Massachusetts House Passes Supplemental Budget

The Massachusetts House of Representatives passed a supplemental budget this week which added some spending, and dealt with the Patrick Administration’s request to deal with a $550 million dollar shortfall in this budget cycle. The House declined to accept the Governor’s recommendation for a 1% cut to local aid, but ratified the further utilization of the rainy day fund advocated by Governor Patrick. Notable action from the House included: (State House News Service)

The House voted 141-13 for a bill delivering $44 million for the emergency shelter system, $25 million for public counsel services to eligible defendants, and $30 million to cover costs associated with an evidence tampering scandal at a state drug testing lab. Lawmakers said costs to taxpayers from the drug lab scandal, which House budget chief Rep. Brian Dempsey called a “disgrace,” could rise even higher. …The supplemental budget submitted by Patrick draws another $200 million out of the state’s rainy day fund and makes about $25 million in cuts to non-executive branch agencies on top of the $225 million Patrick slashed within the executive branch to help bridge a projected $540 million mid-year budget gap brought about by lower-than-expected tax revenues. The House jettisoned Patrick’s request to further cut local aid by $9 million and did not include another $10 million in cuts that required legislative approval.

Even though the House spared localities from the 1% cut ($9 million statewide) the Governor, using his 9C Budgetary authority, had reduced other local aid accounts by $28.5 million in December. From the Massachusetts Municipal Association letter to the House of Representatives:

In December, Governor Patrick used his “9C” emergency budget powers to cut $28.75 million from important municipal and education aid accounts that fund local budgets, including the elimination of $11.5 million from the Special Education Circuit Breaker program, $5.25 million from the McKinney-Vento account to reimburse cities and towns for the transportation of homeless students, $1 million from regional school transportation reimbursements, $6 million from municipal incentive grants, and $5 million from six other reimbursement programs. Cities and towns absorbed this $28.75 million reduction, even though it came five months into the fiscal year, sharing in the efforts to close the state’s estimated $540 million budget gap.

Some other action taken by the House included a freezing of the unemployment rates for business, avoiding a $500 million dollar hike. The January revenue figures came in above the budgetary benchmark by $173 million, an important number after the prior months numbers lagged badly, creating the shortfall that the Governor has sought to close. But that number may have been positively impacted by the fiscal cliff issue in Washington, with some economic activity moved up to avoid change in federal law, creating a blip in state revenues.

According to the Department of Revenue, tax collections in January totaled $2.28 billion, a 12.2 percent or $249 million increase over January 2012. The tax haul eclipsed the monthly benchmark by $173 million, with “weak” withholding and corporate and business tax collections offset by stronger estimated income tax payments, according to DOR. Tax collections over the first seven months of fiscal 2013 are up $455 million or 3.8 percent compared to the same period in fiscal 2012 and are running $307 million above a benchmark that was revised downward midyear by the Patrick administration as the governor made $225 million in unilateral budget cuts in December.

There were a number of Republican amendments beaten back, and some Democratic ones as well. On that score nobody should be overly concerned, as a supplemental of this importance essentially needs to be a “clean” bill. It will move over to the Senate for Tuesday action. The remarks of House Ways and Means Chair Brian Dempsey are below.

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