In Massachusetts state government, the annual budget is where the lofty goals of Beacon Hill's elected set become reality. The $46.6 billion spending roadmap Gov. Charlie Baker outlined Wednesday covers a lot of ground, but with limited ability to spend, not every sector is going to be happy with the Republican's plan.
1. Funding the T isn't a one-time thing.
When Baker described the $135 million he wants to infuse the MBTA with to pay for better service and safety programs in his State of the Commonwealth speech Tuesday night, he left lawmakers wondering whether he intended that money as a one-time fix for the T or a regular annual bonus for the transit agency. Baker's budget plan and call for higher fees on ride-sharing to go to the T makes it clear the governor's finally come over to Democrats' way of thinking that the T needs recurring operating funds in order to stay safe. Whether Democratic leaders want to go further by raising taxes and dedicating even more to the T will be the major question heading into the Legislature's budget negotiations.
2. Higher Education is the new K-12.
The fiscal year that starts in July will be the first affected by the rewritten school funding formula passed into law last year, sending more than $303 million to local school districts. Just as the 20-year struggle to revamp the K-12 formula bears fruit, Beacon Hill battle lines are shifting to higher education, where advocates say the state has also left students behind. Baker's budget includes greater funding for community colleges and job training programs, but gives the University of Massachusetts system only a one percent increase, according to Administration and Finance Secretary Michael Heffernan.
"The marginal campus budget increases and miniscule new college affordability initiatives [Baker] proposes fall far short of the major investments needed to remedy our state’s public higher education funding crisis," Fund Our Future campaign spokesman Andrew Farnitano wrote in a statement.
Expect the coalition pushing for the "millionaire's tax" surcharge on incomes over $1 million to paint the state's public colleges and universities as the new neediest sector revenue should be directed to.
3. Baker is dedicated to the Rainy Day Fund.
After the state's stabilization fund, the savings account used to see the state through tough economic times, hit a low point in 2010 during the Great Recession, lawmakers and Baker's administration have been socking away cash for a rainy day. The fund would sit at a flush $4.3 billion under Baker's new plan, more than double what it was just three years ago. Economic experts have advised the state's budget writers that while the next recession could still be a few years off, revenue growth is likely to slow next year, making the record-level rainy day fund an important part of weathering the coming storm.
4. Tobacco ban hurts the bottom line.
The strict new regulations on vaping products and ban on flavored tobacco put in place by Baker and the Legislature last year equates to $95 million less in tax revenue for the state this year. Most on Beacon Hill won't be bothered by losing revenue from the "vice tax" on nicotine, but it's worth noting that even with the additional revenue brought in by the new 75 percent tax on vapes, lower traditional cigarette sales mean a dent to the state's finances.
