Mass. will dig deep into emergency fund to pass fiscal 2021 budget

The Massachusetts Statehouse. (Photo by Ana Goni-Lessan/BU News Service)

By Samantha Drysdale
BU News Service

BOSTON – With significant revenue shortfalls and no apparent federal aid forthcoming, Gov. Charlie Baker has released a plan to dip deeply into Massachusetts’ emergency savings fund to fill budget holes in the fiscal 2021 financial plan without raising taxes.

Lawmakers on Beacon Hill are preparing to pass the annual budget, originally due June 30, and put the fiscal year 2020 to bed by the end of the month.

In a press conference Wednesday, Baker proposed a plan that included $45.5 billion more than the original budget he filed in January, despite a $3.6 billion shortfall due to reduced tax revenue amidst the COVID-19 pandemic.

According to the Senate Ways and Means Committee Chair Sen. Michael Rodrigues, D-Westport, the state is facing a 12 to 15 percent revenue drop from last year.

Two interim budgets have been passed since the end of the 2020 fiscal year, the second of which expires on Oct. 31. Interim budgets served to “keep the lights on and pay the bills,” while the Legislature assessed the economy and waited for more certainty on a long-promised federal stimulus package to help close budget holes, according to Rodrigues.

Both Baker and Rodrigues agree that the state will have to draw from the emergency savings fund, called the rainy day fund, for fiscal 2021. The fund has increased threefold over the past five years and now stands at $3.5 billion.

Baker proposed pulling $1.35 billion from the reserves to avoid any broad-based tax increases.

“We managed to put a lot of money away into the rainy day fund — and today it is raining,” Rodrigues said.

The senator said the Legislature is committed to not making any cuts to local aid for communities through Unrestricted General Government Aid and to fund state aid for public elementary and secondary schools.

“We’re going to do our best to minimize any material cuts that could affect and have drastic effects on the most vulnerable members of our community,” he said.

Rep. Antonio F. D. Cabral, D-New Bedford, said school funding was one of the most important areas in the operating budget for New Bedford. He is hopeful that, despite budget cuts, there could still be about $107 million in inflation funding from the Student Opportunity Act.

The act, passed last year to reimagine the state’s Chapter 70 education funding formula to commit steady financial support to underfunded schools, has been thrown into uncertainty amidst economic uncertainty. Rodrigues, however, said the Legislature plans to include it in the budget.

“We’ve also committed to, not only level funds, but level funds plus inflation for Chapter 70 that goes back to cities and towns for their education system,” he said.

Additionally, Cabral said he wants to protect support programs such as Residential Assistance for Families and Transition, healthcare and public sector jobs.

“Over the next several weeks, there will be various opportunities to reassess the revenue streams, and we can get a better picture, especially if the federal government, or Congress I should say, can pass a stimulus package that includes direct aid to states and municipalities,” he said. “Otherwise, you’re going to see some cuts in some of the programs.”

The first HEROES Act was passed in the U.S. House of Representatives in May, which would have included $11.4 billion in funding for Massachusetts state and local government, according to the independent, nonpartisan policy institute, Center on Budget and Policy Priorities. The economic stimulus legislation has since stalled in the U.S. Senate.

After four months, the House passed a second HEROES Act in late September with a less-ambitious stimulus plan. This bill includes $7 billion in Massachusetts funding, with New Bedford, targeted for $85 million, and Fall River, for $90 million. This bill has not been acted upon by the Senate.

U.S. Rep. Bill Keating, D-Bourne, said he is concerned about frontline services in the public sector and believes money from a stimulus bill could protect these jobs.

“The people who work on the frontlines of our cities and towns and state, working frontlines in health care and education and all those areas — those people are facing job loss completely,” he said. “Look at it in terms of the services they provide. These are police, fire, public works people, teachers. These are the people who will be affected by this revenue shortfall.”

Republican Helen Brady, who is challenging Keating for his seat, said the best way to fix the budget holes would be to restart the economy by drawing back regulations on businesses.

“How do you make the budget if you don’t have businesses contributing, and you don’t have people working and contributing as well?” she said. “So we have to learn to live with this and until we do that, we will be scrounging for all sorts of money to cover expenses.”

According to Keating, members of Congress are on 24-hour call to get back to Washington should there be a resolution to the HEROES 2.0 Act or news of other federal stimulus aid.

The congressman said it wasn’t an “unreasonable expectation” for Massachusetts lawmakers to anticipate that there would be federal assistance by this time.

However, with confusing and contradictory news coming from Washington every day about the state of federal aid, Rodrigues said while they hope a stimulus package still comes, Massachusetts will have to proceed without it for now.

“We will be prepared to put forward a budget that is balanced and responsible without any additional federal aid,” he said. “It will be difficult; it will be painful in many ways, but it is our responsibility to do so and we’re going to do it.

This article was originally published in South Coast Today.

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