Introduction: The House Budget in Context

People First: What Massachusetts Does for People with Disabilities

An Analysis of the House of Representatives’ State Budget Recommendations for Fiscal Year 2006

Volume II of IV on the FY06 state budget debate

On April 13, 2005, the Ways and Means Committee of the House of Representatives released its state budget recommendations for the fiscal year 2006 (FY06) that will begin on July 1, 2005. After two weeks of amendments and full House debate, a final House budget was completed late in the evening of April 29, 2005. The release of the House budget for FY06 is the second major step in a long process that will determine the actual state budget for FY06. Earlier, on January 26, 2005, the governor released his House 1 for FY06 budget recommendations. Soon, the Senate will have debate to determine their budget recommendations for FY06.

People First provides a disability analysis of the state’s proposed budgets to assist individuals with developmental disabilities, their families, and other advocates. People First also provides information for state legislators and other decisionmakers, to educate them about the important disability programs funded through the state budget. To help create better outcomes for persons with disabilities, people concerned about disability services can participate in this budget debate through regular contact with their own state representatives and state senators. Please see the “Guide for New Readers” chapter for more information on the budget debate process and how to express your concerns to elected officials.

This second People First report for the FY06 budget debate cycle examines the House of Representatives’ recommendations for disability services. The third People First report for FY06 will examine the critical decisions on disability issues to be made in June by the Joint House/Senate Conference Committee, which is charged with reconciling differences between the House and the Senate budgets for FY06. A fourth People First report (available electronically only) will examine the governor’s veto message and recommend overrides necessary to best support disability services. To peruse other volumes in the series, visit www.mass.gov/mddc/peoplefirst/index.html.

Revenue Remains a Key Concern

During House debate, some additional spending was approved with the expectation of Democrats that a bill closing corporate tax loopholes would be passed later. The measure is expected to generate $170 million in new revenues. Still, in spite of new and recovering state revenues, a structural deficit—a mismatch between sustainable revenue and spending needs—is anticipated to continue in FY06 and beyond. According to recent reports, the fiscal challenges Massachusetts faces are due to a combination of tax cuts issued during the 1990s, destined to create a structural budget gap,¹ and spending growth in 4 areas that are consuming about $1 billion (most) of additional spending each year: health care, public education, capital investments and their debt service costs, and pension costs that exceed the inflation rate.² Meanwhile, revenue growth is estimated at about $700 million for FY05 and FY06. In short, the FY06 budget is being created in a very cautious climate, with most programs and agencies slated for just maintenance funding (or below-maintenance level funding) or small increases.

Massachusetts Budget and Policy Center. 2004. “The Massachusetts Budget Crisis: Sources and Solutions” (June). Available at: www.massbudget.org/sources_solutions_june04.pdf.

Massachusetts Taxpayers Foundation. 2005. “State Budget ‘05–’06: The Clash Between Expectations and Reality” (April). Available at: www.masstaxpayers.org/data/pdf/reports/report~1.pdf. See also Michael P. Norton. 2005. “Report Cites ‘Widening Disconnect’ On State Spending Expectations, Realities,” State House News Service (April 12).