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CLT UPDATE
Wednesday, June 22, 2016
More to give away, nothing for
taxpayers?
|
The Amesbury Republican Town Committee is co-hosting a
Massachusetts tax forum to honor the legacy of taxpayer advocate
Barbara Anderson, formerly of Citizens for Limited Taxation.
Chip Ford, executive director of Citizens for Limited
Taxation; Wendy Wakeman, director at the Mass Fiscal Alliance;
and Eileen McAnneny, president of the independent and non-partisan
Mass Taxpayers Foundation, will participate in a panel discussion
and provide insights into the Massachusetts tax environment on June
22 from 7:30-8:30 p.m. The program will be moderated by local
syndicated columnist Taylor Armerding.
The forum will be held at the Newburyport Elks Lodge, 25 Low St.
The Newburyport News
Wednesday, June 15, 2016
Republican committees to host tax forum June 22
Amid new speculation that a planned income tax cut might not be
triggered, Gov. Charlie Baker on Monday filed a $5.3 billion
spending bill to keep state government running for one month while
lawmakers continue to work on a fiscal 2017 budget accord that's
become intertwined with significant doubts about anticipated tax
revenues.
The new fiscal year is set to open in 11 days and $39.5 billion
spending bills are still pending before a six-member legislative
conference committee, so the temporary budget was filed to keep
funds flowing in state government during July in the absence of an
agreement on an on-time budget. Lawmakers are likely to pass the
interim budget since it will buy them more time to work on an annual
spending plan.
After spending the spring crafting their $39.5 billion spending
plans, House and Senate leaders officially learned from the Baker
administration last Tuesday that $450 million to $750 million in
anticipated tax revenues are now unlikely to materialize, removing a
major revenue-side support for their proposals....
[Massachusetts Taxpayers Foundation] officials also said revenue
growth may not be robust enough to force a Jan. 1 reduction in the
income tax rate from 5.1 percent to 5.05 percent. The reduction,
assumed in pending budget proposals, is "much less certain now" and
would keep $80 million in the fiscal 2017 revenue column if it does
not occur. Voters approved a 5 percent income tax rate in a 2000
statewide ballot referendum and have seen it slowly ratchet down
under a series of gradual tax rate decreases approved by the
Legislature.
State House News Service
Monday, June 20, 2016
Income tax cut at risk, temporary budget filed amid search for fixes
Advocates call it one of the state’s cruelest requirements.
Before some poor homeless families can qualify for taxpayer-funded
shelter and motel rooms, they must spend a night in a place “unfit
for human habitation” — such as an emergency room, park bench, or
campground — to be legally homeless in the eyes of the state.
To change that, the state Senate quietly passed a measure last
month dropping the mandate. Supporters say the move would cost the
state little in added caseload — just a few hundred thousand dollars
a year — and would spare parents and children from having to endure
a night of hardship to satisfy a bureaucratic checklist.
But officials in the administration of Governor Charlie Baker say
the change would cost the state an added $41 million annually and
mean hundreds more families per month would enter the system,
already seen as the nation’s most generous....
The emotional debate over whether to expand eligibility is
playing out behind closed doors at the State House. Negotiators for
the Senate, which backs the change, and the House, which doesn’t,
are tangling over the final wording of Massachusetts’ $39.5 billion
spending plan....
The House’s coolness to the proposal — as well as the Baker
administration’s — comes as lawmakers are grappling with a budget
deficit projected to be significant.
In the fiscal year that ends on June 30, the state is projected
to spend almost $200 million on housing for homeless families, and
tens of millions of dollars more on a program that provides up to
$8,000 to help pay for rent, utilities, and other expenses so
families can stay in their homes, or defray the costs of staying
with a friend or relative.
With the state facing what could be a $750 million shortfall in
the new fiscal year, expanding the emergency housing program could
be a big reach....
Massachusetts is the country’s only right-to-shelter state. When
eligible families — those whose incomes are close to or below the
federal poverty level — can show they are homeless because of
domestic violence, natural disaster, no-fault eviction, or health
and safety risks, the state is mandated to provide housing. That can
take the form of a room in a shelter or, if there aren’t any left, a
hotel or motel.
On Friday night, there were 485 families in taxpayer-funded
hotels and motels, and 3,326 in taxpayer-funded shelters.
Baker, who took office in January 2015, has pledged to end the
practice of sending families to hotels and motels by the end of his
first term. And the number of families in such accommodations has
dropped significantly since then, from 1,500 to less than 500.
