Lawmakers keep options open for this fall
Pass 3-month budget; plan to return later in year
LAWMAKERS ON TUESDAY released a three-month interim budget to keep the state running through October, and acknowledged that they will have to take the highly unusual step of returning to formal sessions in late 2020 to pass a full-year budget.
“We certainly are going to have to come back at some time to put to bed the final FY21 budget,” said Senate Ways and Means Chair Michael Rodrigues.
The House and Senate immediately passed the bill and sent it to Gov. Charlie Baker’s desk.
The two-year legislative session traditionally finishes formal sessions July 31 of the second year to give lawmakers time to campaign for reelection in November. The Legislature can continue to meet in informal sessions to pass non-controversial bills until the next Legislature is seated in January. With July 31 looming this Friday, the branches have been conducting the typical flurry of last-minute legislating – but have not proposed an annual budget. While a state budget should ideally be in place by the July 1 start of the fiscal year, the timeline this year was thrown into upheaval due to the coronavirus pandemic and resulting economic devastation.
“We are committed to finalizing a full-year budget that is fiscally responsible and responsive to the needs of our state, but key to developing that budget is further clarity around potential federal action, our economic recovery, and continued trajectory of COVID-19,” the lead budget-writers said. They said they will craft a final budget later in the year once better information is available.
Lawmakers were tight-lipped about the exact timing of when they would return to craft a budget and whether other business not completed by this Friday could be taken up at that point. “In my mind, it’s just a budget,” Rodrigues said, when asked whether other legislation could be passed later in the year.
The Legislature already passed a budget to keep state government operating through July. Baker had proposed another one-month interim budget, to cover August. Although the administration and lawmakers have been collaborating closely, Secretary of Administration and Finance Michael Heffernan did not sign onto the joint statement by Rodrigues and Michlewitz.
Administration and Finance spokesperson Patrick Marvin declined to say whether the administration would support a three-month interim budget rather than a one-month one. “The administration appreciates the efforts of the Legislature to help ensure the continued delivery of essential government services with an interim spending plan during this period of economic uncertainty,” Marvin said in a statement. “The administration will carefully review legislation that reaches the governor’s desk.”
Rodrigues said budget writers currently do not know what the federal government will pass in the next stimulus bill, what the strength of the economic recovery will be, or what the virus’ trajectory will look like. With the state income tax deadline for 2019 delayed until July 15, lawmakers still do not even know how much the state collected in taxes for last year. “The reality is right now there’s too much uncertainty to put together a full year budget,” Rodrigues said.
Sen. Jo Comerford, a Northampton Democrat who has been leading the Senate’s coronavirus response, said the goal is to “get as much information as we possibly can before acting.”
Rep. Bud Williams, a Springfield Democrat who serves on the House Ways and Means Committee, referred to the three-month budget as “buying time.”
Several lawmakers said they anticipate that the Legislature will still try to finish up all their other business by July 31, as scheduled, leaving only the budget for a special session. That said, if any major bills are left undone by Friday at midnight – on health care, climate change, or even bills that are already in conference committee like police reform or transportation funding – lawmakers will likely face pressure from advocates to take those matters up later in addition to the budget.
One tricky factor could be the politics of returning to session. If the three-month budget is signed into law by the governor, it would provide funding through the end of October. The general election is scheduled for November 3, which would mean the Legislature might return to session just before the election. Or if they pass another short-term budget, they could return right after the election, in a lame-duck situation. In that case, voters could end up voting for candidates without knowing how they intend to balance this year’s budget.
More than two-thirds of the state’s 200 lawmakers will face no opponent in the general election.
Evan Horowitz, executive director of The Center for State Policy Analysis at Tufts University, said the timing does present political “complexities.” But he generally said it made sense to wait for more information on the state economy and the timing of vaccine development before approving a final budget for the year.
Baker had proposed a $5.51 billion budget for August. The interim budget of $16.53 billion multiplies Baker’s figure by three to cover three months. If that level of spending were extended for a full year, it would translate to a more than $65 billion annual budget. In comparison, the fiscal 2020 operating budget was $43.3 billion.
Rodrigues said the reason the spending number is so high in the interim budget is because a lot of costs are frontloaded at the beginning of the fiscal year.
Rodrigues said the interim budget is a conservative one: It continues funding government at the same level as it was funded in fiscal 2020, unless Baker’s January budget proposal proposed a cut, in which case the interim budget reflects the lower number. Any discretionary earmarks inserted by lawmakers into last year’s budget will not be funded.“We worked very closely with the administration…to arrive at a number that’s going to ensure that all the bills are paid, that the lights stay on, that people get their pay,” Rodrigues said.
One danger of crafting a full-year budget four months into the fiscal year is it gives government less time to adapt to lower funding levels, since any cuts will be spread over eight months instead of 12 months. But Rodrigues said it was a matter of “weighing risks,” and budget-writers decided that waiting four months was less of a risk than budgeting off incomplete information and making draconian cuts now only to have to restart programs if federal money arrives.