Governor Charlie Baker on Wednesday afternoon, Oct. 14, made an announcement regarding the Fiscal Year 2021 budget, which has been updated since its initial filing in January to reflect almost $1 billion in additional spending.
“This update budget plan reflects the new realities associated with COVID-19 but continues to make significant investments in education and economic development and it does not raise taxes.”
Baker said that given how difficult the pandemic has been on residents and business owners, it is especially important to push for a budget that does not ask for more money from taxpayers.
Baker continued, “as is the case for all other states, COVID-19 has created significant budget uncertainties here.”
He said that projected revenue in the Commonwealth for FY 21 “dropped by about $3.6 billion, according to new projections…”
Tax filing and payment deadlines had also been extended during the pandemic to take some of the pressure off of residents and businesses during these uncertain times, he added.
Baker said that this year, there were many unforeseen expenses due to the pandemic, such as about $1 billion through MassHealth “to help stabilize health care providers,” almost $50 million for field hospitals, $90 million for the contact tracing program, $56 million for food insecurity, and $350 for the acquisition and stabilization of PPE, he said.
He said that the state’s rainy day fund has tripled to an all-time high of $3,.5 billion, and the state has worked to find budget savings over the past few years,” which has now allowed for the build-up of funding reserve, from which some money—up to $1.35 billion—can be pulled, along with some federal aid, without having to increase taxes.
The budget being submitted to the legislature is a $45.5 billion dollar budget that has been updated to make “significant new investments” in schools, pandemic response, and main street economies, he said. The originally proposed budget was $44.6 billion.
“The budget also sustains support for important services like health care, local aid, and transportation, and the funding is available to support these programs that especially will be provided disproportionately to communities that have been affected particularly hard by the virus, including many of our communities of color.”
Baker addressed some highlights of the budget, including $5.3 billion for “K-12 public schools through local municipalities.” He said this is more than what was originally proposed in the January budget.
The budget also supports Partnerships for Growth, an economic development package to support small businesses, as well as adds” $100 million dollars in economic development initiatives that aim to provide workforce development improvements, better connect workers and businesses, and support small businesses.
This funding will provide resources for small businesses such as technical assistance, and will have a focus on businesses that are owned by minorities, women, and veterans, Baker said.
Additionally, the budget calls for $8.4 million in new funding to turn vocational high schools into “career technical institutes” that will train 20,000 new workers in different trades over the course of the next four years. Baker said this is “more important now than ever” as people are looking for well paying jobs that are secure.
“Despite the turbulent fiscal environment for state government, we must continue to promote economic empowerment, especially for people of color across the Commonwealth. The budget continues to make significant investments in workforce development, education, and small business support, which were all recommended by the Black and Latino Advisory Commissions.”
The Baker administration recently announced a “comprehensive plan to provide support for residents and families to help them avoid evictions and foreclosures during these unprecedented times.”
The proposed budget allocates $123 million for the Massachusetts Rental Voucher Program, $72 million for local housing authorities, and $182 million for emergency assistance for the family shelter system, Baker said.
Aside from “sustaining the public health investments” related to COVID-19, the budget includes $160 million “to support Chapter 257 human service provider rate increases…” There is also a ten percent increase for MassHealth to help with the increase in “caseloads” and other costs related to COVID-19, he said.
The budget also calls for $316 million to “combat substance misuse…which continues our work to battle the opioid crisis and other addiction issues as we confront this pandemic,” Baker said.
It also proposes $1.2 billion in operating costs for the MBTA in addition to its $8 billion capital plan, as well as $386 million for MassDOT, “including full funding of its snow and ice budget,” and $20 million for the Massachusetts Emergency Food Assistance Program, he said.
“Thanks in part to the work we did to build up our reserves and our responsible approach to budgeting generally, this revised proposal enables the Commonwealth to make significant investments in our recovery, while continuing to fund key services that support our continued fight against the virus,” Baker said. “We look forward to continuing to work with our legislative colleagues as the budget process moves forward, and we remain committed to supporting all of our residents throughout this public health emergency and the ongoing recovery.”
Lt. Governor Karyn Polito added that the money from this budget “will continue to support communities and families across the Commonwealth,” she said.
She also said that the administration is aware of the “importance of our local governments,” and “this budget proposal will maintain local aid to cities and towns and it will do so without raising taxes.”
The budget will move to the legislature for approval, and more information about the FY21 budget will be made available on mass.gov.