#2023-6, March 3, 2023

Governor Healey Releases $55.5B FY’2024 Budget Proposal

The first state budget from Governor Maura Healey (D- Cambridge) is a $55.5 billion package that her administration described as a “downpayment” on its goals of making Massachusetts a more affordable place to live, driving the state’s decarbonization push and addressing the impacts of climate change, and preparing students for careers in an evolving economy.

Earlier this week, the governor said that her budget (H.1) combines with the tax relief and reform plan she unveiled Monday (H. 42) – which includes long-fought for Association-supported reforms to the Massachusetts Estate Tax code - and separate legislation to create a standalone housing secretariat to form “one package” to “build a strong economy, to create livable communities, and to put Massachusetts on the path towards a sustainable future.”

The bottom line for fiscal year 2024 budget spending represents a 4.1 percent increase over the current year’s budget as originally adopted last summer, exactly the growth rate that the administration and lawmakers expect to see from state revenues in fiscal 2024 when accounting for $1 billion from the state’s new income surtax.  The budget proposal would deliver new money into K-12 and higher education, early education and care, energy and environment initiatives, human service provider rates, housing programs and more.

The budget package proposes $8.36 billion for local aid programs, which the administration said would be a $635 million or 8.2 percent increase over the budget Governor Charlie Baker signed for fiscal 2023.  Along with $1.26 billion for general government aid (a $24.6 million or 2 percent increase), cities and towns would share $6.585 billion in Chapter 70 school funding (a $586 million or 9.8 percent boost) under Healey’s plan.

The Healey administration said the Chapter 70 total it proposed represents full funding of the Student Opportunity Act school finance reform law passed in 2019 and, if enacted, would be the largest increase since at least 1999.  The fiscal 2024 state budget will mark the third budget cycle for the Student Opportunity Act, which aims to address education equity gaps with $1.5 billion in new funds rolled out over a seven-year span.

Of note, the estimated $1 billion generated from the new surtax on income in excess of $1 million - i.e. so-called “Millionaires Tax” - will indeed go towards education ($510 million) and transportation ($490 million) under Healey’s plan.

On the education side, Healey is proposing to use the surtax money to pay for $100 million in child care grants to providers, $140 million in higher education capital funding, the $20 million free community college program the governor outlined earlier Wednesday, a $93 million expansion of a state scholarship program, a $59 million effort to stabilize tuition and fees at UMass and other public higher education institutions, and more.  For transportation, the surtax revenues would go towards $181 million in MBTA capital investments, launching a $100 million municipal partnership program, providing $100 million for highway bridge maintenance and preservation, and making $25 million available in regional transit funding and grants.

Healey is also proposing to exclude surtax money from any future calculation of state revenue for the purposes of Chapter 62F, the 1980s voter law that puts a cap on state revenue growth and last year triggered nearly $3 billion in mandatory rebates, and to shield surtax receipts from the existing requirement that capital gains revenues above a certain level be stashed into state savings or put towards specific benefit accounts.

Governor Healey’s budget is first off to the House Ways and Means Committee to be reviewed and rewritten.  The House generally puts out, debates and passes its own budget proposal in April, followed by the Senate in May.  Those two budgets then typically spend much of June in a conference committee before lawmakers agree to a compromise version.  Fiscal year 2024 begins July 1.

To review the Governor’s FY’24 Budget Recommendations website, click here.
To review the Governor’s tax relief package, click here.

House Passes $353M Supplemental Budget; Association-Supported Remote Online Notarization & Expanded Options for Reverse Mortgage Counseling Included

On Wednesday, the House passed its first significant bill of the session, voting 153-0, to engross a House Ways and Means redraft of Governor Maura Healey’s fiscal year 2023 supplemental budget, H. 58, that also includes elements of her $1 billion “immediate needs” bond bill.

The $353 million bill, which also includes $585 million worth of bond authorizations, temporarily extends pandemic-era programs such as enhanced food assistance and free school meals.  It also gives $86 million to the emergency shelter system to help offset medical costs.  Bond authorizations include $400 million for the MassWorks grant program and $104 million for the Clean Water Trust, among other initiatives.  Of particular note, the House’s final version also includes both Association-supported remote online notarization (RON) provisions as well as language to permanently establish real-time video conference or telephonic counseling, in lieu of the in-person requirement, for consumers seeking a reverse mortgage.

After talks, the House dispensed with 27 proposed amendments to the bill with one consolidated amendment, which included $50 million in bond authorization for the Massachusetts Technology Park Corporation, before its enactment.  The bill now moves to the Senate.

To review the final House supplemental bill in its entirety, click here.

Legislature Kicks Off Eight-Hearing Budget Review Starting Tuesday

With the governor’s budget now in the hands of the Legislature, members of the Joint Ways and Means Committee will spend the next five weeks combing through the $55.5 billion spending plan with agency and department heads, starting with a hearing at the State House next week.

Up first, in the eight-hearing series, will be a session at 11:00 a.m. Tuesday with Governor Maura Healey (D- Cambridge), Administration and Finance Secretary Matthew Gorzkowicz, and other invited participants to go over the basics of the fiscal year 2024 budget proposal (H.1) as well as how it addresses Constitutional officers, the inspector general’s office, and the Executive Office of Technology Security and Services.  The hearing will be held in the State House’s Gardner Auditorium and will be streamed live online, the committee said.

As reported, Governor Healey’s $55.5 billion fiscal 2024 budget represents a 4.1 percent increase in spending over the current year’s budget as originally adopted last summer and injects new money into K-12 and higher education, early education and care, energy and environment initiatives, human service provider rates, housing programs, and more.  It also puts to use $1 billion in new state revenue expected to come in from the surtax on income in excess of $1 million.

The House Ways and Means Committee got Healey’s budget Thursday.  The House generally puts out, debates, and passes its own budget proposal in April; followed by the Senate in May.  Those two budgets then typically spend much of June in a conference committee before lawmakers agree to a compromise version.  Fiscal year 2024 begins July 1.

Division of Banks to Host DOB Connects: Overcoming Financial Barriers of Servicemembers, Veterans, and their Families – Compliance Considerations

On Tuesday, March 14, member bankers are encouraged to join the Division for their latest installment of “DOB Connects: Overcoming Financial Barriers of Servicemembers, Veterans, and their Families”.

The program will feature speakers who will share relevant examples and personal stories as well as commentary on important regulatory and consumer compliance considerations - including strategies and helpful practices - for financial institutions in attendance.

For more information and to register, click here.