Massachusetts last state left with lingering budget impasse

BOSTON — Massachusetts is the only state that has yet to put in place a permanent annual budget for the new fiscal year that began on July 1.

A House-Senate conference committee has been unable to resolve differences between versions of the roughly $41 billion spending plan approved by the respective chambers.

The reasons for the failure to strike a final accord and send a budget to Republican Gov. Charlie Baker’s desk aren’t entirely clear, and there are indications from lawmakers that a deal may be reached in the coming days.

For the moment, however, the impasse is weighing on the Legislature as it tries to complete work on dozens of other bills pending as the two-year session winds to a close on Beacon Hill.

Here are some questions and answers about the legislative logjam:

WILL RESIDENTS NOTICE ANY DISRUPTION?

The majority of residents and visitors to the state won’t notice any immediate changes resulting from the lack of a permanent budget. The state continues operating on a stopgap budget, so there’s no government shutdown.

The temporary budget expires at the end of the month, but in the unlikely scenario the stalemate continues beyond July 31 another stopgap spending plan could be passed. That would create a new set of complications, however, since formal meetings of the Legislature end July 31. That means legislative leaders would have to convene a rare special session to consider the budget.

SO WHAT’S THE IMPACT?

State agencies and vendors that receive state appropriations or grants, including many health care and social services providers, are waiting for final answers on what their level of funding will be in the current fiscal year and can’t set their own budgets and priorities until that happens.

The annual state budget also includes new or expanded programs, but those can’t be implemented because the funding to back them doesn’t yet exist.

Eventually all that could have an impact, particularly on people who rely heavily on state government.

Beyond that, there is the matter of prestige. Being the last state without a budget doesn’t exactly paint a picture of strong financial management.

“I think it’s important for the fiscal stability of the commonwealth that we get this done,” Democratic House Speaker Robert DeLeo said, adding he was more disappointed than embarrassed by the delay.

Bond rating agencies could frown on the tardiness, though the state probably won’t see any immediate hike in its borrowing costs.

DOESN’T MASSACHUSETTS HAVE A SURPLUS?

Yes, which makes the impasse somewhat more puzzling. In each of the last three years, tax revenues fell short of projections, necessitating a flurry of last-minute budget revisions. Yet in each case budgets were still finalized well before the current date.

State officials estimate revenue collections exceeded projections by more than $1 billion in the 12-month period that ended June 30.

WHAT’S BEHIND THE IMPASSE?

Budget negotiations between the House and the Senate take place behind closed doors, and neither side is commenting on specifics. There’s no way to know with certainty what the key stumbling blocks are and whether they focus more on policy disputes than disagreements over spending.

Lawmakers routinely add what are known as outside sections, also called budget riders, to the spending plan. Often these outside sections have little or nothing to do with state finances, and the oft-criticized practice of attaching them to the state budget can complicate negotiations.

According to the Massachusetts Taxpayers Foundation, a fiscal watchdog group, there are 185 non-spending sections in the Senate budget and 109 in the House budget, covering topics from immigration policy to stronger oversight of state police.

DeLeo has suggested that differences over spending be settled so the Legislature can pass a budget, leaving the outside sections for later consideration. Such a move would be unprecedented in recent legislative history, and Senate leaders haven’t agreed to it.

WHAT ABOUT BAKER?

The governor has urged the Democratic-controlled Legislature to reach agreement on the budget as quickly as possible, but there is no indication he is actively participating in negotiations between the House and the Senate.

Baker said on Friday he fears that lawmakers’ continued focus on the budget will interfere with efforts to complete work on several other major bills he wants on his desk before the session ends. When the budget finally does get to Baker, he’ll have 10 days to review it and issue any line item vetoes.