The Commonwealth of Massachusetts' FY2018 Budget Process for ACEC/MA Members

Type:  General 

ACEC/MA Resource Page on the FY2018 Budget Process

(updated as of  July 17, 2017)

 

Massachusetts government is funded on a fiscal year basis. Fiscal Year 2018 runs from July 1, 2017 - June 30, 2018. This page will give you updates on the FY2018 budget process.  This page lists newest actions first.

 

 

Governor Baker Signs FY2018 Budget, Issues Certain Vetoes July 17, 2017: Gov. Charlie Baker signed a budget for FY2018 that includes $39.4B in spending after he vetoed $320 million from the legislature's compromise budget and revised tax revenue projections downward for this year by $749 million.
Governor Baker also returned to the Legislature a new assessment on employers that he initially proposed to help pay for growing MassHealth expenses, calling on lawmakers to act quickly to package the $200 million in new employer fees with MassHealth reforms that lawmakers laid aside during budget deliberations.
 
One assessment would boost a per-employee assessment paid by employers, known as the Employer Medical Assistance Contribution, from $51 to $77 per year. The second would hit employers with penalties of up to $750 per employee if their workers choose MassHealth even though they have access to insurance through their employers. The Governor wants the Legislature to package those assessments, plus a freeze in unemployment insurance rate increases also approved by lawmakers, with a five-year moratorium on new health insurance mandates, the transition of hundreds of thousands of enrollees from MassHealth into subsidized, no-premium health plans offered through the Connector and expanded scope of practice for new mid-level dental therapy providers.
The administration will also seek through the budget amendment to get permission to seek a federal waiver to erect a "gate" blocking full-time workers with access to affordable employer-sponsored health coverage from being eligible for MassHealth.
The Governor is asking for a hearing on his budget amendment within 30 days. 
Overall, the budget signed by Baker on Monday accounts for a $652 million spending increase over last year, or 1.7%.
 
Tax revenues are projected to grow by 3.4%, including $181 million in updates to the tax code that are expected to accelerate the growth by changing the way sales taxes are collected and requiring online retailers that do significant business in Massachusetts to collect and remit sales taxes from customers.
Some online retailers, such as Amazon, already collect sales taxes for the state.
The administration's projections for tax revenue in fiscal 2018 are $99 million lower than the estimated used by the legislative conference committee and $749 million below the number agreed to back in January tax revenue growth slowed to a trickle during the spring months.
 
The Governor also vetoed $320 million in gross spending from the Legislature's budget, incuding $222 million from MassHealth and $42 million in earmarks, along with 9 outside sections mostly related to duplicative reporting requirements at the Department of Children and Families and some newly proposed commissions.
The Governor supported a 3.9% increase in unrestricted payments to cities and towns totaling over $1 billion and $4.75 billion in local school aid, or a 2.6% increase.
Link to Conference Committee Report on the FY2018 Budget

July 7, 2017: House and Senate leaders agreed to a $40.2 billion budget that avoids tax increases and mostly holds spending flat at state agencies for Fiscal Year 2018.

The bill, filed Friday at 9:40 a.m., and scheduled for passage Friday afternoon reflects a new forecast of FY2018 tax revenues that is roughly $700 million below the projection the House and Senate used to build their budget bills this spring.
Both branches of the legislature are expected to accept the conference committee report on the budget in formal sessions this afternoon.
 
The conference committee agreed to $733 million in budget fixes, including about $400 million in direct cuts from the bills the House and Senate approved this spring. Further explanations about the budget fixes and the 327-page bill, which includes 153 outside sections will be posted soon.
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Fiscal 2017 spending is projected to be $40.183 billion, according to the most recent information statement from the state.
It does not appear that budget negotiators cut local aid level that cities and towns had been anticipating, with $4.75 billion scheduled to be delivered to local schools and $1.06 billion appropriated in unrestricted local aid.
The compromise budget incorporates an increase in the Employer Medical Assistance Contribution paid by employers to help cover the cost of Medicaid. That measure marks a new strategy to help the state pay its rising MassHealth tab.
 
Departmental budgets often increase year-to-year to keep pace with rising salaries and others costs. The fiscal 2018 budget generally keeps spending flat from fiscal 2017.
 
After the Governor signs the budget and makes his vetoes, the legislature will determine whether they wish to override any of the vetoes.
 
