The bill now sits in the Joint Committee on Telecommunications, Utilities and Energy, which continues to hear testimony from scores of witnesses on all sides of the issue, from National Grid to Massachusetts Taxpayers Foundation and dozens of renewable energy proponents
The Massachusetts Taxpayers Foundation has projected a gap between available revenues and maintenance spending in fiscal 2017 of between $795 million and $1.05 billion. The business-backed budget watchdog group had projected more modest 3.8 percent revenue growth at the hearing in December.
The Massachusetts Taxpayers Foundation noted the cuts announced Friday were the first emergency budget cuts since 2001 triggered by downgrade in non-tax revenues as tax revenues were actually being upgraded. "While today's plan addresses $104.9 million of the administration's estimated FY 2016 budget gap, fiscal challenges remain. Outstanding spending obligations in areas such as the Committee for Public Counsel Services, Emergency Assistance and MassHealth coupled with savings shortfalls from Retirement Program are among the exposures that present ongoing budget challenges," the group wrote in its analysis of the spending cuts.
But the Massachusetts Taxpayers Foundation, a business-backed watchdog, warned that even with the total $104.9 million budget-tightening plan, challenges remain, thanks in part to signs that Baker’s early retirement plan hasn’t reaped all the savings he’d hoped for. MTF also called the cuts “unique,” given tax revenues are actually exceeding expectations by $113 million. But roughly $205 million in the budget gap is tied to shortfalls in non-tax revenue, said Secretary of Administration and Finance Kristen Lepore, while another chunk comes from expenses such as private attorney costs, human service caseload “exposures” and settlement money.
Mid-year budget cuts are common, as projections of revenue and spending are tracked and revised throughout the year. According to the Massachusetts Taxpayers Foundation, which tracks government spending, there have been seven instances of mid-year budget cuts since fiscal year 2002.
Fiscal watchdogs like Eileen McAnneny, president of the Massachusetts Taxpayers Foundation, call that effort critical, especially with a fare increase looming. “It's going to take a while to fix but they really have to, before they go to riders and ask for more money and increase fares, I think it's clearly critical that they make sure that they take care of some of those issues and certainly overtime is one of them,’’ McAnneny said in an interview Tuesday afternoon.
This year's budget picture looks equally stark. The fiscal watchdog Massachusetts Taxpayers Foundation is projecting a $1 billion shortfall due to increased healthcare costs and the state’s reliance on one-time revenue.
Facing a midyear budget deficit, lawmakers and Gov. Charlie Baker in February rerouted those excess capital-gains revenues into the general fund. Massachusetts Taxpayers Foundation President Eileen McAnneny said fiscal 2015 capital-gains tax revenues have come in at about $1.6 billion, exceeding the amount anticipated from the February change.
“The fact that the rule changed very quickly and abruptly is problematic, particularly for Massachusetts, where we suffer from the perception that we have a negative tax climate,” McAnneny said. McAnneny signed the letter urging Baker to veto the measure, along with representatives of Associated Industries of Massachusetts, the Greater Boston Chamber of Commerce, and the Massachusetts Business Roundtable.
But just two months after passing the “tech tax,” as it had become known, Massachusetts repealed it. Opposition from the state’s business forces rained down pressure on lawmakers. The new law, they claimed, was putting them out of business. “It got very bruising,” says Andrew Bagley, research and public affairs director of the Massachusetts Taxpayers Foundation.