With the books finally closed on fiscal 2018, and fiscal 2019 off to a healthy start, state and local budget-writers are turning to making plans for fiscal 2020.

On Dec. 5, beginning at 10 a.m., the House and Senate Ways and Means committees and the governor’s budget office will convene the annual “consensus” revenue hearing, where the Department of Revenue and other fiscal experts and economists will discuss the prospects for the economy and state revenues over the second half of fiscal 2019 and for fiscal 2020.

Following the hearing, legislative leaders and the administration are expected to reach agreement on a tax revenue forecast for fiscal 2020 that would be used in the governor’s budget recommendation, due in late January, and the House and Senate budget plans that will be released in April and May, respectively.

The hearing, to be held in the Gardner Auditorium at the State House, is important for municipal officials because it provides insights into the direction of the economy and anticipated state revenues available to fund municipal and school aid programs next year, particularly Unrestricted General Government Aid.

The revenue-sharing model used by the governor and the Legislature in recent years has increased UGGA distributions at the same rate as the “consensus” projection for the growth of state tax collections.

The revenue hearing usually features testimony from the revenue commissioner on prospects for the state’s economy and a forecast for tax collections. The state treasurer then provides testimony on pension funding and a forecast for Lottery revenues.

The hearing includes testimony from fiscal experts including the Massachusetts Taxpayers Foundation, the Beacon Hill Institute, and MassBenchmarks, an initiative of the University of Massachusetts’ Donahue Institute and the Federal Reserve Bank of Boston.

Gov. Charlie Baker’s fiscal 2020 budget recommendation is expected to be filed with the Legislature by Jan. 23, the week after the MMA Annual Meeting. The governor typically attends the opening session of the MMA conference to provide a preview of his budget plan for local aid.

On Nov. 6, the state comptroller released a fiscal 2018 financial report that shows generally healthy state finances, including an increase in the state’s Stabilization Fund of $701 million, bringing the total to $2 billion.

In another bit of good news for fiscal 2018, the Community Preservation Coalition announced that the final calculation of the fiscal 2018 state surplus enables the state to provide an additional $10 million to supplement state CPA matching payments. The $10 million will raise the Round 1 match to 19 percent for all CPA communities.

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