#2020-40 December 4, 2020

House, Senate Approves $46.2 Billion Budget

Earlier today, the House (147-10) and the Senate (40-0) voted to approve a $46.2 billion fiscal 2021 budget bill sending the bill to Governor Baker’s desk.  The agreement was the second major deal struck between the House and Senate this week after the Legislature also agreed to a police reform bill that was passed earlier this week.

The budget, which the Conference Committee finalized and filed late Thursday, contains a five percent increase in state spending over FY2020, despite relying on approximately $2 billion less in tax revenue due to the COVID-19 pandemic.  To cover shortfall, House and Senate budget writers relied on one-time federal coronavirus relief funding, the state’s reserve account, and a plan to accelerate the remittance of sales taxes from merchants to the state, which amounts to a one-year bump of $267 million.  MBA and other groups had raised concerns with the sales tax remittance language in a letter to the conferees and we were pleased that the final budget bill makes some positive changes to these provisions. 

The conference committee also increased to $3.5 billion the withdrawal from the state’s “rainy day” fund.  Legislative leaders indicated that this larger withdrawal still leaves more than half of the fund for future years, even though the final budget is using $350 million more in reserves than Governor Baker proposed in October.

The budget agreement also extends mail-in voting authority for all state and municipal elections through March 31, includes a $50 million investment in the Rental Assistance for Families in Transition program and increases funding for the emergency food assistance program by $10 million over last year to a total of $30 million.  In addition, the bill provides $15 million to fund a Community Empowerment and Reinvestment grant program for communities disproportionately hurt by the criminal justice system, $30 million to subsidize child care, a $25 million reserve for early education providers to buy COVID-19 supplies and provide staff with incentive pay.  We were also pleased that an MBA-supported provision authorizing $50k to provide funding for central and western Massachusetts homeowners to test their homes for the presence of pyrrhotite, which causes concrete foundations to crumble. 

As we reported previously, the new fiscal year began on July 1, but the Legislature and Governor Baker delayed major budget decisions over the summer and fall while monitoring federal economic stimulus talks, the trajectory of the COVID-19 pandemic and its impact on state finances.  Legislators passed a series of interim budgets since July 1 to ensure that critical state services continued to be funded. 

With the passage of the budget bill, legislative leaders now turn to the FY2022 budget planning process, with Governor Baker expected to file his budget proposal in late January.  Beacon Hill leaders will be closely watching the debate in Washington over federal COVID relief and the success of efforts to distribute an effective vaccine to combat the pandemic as they develop the spending plan for the next fiscal year.

To review the House & Senate approved FY’21 budget, click here.

MBA’s 2020 Handbook on Deposit and Fiduciary Accounts Shipping in December!

The Association is pleased to announce the release of the 2020 Handbook on Deposit and Fiduciary Accounts.  The Handbook describes all relevant laws and regulations, in effect as of October 31, 2020, to aid branch staff, managers and other deposit operations personnel in staying up to date on best practices and industry requirements. 

This year’s edition includes all relevant revisions to state banking laws in the past year including, but not limited to, all applicable emergency guidance, regulations, and statutes enacted in response to the COVID-19 health crisis.  Other recent changes include the reorganization of topics, separating account management and maintenance issues from account opening procedures, and updated medical & recreational marijuana and hemp banking guidance.  Further, the Handbook continues to be substantially revised and updated annually to ensure a more user-friendly product. 

Preorder yours today by clicking here.