Note:
Transportation: 
The Legislature reduced funding to the Massachusetts Transportation Trust Fund (MTTF) by $39.7 million compared to the FY 2017 budget. But, for the most part, this will likely not turn out to be a cut. The Legislature appears to be significantly underfunding the account for potential snow and ice removal costs. This reduction is likely to be largely offset by the Legislature's new contingency fund created for underfunded accounts.
The Legislature's budget reduces funding for the state's 15 Regional Transit Authorities (RTAs) to $80.4 million in FY 2018, which is below the House and Senate recommendations and the $82.0 million the RTAs received in both FY 2017 and FY 2016.
Budget Votes Expected in Formal Sessions on July 7 July 6, 2017:  
The House and Senate scheduled formal sessions for Friday afternoon, July 7 when they are expected to finalize an FY2018 budget to send to the Governor's desk. On July 5,
Budget Conferees Named

June 1, 2017:  Today the House and Senate named six members to come up with a consensus state budget. The FY2018 budget, which is due by July 1, will be hashed out by a conference committee chaired by House Ways and Means Committee Chairman Rep. Brian Dempsey of Haverhill and Senate Ways and Means Chairwoman Karen Spilka of Ashland. They will be joined by Ways and Means vice chairs Rep. Stephen Kulik of Worthington and Sen. Sal DiDomenico of Everett. Sen. Vinny deMacedo of Plymouth and Rep. Todd Smola of Warren will serve as Republican conference members.

Today the Senate also passed a $43.2 million fiscal 2017 supplemental budget that includes a section requiring 10 percent of the state's master tobacco settlement proceeds to be used to fund liabilities of the state employees' retirement system for health care and other non-pension benefits. Another section of the bill requires the Baker administration to issue a report on inmate populations, costs, and a variety of correction payroll and program expenses.

Link to Senate Budget page
SENATE PASSES $40.4B BUDGET
May 25, 2017:  The Senate added just over $50 million in spending over three days of debate to its fiscal 2018 budget bill, unanimously passing the $40.39 billion budget on May 25 in the final session within the historic Senate chamber before it is to be renovated. Senate President Stan Rosenberg said the Senate would hold all future sessions either in the Gardner Auditorium or Room 428, the restored former document room until the renovation of the Senate Chamber is completed.
$50.67 million in spending was added to the bill on the floor. The Massachusetts Taxpayers Foundation reported that the House added $77.7 million to its budget bill during two days of debate last month.
 
Now the legislature will form a conference committee that will reconcile the House and Senate bills to substantially lower spending.
 
Senate Ways and Means Committee Releases its FY2018 Budget Proposal

On May 16, the Senate Committee on Ways and Means released its FY2018 Budget proposal. This is a $40.3 billion budget proposal (the committee tallied at the budget at $40.791 billion with the inclusion of a transfer to a medical assistance trust fund -- raises spending by 3.3% over FY2017.

If state revenue collections do not rebound and projections for next year are lowered, the Senate Committee on Ways and Means recognizes that cuts would need to be made in conference committee.

The budget focuses on "education at all levels," including preschool expansion grants, increased funding for schools to cover health insurance and special education costs, and workforce training programs.

 

This budget proposal taxes short-term rentals through websites like Airbnb.

Link to H3601 - Final Version of the House Budget, after debate on Amendments House debate on budget concluded in April.  The budget process now moves to the Massachusetts Senate.  The Senate Committee on Ways and Means is expected to release its FY2018 budget proposal in May.
Link to Amendments filed - for House Ways and Means Committee Budget

ACEC/MA, working with Rasky Partners, Inc., is following several budget amendments related to infrastructure funding.

 

Debate on the House Ways and Means FY2018 Budget Proposal began on April 24, 2017. 

Link to House Ways and Means Committee Budget Proposal

  April 10, 2017: The House Committee on Ways and Means release its draft of the Fiscal Year 2018 budget today. The budget is not expected to include any broad based tax increases. Proposed amendments to the budget must be filed by the end of the day on Thursday. The full House is expected to begin debate on the budget and the proposed amendments on Monday, April 24, 2017.

