Negotiators push spending to $46.2 Bil in budget accord

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BOSTON (SHNS) – A final, long-overdue annual budget to be voted on Friday proposes to spend $46.2 billion in the fiscal year that is almost half over, and Democratic leaders will present Gov. Charlie Baker with another tough decision for the Republican on how to respond to an expansion of abortion access in Massachusetts.

The budget, which was agreed to and filed around 7:30 p.m. Thursday evening, increases state spending by over 5 percent from last year, despite accounting for about $2 billion less in tax revenue due to the COVID-19 pandemic.

To cover the spending without raising taxes or cutting services, Beacon Hill leaders are relying heavily on one-time federal coronavirus relief funding, the state’s reserve account, and a plan to accelerate the remittance of sales taxes from businesses to the state, netting a one-year boost of $267 million.

The conference committee also upped the proposed withdrawal from the state’s $3.5 billion “rainy day” fund by about $200 million from earlier House and Senate versions to $1.7 billion, according to Senate budget aide. While officials said it would still leave more than half of the fund for future years, the committee is recommending a budget that uses $350 million more from reserves than Baker recommended in October.

The budget agreement reached Thursday was the second major deal struck between the House and Senate this week after the Legislature also agreed to and passed a bill overhauling policing tactics and oversight. It also came as new cases of COVID-19 are surging, sparking worries of another shutdown of parts of the economy, which would impact state revenues and the budget, both in terms of tax collections and demand for services.

Gov. Baker said Wednesday he had no immediate plans for further pandemic restrictions or business closures, and state revenue officials reported Thursday that with November tax collections factored in the state had collected $142 million, or 1.3 percent, more over the first five months of the fiscal year than in 2019.

The budget bill also notably includes language modeled after legislation known as the ROE Act, which would codify the right to an abortion in state statute and make abortions legal for women after 24 weeks of pregnancy in cases where a doctor has diagnosed a fatal fetal anomaly.

The abortion language was added to the budget after Speaker Robert DeLeo and Senate President Karen Spilka committed to addressing the issue in response to the death of Supreme Court Justice Ruth Bader Ginsberg and the confirmation to the high court of Justice Amy Coney Barrett, who was appointed by President Donald Trump.

The provision would also lower the age above which a woman can seek the procedure without parental or court approval from 18 to 16. Baker has not said specifically what he thinks of the budget provisions, but in the past has said he supports existing state laws on abortion, but not “late-term” abortions.

The abortion access piece is one notable exception to calls from Democratic leaders to limit outside policy sections in the budget, but it is not the only one.

The conference committee budget also extends mail-in voting authority for all state and municipal elections through March 31, which is a shorter window from what was in the Senate version of the budget.

The compromise also directs the MBTA to revisit proposed cuts to services should additional federal relief money become available, but dropped a proposal drafted by Sen. Joseph Boncore to establish a new structure of higher fees for transportation network companies like Uber and Lyft.

On the spending side, a Senate budget staffer said the compromise negotiated between House Ways and Means Chairman Aaron Michlewitz and Senate Ways and Means Chair Michael Rodrigues was able to accommodate much of the spending prioritized in each branch.

The accord includes a $50 million investment in the Rental Assistance for Families in Transition program, which represents a $33 million increase over fiscal year 2020 at a time when housing security is a great concern. The conference budget also increases funding for the emergency food assistance program by $10 million over last year, to a total of $30 million and doubles the Healthy Incentives food program to $13 million.

Other notable new investments include a $15 million Community Empowerment and Reinvestment grant program for communities disproportionately hurt by the criminal justice system, $30 million to subsidize child care and a $25 million reserve for early education providers to buy COVID-19 supplies and provide staff with incentive pay.

The fiscal year began on July 1, but the Legislature and Gov. Baker delayed major budget decisions over the summer and fall while watching federal economic stimulus talks, the trajectory of the COVID-19 pandemic and its impact on state finances. Lawmakers extended their formal session, in part, to be able deal with the budget this fall.

The state is currently operating on its third interim budget that Baker said was intended to run through November. As the month was ending, a Baker aide said there was actually enough money authorized for “several days” into December. The governor will have 10 days to review the budget after it reaches him.

The agreement means Beacon Hill can soon turn its attention to fiscal 2022 budget planning, with Baker required to file his budget proposal by late January. The outlook for that spending plan depends largely on how things go over the next seven months, including whether Washington can deliver fiscal relief to the states and the success of efforts to control COVID-19 and distribute a vaccine.

If additional federal aid arrives or fiscal 2020 tax collections continue to beat projections, state officials may be able to minimize their withdrawals from state reserves. But if not, raising taxes and cutting services may be on the table since this year’s budget is built on so much one-time revenue.

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