Legislative News
June 26, 2017
Awaiting Budget Consensus
Jim Machado
With the new fiscal year only days away, members of the conference committee representing both House and Senate are yet to reach consensus on a fiscal 18 budget. In the interim, Governor Baker has submitted a temporary fix of $5.1 billion to get through July and not jeopardizing local aid payments. Revenue is still the question as projections called for 3.9% increase in fiscal 18. It has become apparent that those may be optimistic causing cuts to fiscal 18 spending and extending discussions. It's been several years since the budget hasn't been on time but these deliberations could stretch
on for weeks.
Also this week, a different group of conferees will decide amongst other details how much to tax marijuana. A bill which needs to be to the Governor by 6/30 has caused pro-marijuana supporters crying foul. The House version puts more restrictions and puts the tax at 28% while the Senate version looks similar to what voters approved last November. Because experience tells us it's hard to correct later, we agree with the House and the higher tax. The 28% would put Massachusetts in the middle of the pack of states that legalized the sale of marijuana.
Finally, the Senate will take up a bill (S2058) which would prohibit drivers from using hand held devices. A similar bill stalled in conference last session.
Enjoy the summer and stay in touch
May 30, 2017
Senate Wraps Up Budget
Jim Machado
The Senate completed debate on their vision for fiscal 2018. Their $40 billion blueprint included $52 million in spending approved in floor amendments. Included in this package was a $2 million increase in Shannon Grants to combat gang violence. Another important amendment approved capped out of pocket costs for individuals enrolled in the GIC.
Given the bleak outlook in meeting revenue expectations this year, most believe cuts will be necessary. The conference committee will face the difficult task of reconciling both House and Senate priorities. We expect a long a deliberate discussion which hopefully can be reconciled before July 1st when fiscal 2018 begins.
Hearings continue today, Tuesday with the Committee on Public Service meeting at 11 am on the topic of disability pensions and benefits.
May 4, 2017
One, Two Punch Knocks Out Budget
Jim Machado-Executive Diretcor
Only a week after the House completed deliberations on the $40 billion fiscal 18 budget the Commonwealth got bad revenue news. April revenues came in $241 million short of expectations bringing the fiscal shortfall to $462 million. With only two months remaining in this fiscal year, cuts must be delicate to reduce impact on various programs. Governor Baker has already ruled out using the rainy day fund for fear of impacting the bond rating. If that wasn't bad enough, it may cause the Senate to rethink the revenue number for 18 before beginning budget debate later this month. This would make conference committee deliberations very interesting. Next years revenue consensus is based on a 3.9% increase. To date revenues are only up 1.1%. What causes confusion is the fact that Massachusetts unemployment is less than 4% yet income tax revenue continues to disappoint. Some worry a real slowdown would blow up assumptions for next year.
Finally, another concern comes on today’s repeal of Obamacare by the US House. Early estimates show this could cost Massachusetts $1 billion in healthcare reimbursements. The measure goes to the Senate which could tweak it again. Given the current climate that could be a knockout punch for the state budget.
April 26, 2017
House Begins Budget Debate
Jim Machado
Today theHouse begins deliberation on its $40.3 billion budget and over 1200 amendments. Public safety appropriations are similar to past years with discussion over a final number for Shannon grants as well as hiring grants. These items usually are decided in conference with the Senate in June.
Although most have little chance of passage, we will be watching the 1200+ amendments closely. If they were to survive the process they would take effect in July. Debate is expected to end this week with the Senate releasing their version in May.
On lighter notete the National Law Enforcement Appreciation Night is coming to Fenway Park for a Sox game on May 1st against the Orioles. Given the recent dust up between the clubs, it should be an interesting night. Log into red sox.com/law enforcement for tickets and $5 from each ticket donated to the National Law Enforcement Memorial Fund. Hope to see you there.
UPDATE: April 6, 2017
Revenues Fall As House Prepares Budget
From Executive Director Jim Machado
After promising mid month revenues, March could not deliver. Even with revenues of $2.28 billion for the month there was an $81 million miss against benchmark. This means that with only three months left in the fiscal year there is a. $220 million shortfall. With April collection usually amounting for 12% of annual revenues, a miss would surely mean emergency cuts.
All this serves a the backdrop as the House prepares the release of their fiscal 18 budget next week. We believe that will be based on a 3.5% increase in revenues. A miss for the remainder of the year would jeopardize those projections. All this with an unemployment rate in the mid 3% range. Sales and corporate tax seem to be the most responsible for the shortfall.
On the legislative front, Governor Baker has again filed a bill that would increase the penalty for assaulting police. This same bill filed large last session never received a vote. We will be working with the administration in hopes of its passage.
Finally, labor lost one of its greatest advocates with the passing of Senator Ken Donnelly. A past legislator of the year and former secretary-treasurer of the PFFM, Senator Donnelly fought valiantly against brain cancer for the last eight months. We wish to express our deepest sympathy to his family and friends.
UPDATE: March 22, 2017
Supplemental Budget Would Increase LOD Death Benefit
When the House meets later this afternoon to act on a mid-year spending bill, they will be considering a section that would increase the state line of duty death benefit from $150k to 300k. This is a one-time payment made to families of public safety officials that make the ultimate sacrifice. We worked in the last session to increase the benefit and are happy to see it done as part of the budget. Families would also be eligible for federal benefits.
Another positive can be found in the mid-March revenue numbers. After several months of missing benchmark, revenues through the first half of March are up 9.8% or $124 million. Year to date collections stand at $17.23 billion. This helps close some of the budget gap that caused mid-year cuts. We will watch for the final numbers.
Only days after being named the best state to live in, tax revenues showed little connection. Governor Baker answered questions of how this could be in a blue state with a Republican governor. He pointed toward education and a diverse economy as well as cooperation between branches of government. His enthusiasm would be tempered by disappointing revenues in February. He had predicted this when he made mid-year cuts to the budget. Legislative leaders thought that premature and we're looking to restore some of the cuts. These results put at least a hold and maybe a stop to those thoughts.
February revenues were $1.17 billion which was $117 million below benchmark or 9.1%. Eight months into the fiscal year has revenues at$15.85 billion of $134 million or 1%. The final four months generally produce 40% of annual revenues. With all categories down in February, March will be vital to righting the ship.
On another note, the legislative committees have been named with hearings to begin shortly. Senator Timilty continues double duty chairing both Public Service and Public Safety. He will again be joined by Representative Naughton at Public Safety and Representative Parisella who moves from Veterans Affairs to Public Service. We look forward to working with the committee in the upcoming session.
