BOSTON (SHNS) – Senate President Karen Spilka told local officials in her district this week that action on the overdue annual state budget is unlikely to happen in the Legislature until after the November election, a softer target than the more ambitious goal articulated earlier in the week by the Senate’s budget chief of making decisions on how to spend billions in tax dollars by the end of October.
Spilka also said that Gov. Charlie Baker may be planning to file an updated version of the pre-pandemic fiscal 2021 spending plan he put forward in January, which would become the jumping off point for the House and Senate to craft their own budgets for the fiscal year that began on July 1.
“Currently the state budget has been delayed, as you know,” Spilka said, appearing before the Holliston Board of Selectmen and the town finance committee on Tuesday night. “We are waiting on certain factors.”
“We will also know more after the election. If the feds have not done anything with a stimulus package, a second one, before that, we’ll have a better idea as to how to interpret that with the election,” Spilka said, according to a recording of the meeting reviewed by the News Service.
The comments made by the Senate’s top Democrat add to the uncertainty of how Beacon Hill intends to proceed in the development of an annual state budget as they continue to wait for any clear signs from Congress about the prospects for additional federal aid.
On Monday, Senate Ways and Means Chairman Michael Rodrigues said his goal was to have a budget passed and on Gov. Baker’s desk by the end of the month when a three-month, $16.5 billion interim budget expires. “Our idea is to get it done by the end of October. I’m here today. I’m here every day. We are working,” Rodrigues said at the State House.
Rodrigues told the News Service on Thursday that he didn’t mean to imply it had to happen by the end of the month, and that his goal is to finish the fiscal 2021 budget and turn his attention to the fiscal 2022 budget “as soon as possible.” He acknowledged that was different from what he said three days earlier, and said he could have been more careful in choosing his words.
After learning of the News Service’s reporting, Spilka reached out to say she felt her comments were not incompatible with what Rodrigues has been saying, and that everything from the timeline for budget to the amount of money lawmakers will have to spend remains uncertain.
“We would all love to get the budget done and focus on FY22. But our need is to do it right. We need more clarity … ,” she said, pointing to renewed talks in Washington over relief spending. “This week alone it’s changed at least three time what they’re doing or not doing.”
A rare post-election budget debate would mean that scores of major decisions about spending would be made in part by a lame-duck Legislature featuring some lawmakers who are retiring and others who won’t be returning in January because they lost their elections.
Spilka told Holliston officials another interim budget is “very possible,” and suggested the Legislature was inclined to wait a little longer to see if Congress will deliver another stimulus package with aid for states and municipalities.
“There are people saying we can hold out for months. I’m not so certain. Eventually, we are going to need to do a full-year budget,” Spilka said, later specifying, “We need to have a balanced budget and we need to get it done, I would say hopefully before this year is out, this calendar year.”
Spilka went before the board with Rep. Carolyn Dykema, of Holliston, to update the town on status of the state budget as local officials try to plan their own finances for the year.
She noted that Rodrigues and House Ways and Means Chairman Aaron Michlewitz, whose committee has custody of the governor’s fiscal 2021 budget bill, meet every Monday morning to discuss budget planning, but said the uncertainty in Washington has made moving forward difficult.
“We have no idea at this point what the federal government is doing. We need relief. It really is dependent a lot upon what the feds do in terms of us putting together a budget, but we will have a full year budget,” Spilka said.
Next Wednesday, the Ways and Means committees have invited economists and other fiscal experts to offer updated projections for tax revenues for the remainder of the fiscal year. The hearing falls about a week before the annual Oct. 15 deadline for the administration to make adjustments to annual revenue projections that were agreed to by the administration and the Legislature in January.
“The administration is required to certify revenues by Oct. 15 and they may be filing another budget, a revised budget from what they did last January. We’re not certain,” Spilka said.
A spokesman for Administration and Finance Secretary Michael Heffernan would not say whether Baker intended to file another budget, only that the administration was working with legislative leaders. But officials in both the House, Senate and administration told the News Service that a new budget from Baker is on the table as an option, and that votes in the Legislature were unlikely until after Nov. 3.
Holliston officials were particularly concerned that Beacon Hill’s promise to level fund unrestricted local aid and Chapter 70 school aid, with a $107 million boost for inflation, might get broken if Congress doesn’t come through with additional relief.
Spilka assured them that would not happen.
“We have given our commitment. The Senate, the House and the governor. You don’t get much better than that in this business,” Spilka said.
The Ashland Democrat, however, did say that support from Washington would go a long way toward alleviating financial pain in states like Massachusetts, where Gov. Baker confirmed Wednesday that the COVID-19 pandemic took a $693 million bite out of expected revenues in fiscal 2020 and Spilka said the Senate was “guestimating” that revenues could drop up by up to $5 billion in fiscal 2021.
Tax collections over the first two months of fiscal 2021 are actually on the rise compared to last year, with a report due next week on collections for September, which is typically a major month for tax receipts.
House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin revived stalled talks Wednesday over a stimulus package, but were unable to reach a deal as negotiations spilled over into Thursday.
Spilka said the $3.4 trillion Heroes Act passed by the House would mean $10 billion for Massachusetts, but the latest talks have revolved around a significantly smaller package of aid.
Pelosi on Thursday said she’s optimistic that Republicans and Democrats can reach a deal on the next round of coronavirus stimulus funding and that she hopes to bring a bill to the floor for a vote later in the day.
Asked about taxes if the federal government doesn’t come through, Spilka said there are “other ways and other ideas.”
“We have options, but we don’t want to start going down the path of one option if we’re going to end up getting a decent amount in the federal stimulus,” she said.
In addition to the $3.5 billion “rainy day” fund, Spilka said legislators could employ an accelerated sales tax collection schedule that has been discussed for years, and would offer a one-time shift of hundreds of millions in sales taxes from one fiscal year to another.
The Baker administration filed a spending bill Wednesday to close out fiscal 2020 without resorting to state reserves or borrowing to address the revenue shortfall, instead proposing to avoid a large capital gains tax deposit in the rainy day fund to help close last year’s deficit. While Baker did not make formal spending cuts in response to last fiscal year’s revenue downturn, the administration says spending slowed down.