for education aid. That’s a big short,” Chang-Diaz wrote in a statement, referring to a move in Baker’s budget to expand a certain kind of tax relief to multi-state companies that do business here.
Noah, Berger, the president of MassBudget, a left-leaning fiscal group that keeps tabs on the ways and means of Beacon Hill spending, called Baker’s plan “largely a status quo budget.”
“This budget continues a pattern that has been in place since the state cut taxes by over $3 billion between 1998 and 2002: deep budget cuts in bad times and very little progress in good times. We continue to put off making the kinds of long-term investments in our people and our transportation systems that would make life better for Massachusetts families and improve the long-term strength of our state economy,” Berger wrote.
The MBTA gets a specific amount of money dedicated to it from the sales tax, and this year the T will garner about $15 million. The big transit money comes from the now-regular extra cash the MBTA needs from the Legislature to survive, this year coming in at $187 million, the same amount as last year.
