What Got Vetoed In MA State Budget?

Gov. Charlie Baker signed a $41.7 billion budget on Thursday that the Republican touted as a "fiscally responsible" spending plan that both increased a tax credit for low-income families and invested $160 million into public education, but also held the line on taxes and will prepare the state for the next economic downtown.

The budget, which is finally in place more than three weeks after the start of the fiscal year, increases spending in fiscal 2019 by 3.2 percent, making investments in education, substance abuse treatment and economic development.

It also makes a $368 million deposit into the "rainy day" fund, which will boost state reserves to their highest level since 2007 at $2.15 billion.

"We must keep in mind and plan for the future to continue maintaining fiscal discipline," Baker said.
Massachusetts is the last state in the country to put a final budget in place for fiscal 2019.

The late budget arrived on Baker's desk after a tax windfall in fiscal 2018 that saw revenues grow by more than $2 billion from last year, leaving the state with a surplus and allowing legislators and the governor to pad this year's budget with additional spending.

With a lighter touch than in the first three years of his administration, Baker vetoed only $48.9 million, slashing spending from 48 line-items, including 293 legislative earmarks and some MassHealth spending that the administration said had already been baked into approved rate increases.

>>>You can see what Gov. Baker vetoed here.

The administration is also counting on agencies to leave unspent about $150 million by the end of this fiscal year, money that will revert back to the general fund. Together, the $200 million in vetoes and reversion account for the differences in total spending between the budget the governor signed and the $41.9 billion plan sent to him eight days ago.

Both the governor and his budget team said that in contrast to past years the Legislature had included more spending for chronically underfunded accounts like snow and ice removal and public counsel services. The governor usually cuts spending elsewhere in the budget to make room for additional spending in those areas later in the year, but this year he didn't have to.

The one deficiency identified by the administration as underfunded by the Legislature was $60 million for collective bargaining agreements.

The governor also signed 91 of the 110 outside policy sections in the budget, and returned 19 sections with proposed amendments for the Legislature to consider.

The Republican governor, who is seeking re-election this fall, put many of the investments (and fiscal restraints) in this year's budget in the context of how they compared to when he took control in 2015.

For instance, Baker said spending on local education through Chapter 70 has increased by $500 million since 2015 and the $200 million invested in "substance misuse" is up 70 percent from 2015. Meanwhile, the rate of spending growth in the MassHealth program has gone from 10.6 percent to 2.9 percent, and the amount of one-time revenues used to balance the budget has been cut from $1.2 billion to $95 million.

Asked if he might be ready to propose tax cuts in a second term now that he says the budget is more structurally balanced, Baker said, "We certainly believe that reducing the tax burden on 450,000 low-income families, all of whom are working here in the commonwealth of Massachusetts and the vast majority of which are headed by women, is exactly the sort of tax policy we should be pursuing."

The governor was referring to the second increase in the earned-income tax credit since he took office that raised the benefit for low-income families to 30 percent of the federal credit.

"We'll obviously continue to engage with our colleagues in the Legislature on debates about taxes and spending if we are fortunate enough to return to office, but our goal at the end of the day is to always make sure we are fiscally disciplined and that we do everything we can to make sure voters get the biggest bang they possibly can for their buck," Baker said.

Of the outside sections that went unsigned, Baker has proposed changes to a pilot program that would have tested congestion tolling on the Turnpike. The governor has recommended, instead, that a study be conducted on traffic that identifies all possible solutions.

"I think putting a pilot in place before you actually do the work to figure out what will solve and work to improve our issues with respect to congestion puts the cart before the horse," Baker said.

Transportation advocates are already urging the Legislature to reject the governor's amendment.

"We believe a smarter tolling pilot program would yield useful data to help understand congestion and its solutions. We urge the Legislature to reject the Governor's amendment and continue their leadership on this issue," said Chris Dempsey, director of Transportation for Massachusetts.

The governor also returned an outside section that would have lifted a restriction on welfare benefits that prevents families from receiving additional benefits for a child born while the family is already on public assistance.

Baker's amendment would go along with lifting the "cap on kids" if the Legislature would agree to changing the way benefits are calculated by accounting for social security disability benefits the same way other benefits are factored in, such as veterans benefits. Baker said his amendment is similar to a change Deval Patrick's administration sought while in office.

"We view it as an equity issue, and we consider it to be a reasonable compromise," Baker said.

The Legislature has five days left for formal sessions to consider all of Baker's vetoes and budget amendments. While the governor can't stop the House and Senate from overriding his spending cuts with two-thirds votes in each branch, the governor could still veto any of the policy sections that the Legislature returns after July 31 and the Legislature would be powerless to react.

The House planned a formal session for Friday, while the Senate won't meet again in formal session until Monday.

The limited number of vetoes from the governor, which could be reversed with just 48 votes rather than the hundreds leaders thought might be necessary, has given the Legislature some breathing room with respect to the end-of-session schedule.

Al Norman, a longtime elder care advocate, criticized some of the vetoes the governor made, including $2 million for rate increases to both adult foster care and adult day health within MassHealth and $35,000 for an aging-in-place initiative.

"Massachusetts is a 'community first' state. To Governor Baker that means he cuts community programs first," Norman wrote in an email.