The $47.65 billion spending plan the House proposed Wednesday for fiscal year 2022 includes none of the roughly $4.5 billion in federal aid coming to Massachusetts and attempts to give the state a solid foundation for its post-pandemic rebound, House leaders said.
The House Ways and Means Committee’s budget recommendation, which is expected to be debated the week of April 26, would increase spending by $1.189 billion, or 2.6 percent over the current year’s budget, and proposes to spend $1.792 billion, or 3.9 percent, more than Gov. Charlie Baker recommended in his January budget filing.
House Speaker Ronald Mariano said his first budget does not include tax hikes on individuals, does not cut services and makes investments “where we think they will have the greatest impact in benefitting our residents.” Notably, the House proposal would boost funding for tourism promotion, and does not include Baker’s plan to penalize pharmaceutical companies for excessive drug price increases, which Baker promoted last week with Connecticut Gov. Ned Lamont.
“In this budget, we try to balance two priorities: we’re trying to take care of the residents’ immediate needs that are created by dealing with the pandemic and trying to chart the course of the commonwealth’s future by looking at some ways we can change job training and create some jobs here in Massachusetts,” Mariano said.
The House budget plan is built on a base of $30.12 billion in state revenue (roughly 3.5 percent growth over fiscal 2021), which has been supplemented by billions in unrestricted federal revenue unrelated to the American Rescue Plan Act, revenue generated by state departments and agencies, fees and other sources.
The revenue base, which was agreed to months ago by the House, Senate and governor’s office, is less than the $30.539 billion that the state is on pace to collect by the end of the current budget year and would assume a decline in revenue during a time that many economists are forecasting to be a high-growth period.
Mariano and Ways and Means Chairman Rep. Aaron Michlewitz cautioned that the currently rosy revenue picture may not last and said they wanted to take a “cautiously optimistic” approach to the budget.
“No matter how good the numbers seem to be month to month, we’re still probably close to $1 billion … short of where we were prior to the pandemic,” the speaker said, referring to the pre-pandemic revenue estimate of $31.15 billion in fiscal 2021.
The state is expecting to get the rules next month for spending the approximately $4.5 billion in federal aid coming to Massachusetts and Mariano said Wednesday that the House would rather dole that money out in a separate spending bill and not in the fiscal 2022 budget.
“We will move on, deal with our budget now and sometime probably around June deal with the financial impact of the federal monies, how best to spend that,” he said.
In keeping with an agreement Michlewitz and his Senate counterpart announced last week, the House budget includes a $219.6 million increase to Chapter 70 education aid to school districts, up from the $197.7 million hike Baker proposed in January. It would fund unrestricted government aid at $1.16 billion, a 3.5 percent increase that matches the governor’s proposal.
The budget would also put the 2019 school finance reform law known as the Student Opportunity Act “back on track,” according to Mariano, after the pandemic disrupted what was supposed to be the first year of SOA funding in fiscal 2021.
“We came up with a plan, we are going to fund one-sixth of the Student Opportunity Act so now it will be funded over a six-year period instead of a seven-year period,” he said. “And we will be giving back to the students in our commonwealth $5.5 billion in aid and assistance … which we think is extremely important and keeps our commitment to the Student Opportunity Act.”
The bill would also create a $40 million reserve fund “to stabilize school districts adversely impacted by pandemic-related enrollment changes.”
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