House Speaker Robert DeLeo says he'll try to restore funding cut by Gov. Charlie Baker yesterday when the governor unilaterally slashed state spending.
DeLeo told WGBH News he expects to pass a supplemental budget in January or February that will restore at least some of the $98 million dollars Baker cut from the state budget Tuesday. DeLeo said he'll work with his Ways and Means Committee to determine if the state takes in enough revenue in December to allow spending on the cut items.
“I think this is going to be a major issue with an awful lot of groups of people in the commonwealth," DeLeo told WGBH News, adding that he's looking at ways to restore the cuts in response to "the outrage" he's heard since Baker announced cuts.
DeLeo said he will meet with his budget chairman, Rep. Brian Dempsey, D-Haverhill, to determine if revenue is high enough to start restoring the items Baker cut. DeLeo said he wants "to compare and to look at the possibility again at January or February, of doing a [supplemental] budget in restoring, at the very least, some of these cuts and some of these very, very critical programs that we have."
In a post on Twitter shortly after the speaker made his intentions known, Senate President Stan Rosenberg allied himself with DeLeo "on restoring funds to programs which support our neediest."
DeLeo said he will focus on restoring funds for substance addiction treatment, suicide prevention, and homelessness programs that suffered from the cuts.
Baker made the cuts to free up funds to pay for critical accounts he said the Legislature underfunded. Many of the budget reductions were items Baker had previously vetoed from spending bills that lawmakers overrode, including many legislative priorities Baker considers wasteful earmark spending.
The governor used his authority to unilaterally slash state spending Tuesday afternoon when he decreased funding levels for over 100 government line items, including health care services, parks and recreation, tourism, the State Police, senior care, suicide prevention programs, and more. Because of lower than expected revenue projections, Baker said he's unwilling to put off making corrections to the budget that, he says, are necessary to keep it balanced.
"It's pretty clear that with the deficiencies we need to fund — court-ordered attorneys, snow and ice, emergency assistance, stuff that I think there's general agreement that we're going to need to pay for — and the downturn that we've all seen in revenue despite the success of our economy, that we needed to take action at this time," Baker told State House News Service on Tuesday after announcing the cuts.
Beacon Hill legislative leaders disagree that now is the time to make proactive cuts in order to shore up the budget, especially if that means limiting many of the social programs Democrats support. Dempsey said in a statement Wednesday that the state's most significant revenue comes in the latter half of the fiscal year — January through July — and the state's current incoming revenue is only 0.2 percent below expectations. With unemployment, market performance, and business confidence all up, Dempsey said Baker's cuts were premature.
"Balancing a budget is a year-round exercise, and we will continue to monitor revenue collections and be prepared to respond as needed," Dempsey wrote in the statement.
The conflict between lawmakers and the governor over budgeting may lead to a combative debate on DeLeo's planned supplemental budget to restore the funding. Baker will likely re-veto the spending items he has previously rejected, for a third time, and legislative Democrats will use their overwhelming majority to override Baker and put the money back in the budget.
That conflict can also be seen as a clash of budgeting styles between Republican Baker and his mostly-friendly Democratic colleagues in the Legislature. Baker wants to brace for a worst-case scenario now in case revenues drop lower. Democrats want to make sure revenues dip before they stand by and see coveted line items get slashed.
Democrats' wait-and-see approach is typical of how they tend to manage state spending year to year. But the habit of spending until the money's clearly just not there, teamed with lower-than-expected revenue estimates and exploding cost overruns for state services, has Massachusetts Taxpayers Foundation President Eileen McAnneny unsurprised that Baker would want to move on cuts now.
"There were some accounts that we knew weren't fully funded when the budget was passed, which is pretty routine, but then some programs like MassHealth have exceeded the cost expectations," McAnneny said. "So it's kind of a trifecta of things that have come together." The foundation, she said, sides with Baker that cuts now, not later, are the way to proceed.
"We do think it's going to be a very challenging budget and that proactively managing spending is an important action step that has to be taken, so I'm not sure that it is premature," she said.
MassBudget president Noah Berger thinks it shouldn't be routine that certain state accounts end up unaccounted for in the budget process. To avoid "problematic" underfunded accounts mid-year, Berger said the governor should file a clear maintenance budget that lays out the costs of existing programs.
“I think that both the Legislature and the governor should be very clear in their budgets what are the fundamental costs that are being paid and when items are being underfunded," to avoid a scramble of corrections, Berger said.
Baker's budget reductions did not sway DeLeo to consider adding tax increases to next year's annual budget. The speaker said that without a clearer revenue picture, it's too early to make cuts or consider additional taxes to help balance the budget. Still, he hasn't ruled out a tax hike.
“I wouldn’t say that this has anything to do with, you know, what we do in the next fiscal year," DeLeo said.
He added that the revenue outlook for next year "will decide what next year’s fiscal budget may look like.”
Other Democrats are more eager to raise taxes to possibly prevent both unfunded accounts and mid-year cuts.
“There is a consensus that we have a structural deficit, and so therefore the only way to really fix that, unless you’re going to gut core central services, is to raise taxes," Sen. Jamie Eldridge, D-Acton, said. Eldridge wants to eliminate tax incentives the state grants companies to do business here — what he considers corporate tax loopholes.
“Why don’t we do it in a fair way, where the burden is put on those who are the most well off — large corporations and not the general population," Eldridge said.
Baker too, said Wednesday that he hopes revenues will improve to the point that his administration could consider restoring the cuts.
Speaking after appearing at an investors conference in Boston Wednesday, Baker said he could reverse the cuts if revenue receipts "dramatically" improve, according to the State House News Service.
Baker remarked Wednesday that his objections to what he sees as the Legislature's underfunding of accounts has been a factor in negotiations since Beacon Hill leaders agreed on a budget plan in July.
"We said fine. We'll take a break from this and we'll see what happens in the first four or five months of this year and if it turns out that revenue comes in above expectations then we'll be perfectly happy to defer to you on this. Well, we're five months into the fiscal year. Revenue has not come in above expectations," Baker told reporters, according to the News Service.