 

ACEC/MA Infrastructure Related Line Items in House Ways and Means FY2018 Budget proposal

 

House Ways and Means Budget FY18 – Outside Sections of interest to ACEC/MA Members:

 

SECTION 4. Section 15 of chapter 6C of the General Laws, as appearing in the 2014 Official 2 Edition, is hereby amended by inserting after the word "expenditures", in line 12, the following 3 words:- , unless used as the state match to federal funding for transportation projects; provided, 4 however, that the department shall report annually, on or before February 1, to the house and 5 senate chairs of the joint committee on transportation, on the following: (i) the amount of capital 6 expenditures used as the state match to federally-eligible capital projects; (ii) the total number of 7 department employee salaries included in capital expenditures, including a breakdown by 8 division of the position titles and accompanying salaries; (iii) the total number of employees of 9 the division of highways assigned to capital projects; (iv) a schedule of transportation capital 10 projects where employee salaries are included in capital expenditures; (v) the status of said 11 projects; (vi) any projected cost savings; and (vii) the impact of including department employee 12 salaries in capital expenditures on the ability of the division of highways to plan, design, 13 construct and complete transportation capital projects.

 

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Section 35EEE. There shall be established and set up on the books of the commonwealth a 28 separate expendable trust, to be known as the Commonwealth Facility Trust for Energy 29 Efficiency, hereinafter in this section referred to as the trust. There shall be credited to the trust: 30 (i) amounts paid by agencies having completed energy or water efficiency projects funded at 31 least in part by monies disbursed from the trust; (ii) any monies received by the commonwealth 32 from persons or governmental, quasi-governmental or non-governmental entities as rebates, 33 credits, securities, grants, or the like as a result of enhancing energy efficiency and utilizing 34 renewable energy applications in facility projects funded at least in part by monies disbursed 35 from the trust; and (iii) any appropriations, bond proceeds, or other monies authorized by the 36 general court and specifically designated to be credited thereto. The comptroller shall disburse 37 amounts in the trust at the direction of the secretary of administration and finance, in consultation Fiscal Year 2018 Budget Recommendations 199 38 with the commissioner of the division of capital asset management and maintenance, without 39 further appropriation, for the purpose of funding certain small and medium energy and water 40 efficiency projects at state facilities identified by the division of capital asset management and 41 maintenance. The secretary of administration and finance or the commissioner of the division of 42 capital asset management and maintenance may require agencies to agree to repayment terms, 43 including without limitation payment of administrative fees, as a condition of receipt of monies 44 from the trust. All monies received from non-governmental parties by the division of capital 45 asset management and maintenance under this section shall be by check made payable to the 46 commonwealth of Massachusetts and deposited in the trust by the division of capital asset 47 management and maintenance. Amounts credited to the trust shall not be subject to further 48 appropriation. Money remaining in the trust at the close of a fiscal year shall not revert to the 49 General Fund and shall be available for expenditure in subsequent fiscal years.

 

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SECTION 15. Section 14 of chapter 25A of the General Laws, as so appearing, is hereby 68 amended by striking out, in lines 1 and 2, the words "or local governmental body" and inserting 69 in place thereof the following words:- , local governmental body or the judiciary. 70 SECTION 16. Said section 14 of said chapter 25A, as so appearing, is hereby further amended 71 by striking out, in line 9, the words "or body" and inserting in place thereof the following 72 words:- , body or the judiciary. 73 SECTION 17. Said section 14 of said chapter 25A, as so appearing, is hereby further amended 74 by striking out, in line 14, the word "or local governmental body" and inserting in place thereof 75 the following words:- , local governmental body or the judiciary.

 

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SECTION 22. Section 1 of chapter 32 of the General Laws, as so appearing, is hereby amended 195 by inserting after the word "system", in line 574, the following words:- , and the Massachusetts 196 Bay Transportation Authority Retirement Fund shall be deemed to be a system.

 

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SECTION 35. Subsection (a) of section 17C of chapter 90 of the General Laws, as appearing in 363 section 193 of chapter 218 of the acts of 2016, is hereby amended by striking out the words “on 364 any roadway inside a thickly settled or business district in the city or town on any way that is not 365 a state highway” and inserting in place thereof the following words:- on all roadways inside 366 thickly settled or business districts in the city or town that are not state highways.

 

Link to House 1,

the Governor's FY2018 Budget Proposal

January 25, 2017:  Governor Baker released his proposed FY18 budget which totaled $40.5 Billion and boosts state spending by $1.655 Billion while also calling for reforms to the health insurance market and tax policy changes. This is the first budget in state history to exceed the $40 billion mark and relies on a forecast of $27 billion in tax collections next year and an additional  $187 million in taxes via a series of  tax modernization proposals.

The Baker-Polito Administration budget proposal for Fiscal Year 2018 (FY18), is known as “House 1.” 