The Boston Globe
Monday, June 20, 2016
Costs at heart of emergency shelter eligibility debate
Governor Charlie Baker, facing revenue shortfalls in both the
dwindling current fiscal year and in the one that starts July 1, has
instructed his agency heads to base their budget planning on the
lowest of the three proposals circulating on Beacon Hill.
Baker, the House, and Senate have all filed budgets, with
legislative leaders beginning formal negotiations late last week. In
essence, the governor’s message to his aides: Find your line item in
all three spending proposals and, with a few targeted exceptions,
expect to receive whichever one is smallest.
“We did tell agency heads to begin planning for the lowest of the
three, whether it’s House, Senate, or ours,” said Baker senior
adviser Tim Buckley.
Buckley said that “historically underfunded” accounts – such as
emergency homeless shelters and the state’s public defender agency –
would be exempt from the low-balling instructions.
The Boston Globe
Thursday, June 16, 2016
Baker to bureaucrats: Plan for smallest budget proposal
With tax revenues slowing the state is expected to take in
somewhere between $450 million and $750 million less than it
expected in the fiscal year that begins July 1, confirming that
there is no such thing as too conservative when it comes to revenue
forecasting....
The shortfall isn’t insurmountable. The overall budget, after
all, comes in at about $40 billion. If the House, Senate and Gov.
Charlie Baker can reach an agreement on some belt-tightening they
can balance the budget by the start of the new year.
But that’s a fairly big “if.” Many senators have expressed their
preference for raising taxes to finance more spending next year —
and that was before the revenue hole opened up.
A Boston Herald editorial
Friday, June 17, 2016
Put budget in focus
Acknowledging a sudden erosion in the state budget's fiscal
underpinnings just before the budget is due, House Speaker Robert
DeLeo on Wednesday said policy differences between the House and
Senate loom as an even larger obstacle to a budget accord that's due
in two weeks.
Talking to reporters after a closed Democratic caucus, DeLeo said
the House budget (H 4201) included close to 100 outside sections
while the Senate's spending plan (S 2305) featured nearly 300 budget
riders, including many calling for policy changes unrelated to
appropriations.
"I look at a budget as just that, trying to figure out what the
fiscal situation's going to be for the following year," DeLeo said.
"I think there's probably a lot of policy issues and I'm not sure
how resolute the Senate is in trying to push all of those. My idea
would be that those are best left to committee and should be
addressed at committee and not in the budget. I'm more concerned
about that delaying the process really, than the figures."
State House News Service
Wednesday, June 15, 2016
DeLeo: Policy looms as bigger threat than $$$ to on-time budget
Gov. Charlie Baker on Thursday said he'll offer recommendations
to legislators crafting a fiscal 2017 spending bill in the face of a
potential drop of up to $750 in revenue estimates, but wants to
respect "their turn at bat."
With just over two weeks until the start of the 2017 fiscal year,
the Baker administration on Tuesday filed a financial statement
disclosing that 2017 tax revenues are now likely to run $450 million
to $750 million below the projections that Baker and House and
Senate budget writers have been working with for most of 2016. A
$750 million write-down would remove most of the state's new
discretionary revenue.
State House News Service
Thursday, June 16, 2016
Baker defers to budget conferees, but has recommendations
Key Massachusetts lawmakers said Monday that the state's annual
sales tax holiday is "on the table" for discussion given a potential
budget deficit.
"The Senate has increasingly been skeptical about whether this is
a good use of $20 million, now $25 million a year," Senate President
Stan Rosenberg, D-Amherst, said Monday. "It's on the table for
discussion."
The sales tax holiday is traditionally held on a weekend in
August. It has been held in 12 of the last 13 years, but has faced
some growing opposition from lawmakers who question whether the
state should be giving up approximately $25 million in sales tax
revenue each year.
The Springfield Republican
Tuesday, June 21, 2016
Annual Massachusetts sales tax holiday could be eliminated amid
budget deficit
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Chip Ford's CLT
Commentary
If you're in the Newburyport area this
evening, you might want to stop in at the Elks Lodge for
what should be an interesting and informative forum on the
current tax and fiscal situation in Massachusetts.
I'll be joining in the discussion with the other two
panelists, Wendy Wakeman, director at the Massachusetts
Fiscal Alliance; and Eileen McAnneny, president of the
Massachusetts Taxpayers Foundation.
There will be much to discuss then, as there is here
and now.
The news from Beacon Hill just keeps worsening.
The state is overspending its "anticipated
tax revenues
projections." These projections are the Legislature's and
Administration's agreed upon best-guess estimate of how much revenue
they expect to come into state coffers. They use these
"projections" to put together the next annual state budget. (The
Massachusetts Constitution requires a balanced budget.) For this
fiscal year (ending June 30) the budgeted spending currently exceeds the
actual revenue taken in by $320-$370 million.
