State could be short $750M next fiscal year
Gov. Charlie Baker is attempting to figure out how to address a revenue shortfall without raising taxes.
Despite a solid economy, low unemployment Massachusetts finds itself turning the page on one fiscal year and entering a new one with major questions swirling about spending exceeding revenues in two state budgets.
Most lawmakers are waiting on Baker and legislative leaders to outline a path forward and with new taxes and the use of reserve funds being frowned upon, spending cuts or other revenue raids appear as possible courses. Due to faulty revenue assumptions agreed to in the winter by Baker and legislative leaders, negotiators have two weeks to take two $39.5 billion spending bills and somehow adjust them to reflect revenues that the Baker administration disclosed this week are now likely to come up short by between $450 million and $750 million next fiscal year, and as much as $370 million short this fiscal year. Tuesday's stunning news, coming just months after Baker's team increased its expectation of tax revenues for fiscal 2016, was followed by several days of head-scratching and pledges to work together on solutions that are still not apparent heading into the conference committee crunch time.
When the House and Senate agree on identical spending levels in budget line items, those appropriations "shall not be disturbed," according to joint legislative rules, by budget negotiators who are charged only with settling differences between House and Senate spending bills. And when there are differences in appropriations, budget conferees typically land somewhere between the higher figure and the lower figure, but not below the lower figure. Therein lies the dilemma for the fiscal 2017 budget conference committee. Rules allow conference committee reports to be accepted or rejected only, not amended. One option for conferees would be to release a slimmed down consensus budget and make any other further spending reductions by taking the unusual step of amending the budget at the enactment stage, which requires a four fifths vote in both branches. If lawmakers want to give Baker his full 10 days to review the budget before signing it, they'll need to get it to his desk next week. That appears unlikely, and the potential for an interim budget more likely, as each day passes. Baker and legislative leaders meet privately Monday afternoon, and the budget looms as an agenda item.
The budget woes, even as Baker tries to downplay the scope, have turned into a surprise distraction from the business of wrapping up work on other bills with 44 days until formal sessions come to an end. The momentum of a transgender rights bill has slowed, the Senate has yet to debate its energy and ride-hailing industry regulation bills, and the House has yet to take up Senate-approved pay equity legislation. An economic development bill has yet to hit the floor in either branch. The House plans a formal session Wednesday and the Senate does not plan to hold any formal sessions next week.
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