Baker slammed for not filing updated budget

Baker slammed for not filing updated budget

Some say law requires governor to file if revenues change

STATE HOUSE NEWS SERVICE

GOV. CHARLIE BAKER, at least publicly, has given lawmakers space to reconsider revenue and spending targets in the budget due in just a matter of days. But his reluctance to officially update his budget proposal in light of weak revenue growth in recent months is being questioned as a matter of law and leadership.

State tax collections through May have missed projections for the year by $439 million, and legislative leaders have acknowledged that the budget being negotiated in private right now for the fiscal year that begins July 1 will have to be revised in light of that trend. People are bracing for spending cuts.

Economists told the administration and House and Senate budget officials earlier this month that the revenue targets used to build fiscal 2018 spending plans could be off by as much as a $1 billion. And yet Baker’s budget team has maintained that the conditions do not exist to trigger a state law requiring the governor to revise and resubmit the budget he filed back in January if revenues “materially” decrease.

Democratic candidate for governor Jay Gonzalez, who managed the state budget under Gov. Deval Patrick, sharply disagreed with that assessment in an interview Wednesday.

“No, I don’t think he should have. He’s legally required to. When I was there, I was legally required to twice and did both times,” Gonzalez said.

Newton Mayor Setti Warren, another challenger for governor in 2018, also said he would have filed a revised budget and would have “done it a long time ago.”

“But even that is not enough.  Beacon Hill has still not published a projected level service budget for the spending that begins in two days!  It’s outrageous,” Warren said in a statement. “Right now, we know there are three public budget proposals based on revenue projections that no one believes.”

When Gonzalez was undersecretary for administration and finance in 2009, Patrick filed a revised budget on June 4 for fiscal 2010 after a “revenue loss” of $1.5 billion in the three months after the governor filed his initial spending plan in January.

The Patrick administration had to take a similar step the following year when Congress failed to approve a six-month extension of enhanced federal Medicaid reimbursements that were counted on by the governor to balance his fiscal year 2011 budget proposal.

Estimating the enhanced payments to be worth $608 million, Gonzalez, who was budget secretary by that time, wrote to the House and Senate chairs of Ways and Means on June 8 recommending proportional cuts across the budget to achieve balance, with the exception of local aid and debt payments.

Gonzalez said that based on state law the governor should have, at the very latest, filed a revised budget within 15 days of the June 7 meeting between economists and House, Senate and administration budget officials when state leaders were told revenue projections for fiscal year 2018 could be off by as much as $1 billion.

“What it does is it once again puts them in a position where he’s taking no responsibility for big issues that, yes, would require some controversial decisions to be made. He’s just letting the Legislature hold the bag on this. It’s not only not acceptable and not leadership, but it’s not what he’s legally required to do,” Gonzalez said.

The governor’s budget office did not move off its position Wednesday that while aware of the law, it does not believe formal revision of the budget is necessary.

“Despite inheriting a billion dollar budget deficit, the Baker-Polito Administration has reduced taxes for working families, made record-high investments in public education and set the Commonwealth on a more stable fiscal path – all through the bipartisan budget process, and the administration looks forward to continuing that effort as the legislature’s conference committee carries out its work,” budget office spokeswoman Sarah Finlaw said.

The Massachusetts Taxpayers Foundation said last week in a budget bulletin that a refiled budget from Baker would provide conferees with the administration’s “roadmap for balancing spending needs with reduced tax revenue.”

Gonzalez said legislative Democrats “should be demanding it” from Baker.

“I don’t remember how it was received, but it was received,” Gonzalez said in response to a question about the impact those revised budgets had on negotiations between lawmakers with their own agendas.

Baker did not file a revised budget last year under similar circumstances that led to the legislative conference committee reducing revenue projections by $750 million and making cuts in the budget accordingly.

“The Conference Committee is hard at work trying to deliver a final budget to the Governor’s desk in the coming days. I am certain a revised FY18 budget and any updated information from the Administration, as required by law, would be most helpful to their efforts,” Senate President Stanley Rosenberg said in a statement to the News Service.

DeLeo has not called on Baker to submit a new budget. “The focus is on getting the budget done,” DeLeo spokesman Seth Gitell said Wednesday.

Warren re-upped his call for Beacon Hill leaders to adopt changes to the state budgeting process originally recommended by the Massachusetts Budget and Policy Center that the mayor believes would improve transparency.

“It starts with telling the truth and Governor Baker and Beacon Hill should start today and change the way they create our budget so the people of the Commonwealth can have a shot at understanding how their money is being spent,” Warren said.

Massachusetts Democratic Party Chairman Gus Bickford also criticized Baker on Wednesday for the opaque way his administration has approached disclosure of controls used to keep the fiscal 2017 budget in balance and the process of building toward a fiscal 2018 budget.

Meet the Author

Matt Murphy

State House News Service
“With two days left in the fiscal year, the Governor hasn’t said a word about how he’s balancing a more than $400 million gap this year, and he’s failed to follow state law by proposing amendments to his budget to close an almost $1 billion dollar gap next year. What secret cuts is he making this year? What secret cuts is he planning next year? It’s time for Governor Baker to come clean with the public and explain his plans,” Bickford said in a statement.

The campaign for the third Democrat running for governor in 2018 – Robert Massie – did not return an email seeking comment.

  • QuincyQuarry.com

    For some funny reason I can’t help but thinking that all of this caterwauling will go for naught as Baker manages to scrap up enough unspent money to close the FY 2017 books and as he is slow to show his hand as regards the rosy scenario revenue shortfall going forward.

    • Beeker

      It is the Department of Revenue who provides the consensus revenue that is agreed to by all leaders when the budget process gets underway. It has build-in estimate that took into account of the projected tax cut that Baker submitted to the legislature. On all account, it has been too rosy.

      • QuincyQuarry.com

        True on both the formalities of the process and the assessment of the DOR’s revenue projections, but the reality is that a capable governor should be able to squeeze spending by a couple/three percent and so be able to cover the shortfall for FY17.

        Thereafter, however, is another story unless the structural deficit status of the state budget is duly addressed.

        • Beeker

          While I agree on your assessment, however the Legislature makes changes to the budget throughout the 6 months process and sometimes Governor Baker does not let them know of the changes in the revenue picture as required by law and allows wiggle room for himself not tell them so they can make adjustments.

          • QuincyQuarry.com

            As noted long ago by Bismark, the making of politics is akin to making sausage – the process is something perhaps best not observed.

            Seriously, let’s face: the MA General Laws and related protocols for governance in the Commonwealth have more wiggle room than a worm bait farm – and thus plenty of ways to play the Blame Game.

            Even so, one must give Baker some credit for speaking up when it became increasingly clear that FY17 revenue projects were overly optimistic whereas the General Court generally pooh-poohed him.

            At the same time, it is only fair to note that missing by just a couple of percentage points on the TOTAL revenue projection yields hundreds of millions in revenue swings even if staying within plus/minus 2% of projections is per most knowledgeable parties a pretty good forecast.

            More importantly, as well as again, the state budget is mired in a structural deficit – but so far the Legislature has not been willing to do what is needed to address this verity.

            As such, image not only the pain as health care costs continues to soar, but also when the economy eventually suffers a downturn but the Rainy Day Fund has not been duly replenished.