Beacon Hill could be facing a serious budget crisis if state revenues continue to drop. Lawmakers and Gov. Charlie Baker are poised to fill the budget gap, but Senate President Stan Rosenberg want to look at stabilizing the state’s revenue stream through higher taxes on the rich.
Tax revenue for the month of May will be reported soon and it will give state budget writers a clearer sense of how much needs to be cut from the $40 billion budget being negotiated by the Legislature.
Baker and House Speaker Robert DeLeo say they’ll be able to balance the budget, but Senate President Stan Rosenberg says the state needs to stop nibbling around the edges of the problem or the state’s robust economy and quality of life could be there threatened.
“We’re getting closer and closer to the point where we’re going to put that at risk. If you don’t make the appropriate public investments, you’re going to have serious problems,” Rosenberg said after meeting with DeLeo and Baker Monday.
Rosenberg says the first step is passing the so-called “fair share amendment” that would add a surtax to incomes over $1 million dollars and could bring another $2 billion in revenue to state coffers. The Legislature will vote next week to allow the amendment to go before voters in 2018 as a ballot question.
Baker says he expects the May revenue numbers, expected to be released Monday evening or Tuesday morning, to follow the pattern of decreased revenue that’s been apparent the last few months.
“I’m not expecting any significant change from where we’ve been. We continue to monitor the situation and we still have one month to go, but generally speaking, we’ve been somewhere around somewhere between 4 and five hundred million under benchmarks now for awhile and we’ve been making adjustments all the way through to deal with that,” Baker said.
Senate and House leaders began meeting behind closed doors Monday to reconcile differences between the budget plans both chambers passed. Lawmakers could arrive at a compromise budget that’s a few hundred million dollars lighter than either existing plan, showing a reaction to the lower revenue numbers that could persist throughout fiscal year 2018.
“Right now I think most importantly we have to see what the figures are in May and then I think we have to sit down and talk to our chairs of ways and means and the administration and decide whether any change is necessary,” DeLeo said.
The Baker administration estimates the budget gap for the current fiscal year to be between $375 million and $575 million. If the slouching revenue trends continue, the budget for next fiscal year could face hundreds of millions of dollars in cuts to balance the plan.
