More than a week into the fiscal year, the House and Senate agreed in bipartisan fashion Friday to a $48.1 billion annual state budget and shipped the proposal to Governor Charlie Baker’s desk.
Both branches voted unanimously to approve the revised spending plan, which calls for permanently enshrining the state’s controversial film tax credit program, continuing to delay implementation of a charitable giving tax deduction, and setting aside $350 million to buttress a multiyear education funding reform law.
House Ways and Means Committee Chair Representative Aaron Michlewitz, who cochaired the conference committee that resolved differences between the House and Senate budget proposals, said the vote will “mark a capstone to a volatile 16-month odyssey we have seen since the pandemic first struck the commonwealth.”
At this time last year, budget writers were fretting a potential tax revenue implosion and wondering if state reserves would be enough to hold public services together. But taxpayers have delivered robust collections for the state, enabling significant spending increases and allowing historic deposits into the rainy day fund.
“We’ve been through a lot, and we’ve come out of the last year and a half in a stronger fiscal situation than any of us could have ever imagined,” Michlewitz, a North End Democrat, told his colleagues prior to the vote.
Representative Todd Smola of Warren, one of two Republicans involved in the budget talks, praised the final accord as a “culmination of those good working relationships that we have with one another across the aisle.”
While all 160 representatives and 40 senators voted to accept the conference committee budget, two Senate Democrats running for higher office criticized some aspects of the spending plan before approving it.
Senator Sonia Chang-Diaz, a Jamaica Plain Democrat vying for the gubernatorial nomination, said there were “a few items that give me real concern,” including the decision to shift $350 million into a reserve for later years of the Student Opportunity Act.
The budget funds one-sixth of that $1.5 billion school funding reform law, approved in 2019, after the pandemic disrupted its original seven-year implementation timeline. Chang-Diaz said she believes the Legislature should have used part of the $350 million fund to immediately increase school funding this year, particularly as districts attempt to recover from more than a year of pandemic-fueled upheaval.
“If districts have to engage in accounting acrobatics to figure out how to stretch their one-time (American Rescue Plan Act) money to cover operational costs that the state is dropping the ball on, that means they’re not moving to spend the recovery money now to meet the needs of the moment,” Chang-Diaz said. “That will be an awful and avoidable shame on our commonwealth.”
State auditor candidate and Methuen Democrat Senator Diana DiZoglio slammed the final budget for dropping language that would have required a study on allowing legislative staffers to get health insurance through the state Group Insurance Commission. She also jabbed at leaders for scheduling a vote on the compromise less than a day after the conference committee submitted its report.
“This is occurring yet again, positioning members to vote on something we did not get adequate time to review. It’s not acceptable,” DiZoglio said. “If we keep doing this over and over again, it’s not going to become magically acceptable.”
Legislative negotiators found compromise on the multiple policy areas that separated the House and Senate budget bills, including the future of a program offering tax credits to film and television productions in Massachusetts. Supporters praise the program as an economic boon, while opponents contend it siphons resources away from the Bay State with insufficient returns.
The House voted unanimously in April to eliminate the sunset date altogether, while the Senate voted to push it back four years while imposing several additional eligibility requirements on the tax credits.
In their compromise, the Legislature agreed to make the credit permanent while imposing one of the Senate-backed changes. Production companies would now be required to conduct at least 75 percent of their principal photography days or spend at least 75 percent of their budget in Massachusetts, up from 50 percent currently.
“Thanks to the legislature’s action today, Massachusetts will be poised and ready to capture the growing streaming TV industry that will bring even more good-paying jobs to Massachusetts for years to come, employ more local workers, and spend millions of dollars with more local businesses,” said David Hartman, executive director of the Massachusetts Production Coalition.
The final budget does not include Senate-authorized language allowing the purchase of Massachusetts Lottery products with debit cards, which that branch and Governor Charlie Baker have both unsuccessfully sought in previous spending bills.
Negotiators also dropped another section from the Senate budget that would have increased the per-ride fees imposed on ride-hailing companies such as Uber and Lyft.
Michael P. Norton and Sam Doran contributed reporting.