‘HANG ONTO YOUR WALLETS’
Healey proposes $55.5B budget, nearly 15% more than Baker's last request
The governor is proposing the state increase spending a full $7 billion above the previous year’s budget request.
“We have filed our first budget,” Gov. Maura Healey said Wednesday at the State House. “Today we wanted to present a budget that will set Massachusetts up for success by lowering costs, growing our economy and delivering on the promise of our people.”
The budget, a proposal for $55.5 billion in spending for 2024, is a “down payment” toward tackling inflation, combating climate change’s impact on cities and towns, building housing, and funding education for the state’s youngest citizens.
The proposed budget puts “forward ambitious goals and historic, significant investments,” according to the governor.
Former Gov. Charlie Baker, last January, asked the Legislature to approve $48.5 billion in funding. Lawmakers ultimately approved a spending plan north of $53 billion, $2 billion less than Healey seeks in fiscal 2024 but a full 10.7% more than was spent in 2022. Healey’s spending ask will, most likely, arrive back on her desk this summer with a very different price tag after the Legislature is done with it.
As proposed, about $6.6 billion will be spent to fully fund the third year of transition toward the goals outlined in the Student Opportunity Act and offer a “historic” investment in Chapter 70 funding, representing an increase of 9.8% over fiscal 2023, “the largest percentage increase in more than two decades.”
A full 1% of the budget — about $550 million — will be dedicated to climate initiatives, fulfilling a Healey campaign promise to be the first state to dedicate such a substantial portion of its annual budget.
“This will expand the state’s ability to safeguard public health through environmental stewardship, climate adaptation and mitigation, and clean energy expansion, while making sure these efforts are realized equitably across all communities,” the governor wrote ahead of the budget’s release.
The spending plan also comes with the intention to cut about $750 million from the state’s revenues through reform of the estate and short-term capital gains taxes, an increase in the rental deduction and the senior circuit breaker, and the implementation of a $600 per dependent tax credit.
That idea was met with swift backlash when revealed early this week, with one progressive group calling the plan to lower taxes on wealthy estates and gains made by a handful of well-off investors “incredibly regressive.” Healey said Wednesday the tax cuts will help keep the state competitive with other jurisdictions while investing in the state’s residents.
“I would be interested to see how people feel today, given our budget and what we spoke of in terms of some really significant investments in folks across the state,” Healey said when asked to respond to the criticism.
A full $1 billion of the budget represents funds from the Fair Share Amendment, a change to the state’s constitution which will see incomes over $1 million taxed an additional 4% over the state’s flat 5% income tax and the money raised spent on education and transportation.
Matthew Gorzkowicz, the secretary for administration and finance, said when pressed by the Herald, that not a single dollar from the general fund was being diverted from education and transportation to elsewhere now that the administration is expecting an additional $1 billion for those needs.
Instead, administration and finance staff explained, all of the transportation and education funding from 2023 was left in place and the full $1 billion will be split — $510 million for education and $490 million for transportation — and kept separate from the general fund in an as yet unestablished Fair Share Amendment trust fund.
The budget calls for no new tax increases.
What it doesn’t do, says Paul Craney of the MassFiscal watchdog group, is rein in rampant overtime “as more and more state workers are earning hundreds of thousands of dollars without any accountability of payroll expenses.
“Hang onto your wallets, (this) budget will cost you!” he added.