Based on the latest "anticipated
tax revenues
projections" for the coming fiscal year, which begins on July 1, already
revenues are below earlier projections of but a mere few months ago by
between $450-$750 million. It is upon that overly optimistic
tax revenues
projection that the House and Senate based its proposed $39.5 billion
budget for the coming fiscal year, now in the House/Senate conference
committee.
One of the first "solutions" to solving this
over-spending problem is — drum-roll folks
— to again "freeze" the voters' 2000
mandate that the income tax be rolled back to 5 percent.
Twenty-seven (27) years after it was hiked "temporarily"
— over a generation ago
— and sixteen (16) years since the voters
overwhelmingly demanded it, the Legislature is still treating the
voters' order to their employees, their representatives, as merely a
request by supplicants on bended knee.
Then comes the traditional sales tax holiday, which
over one weekend a year allows taxpayers to keep $20-$25 million
a year in their collective pockets, out of some $39 billion the
state expects to take in and intends to spend. (Remember, each
billion is one thousand millions!) This tax holiday weekend has
been celebrated in 12 of the last 13 years, but perhaps not this one.
In last week's CLT Update ("Bottom
of the barrel for the Bay State, again") I wrote:
On April 27 the House passed a budget of $39.54 billion; the
Senate passed its $39.56 billion version on May 26. While the
final bottom lines are similar the contents of each vary widely.
Both versions are now in the House/Senate conference committee.
I expect that whatever comes out as a "compromise" will only
expand the bottom line.
While I was recently watching old VHS videos of Barbara's media
appearances from the mid-80s for our ‘celebration of life’ event
for her, leading up to CLT's repeal of the income surtax in
1986, I noted that the debate at that time was over a state
budget of $9-$10 billion. That was a mere quarter of what it is
today, only thirty years ago. That's an average state budget
increase of one billion dollars each and every year since then.
According to the
U.S. Bureau of Labor Statistics, $100 in 1986, adjusted for
inflation, is today equal to $218 — a little more than double.
That $10 billion state budget in 1986, adjusted for inflation
alone, today would amount to $21.8 billion. Instead, that amount
will almost double again to $40 billion in the next fiscal year
state budget, from additional programs and spending — aka,
"investments."
And still that's not enough. More Is Never Enough (MINE) and
never will be in Taxachusetts. As the Eagle-Tribune noted in its
editorial:
The Bay State
is in a worsening bind because for years it has lived beyond
its true means, using fiscal gimmicks like one-time revenue
sources and debt-financed spending to paper over the gap
between income and expenses. It's still doing it, forever
seeking ways to siphon more money from the pockets of the
public by promoting more public sector "investments" and new
"revenue streams" like the graduated income tax — the
longtime holy grail of "progressives," though it's been
rebranded as the "millionaires' tax" to sway the gullible.
Massachusetts has the fifth-highest tax burden per capita.
Massachusetts taxpayers are the fourth-latest to reach national
Tax Freedom Day, followed only by New York (#48), New Jersey
(#49), and Connecticut (#50). And now we learn our state —
Massachusetts — is among the bottom five in debt burden: "The
only state with a worse outlook is Connecticut, followed by the
U.S. territory of Puerto Rico, which is on life support," the
Eagle-Tribune editorial noted.
Therein lies the heart of all our fiscal
problems: Ever-increasing, unsustainable spending along with
new and expanded "investments"/programs —
for example, The Boston Globe reported:
In the fiscal year
that ends on June 30, the state is projected to spend almost
$200 million on housing for homeless families, and tens of
millions of dollars more on a program that provides up to
$8,000 to help pay for rent, utilities, and other expenses
so families can stay in their homes, or defray the costs of
staying with a friend or relative....
But officials in the
administration of Governor Charlie Baker say the change
would cost the state an added $41 million annually and mean
hundreds more families per month would enter the system,
already seen as the nation’s most generous....
Massachusetts is the
country’s only right-to-shelter state.
This proposal to make it easier for "the
homeless" to be provided "emergency housing" at taxpayers' expense
is one of those hundreds of pesky little "budget riders"
— outside policy changes disguised as
budget items which have no legitimate place in a must-pass,
up-or-down vote without amendments, state budget bill.
Even some homeless advocates oppose it:
In a twist, not all advocates for the homeless support dropping
the controversial hardship requirement. Some say the adjustment
would needlessly expand Massachusetts’ emergency shelter
program, leading to more and more families being placed in
last-resort hotels and motels at taxpayer expense.
