House budget: No new taxes, more eviction protections

$46b proposal seems designed to avoid controversy

MASSACHUSETTS HOUSE budget writers on Thursday released a $46 billion spending proposal for the rest of the fiscal year, which includes no sweeping changes to tax or fiscal policy and adopts some increased protections for tenants applying for rental assistance.

The budget, which adopts part of Gov. Charlie Baker’s proposal to accelerate the collection of sales taxes from large businesses, seems designed to avoid controversy with an eye toward achieving relatively quick consensus with the Senate and governor. The full House will debate and vote on the budget next week, after which it will go to the Senate.

House Ways and Means Chair Aaron Michlewitz, a Boston Democrat, said he has been working closely with Senate Ways and Means Chair Michael Rodrigues, a Westport Democrat, on the framework for the budget – although the budget was not pre-negotiated or released jointly. “I think we’re both under the understanding…that time is of the essence relative to the need to get this done in a relatively quick manner, just because of the circumstances that were put on us this year,” Michlewitz said.

The state has been operating on a series of temporary budgets since July as lawmakers tried to better understand the economic impacts of the COVID-19 pandemic. Baker, who introduced his own revised budget proposal in mid-October, said he would like a budget on his desk by Thanksgiving. House Speaker Robert DeLeo said his goal is to get the budget to Baker “if not by Thanksgiving then by the end of the month or closely thereafter.”

Overall, the House Ways and Means budget adopts Baker’s assumption that revenues will drop by 6.8 percent in fiscal 2021. The $46.02 billion bottom line is $188 million higher than the budget Baker had proposed. The biggest difference is that House budget writers want to take up to $1.55 billion out of the state’s $3.5 billion rainy day fund — $200 million more than Baker.

“We built it and protected it for times just like these,” DeLeo said.

One of the biggest spending differences involves RAFT, a program that provides rental assistance to needy families. As a temporary moratorium on evictions expired last month, tens of thousands of Massachusetts households are facing housing insecurity, unable to pay their back rent. Baker announced a $171 million initiative to help tenants facing eviction, which housing advocates – who have been pushing for a continued moratorium – criticized as inadequate.

Baker, as part of his initiative, wanted to fund RAFT at $100 million for fiscal 2021. The House budget would increase that to $150 million. (These figures include money already distributed from the federal CARES Act.)

The House also includes language restricting the courts from executing evictions if a tenant has an active RAFT application that has not yet been processed. The Boston Globe reported that the RAFT program has been overwhelmed with applications and unable to keep up, leaving tenants at risk of eviction while their application is being processed.

“We want to make sure people aren’t being left out in the cold while an application process is in place,” Michlewitz said.

In other areas, the House budget hews relatively closely to Baker’s. It does not change Baker’s spending proposals for MassHealth or the MBTA. Both budget proposals would delay the implementation of a state charitable deduction by a year.

The House includes a proposal Baker made to require businesses that collect more than $150,000 in sales, room, or meals taxes annually to remit those taxes to the state in the final week of the month, rather than on the 20th day of the following month. That would generate $267 million in one-time revenue for fiscal 2021 because taxes that would otherwise have been paid in the first few weeks of fiscal 2022 would be paid earlier.

Baker had wanted to move to daily sales tax collections by 2024, which businesses opposed, citing the high costs of implementation and compliance. The House proposal does not adopt daily tax collections.

Baker had proposed the sales tax acceleration previously, in a slightly different format, and lawmakers had not adopted it. This year, Michlewitz said, the time was right. “It’s one of those break the glass in time of emergency situations,” Michlewitz said. “This is a fiscal emergency.”

Like Baker’s proposal, the House proposal pushes off implementation of the Student Opportunity Act, a new education funding formula, by a year. It would add $108 million to the education funding formula compared to last year, which is just enough to cover inflation. Michlewitz said the new law has a seven-year implementation period and, “we’ll be doing our best to implement that in the years to come.”

The House would create a new $50 million COVID student support fund, which would distribute money based on enrollment and number of low-income students, to help schools cover coronavirus-related costs.

Michlewitz said school districts would have “broad latitude” in how to use the coronavirus money, for things like enhancing remote learning, buying personal protective equipment, or improving spaces to accommodate social distancing requirements. Michlewitz said the money is meant to help districts, particularly those with large numbers of low-income students, address the “new confounding challenges they never had before.”

The House would trim down Baker’s $101 million small business recovery plan, instead spending closer to $50 million on economic development through various business loan and grant programs.

The House would spend more money than Baker on emergency food assistance, community day and work programs for people with disabilities, substance addiction services, domestic violence prevention, and legal assistance. The $5 million increase in legal assistance would go toward civil legal aid for low-income individuals. The House would create new $10 million fund to help low-income parents pay childcare fees.

Meet the Author

Shira Schoenberg

Reporter, CommonWealth

About Shira Schoenberg

Shira Schoenberg is a reporter at CommonWealth magazine. Shira previously worked for more than seven years at the Springfield Republican/MassLive.com where she covered state politics and elections, covering topics as diverse as the launch of the legal marijuana industry, problems with the state's foster care system and the elections of U.S. Sen. Elizabeth Warren and Gov. Charlie Baker. Shira won the Massachusetts Bar Association's 2018 award for Excellence in Legal Journalism and has had several stories win awards from the New England Newspaper and Press Association. Shira covered the 2012 New Hampshire presidential primary for the Boston Globe. Before that, she worked for the Concord (N.H.) Monitor, where she wrote about state government, City Hall and Barack Obama's 2008 New Hampshire primary campaign. Shira holds a master's degree from Columbia University's Graduate School of Journalism.

About Shira Schoenberg

Shira Schoenberg is a reporter at CommonWealth magazine. Shira previously worked for more than seven years at the Springfield Republican/MassLive.com where she covered state politics and elections, covering topics as diverse as the launch of the legal marijuana industry, problems with the state's foster care system and the elections of U.S. Sen. Elizabeth Warren and Gov. Charlie Baker. Shira won the Massachusetts Bar Association's 2018 award for Excellence in Legal Journalism and has had several stories win awards from the New England Newspaper and Press Association. Shira covered the 2012 New Hampshire presidential primary for the Boston Globe. Before that, she worked for the Concord (N.H.) Monitor, where she wrote about state government, City Hall and Barack Obama's 2008 New Hampshire primary campaign. Shira holds a master's degree from Columbia University's Graduate School of Journalism.

The budget does not include any revenue from legalizing sports betting, since a separate bill to allow sports betting remains under negotiation.

The House bill does not include an increased fee on Uber and Lyft that Baker had proposed.