HWM Committee's modest budget proposal lacks needed investments in FY 2020

MassBudget    Information.    Participation.  Massachusetts Budget and Policy Center    Democracy. April 18, 2019 House Ways and Means Committee's modest budget proposal lacks needed investments in FY 2020 The House Ways and Means (HWM) Committee kicked off the legislative budget process with its Fiscal Year (FY) 2020 proposal. Overall the Committee's budget proposes modest increases in some areas, and reduces funding in others, according to a new analysis by the Massachusetts Budget and Policy Center (MassBudget). Because the budget lacks any significant new revenue, our Commonwealth will go another year without making needed investments in important areas, including education, transportation, and affordable housing. Here are some key takeaways: While the Committee proposes slightly more funding for public elementary and secondary schools in FY 2020 than the Governor, the amount is still significantly less than a more comprehensive fix to the outdated education funding formula. Further, the proposal does not lay out a long-term plan to overhaul the formula so schools can better serve all their students. The Committee proposes modest increases in some areas such as early education, programs to help low-income people afford rent, and services to help expand supports for youth with autism spectrum disorders. The proposal also includes some notable initiatives such as funding for community outreach to support a complete and accurate count in the upcoming 2020 Census, a pilot program to help reduce pregnancy-related deaths, and expansion of eligibility for the Medicare Savings Plan that would benefit low-income elders. (This last initiative was also included in the Governor's proposal.) The Committee proposal, however, decreases funding in several areas below the current FY 2019 budget. For example, it includes less funding for the Regional Transit Authorities that serve Massachusetts residents, including those in Gateway Cities, who live outside the MBTA service area. Most notable is what is not in the HWM Committee proposal. The Committee budget does not include any substantial, new revenue sources. The additional tax revenues in the proposal come either from pre-existing sources that only recently have begun generating revenue (like taxes on recreational marijuana sales) or from proposed technical changes that would improve collections of existing taxes (like sales taxes due on online purchases). Meanwhile, several already-scheduled tax cuts and other revenue losses will take a significant bite out of revenue totals in FY 2020 and beyond - completely eliminating any gains from the additional revenue sources on which the HWM budget relies. Also notable is that most additional revenue in the proposed budget comes from a variety of consumption taxes, which hit low-income earners the hardest, and will make the state's tax system more upside-down than it already is. Members of House leadership have indicated that they would like to take a thoughtful approach toward raising new revenue - an effort they have said will take place separate from the budget process. Our state has many underfunded and unfunded short and long-term priorities and, without substantial new revenue, it will be challenging for lawmakers to make progress on these priorities. Even in a time of economic expansion and strong tax revenue growth, Massachusetts still has not moved the needle on reforming education funding, updating transportation infrastructure, and supporting people who can't afford housing. While revenue growth for the current fiscal year (FY 2019) may yet meet earlier expectations of continued strong growth, official projections are for growth to slow markedly in FY 2020 without policy changes to increase revenue. New, substantial sources of revenue will allow the Commonwealth to invest in core priorities when times are good, so we can ensure everyone has access to good quality of life - even when times are tight. Read the full report here. The Massachusetts Budget and Policy Center (MassBudget) produces policy research, analysis, and data-driven recommendations focused on improving the lives of low- and middle-income children and adults, strengthening our state's economy, and enhancing the quality of life in Massachusetts. MASSACHUSETTS BUDGET AND POLICY CENTER 15 COURT SQUARE, SUITE 700 BOSTON, MA 02108

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