Fed reimbursements, rainy day fund drive up bottom line
3.9% increase over Baker proposal
» House Democrats on Wednesday put forward a state budget proposal that would spend $47.65 billion while avoiding service cuts or tax hikes on individuals, an approach made possible by higher-than-expected tax receipts, a change in a key federal reimbursement and a sizeable withdrawal from the state’s rainy day fund.
Speaker Ronald Mariano said his first budget as the new leader of the House makes investments “where we think they will have the greatest impact in benefiting our residents.”
“In this budget, we try to balance two priorities: we’re trying to take care of the residents’ immediate needs that are created by dealing with the pandemic and trying to chart the course of the common
wealth’s future by looking at some ways we can change job training and create some jobs here in Massachusetts,” the speaker said.
The House Ways and Means Committee’s budget recommendation, which is expected to be debated the week of April 26, includes none of the roughly $4.5 billion in federal aid coming to Massachusetts, would increase spending by $1.189 billion or 2.6% over the current year’s budget, and proposes to spend $1.792 billion or
3.9% more than Gov. Charlie Baker recommended in his January budget filing.
About $1.4 billion of the nearly $1.8 billion increase in spending over the governor’s proposal is the result of a federal-level change that drove up costs for MassHealth, the single largest budget item.
Baker’s budget called for a 3.4% reduction in gross MassHealth spending predicated on the thought that the state would be able to trim the MassHealth rolls, which have grown by more than
230,000 individuals over the last year, through redeterminations as soon as May. But just before Baker unveiled his budget publicly, the Biden-Harris administration announced that the public health emergency would remain in place through this year, meaning that MassHealth enrollment (and costs) are likely to continue to remain elevated. The House budget includes $18.97 billion gross spending for MassHealth, $1.4 billion more than what Baker included in his budget.