What you need to know about tomorrow’s budget proposal
Tomorrow, the Massachusetts House Ways and Means Committee is scheduled to release its budget proposal for next year. Their proposal is hardly the final word in this process — that takes some time — but it’s a crucial step and also the first indication of the Legislature’s spending priorities for the coming year. Here’s what you need to know.
Disclosure: The numbers I’m using are drawn from the Massachusetts Budget and Policy Center, a nonpartisan research center where I used to work.
- new investments (in education or transportation, etc.)
- ongoing support for programs that help young kids, workers, veterans, seniors, people with disabilities — all of us, really.
- cuts to programs deemed inefficient, unnecessary, or unaffordable
- tax policies that pay for these things
The bulk of state spending, however, goes to just two areas: education and health care. A common refrain among policy experts is that the federal government is basically an insurance company with an army. At the national level, at least, that’s where the money goes — to Social Security, Medicare, Medicaid, and defense.
By contrast, Massachusetts is more like a school system with health benefits. More than 25 percent of state spending goes to education — including K-12 schools, early education, and higher ed. Another 30 percent goes to health care, most of that in our state’s Medicaid program (MassHealth). That leaves about 45 percent for the other stuff like roads, bridges, etc.
The governor’s proposal this year is far more modest than the budget he proposed last year. Given that the House led the effort to rein in the governor’s budget last year, it seems unlikely they’ll push for anything really dramatic this time around. Still, the smaller things matter and there are a lot of choices to be made.
For instance, how to close the deficit. This is the sixth year in a row that the state faces a deficit, and unlike the federal government we have to eliminate it (balancing the budget is a constitutional requirement). There are a few ways to do this: raise new taxes, cut spending, borrow from the “rainy day” fund, or try to scrape together money from other, smaller sources. The governor’s proposal included a mix: about $130 million in new revenue initiatives, $185 million from the rainy day fund, and another $150 million cobbled together from here and there. It will be interesting to see what the House Ways and Means Committee recommends.
Data: Overall budget data reflects net state costs, which excludes federal reimbursements and departmental fees