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Lokvani Team
01/28/2021
Beacon Hill will quickly pivot to considering the Fiscal Year (FY) 2022 budget when Governor Baker releases his proposal. The Massachusetts Budget and Policy Center, a leading public policy think-tank, has issued a report on key challenges that the Baker Administration and lawmakers will confront as they build the budget for the new fiscal year starting on July 1st.
Amid multiple converging crises – COVID-19 and ongoing economic and racial inequality – there are fundamental questions about how we pave the path to an equitable, just response to these crises and support everyone in our Commonwealth.
“The devastating impact of the pandemic, compounded by existing economic and racial inequality and injustices, will last for years and requires a state budget that meets the moment,†said Marie-Frances Rivera, MassBudget president. “Funding health, education, climate resiliency at status quo levels will produce status quo results and continue to have dire consequences for those who are suffering most.â€
MassBudget analysts raised five themes in this report in anticipation of the FY 2022 state budget process: - How will the state generate enough revenue to meet everyone’s needs? Given the economic outlook, balancing the FY 2022 budget without making deep and widespread cuts to essential public programs will be a challenge without additional progressive revenue, even after accounting for federal aid and Rainy Day funds.
- Will lawmakers begin fulfilling their promise on school funding? Lawmakers delayed the first year of the Student Opportunity Act due to the economic downturn, while schools faced many new challenges with remote learning and keeping their students and staff safe. To get back on track, lawmakers would have to fund one-sixth of the reform plan for K-12 schools to complete the reforms by 2027.
- Will the state’s Unemployment Insurance (UI) system continue to be shortchanged? Business groups have called for suspending rules that would require significant increases in UI rates. While this may be an appropriate time to freeze UI payments and alleviate costs for businesses suffering from the pandemic, it will only worsen the state’s ability to pay its UI debts. Official estimates showed the UI Trust Fund likely had a $2.4 billion deficit as of December.
- Will the state allow public transit to languish? The MBTA saw cuts to its bus, subway, commuter rail, and ferry services last year, affecting many who have no other mode of transportation. The state budget proposals will be one indicator of the value lawmakers place on the MBTA and on the Regional Transit Authorities.
- How will lawmakers fund programs to ensure housing stability? Even with additional federal aid and President Biden’s extension of the eviction moratorium, many could lose their housing. Lawmakers gave a $101 million boost in FY 2021 for homelessness assistance and housing supports, but failed to take up a bill that could have offered more sweeping protections to renters and small homeowners.
For the full FY 2022 Budget Preview, click here.
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