“This change may be well intentioned, but what we’ve learned, of
course, is that good intentions often lead to unintended
consequences for the people to whom we are extending our
largesse,” said Philip Mangano, a longtime advocate for the
homeless who worked for the administrations of George W. Bush
and Barack Obama. “So, some tell us, let’s put moms and kids in
motels for just a day or two. But the reality is they’re there
for months and months, isolating them from social capital
including faith communities, their families, and often their
support systems.”
I can't help but wonder what the
qualifications are for "emergency housing" that in reality
amounts to a free motel room for months and months. My
first question is: Must a recipient of "our largesse" be a
citizen of Massachusetts, or even a citizen of the United
States? My money is on "no" —
that perceived "need" is the only requirement. As the only
state in the nation with a "right-to-shelter" (signed into
law in 1983 by Gov. Michael Dukakis), and with the state
Senate now trying to ease its eligibility requirements, I
suspect this would make Massachusetts an even greater magnet for
illegal immigration and an attraction for residents of other
states, along with other attendant "public assistance" costs.
Beacon Hill worries about whether the state can
afford a $25-$28 million sales tax holiday in August, but shrugs its
collective shoulders at giving away an additional $41 million annually
on top of the $200 million it already spends on this program.
Regardless, such a major public policy debate does
not belong in a budget document, where it cannot be debated,
cannot stand or fall on its own merits.
It's infuriating how there never seems to be enough
to ease the onerous burden on those who earned it, but always plenty to
give away to those who didn't. This explains how the bloated state
budget increases on average by a billion of our dollars every year.
And it's never enough, never will be.
As The Boston Herald editorial noted: "Many
senators have expressed their preference for raising taxes to finance
more spending next year — and that was before the revenue hole
opened up."
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Chip Ford
Executive Director |
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The Newburyport News
Wednesday, June 15, 2016
Republican committees to host tax forum June 22
AMESBURY — The Amesbury Republican Town Committee is
co-hosting a Massachusetts tax forum to honor the legacy of
taxpayer advocate Barbara Anderson, formerly of
Citizens for Limited Taxation.
Chip Ford, executive director of Citizens for
Limited Taxation; Wendy Wakeman, director at the Mass
Fiscal Alliance; and Eileen McAnneny, president of the
independent and non-partisan Mass Taxpayers Foundation, will
participate in a panel discussion and provide insights into
the Massachusetts tax environment on June 22 from 7:30-8:30
p.m. The program will be moderated by local syndicated
columnist Taylor Armerding.
The forum will be held at the Newburyport Elks Lodge, 25 Low
St., and will be preceded by breakout Republican Town
Committee meetings starting at 7.
Doors open at 6:30. Refreshments and a cash bar will be
available. All area taxpayers are encouraged to attend.
The event is being sponsored by the Northeast Essex GOP, a
coalition of the Amesbury, Georgetown, Newbury, Newburyport
and West Newbury Republican town committees.
State House News Service
Monday, June 20, 2016
Income tax cut at risk, temporary budget filed amid search for fixes
By Michael P. Norton
Amid new speculation that a planned income tax cut might not be
triggered, Gov. Charlie Baker on Monday filed a $5.3 billion
spending bill to keep state government running for one month while
lawmakers continue to work on a fiscal 2017 budget accord that's
become intertwined with significant doubts about anticipated tax
revenues.
The new fiscal year is set to open in 11 days and $39.5 billion
spending bills are still pending before a six-member legislative
conference committee, so the temporary budget was filed to keep
funds flowing in state government during July in the absence of an
agreement on an on-time budget. Lawmakers are likely to pass the
interim budget since it will buy them more time to work on an annual
spending plan.
After spending the spring crafting their $39.5 billion spending
plans, House and Senate leaders officially learned from the Baker
administration last Tuesday that $450 million to $750 million in
anticipated tax revenues are now unlikely to materialize, removing a
major revenue-side support for their proposals.
Over the past several days, Baker and legislative leaders have not
outlined a path forward to address the revenue shortfall, but say
they are working cooperatively and exchanging ideas. State officials
say tax collections reflect a healthy economy and attribute the
markdown in revenues to capital gains tax collections that in
February began missing estimates due to the stock market's
performance in 2015.
However, the Massachusetts Taxpayers Foundation (MTF) on Monday said
the 4.3 percent fiscal 2017 tax revenue growth estimate was on the
high side "from the outset," noting that five of the six revenue
estimates offered at a hearing last December assumed revenue growth
of lower than 4.3 percent.
