Legislative leaders punt on budget, pass interim measure funding state until Oct. 31

The Massachusetts State House, where lawmakers are punting on hard budget decisions.Craig F. Walker/Globe Staff

The Massachusetts Legislature on Tuesday quickly passed an interim $16.5 billion budget that will keep state government funded through the end of October, likely pushing any painful decisions on a full-year spending bill into the fall.

Lawmakers sent the spending proposal to Governor Charlie Baker just hours after legislative leaders first announced it, adding to the crush of bills lawmakers are juggling before the scheduled end of the legislative session on Friday.

But the bill, and its three-month timeline, provided the clearest indication yet that legislative leaders may move to extend formal lawmaking to handle an annual budget plan — a possibility they’ve privately discussed but have yet to formalize after the coronavirus pandemic upended the state’s finances.

In a joint statement, state Representative Aaron Michlewitz and Senator Michael J. Rodrigues said the three-month interim budget “will provide near-term fiscal stability,” and argued that without knowing whether the federal government will provide more financial help to cities and towns, it’s “the most prudent and responsible path forward.”

It also achieves something else: Punting any painful decisions to slash spending until at least after the Sept. 1 primary. Seventeen Democratic lawmakers, a relative sliver of the supermajority Democrats enjoy, face challenges from within their own party.

“We are committed to finalizing a full-year budget that is fiscally responsible and responsive to the needs of our state,” Michlewitz and Rodrigues, who lead their respective chambers’ budget committees, said in the statement. “But key to developing that budget is further clarity around potential federal action, our economic recovery and continued trajectory of COVID-19.”

The lawmakers did not provide a concrete timeline for when a more complete proposal could be debated. “Once better information is available, we will take action on a final FY2021 framework,” they said.

The relatively sparse spending bill is four pages long, and requires spending at levels “not less than” last fiscal year or what Governor Charlie Baker proposed in a $45 billion spending bill he released in January — weeks before the pandemic threw the state’s financial picture in disarray. The annual budget allocates tens of billions of dollars each year, funding an array of state agencies; carving out money for district attorneys, sheriff departments, and other offices; and floating billions to cities and towns.

The state is currently leaning on a temporary budget through July. In passing Tuesday’s bill, lawmakers essentially rewrote a more narrow $5.51 billion placeholder bill Baker had filed to keep government funded through August. At the time, Baker said that he expected his administration and the Legislature to at least outline a full-year projection for local and school aid in the “coming weeks.”

A Baker spokesman said the Swampscott Republican would review the bill, and added that Baker “appreciates the efforts of the Legislature.”

But amid the bill’s release, there appears to be some confusion over what it would cover. Senator Adam G. Hinds, the cochairman of the Committee on Revenue, wrote — and then appeared to delete — a message on Twitter saying the budget level-funds direct aid to towns and as well local school aid, plus $107 million “for inflation.”

His office did not immediately respond to an e-mail asking where he got that figure.

As of early July, Massachusetts was one of eight states to not have passed a full-year budget for the current fiscal year, according to the National Association of State Budget Officers.

This year, of course, has been riddled with uncertainty since March, when the pandemic cratered the state’s financial picture, prompting closures of swaths of the economy and putting hundreds of thousands out of work in Massachusetts.

State lawmakers have been closely eyeing any movement in Washington, where the Senate on Monday released a $1 trillion coronavirus relief package. But it’s unclear how quickly a bill could be approved or what help a final version will include for state coffers. A bill approved in the House in May proposed allocating $1 trillion for state and local governments, but the Senate Republicans’ bill did not include any aid specifically for them.

Michael Goodman, an economist from the University of Massachusetts Dartmouth, said it makes sense for lawmakers to wait on any potential federal help before crafting a complete budget. The state is also waiting on a clearer revenue picture for the fiscal year that ended in June after reporting this month that revenues were down $3 billion, or 10 percent, from what the state had forecast.

“But there is no small amount of risk,” said Goodman, warning that should the state and municipalities still have to make cuts later, they’d be tougher to swallow deeper into the fiscal year. “There will be a price to be paid later.”

There are also questions of whether, and to what degree, the state will dip into its $3.5 billion emergency savings account, or tap further into a $1.75 billion line of credit. (Treasury officials told the State House News Service in late June they had, at that point, drawn down $500 million.)

“I’m not sure what the magic of the three months is,” Eileen McAnneny, president of the Taxpayers Foundation, said of the interim budget. “It provides some of the folks who are getting the money at least some certainty in the short term. But it doesn’t allow for full year planning.”