Gov. Baker Says State's 'Rainy Day' Fund Will Help Balance Budget
BOSTON (AP) — Besides costing thousands of lives in Massachusetts and upending the economy and schools, the coronavirus pandemic has also wreaked havoc on the state's budget process.
On Wednesday, Gov. Charlie Baker tried to restart the debate over the state's annual spending plan by submitting a new budget proposal for the current fiscal year that is higher than the original plan he submitted back in January — just before COVID-19 gripped the state.
He said the budget would avoid deep cuts to core services and increase health spending. The budget Baker is proposing is for the 2021 fiscal year that began July 1.
To keep the government running, state lawmakers have approved about $21.7 billion in spending through two interim budgets. The second of those interim budgets is set to expire at the end of the month. They are expected to approve another interim budget before approving the final budget plan.
Gov. Charlie Baker had initially released a $44.6 billion state budget proposal for the 2021 fiscal year before the pandemic hit.
The budget he released Wednesday would spend $45.5 billion — about a billion more than the January proposal — even though tax revenues are expected to drop by more than $3 billion compared to pre-pandemic projections.
Baker plans to make up the difference by relying in part on federal relief funds and drawing $1.35 billion from the state's "rainy day" fund — leaving about $2.2 billion in the reserve fund.
"The rainy day fund is there to support services when it is raining and I think most people would agree it's raining," Baker said.
Baker said the state's ability to build up the fund during the prior five years has given the state a fiscal cushion.
The budget proposal includes no new taxes and must be approved by state lawmakers before taking effect.
Much of the increase in the new budget, compared to the January proposal, was being driven by the extra health care costs imposed by the pandemic, administration officials said.
Baker also looked to close the budget gap by trimming funding increases in other areas including the Massachusetts Bay Transportation Authority, which runs the greater Boston public transit system.
While Baker's new budget proposal would increase funding by $64 million to the MBTA — which has taken a revenue hit as a result of a declining ridership during the pandemic — it's more than $100 million less than what Baker proposed in January, according to administration officials.
Baker urged commuters and others to begin riding the MBTA again. He said the agency has taken steps to ensure safety, including requiring riders wear masks.
Baker's plan would also trim back what would have been other spending increases in the original budget.
Agencies like the state Department of Transportation, the Executive Office of Energy and Environmental Affairs, and the Department of Children and Families would all see more modest increases than first proposed in January.
The budget proposal now heads to the Massachusetts House and Senate, which will have a chance to come up with their own budget proposal.
Baker said he hopes to get the budget back from lawmakers by Thanksgiving — when his administration will begin working to pull together the budget for the 2022 fiscal year that begins in July of next year.
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