The foundation said fiscal 2016 tax revenues are likely to exceed
fiscal 2015 tax revenues by just 2.6 percent. Looking ahead,
lawmakers should downgrade their tax revenue growth projection for
fiscal 2017 to 3.8 percent, which would reduce available revenues by
$521 million, according to the MTF.
Calling the fiscal 2017 capital gains tax estimate of $1.484 billion
"greatly inflated," MTF wrote in a bulletin on Monday, "The next
steps for how to address the FY 2017 revenue shortfall are somewhat
unclear. Under statute, the January consensus revenue agreement
represents the maximum level of tax revenue to be approved in the
upcoming budget, but it is silent about the process for a revenue
reduction." State finance law directs the administration to amend
budget recommendations in light of new revenue information,
according to the foundation, "but there is no requirement that
budget conferees take this information into account or agree to the
same revenue assumptions."
Foundation officials also said revenue growth may not be robust
enough to force a Jan. 1 reduction in the income tax rate from 5.1
percent to 5.05 percent. The reduction, assumed in pending budget
proposals, is "much less certain now" and would keep $80 million in
the fiscal 2017 revenue column if it does not occur. Voters approved
a 5 percent income tax rate in a 2000 statewide ballot referendum
and have seen it slowly ratchet down under a series of gradual tax
rate decreases approved by the Legislature.
MTF noted it's also possible that non-tax revenue estimates might be
revised upwards, which would on paper put more money into the
budget, and said sales tax revenue transfers to the MBTA and school
building efforts might also be reduced if the tax revenue estimate
is lowered.
Adopting the lower of House or Senate line items could generate $200
million in fiscal 2017 savings, according to MTF, and budget
negotiators might be able to achieve spending reductions without
cutting programs by obtaining updated caseload and staffing
information from the executive branch.
The temporary budget bill allows Treasurer Deborah Goldberg to make
advance local aid payments to cities and towns that can demonstrate
an emergency cash shortfall in July and extends capital accounts
that would otherwise expire.
Temporary budgets have become routine on Beacon Hill and generally
are not controversial. The mini-budgets attract more attention if
more than one is needed.
In a letter to lawmakers, Baker asked that they pass the temporary
budget by Tuesday, June 28.
The Boston Globe
Monday, June 20, 2016
Costs at heart of emergency shelter eligibility debate
By Joshua Miller
Advocates call it one of the state’s cruelest requirements. Before
some poor homeless families can qualify for taxpayer-funded shelter
and motel rooms, they must spend a night in a place “unfit for human
habitation” — such as an emergency room, park bench, or campground —
to be legally homeless in the eyes of the state.
To change that, the state Senate quietly passed a measure last month
dropping the mandate. Supporters say the move would cost the state
little in added caseload — just a few hundred thousand dollars a
year — and would spare parents and children from having to endure a
night of hardship to satisfy a bureaucratic checklist.
But officials in the administration of Governor Charlie Baker say
the change would cost the state an added $41 million annually and
mean hundreds more families per month would enter the system,
already seen as the nation’s most generous.
The emotional debate over whether to expand eligibility is playing
out behind closed doors at the State House. Negotiators for the
Senate, which backs the change, and the House, which doesn’t, are
tangling over the final wording of Massachusetts’ $39.5 billion
spending plan.
In a twist, not all advocates for the homeless support dropping the
controversial hardship requirement. Some say the adjustment would
needlessly expand Massachusetts’ emergency shelter program, leading
to more and more families being placed in last-resort hotels and
motels at taxpayer expense.
“This change may be well intentioned, but what we’ve learned, of
course, is that good intentions often lead to unintended
consequences for the people to whom we are extending our largesse,”
said Philip Mangano, a longtime advocate for the homeless who worked
for the administrations of George W. Bush and Barack Obama. “So,
some tell us, let’s put moms and kids in motels for just a day or
two. But the reality is they’re there for months and months,
isolating them from social capital including faith communities,
their families, and often their support systems.”
Mangano continued: “In our rush to be do-gooders, we do long-term
bad for these moms and children.”
But at its core, this is a debate more about money than morals.
The average state cost to put a family in emergency shelter is $117
per night. And proponents say expanding eligibility would, at most,
mean a few hundred more families spend a single additional night or
weekend on the taxpayers’ dime, for a total cost of perhaps
$300,000.
But, according to the Baker administration estimate, the policy
proposal would mean 200 additional families would enter emergency
housing per month that otherwise would not have been eligible for a
state-funded room, costing taxpayers an additional $41 million
annually. Administration officials said the estimate is based on
their expectation of increased demand, but didn’t provide details.
