Massachusetts House rallies around big-spending budget with tax relief

By Chris Lisinski

STATE HOUSE, BOSTON, APRIL 26, 2023…..The Massachusetts House unanimously approved a $56.2 billion fiscal year 2024 budget on Wednesday, shipping the Senate a spending plan that factors in hundreds of millions of dollars in tax relief, online Lottery authorization and a change to the tax cap law that triggered mandatory rebates last year.

The House voted 156-0 on the bill (H 3900) around 6:20 p.m., capping three days of deliberations that appeared mostly lethargic in public view while representatives decided behind closed doors which of the 1,566 budget amendments would survive.

Following private meetings in a nearby lounge, top Democrats grafted almost all of those proposed changes together into seven mega-amendments, each of which secured approval after introductory remarks but no substantive debate.

The House added roughly $120 million in spending over the course of its budget process. That did not, however, change the bottom line that House leaders had been trumpeting for weeks: a House Ways and Means Committee spokesperson said Wednesday that the $56.2 billion figure Speaker Ron Mariano and budget chief Rep. Aaron Michlewitz attached to their draft budget proposal two weeks ago had already accounted for the earmarks and program boosts that would later be inserted.

“This was as efficient and stress-free as any budget in the past 32 I’ve done,” Mariano said on the floor right before the final votes were cast Wednesday.

Steep spending increases coupled with tax relief made it a budget with broad appeal among House members, and if there were sharp differences over how best to spend what will be the state’s largest budget, representatives were careful to keep their disagreements out of the public sphere.

The House budget pursues major spending increases across state government, particularly on education, environmental agencies, transportation and child care, while projecting more savings that will push the balance of the state’s “rainy day” fund above $9 billion by the end of FY24. Its bottom line is about $3.7 billion or 7 percent higher than the fiscal year 2023 state budget enacted last summer.

The bill factors in about $650 million in tax relief next fiscal year, which the House approved in a standalone bill (H 3770) whose annual impact would eventually rise to $1.1 billion.

Michlewitz said Monday that the budget “complements that tax relief package by building off past successful investments.”

“The strides we have made as a Legislature over the past few budget cycles were largely directed toward programs investing in those who have borne the brunt of the COVID-19 pandemic. From housing stability to food security and early education funding, this House has met the needs of our constituents,” Michlewitz said. “Now, as our revenue growth begins to slow and as COVID-era federal programs begin to end, we as a commonwealth must determine how to continue to meet the needs of our residents. This budget aims to do that with historic investments in housing, education and workforce development while keeping Massachusetts a competitive economic engine.”

Attention turns now to the Senate, where top Democrats have said they are interested in “progressive, permanent tax reform” and will likely unveil their own tax policy proposal before taking up their own fiscal 2024 budget bill toward the end of May.

The House budget would allow the Massachusetts Lottery to sell games online, expanding another gambling option onto digital platforms shortly after the launch of in-person and mobile sports betting in the Bay State. Revenue from the “iLottery” would be directed toward Commonwealth Cares for Children (C3) grants that stabilize early education and care providers, and House Democrats estimate it would generate about $200 million per year for that program.

On Monday, House Democrats voted to exempt surtax revenue from a tax cap calculation, making it less likely that state tax collections will trigger a voter-approved law that last year prompted nearly $3 billion in mandatory rebates to taxpayers.

Most of the changes adopted via mega-amendments tacked on earmarks for projects, community organizations and other local needs in legislative districts.

One package included a Rep. John Lawn amendment awarding a 25 percent pay raise for members of the Governor’s Council, an elected body that vets and confirms judicial nominees. Councilors — many of whom are themselves attorneys — would earn $45,025, up from their $36,025 salary under existing law.

The council usually meets once a week, and its members publicly interview and usually confirm judicial nominees submitted by the governor.

The raise, which no representative mentioned during the public-facing proceedings, drew criticism from the Massachusetts Fiscal Alliance.

“The budgeting process at the State House is completely broken. This is just one example of how taxpayer dollars get thrown around with no account,” said MassFiscal spokesperson Paul Craney. “There’s absolutely no excuse why the amendment sponsor or a member of the House leadership team couldn’t have made their case as to why they feel these pay increases are necessary.”

Another measure, filed by Speaker Pro Tempore Kate Hogan, that won approval in a giant amendment package would allocate $1 million to reimburse public universities for the bulk purchase of abortion medication that could become harder to acquire due to a pending U.S. Supreme Court case.