Uncertain fiscal outlook causes Legislature to send 1-month budget to governor

With the new fiscal year set to begin this Saturday, July 1, the Legislature today sent a temporary, one-month budget bill to Gov. Charlie Baker in order to keep state government operating through July 31.
 
The governor is expected to sign the $5.15 billion measure, which will give a House-Senate conference committee more time to negotiate a final state budget bill for fiscal 2108.
 
Declining state tax collections have opened a $440 million hole in the budget for the current fiscal year, and budget experts are predicting that state leaders will need to lower their revenue assumptions for next year by as much as $750 million to $1 billion.
 
Legislative leaders are likely waiting to see what June tax collections look like before making final decisions on funding levels in next year’s budget.
 
Because final local aid distributions will not be set until the state adopts the final general appropriations bill for fiscal 2018, the temporary budget includes language that allows the state treasurer to provide advance local aid payments or reimbursements to cities, towns and school districts that demonstrate “an emergency cash shortfall.” This is identical to provisions put in place last year, when the state also passed a temporary budget due to similar revenue woes.
 
The state’s revenue shortfall has created significant uncertainty on Beacon Hill and cast a cloud over state finances. The MMA has called on the governor and lawmakers to protect local aid as a top priority, including full support of the $40 million increase in Unrestricted General Government Aid, the highest possible funding for Chapter 70 education aid, and full funding of vital accounts, including special education reimbursements. Reductions to these local aid programs would create budget shortfalls in communities across the state, and would force many cities and towns to reopen their budgets to impose mid-year service cuts.