Which of the vastly different projections is closer to reality is
hard to know, experts say, because it depends on how many families
seek the state’s help.
The House’s coolness to the proposal — as well as the Baker
administration’s — comes as lawmakers are grappling with a budget
deficit projected to be significant.
In the fiscal year that ends on June 30, the state is projected to
spend almost $200 million on housing for homeless families, and tens
of millions of dollars more on a program that provides up to $8,000
to help pay for rent, utilities, and other expenses so families can
stay in their homes, or defray the costs of staying with a friend or
relative.
With the state facing what could be a $750 million shortfall in the
new fiscal year, expanding the emergency housing program could be a
big reach.
Kelly Turley of the Massachusetts Coalition for the Homeless said
the change would have a profound impact on hundreds of families.
From last July through April, she said citing state data, more than
500 families stayed in a place unfit for human habitation for at
least one night before entering taxpayer-funded shelter.
“This change would benefit children and families who are already
experiencing homelessness — often seeking help when they can no
longer double up with another family in untenable situations.
They’re just not homeless enough by the administration’s standards
to get help,” Turley said.
Massachusetts is the country’s only right-to-shelter state. When
eligible families — those whose incomes are close to or below the
federal poverty level — can show they are homeless because of
domestic violence, natural disaster, no-fault eviction, or health
and safety risks, the state is mandated to provide housing. That can
take the form of a room in a shelter or, if there aren’t any left, a
hotel or motel.
On Friday night, there were 485 families in taxpayer-funded hotels
and motels, and 3,326 in taxpayer-funded shelters.
Baker, who took office in January 2015, has pledged to end the
practice of sending families to hotels and motels by the end of his
first term. And the number of families in such accommodations has
dropped significantly since then, from 1,500 to less than 500.
Advocates, lawmakers, and the governor broadly agree that hotels and
motels are often a terribly inadequate option for housing families.
That type of lodging frequently separates families from the social
support of relatives and friends, familiar schools, a clean place
for children to play, easy access to public transportation, and
kitchen equipment such as a refrigerator and stove.
So some advocates are of two minds about further expanding
eligibility, which would almost certainly lead to the number of
mothers, fathers, and kids in motels rising, without solving the
underlying problem of too few affordable apartments for people who
are just barely scraping by financially.
“Expanding eligibility doesn’t solve the larger crisis,” said Libby
Hayes, executive director of Homes for Families, a nonprofit.
“The last thing that we want is for motel numbers to go up,” she
said, “but we don’t want families to be sleeping in ERs or on the
street either.”
The Boston Globe
Thursday, June 16, 2016
Baker to bureaucrats: Plan for smallest budget proposal
By Jim O’Sullivan
Governor Charlie Baker, facing revenue shortfalls in both the
dwindling current fiscal year and in the one that starts July 1, has
instructed his agency heads to base their budget planning on the
lowest of the three proposals circulating on Beacon Hill.
Baker, the House, and Senate have all filed budgets, with
legislative leaders beginning formal negotiations late last week. In
essence, the governor’s message to his aides: Find your line item in
all three spending proposals and, with a few targeted exceptions,
expect to receive whichever one is smallest.
“We did tell agency heads to begin planning for the lowest of the
three, whether it’s House, Senate, or ours,” said Baker senior
adviser Tim Buckley.
Buckley said that “historically underfunded” accounts – such as
emergency homeless shelters and the state’s public defender agency –
would be exempt from the low-balling instructions. The instructions,
Buckley said, would be “tailor-made” for individual agencies.
The belt-tightening orders come in the wake of Baker’s budget office
announcing Tuesday that tax revenue for next fiscal year could be
$750 million less than the number around which the governor, House,
and Senate all built their spending proposals. The three blueprints
each carried similar bottom lines, about $39.5 billion.
But tax revenue growth next fiscal year, pegged at 4.3 percent when
the policymakers began the budget process, is now expected to come
in lower.
In addition to the expected fiscal 2017 shortfall, the budget for
the current fiscal year, which ends June 30, has a structural
deficit due to a downgrade of revenue estimates of between $320
million and $370 million.
Baker aides have said they plan to close the current-year gap
without drawing down emergency reserves, laying off state workers,
or imposing other emergency cuts.
The Boston Herald
Friday, June 17, 2016
A Boston Herald editorial
Put budget in focus
With tax revenues slowing the state is expected to take in somewhere
between $450 million and $750 million less than it expected in the
fiscal year that begins July 1, confirming that there is no such thing
as too conservative when it comes to revenue forecasting.
