More than two weeks after their fiscal year started, Massachusetts legislative leaders on Sunday unveiled an agreement on a $52 billion state budget bill they said would dedicate hundreds of millions of additional dollars to the MBTA, sock away more cash in the state’s savings account, and includes $1.8 billion more in spending than either the House or Senate initially approved.
The $52.7 billion spending plan, which lawmakers expect to pass and send to Governor Charlie Baker on Monday, reflects the state’s heady fiscal times, with tax revenues flowing far above estimates and lawmakers simultaneously racing to pass a separate $1 billion tax relief proposal by month’s end.
The proposed budget does not include any broad-based tax increases, Democratic leaders said, and the bulging state coffers prompted negotiators to rely on a rosier fiscal forecast for the current fiscal year.
As a result, legislative leaders beefed up spending across the budget, including setting aside $150 million more for a trust fund to help cover the cost of a $1.5 billion school funding law passed in 2019. They also estimated that the plan would push the state’s savings account to $7.35 billion by the end of the fiscal year.
The investments, Democratic leaders said, are intended to take advantage of the prosperous year of unexpected surplus, and ready the state for rainier days ahead.
“All indications from many economists is that things are going to slow down over the next fiscal year, and we are preparing for it,” said Senator Michael J. Rodrigues, a Westport Democrat and the chamber’s budget chief.
The budget proposal also dedicates $266 million to a reserve for the MBTA to spend in response to a looming report from the Federal Transit Administration. The FTA launched an inspection of the beleaguered system in April following what it called a “pattern of safety incidents” at the T, including the April 10 dragging death of Robinson Lalin, whose arm got caught in a Red Line car at Broadway Station.
A MBTA official said last week that the agency estimates it will need to spend around $300 million to meet the FTA’s directives, and that it has so far only budgeted $100 million.
The proposal is “more than we’ve ever invested in ensuring that patrons of the T are safe,” Rodrigues said.
The money comes on top of a series of other promised and potential buckets of funding for the T. The budget plan already included $187 million for the T in addition to the revenue it collects from a portion of the state’s sales tax, legislative leaders said. The budget plan would reshape the MBTA’s board by adding two seats: one named by Boston’s mayor and another named by other municipalities served by the T, said State Representative Aaron Michlewitz, the House’s budget chairman.
Separately, the House and Senate also have passed separate infrastructure bond bills that would make $400 million available for the agency to address any recommendations from the federal probe. A full safety management inspection report by the FTA is expected in August.
From the budget or the bond bill, “either account will give the [Baker] administration, we feel, the resources to meet the needs of whatever the Transit Administration safety report requires,” said Michlewitz, a North End Democrat.
With flush times also come less painful choices. Michlewitz said when faced with differing spending amounts between the chambers, negotiators repeatedly opted for the higher number.
That included dedicating an additional $494 million in aid to local school districts, and adopting House measures to put $110 million toward a free school meals initiative and creating a $20 million fund to cover eliminating the costs incarcerated people or their families pay for phone calls.
The bill also includes a round of 12.5 percent pay hikes for the state’s judges, as well as increases for hundreds of clerks, registers, and assistant clerks whose pay is tied to the judge’s salaries. The Supreme Judicial Court chief justice’s salary, for example, would rise by nearly $26,000 to $232,101, while trial court justices’ pay would reach $207,855.
The agreement’s emergence Sunday continues what’s now a decade-long tradition on Beacon Hill of negotiations bleeding well into the current fiscal year, forcing the state to rely on a temporary spending plan to keep the government running.
Once again, Massachusetts is the only state in the country with a fiscal year starting July 1 where lawmakers have yet to finalize an annual spending plan.
The deal unveiled Sunday evening is expected to move quickly. Both chambers intend to take up the policy-packed bill less than 24 hours after its release with up-or-down votes on Monday, when it’s likely to move to Baker’s desk by day’s end.
By doing so, lawmakers would guarantee themselves at least a few days to override any potential gubernatorial vetoes before formal sessions end on July 31.
Rodrigues said that while leaders are “almost always late,” this year they were waiting to get a better sense of revenue numbers from June.
“It’s not like we were fretting about what line items we will have to cut, what services we will have to reduce,” he said.
Indeed, state coffers are awash in cash. The Massachusetts Taxpayers Foundation, a business-backed budget watchdog, has projected that lawmakers will have a nearly $3.6 billion budget surplus from the fiscal year that ended June 30. The state also has $2.3 billion in federal stimulus money that it has yet to spend.
The budget bill is just one of several major spending bills that lawmakers are trying to finish under that July 31 deadline.
The House last week passed a $4.2 billion package designed to help spur the state’s economy and features $1 billion in proposed tax relief, including a plan to send $510 million in rebate checks to potentially millions of taxpayers by October. It also would spend more than $2.5 billion between the surplus and unspent federal aid.
The Senate will be announcing its version of an economic development and tax package Monday morning, Rodrigues said.
And both chambers have approved their own versions of a nearly $11 billion infrastructure bond bill, the differences of which need to be reconciled before it, too, can be shipped to Baker.
In the budget, both the House and Senate funneled additional dollars toward a child-care industry beset by low wages and some of the highest costs in the country.
The House sought to boost a state rate reserve for worker salaries from $20 million to $60 million, part of roughly $70 million in increased funding. The Senate proposed pouring $310 million in new state spending over the current fiscal year, with the vast majority — $250 million — going toward the Commonwealth Cares for Children program, which makes grants available to all child-care providers, regardless of whether they receive other public subsidies. To date, the program has been funded by federal aid.
The agreement ultimately adopted the Senate’s proposal for the Commonwealth Cares for Children program, and also invested $175 million into a new early education and care trust fund, Rodrigues said.
Democratic leaders cut from the agreement a Senate-passed package intended to help shield abortion providers from out-of-state prosecution for procedures that are legal here after the chambers in recent weeks passed different versions of wide-ranging abortion rights legislation.
Correction: Due to incorrect information that was provided to the Globe, an earlier version of this story misstated the total spending under the budget proposal. It’s $52.7 billion.