#2020-41 December 11, 2020

Baker Signs $45.9 Billion FY’21 State Budget

On Friday, Governor Charlie Baker signed a $45.9 billion state budget that will not raise broad-based taxes and reflects a more optimistic view of state finances than once feared early in the pandemic. 

As previously reported, the FY’21 budget relies heavily on one-time revenue to balance spending growth of 4.5 percent, including more than $2.76 billion in federal COVID-19 funds and a draw of up to $1.7 billion from the state’s “rainy day” fund.  But the administration also planned to upgrade its revenue projections for the year by $459 million, as some sources of tax revenue, like the sales tax, continue to perform strongly.

The Executive Office of Administration and Finance said the combination of strong revenues and money vetoed from the budget make it likely that the state will only need to use about $1.35 billion this fiscal year from its $3.5 billion in reserves.  The budget level funds local aid to cities and towns and includes a $108 million increase in Chapter 70 for schools, increases support for substance abuse treatment and boosts spending on rental assistance and food security programs.

The budget is still built upon $1.2 billion less in tax revenue than the state collected in fiscal year 2020 and $3.1 billion less than the original fiscal 2021 budget Baker filed in January before the pandemic began, according to the administration.

Though the governor often vetoes legislative earmarks, budget officials said Baker signed off on $80 million in earmarks that it saw as one-time needs directed by local legislators to deal with the impacts of COVID-19, but the governor vetoed $156 million in other spending, including $103 million that it saw as an expansion of benefit programs or service provider rates that would carry from year to year.  The other $53 million vetoed by Baker was K-12 education funding supported by the Legislature to help schools struggling to educate students during the pandemic.  Instead, Baker refiled for the $53 million in a supplemental budget bill that would allow his administration to dole out the money for targeted programs, rather than distribute it through a formula.

In total, the governor signed 96 of the 113 outside policy sections passed by the Legislature, including one allowing the Registry of Motor Vehicles to require anyone granted a hardship license after being caught driving with a blood alcohol content of 0.15 or higher to use an ignition interlock device.  Baker also approved of allowing marijuana dispensaries to sell hemp and hemp products grown and manufactured in Massachusetts. 

Governor Baker Announces Massachusetts COVID-19 Vaccine Distribution Plan

On Wednesday, Governor Charlie Baker announced an updated COVID-19 vaccine distribution plan for the Commonwealth that includes additional details on when Massachusetts residents will be eligible to receive a vaccine when it is approved and available.  The first phase, which is expected to take place between December and February, includes health care workers, police, fire and emergency medical services personnel, and residents of long-term care facilities, among others. 

The second phase includes high-risk individuals, some essential workers and those over the age of 65, while the final phase, which is anticipated to begin in April of 2021, will allow all Massachusetts residents to receive the vaccine.  The Association is currently looking into when front-line bank employees may be eligible to receive the vaccine and we will provide additional updates as more information becomes available.

For more information on Massachusetts’ vaccine plan, click here.

Governor Baker Moves Reopening Back to Phase 3, Step 1 

On Tuesday, Governor Charlie Baker said that he is rolling back the state’s reopening plan to Phase 3, Step 1, after a significant increase in COVID-19 infections and hospitalizations.  The step, which is effective on Sunday, December 13, makes several changes to the sector-specific guidance and includes a stronger mask mandate for Massachusetts residents as well.

Specifically, the Governor’s order reduces to 40 percent the maximum capacity for office space and retail locations, including bank branches and back-office operations.  Certain categories of businesses that had been allowed to open earlier this year, such as indoor theaters and performance spaces, will be required to close entirely.  Additionally, updated guidance on face coverings now mandates that employees must wear masks at their place of work when not in their own workspace and alone.  Employers are also encouraged to close or limit the use of break rooms. 

To read more and download sector-specific guidance, click here.

SJC Rejects Challenge to Baker’s Authority in Pandemic

On Thursday, the state’s Supreme Judicial Court (SJC) ruled that Governor Charlie Baker’s extensive use of executive orders to respond to the pandemic did not violate the constitutional rights of businesses and organizations affected by mandatory shutdowns and is allowed under state law.  The ruling comes in a case filed by the New Civil Liberties Alliance (NCLA), which had sued the Commonwealth on behalf of business owners and religious institutions.

The SJC decision upholds the Governor’s emergency actions, citing powers granted to the executive branch under a 1950 state law.  The decision allows the state’s COVID-19 response strategy to continue and avoids a mandatory, court-ordered shift in how the Governor is addressing the public health emergency.  However, the ruling does not give blanket authorization for future health emergencies and that the Governor’s response might need to be curtailed when the pandemic wanes. 

The NCLA and the Massachusetts Fiscal Alliance had argued that Governor Baker improperly based his executive orders on powers granted under the Civil Defense Act (CDA), a 1950 state law that outlines gubernatorial emergency powers in crisis situations such as wars and natural disasters but does not explicitly name pandemics.  The SJC disagreed, stating that a global pandemic clearly falls into the “other natural causes” category in the law.  The court also ruled that Baker’s forced business shutdowns and phased reopening plans do not violate constitutional due process or free assembly rights.  According to published reports, NCLA may be considering appealing portions of the ruling to the US Supreme Court.

To read the complete SJC decision, click here. 

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

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. 

Order yours today by clicking here.