As the House and Senate engage in negotiations over a spending plan for
fiscal 2017 — and with just two weeks to spare — they need to sharpen
their red pencils to a fine point.
The shortfall isn’t insurmountable. The overall budget, after all, comes
in at about $40 billion. If the House, Senate and Gov. Charlie Baker can
reach an agreement on some belt-tightening they can balance the budget
by the start of the new year.
But that’s a fairly big “if.” Many senators have expressed their
preference for raising taxes to finance more spending next year — and
that was before the revenue hole opened up.
The House, though, continues to represent a welcome firewall on the tax
front, and like Baker House leaders seem committed to reducing the
reliance on one-time revenues.
“I prefer not to use the rainy day fund” to close the budget gap, House
Speaker Robert DeLeo told Boston Herald Radio this week, “and I prefer
not to use new taxes.”
(Complicating matters is that DeLeo also prefers not to cut new funding
for early childhood education, opiate addiction services or local aid
... )
The speaker also points out that the Senate has needlessly gummed up the
budget with a menu of complex, unrelated policy initiatives (OK, he put
it more politely than that). The Senate version of the budget contains
nearly 300 outside sections, compared to about 100 in the House, and
DeLeo suggested the policy differences might be an even bigger problem
to solve than the revenue shortfall.
Here’s an easy solution: The two branches should agree to set aside most
of those bills-in-disguise. After all, if negotiators are arguing over
the wisdom of a ban on plastic shopping bags it leaves less time for
getting the numbers to add up. And when building a budget, isn’t that
the whole point?
State House News Service
Wednesday, June 15, 2016
DeLeo: Policy looms as bigger threat than $$$ to on-time budget
By Michael P. Norton
Acknowledging a sudden erosion in the state budget's fiscal
underpinnings just before the budget is due, House Speaker Robert DeLeo
on Wednesday said policy differences between the House and Senate loom
as an even larger obstacle to a budget accord that's due in two weeks.
Talking to reporters after a closed Democratic caucus, DeLeo said the
House budget (H 4201) included close to 100 outside sections while the
Senate's spending plan (S 2305) featured nearly 300 budget riders,
including many calling for policy changes unrelated to appropriations.
"I look at a budget as just that, trying to figure out what the fiscal
situation's going to be for the following year," DeLeo said. "I think
there's probably a lot of policy issues and I'm not sure how resolute
the Senate is in trying to push all of those. My idea would be that
those are best left to committee and should be addressed at committee
and not in the budget. I'm more concerned about that delaying the
process really, than the figures."
Policy proposals added to the budget bill by senators include a ban on
"single use" plastic bags at chain stores and large retailers, a waiver
of medical marijuana registration fees for veterans, and an MBTA fare
hike cap of 5 percent over two years, along with measures dealing with
teacher evaluations, retiree health care premiums and mid-level dental
practitioners.
Senators this session have chafed over the joint committee process in
which House members exercise more control over the flow of bills. A spat
between the branches flared just after the 2015 start of the session
when the House dug in against rules reforms that senators said would
give them easier access to their policy measures and prevent them from
being buried in House-controlled committees.
Senate leaders subsequently initiated several special committees to
draft policy proposals, but with formal sessions winding down senators
also used the budget as a vehicle to attach policy measures.
Beacon Hill leaders appear to have been caught off guard by the tax
revenue impacts of the stock market slowdown of 2015, which cut into
capital gains taxes paid on investment gains.
Tax collections for fiscal 2016, which ends June 30, are now estimated
to run $320 million to $370 million below forecasts used to build the
budget. Looking ahead, tax collections to support the proposed $39.5
billion fiscal 2017 budgets are expected to fall short by $450 million
to $750 million, according to the Baker administration, which has been
trying to hold the line on spending throughout the executive branch in
the face of sagging revenue reports that began to hit this year.
DeLeo plans to meet Wednesday afternoon with House Ways and Means
Committee Chairman Brian Dempsey, but said he believes the tax revenue
estimate used by state officials to build the fiscal 2017 budget needs
to change. "I think it has to be adjusted. That's going to be my advice
on it," he said.
While disclosing updated projections on Tuesday, the Baker
administration has not officially changed the state's revenue estimate
for fiscal 2016 or fiscal 2017, according to an administration official.
The overly optimistic revenue projections were derived based on
testimony from so-called "top economists and folks," said DeLeo, who
added that global economic conditions were "having a ripple effect here
in the United States" and compounding problems with tax collections on
unearned income.
DeLeo said it's not the time to discuss tax and fee increases to shore
up fiscal 2017 revenues.
