Overview
The Governor’s budget proposal, “House 1,” presents his plan to close a $3.5 billion budget gap. This gap is the result of both the national recession and policy choices made over the past decade that have significantly reduced tax revenues in Massachusetts.1 The Governor’s proposal would close almost half of the gap with spending cuts and reductions, and about a sixth of the gap with new revenues. The remaining $1.3 billion gap would be filled with money from temporary sources (the state’s stabilization fund and the emergency fiscal relief from the federal government).
While the 9C cuts made earlier this year were concentrated in health care, human services, and higher education, this budget proposal also includes large cuts to education and other forms of local aid, which will particularly affect lower income communities which rely most on local aid. The proposal would reduce unrestricted local aid by 28.5 percent. The Governor, however, proposes increases in the meals and hotels taxes that could produce $150 million in new revenue and reduce the local aid cuts to 16.7 percent.
The Governor’s budget documents describe the proposed Chapter 70 education funding level as a cut of $300 million. One element of the Governor’s Chapter 70 education funding proposal raises significant legal as well as policy concerns.
Data on the website of the state Department of Elementary and Secondary Education indicates that the House 1 funding levels could leave funding in 153 districts a cumulative $168 million below the “foundation budget” levels that the state has calculated as the minimum amount of funding that a district needs to provide an adequate education to its students.
At the core of the Education Reform Act of 1993 and Supreme Judicial Court decisions on education financing is the principle that the state has a constitutional obligation to provide enough funding for each district to provide an adequate education for its students. The Governor has indicated his hope that the emergency state aid coming from Washington will provide enough money to allow all districts to spend at the foundation budget level. He has also been a leader in the national efforts to encourage Congress to include such education aid in the stimulus package. If those efforts are not successful, however, there is a danger that the 569,000 students in these 153 districts will be denied what had been thought to be a constitutionally guaranteed right: the right to attend a school that receives at least the minimum amount of funding it needs to provide an adequate education to its students.
The budget also proposes deep cuts in human services, health care, environmental and other accounts across state government. In addition, the Governor proposes several revenue measures in addition to those tied to local aid. His budget would repeal the sales tax exemptions for candy, soda, and alcohol, expand the bottle bill, increase fees at the registry, and hire more auditors to reduce tax evasion.
This Budget Monitor examines the spending recommendations in each area of the budget and revenue proposals and compares proposed spending levels to historic levels. While there is very little good news in the budget, this reflects the reality of the situation we are in. The state has had structural fiscal problems for a decade and we are now in the middle of the worst recession since the Great Depression.
Staff