 

The Governor's Budget Message

 

Here are several items of interest to ACEC/MA Members.

 
Executive Summary
 
Transportation
The FY17 House 2 proposal supports the ongoing needs of both the Massachusetts Department of Transportation (MassDOT) and the MBTA.  The proposed funding levels, coupled with substantial capital investments, will support the important work of both MassDOT and the MBTA as we continue to invest in transportation to support economic development, prosperous cities and towns and the quality of life for the Commonwealth’s residents, workers, and visitors.
 
MBTA
As requested by the MBTA Fiscal and Management Control Board (FMCB), the FY17 House 2 proposal includes $187 million in additional contract assistance to the MBTA, an amount which was increased by over $64 million (53%) in the first Baker-Polito budget in FY16.  This amount is on top of the statutorily-required Base Revenue Amount that is automatically provided to the MBTA from sales tax and other general revenue, which increases to $1.001 billion in FY17.
 
The FMCB is hard at work implementing a combination of internal cost controls, increases in own-source revenue, strategic privatization, carefully considered changes to high-cost low-ridership services and predictable and moderate fare increases to close the MBTA’s structural operating deficit.  The proposed additional contract assistance of $187 million – which brings total state assistance to the MBTA to nearly $1.2 billion annually – should be viewed as a resource that will allow the MBTA to increase spending on maintenance, State of Good Repair, and other capital needs. The FY17 House 2 proposal limits the use of these funds to a variety of capital-related needs, including repayment of so-called “legacy debt”, the movement of costs from the capital to operating budget, pay-as-you-go capital programs, and debt service for new MBTA borrowing for the purposes of improving the system's State of Good Repair.
 
 

Outside Sections

 

Commonwealth Facility Trust for Energy Efficiency

 

SECTION 10.   Chapter 10 of the General Laws is hereby amended by inserting after Section 35DDD the following section:-

 

Section 35EEE. There shall be established and set up on the books of the commonwealth a separate expendable trust, to be known as the Commonwealth Facility Trust for Energy Efficiency, hereinafter in this section referred to as the trust. There shall be credited to the trust (i) an initial $500,000 transfer from the existing Energy Credit, Efficiency and Sustainable Design Trust Fund previously established by a declaration by the secretary of the executive office of administration and finance executed March 21, 2006 and most recently amended and restated on March 1, 2011; (ii) amounts paid by agencies having completed energy and/or water efficiency projects funded at least in part by monies disbursed from the trust; (iii) any monies received by the commonwealth from persons or governmental, quasi-governmental or non-governmental entities as rebates, credits, securities, grants, or the like as a result of enhancing energy efficiency and utilizing renewable energy applications in facility projects funded at least in part by monies disbursed from the trust; and (iv) any appropriations, bond proceeds, or other monies authorized by the general court and specifically designated to be credited thereto. The comptroller shall disburse amounts in the trust at the direction of the secretary of administration and finance, in consultation with the commissioner of the division of capital asset management and maintenance, without further appropriation, for the purpose of funding certain small and medium energy and water efficiency projects at state facilities identified by the division of capital asset management and maintenance. The secretary of administration and finance or the commissioner of the division of capital asset management and maintenance may require agencies to agree to repayment terms, including without limitation payment of administrative fees, as a condition of receipt of monies from the trust. All monies received from non-governmental parties by the division of capital asset management and maintenance under this section shall be by check made payable to the commonwealth of Massachusetts and deposited in the trust by the division of capital asset management and maintenance. Amounts credited to the trust shall not be subject to further appropriation. Money remaining in the trust at the close of a fiscal year shall not revert to the General Fund and shall be available for expenditure in subsequent fiscal years.

 

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Room Occupancy Tax Changes 1

 

SECTION 36.   Chapter 64G of the General Laws is hereby amended by striking out sections 1 to 12, inclusive, as appearing in the 2014 Official Edition, and inserting in place thereof the following 11 sections:-

 

Section 1. As used in this chapter the following words shall, unless the context requires otherwise, have the following meanings:

 

(a) ''Bed and breakfast establishment'', a private owner-occupied house where 4 or more rooms or units are let and a breakfast is included in the rent, and all accommodations are reserved in advance.

 

(b) ''Bed and breakfast home'', a private owner-occupied house where 3 or fewer rooms or units are let and a breakfast is included in the rent, and all accommodations are reserved in advance.

 

 

 

 

 

 

 

 

 
 
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