Governor Baker Signs Fiscal Year 2016 Budget; Enacts MBTA Reforms
Administration also files Fiscal Year 2015 year-end supplemental legislation which includes funding for local snow relief, homelessness, opioid prevention
BOSTON – Governor Charlie Baker today signed the Fiscal Year 2016 budget into law, reflecting the administration’s priorities for responsible, smarter government and better communities, schools and jobs for Massachusetts. The $38.117 billion spending plan, which holds growth to a responsible 3% over the previous fiscal year, solves a $1.8 billion structural deficit without new taxes, makes critical investments in local aid, education and transportation, and gives the administration many new tools to fix the troubled MBTA including the creation of the MBTA Fiscal Management and Control Board and the three-year suspension of the Commonwealth’s anti-privatization law.
Additionally, a year-end supplemental budget was filed today to support the Commonwealth’s cities and towns for historic winter weather and snow removal costs, family homelessness prevention and combatting opioid abuse, while paying down debt in advance and increasing the balance of the Stabilization Fund for the first time in three years.
“I’m proud to have signed a fiscally responsible budget that prioritizes Massachusetts’ jobs, communities and schools, without raising taxes, by investing in transportation, local aid, education and providing tax relief for over 400,000 working individuals and families,” said Governor Baker. “As we implement our vision for a greater Massachusetts, we look forward to beginning the work of fixing the MBTA, investing in vital services for our most vulnerable, and curbing the opioid epidemic that has claimed far too many lives. Putting the state back on solid fiscal footing will play a major role in making our Commonwealth a better place to live, work and raise our families.”
In addition to avoiding new taxes, the Fiscal Year 2016 budget protects the anticipated reduction in the state income tax to 5.1% on January 1, 2016 and boosts the Earned Income Tax Credit from 15% to 23%, helping over 400,000 low income individuals and working families.
“This budget delivers on our commitment to our cities and towns, increasing local aid in a way that reflects the Commonwealth’s growing economy and invests $2.6 million worth of Community Compact Cabinet grants we initiated early in our administration,” said Lt. Governor Karyn Polito. “We are proud to expand on our partnership with municipal officials statewide, promoting best practices and providing critical levels of local support, in order to drive economic growth and stronger communities throughout the Commonwealth.”
Other highlights of the signed budget include an increase in unrestricted local aid by 75% of tax revenue growth, support for an additional $111 million in Chapter 70 local education funding to its highest level ever, and funding for summer jobs up to an historic high of $11.5 million. Additionally, the budget invests $10 million in the I-Cubed public private partnership program for economic development, $2 million in development grants in urban communities as part of the administration’s Urban Agenda and $1 million for the Transformative Development Initiative’s support of Gateway Cities.
“I want to thank our colleagues in the Legislature for their collaboration on fixing a serious spending problem,” said Secretary for Administration and Finance, Kristen Lepore. “Our ability to keep spending responsibly below revenue projections and implement sound budgeting practices, like reducing our use of one-time solutions and not drawing down on the rainy day fund, will have a positive impact on the long-term fiscal health of the Commonwealth.”
Recognizing the growing opioid epidemic and the work of the Governor’s Opioid Working Group, the budget supports $111 million in substance abuse prevention and treatment efforts, with an additional $28 million included in the supplemental budget. The Fiscal Year 2016 budget includes more than $21 billion in support for Health and Human Services and increases support for the mission of the Department of Children and Families by 4.3%. The budget signed by the governor also supports increased funding for autism services and veterans.
While the administration is proud to achieve so many accomplishments in its first budget enactment, it also recognizes several revenue and spending items within the conference committee report which require corrective action.
The administration has identified $83 million in additional spending over its original House 1 proposal, and recognizes several underfunded accounts, such as the Committee for Public Counsel Services and the Emergency Assistance program, which need to be funded at higher levels later in the fiscal year. It also anticipates that non-tax, departmental revenue will come in lower than initially projected for Fiscal Year 2016.
Accordingly, this budget reflects $162 million in line-item and outside sections vetoes, including $38 million in earmarks, and proposes to use surplus money from Fiscal Year 2015 to make advance payments and retire debt early to achieve upfront savings.
The budget will be updated at the following link after the Governor signs it: http://www.mass.gov/bb/gaa/fy2016/