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Gov. Baker signs new $47.6B Massachusetts state budget

July 16, 2021 GMT

BOSTON (AP) — Gov. Charlie Baker signed a new $47.6 billion state budget Friday for the fiscal year that began July 1, as the state is enjoying an expected jump in revenues despite the pandemic.

The spending plan is designed to support the state’s cities and towns, schools, families, small businesses, and workers as Massachusetts emerges from COVID-19, Baker said.

The budget makes key investments, including fully funding the state’s new Student Opportunity Act, which requires more funds be channeled into school systems with higher percentages of low-income students and English language learners.

There are no new taxes in the budget, which also forecasts a $1.2 billion deposit into the state’s Stabilization Fund — bringing the total balance of the “rainy day fund” to $5.8 billion. There is no planned withdrawal from the fund.

Baker and House and Senate Legislative negotiators who hammered out the final budget benefited from an upgraded $34.3 billion tax revenue forecast for the fiscal year. This represents an increase of $4.2 billion over the FY 2022 consensus tax revenue estimate announced in January, based off better-than-expected actual tax collections in recent months.

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The budget also includes a compromise on the film tax credit by making the tax break permanent. The tax break has been criticized by some, saying big-budget Hollywood movies don’t need a tax break, but supporters — including Teamsters Local 25 — have said it’s key to nurturing the state’s home-grown film industry and retaining jobs.

“As we continue in our economic recovery, we are focused on supporting those communities that have been hardest hit by COVID-19,” the Republican said in a written statement. “We are able to responsibly grow our reserves without raising taxes, while continuing to make historic investments in our schools, job training programs and downtown economies.”

The budget includes $35 million for a range of initiatives recommended by the Black Advisory Commission and the Latino Advisory Commission, including Adult Basic Education, YouthWorks Summer Jobs, early college, teacher diversity, small business development, financial literacy, and workforce training, according to Baker.

Baker also signed some “outside sections” of the budget, which typically deal more with policy initiatives than spending, including a section filed by the administration to create a Disability Employment Tax Credit to support businesses that hire individuals with disabilities.

Another section makes permanent the Massachusetts Education Financing Authority’s college savings tax deduction program, which was scheduled to end this year. Nearly 30,000 tax filers across Massachusetts benefit from this program, according to the administration.

Baker vetoed $7.9 million in gross spending. Of 149 outside sections, he signed 122, vetoed 2, and returned 25 to lawmakers with proposed amendments.

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Democrats in the Massachusetts House and Senate hold wide enough margins in both chambers to override any vetoes. Lawmakers put a $48.1 billion bottom line on the budget they sent to Baker. The administration reached the slightly lower figure of $47.6 billion by excluding funding from the Medical Assistance Trust Fund.

Also Friday, Baker signed a separate spending package focused on transportation needs.

The bill, which was approved by lawmakers on Thursday, authorizes $200 million for municipal road and bridge repairs and $150 million to support statewide projects to address congestion, support electric vehicle infrastructure, prioritize bus infrastructure, and improve public transit.