BOSTON (SHNS) – Gov. Charlie Baker said Thursday that his administration would do everything it could to make sure cities and towns were in “decent shape” financially next year, but could offer no reassurances that local aid from the state would not be hurt by the economic crisis brought on by COVID-19.
The new fiscal year starts in just over two months, but Baker and the Legislature have not yet settled on how much money they think the state will have to spend, or how and when the House and Senate will attempt to debate and pass a budget while operating remotely for now.
“It’s hard to figure out exactly where we’re going to land on a number of elements associated with the budget,” Baker said Thursday during his daily press conference on the state’s coronavirus response.
It’s been a month since economists and fiscal watchdogs warned that state tax revenues could plummet by $4 billion to $6 billion in fiscal 2021. Baker, however, noted that the state could still receive considerable federal aid, and is unsure of the full impact of the decision to postpone the state income tax filing deadline to July 15.
March tax revenues exceeded budget estimates for the year, but April revenues were off by more than $2 billion.
“April was terrible, but April was terrible in part because we had sort of the full brunt of COVID but also nobody filed their tax payments if they owed because they’re not due until July. So local communities and the commonwealth are still trying to figure out exactly where this all lands both for closing this fiscal year and opening next year,” Baker said.
The governor was asked if cities and towns, already using furloughs and layoffs to control expenses, should be prepared for cuts in local aid for government operations and schools.
Baker said a lot will depend on whether the federal government gives the state more flexibility in how it spends relief money from the CARES Act, and whether Congress delivers more assistance. He pointed to U.S. Rep. Richard Neal’s role in helping to craft a new coronavirus relief package that will be voted on by the House Friday that included $875 billion in direct aid to state and local governments.
“There’s just a lot of moving parts there and I hesitate to comment on specifics around what is going to happen either to close the books or open next year when there’s still a lot of stuff that’s kind of up in the air,” Baker said.
Referring to Lt. Gov. Karyn Polito, he added, “We have both talked at great length with our colleagues in municipal government and are going to do everything we can to make sure that they’re in decent shape heading into the fiscal year.”
A year ago at this time, the House had already passed its version of the annual state spending bill and senators were reviewing a proposal from the Senate Ways and Means Committee with an eye toward filing amendment for debate that would begin in the days before Memorial Day weekend.
A senior House official told the News Service this week that talks were still happening with the Senate and administration about how to approach the budget process and develop a new estimate of revenues on which to build a spending plan.
Massachusetts Municipal Association President Geoff Beckwith recently told the News Service that another federal stimulus bill is the “last best hope” to bail out municipal governments.
“There’s no local official that’s seen anything like this in their lifetime,” he said.