"I think we have to play with what we have before us," DeLeo said.
Lawmakers held a public hearing Wednesday on Gov. Charlie Baker's
proposal to rein in sick leave benefit policies that critics believe are
too generous. DeLeo said the issue is one that lawmakers have to
address, but said he doubted they would this session.
"I think we've got enough issues, namely with the latest budget
shortfall, that we have to address," he said. "I'm not sure whether we
would be able to address that in sufficient time."
State House News Service
Thursday, June 16, 2016
Baker defers to budget conferees, but has recommendations
By Katie Lannan
Gov. Charlie Baker on Thursday said he'll offer recommendations to
legislators crafting a fiscal 2017 spending bill in the face of a
potential drop of up to $750 in revenue estimates, but wants to respect
"their turn at bat."
With just over two weeks until the start of the 2017 fiscal year, the
Baker administration on Tuesday filed a financial statement disclosing
that 2017 tax revenues are now likely to run $450 million to $750
million below the projections that Baker and House and Senate budget
writers have been working with for most of 2016. A $750 million
write-down would remove most of the state's new discretionary revenue.
Since Tuesday, Baker and legislative leaders have talked about how they
plan to work together to figure out how to solve the problem, but no
solutions have been offered.
Baker said he plans to continue the approach his administration has
taken so far, keeping communication open with members of the Ways and
Means Committees and sharing "ideas and options and proposals."
"I think our point of view at this point is we'll give them anything
they want from us in terms of data, we'll make recommendations to them
with respect to where we would go to solve the problem," he told
reporters after a transportation forum Thursday. "But we want to respect
the fact that this is their turn at bat, so to speak, and that they need
to be able to make the decisions they think as a conference make the
most sense and then we'll deal with whatever they send us."
Earlier this week, Senate Ways and Means Chair Karen Spilka — who is
leading the budget conference committee with House Ways and Means Chair
Brian Dempsey — said she expected Baker to file a "corrective budget"
based on the new revenue expectations.
The conference committee meets privately. No areas where spending would
be shaved from the $39.5 billion budget proposals or other adjustments
have been publicly put forward.
Referring to the Legislature, Baker said he plans to work "as
collaboratively with them as we can." He praised Senate President
Stanley Rosenberg and House Speaker Robert DeLeo, whom he described as
"two former Ways and Means chairs who have been there and done that
before."
"If you look at the size of the problem here, it's about one and a half
percent on a $40 billion base, and while the absolute number is
challenging, it's what we're supposed to do," the governor said of
working with a smaller pool of revenue.
The Springfield Republican
Tuesday, June 21, 2016
Annual Massachusetts sales tax holiday could be eliminated amid budget
deficit
Shira Schoenberg
Key Massachusetts lawmakers said Monday that the state's annual sales
tax holiday is "on the table" for discussion given a potential budget
deficit.
"The Senate has increasingly been skeptical about whether this is a good
use of $20 million, now $25 million a year," Senate President Stan
Rosenberg, D-Amherst, said Monday. "It's on the table for discussion."
The sales tax holiday is traditionally held on a weekend in August. It
has been held in 12 of the last 13 years, but has faced some growing
opposition from lawmakers who question whether the state should be
giving up approximately $25 million in sales tax revenue each year.
Local business say the annual reprieve from the state's 6.25 percent
sales tax incentivizes shoppers to buy from local retailers.
Gov. Charlie Baker's administration recently announced that revenues for
the current fiscal year, which ends June 30, are expected to be $320
million to $370 million short of what is needed to match spending.
Anticipated tax collections for fiscal 2017 are now expected to be $450
million to $750 million below what was projected. Lawmakers and Baker
are figuring out how to resolve the potential budget shortfalls.
House Ways and Means Committee Chairman Brian Dempsey, D-Haverhill, said
eliminating this year's sales tax holiday, which would affect the 2017
budget, is "certainly an issue that were looking at."
"Given that it's a cost in the $23 million to $28 million range, it's
something we have to take a hard look at," Dempsey said.
House Speaker Robert DeLeo, D-Winthrop, said lawmakers are still
determining exactly how much money they have to work with for 2017.
"Until we have all of these facts and figures, I don't think we're ready
to quite give an opinion just now relative to the sales tax holiday,"
DeLeo said.
Baker, a Republican, agreed that the sales tax holiday should be
discussed, though he declined to weigh in on whether it should be
maintained or not.
"I certainly think it ought to be part of the conversation," Baker said.
"The back and forth that's going on between the branches at this point
is based on the notion that everything's on the table, and we'll work
through that accordingly."
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