Baker's first budget helps chart course for more growth
When a new governor takes office, the first budget offers a clear picture of the spending priorities and focal points of the new administration.
In his first spending plan since he took office two months ago, Gov. Charlie Baker has charted a course that many in the business community would find appealing, while striking themes that will also play well with the Democratic-dominated legislature. Among them:
LONG FADE TO BLACK. A two-year-long phaseout of the state's film tax credit, which the Baker administration didn't believe was yielding adequate payback. The credit has its champions in the legislature, as well as the film industry, and is expected to be a key subject of debate when lawmakers begin their budget deliberations.
ROADS AND RAILS. Increasing transportation spending by 20 percent, including $187 million, or a 53-percent jump, in direct aid to the MBTA, which demonstrated its need for more funding during last month's winter storms. Many businesses rely on a strong transportation infrastructure to get their employees to and from work, as well as moving goods and delivering services. The MBTA is broken pretty badly, and $187 million will not make a substantial difference. But that will have to wait until a long-term plan for the T emerges that can gain the buy-in of both Baker and the legislature.
MORE CASH FOR COLLEGES. An average 3 percent increase for higher education, including the University of Massachusetts system, state universities and community colleges. As business calls for stronger alignment between course offerings and “job ready” skills, this increase demonstrates a forward-thinking perspective.
MORE STEM MONEY. While it's a relatively small item, an extra $27,000 (to $1.5 million) in professional development money for math and science teachers to boost student scores in those subjects answers a top priority for industries that depend on those skills.
BOOST FOR LOW-INCOME RESIDENTS. Doubling the state's Earned Income Tax Credit from 15 to 30 percent of the federal limit.
The $38.1 billion budget plan keeps spending growth at around 3 percent while holding the line on taxes (keeping a promise the governor made in last year's campaign) and fees. The budget protects the commonwealth's “rainy day” fund — which sits at $1.1 million as of Feb. 28, down from $1.65 million in 2012 — for the first time in four budget cycles, according to Baker's budget chief, Kristen Lepore.
But cuts are also necessary to help restrain spending growth, and the governor cited “bipartisan consensus” in his plan to curb spending on MassHealth, the health insurance program for low- and moderate-income Bay State residents. Yet at the same time, the budget seeks nearly $475 million more for women's health care, dental care for adults and services for autistic children.
“In a large, healthy economy,” Baker wrote in his budget message, “it is clear our issues are based on a need to prioritize spending and make state government more efficient.”
While some would argue that the commonwealth's budget must go on a more drastic diet, and others would argue for providing more financial incentives to certain industries, the governor's budget proposal provides a solid starting point to chart a course of priorities beginning in the 2016 fiscal year, which starts July 1. Further, Baker's previously announced 90-day freeze on new regulations sent a signal to the business community that economic growth is a high priority.
Both sides of the political aisle would agree that loosening up unnecessary restrictions that can help business grow, while crafting a spending plan in support of it, can lay a foundation for future success. The governor's budget proposal provides a good starting point.
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