Economy/ State government

Lobbying begins on what to do next on budget

Wait until next year, says High Tech Council 

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AS BEACON HILL on Wednesday began trying to find consensus on the budget challenges facing the state, key interest groups began jockeying on how best to respond. 

The Fund Our Future campaign, which successfully pressured Beacon Hill to boost funding for public schools prior to the pandemic, called for raising revenues to plug the billions of dollars in holes emerging in the state budget. 

“Massachusetts has traditionally raised taxes in past recessions, and it’s only right and fair for those who can most afford it – especially the large corporations and wealthy investors who are accumulating sky-high profits during the pandemic – to pay more,” the group said in a statement. “New needs that have emerged due to COVID-19, and pre-existing needs that have not gone away, cannot be sacrificed because of a lack of revenue. It’s time for the legislature to raise the new revenue needed to keep their past promises and fund our future!” 

The Massachusetts High Technology Council came at the budget problem from a different direction, sending a memo to state leaders urging them to put off any action on a budget for this fiscal year until after the election and possibly until a new Legislature takes office in January. 

Waiting to craft a budget until half the fiscal year is over is unprecedented, but the High Tech Council said the delay would allow lawmakers to learn who will be in control in Washington for the next several years and the likelihood of another COVID relief package. 

The council also said delaying any action until January would reassure taxpayers that tax and economic decisions are not being made in a lame-duck session. 

The council warned that raising taxes should be the last option considered, given the challenges of COVID-19, the high level of unemployment, soaring unemployment insurance premiums, and the very real possibility post-COVID that companies will have a lot more flexibility about where they choose to locate their businesses. 

“Temporary revenue-raising options may ultimately be necessary and could attract significant support from business leaders – including the council – provided they are coupled with a combination of prudent and forward-looking approaches that include the use of all available fiscal tools, including federal aid, state rainy day funds, state borrowing, public procurement reforms, and control on state spending,” the council memo said. 

The Massachusetts Taxpayers Foundation issued a report indicating the state’s economy is very fragile. The report said there are 418,000 fewer people working today in Massachusetts than there were in February, despite a 7.3 percent jump in job growth since March. 

“This is not the V-shaped recovery some anticipated,” the foundation report said. “Instead, there are several indications that employment growth will soon stall after the Q2 bump. In fact, Moody’s Analytics projects that at the beginning of FY2023 [July 2022] Massachusetts will have 3.4 million jobs, 300,000 fewer people employed than this past February.”  

At a State House hearing Wednesday focused on gaining a better picture of the state’s fiscal situation, lawmakers and Baker administration officials provided little guidance on next steps. Gov. Charlie Baker and legislative leaders have indicated they want to pass, or at least start the process of passing, a budget for the current fiscal year this month. 

The hearing was run by House Ways and Means chairman Aaron Michlewitz, Senate Ways and Means chairman Michael Rodrigues, and Administration and Finance Secretary Michael Heffernan. In opening remarks, none of them mentioned a specific time frame for releasing the budget. 

Rodrigues said only that lawmakers must put forward a budget “as soon as possible.” He added: “In the face of glaring federal dysfunction and an ongoing public health emergency, we have a job to do.”  

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Bruce Mohl

Editor, CommonWealth
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About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.