Analyzing the State Budget for FY 2016
With the House and Senate having overridden a number of the
Governor's vetoes, the Fiscal Year 2016 (FY 2016) budget is now largely
complete. This year's budget makes few major changes in overall funding
provided to educate our children, keep our communities safe, protect our
most vulnerable, strengthen our economy and improve the quality of life
in our communities. Click
HERE for our full analysis.
The budget does include several significant new initiatives, including:
- Increasing the value of the state earned income tax credit
from 15% of the federal credit to 23%. This will provide additional
income to over 400,000 lower wage workers and their families
(click HERE
for town-by-town detail). Besides improving lives now by helping
parents to pay for necessities like food and clothing for their
children, this additional support is also likely to expand
opportunity for these children over the long run: there is growing
evidence that when the income of a lower income family increases, the
children often do better in school and earn more as adults.
- Providing significant new tools for the administration to
improve management at the MBTA. The budget creates a new MBTA
Control Board and authorizes the Secretary of Transportation to
appoint the Director of the MBTA. The budget also suspends for
three years the Taxpayer Protection Act (commonly called the
Pacheco Law) that regulates privatization. The law requires that
privatization efforts achieve savings by efficiency improvements
rather than by reducing pay and benefits for workers (click HERE for more detail).
- Addressing substance abuse with targeted investments
throughout MassHealth, public health and mental health. In
particular, new initiatives support first responders and others in
the community struggling to address the challenge of opioid
addiction.
The final budget, like the budget proposed by the governor back in
March, relies heavily on temporary strategies to balance the budget. It
spends $300 million in capital gains tax revenue that would have gone
into the Rainy Day Fund under current law. It also counts on $100
million from a tax amnesty and $116 million from putting off paying some
of our FY 2016 MassHealth bills into FY 2017.
As has been the case for many years, state budget choices are being
shaped by fiscal challenges that date back to the late 1990s: after
cutting the income tax by over $3 billion dollars between 1998 and 2002
our state has had to make deep cuts in areas like higher education,
local aid, and public health. Meanwhile, the highest income residents in
the Commonwealth are paying a substantially smaller share of their
income in state and local taxes than do the other 99%. If our tax system
were reformed so that the highest income 1% of taxpayers paid roughly
the same share of their income in taxes as everyone else, that would
raise about $2 billion that could be invested in things like making
college affordable, improving our transportation systems, and providing
all children with the supports they need to thrive.
Please click HERE for our full analysis.
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