June 11, 2017

On Beacon Hill: With potential $1B storm on radar, foggy fiscal forecast looms

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Sam Doran / State House News Service

Rep. Juana Matias of Lawrence, left. and Sen. Jamie Eldridge of Acton, testify at the start of the June 9 Public Safety Committee hearing.

Recap and analysis of the week in local, state and federal government
from State House News Service

BOSTON — Storm clouds have been gathering for months over state finances, but as the end of the fiscal year fast approaches it’s the dense fog that has rolled into Beacon Hill casting the darkest shadow.

May tax collections reported last week by the Department of Revenue solidified the status quo. The state is on track to finish the year in three weeks close to half a billion dollars short of revenue targets.

For the glass-half-full set, the fiscal drought did not get worse after last month. Taxes paid in May exceeded expectations by $30 million, ending a four-month slide and leaving a $439 million revenue hole to fill and one month of receipts left to tally.

But that may have been cold comfort for the penny pinchers in Secretary Kristen Lepore’s office who, according to Gov. Charlie Baker, have their scalpels out “nipping and tucking” to trim any fat from the budget bones, and probably a little bit of meat as well.

Antonio Caban / State House News Service

Gov. Charlie Baker

“Every year things happen, and because things happen there are many line items in the budget that don’t end up actually spending their full appropriation. We just started paying a lot more attention to that earlier than we normally would,” Baker said early in the week about how his administration is approaching this year’s budget-balancing Rubik’s Cube.

So what kinds of things have been happening? That’s anybody’s guess.

The governor’s budget shop — and the governor himself — has been tight-lipped about how it’s managing the state’s spending in the face of the revenue drizzle. And legislative leaders, after working themselves into a tizzy in December about the governor’s choices to cut $98 million, seem content to let him nip-tuck as much and as often as he sees fit.

House Speaker Robert DeLeo said last week he doesn’t know how the governor has been controlling spending, but hasn’t heard any complaints from advocates either. And Senate President Stanley Rosenberg said he’s confident the governor will share his strategy when he’s ready.

“So that’s his job, and we’ll work with him, but I’m hoping and looking forward to getting some more information soon,” he said in a radio interview.

So until Baker decides to let a little sunshine into his process, budget watchers will have to hold their breath and wait for the storm to pass.

The length of the storm is undetermined but it was punctuated Friday by news that Standard & Poor’s has lowered the state’s bond rating.

The Boston Globe also reported last week that days after House and Senate budget negotiators met for the first time Monday to begin the push-and-pull over the fiscal 2018 budget, top legislative and administration officials huddled with economic advisors to get a read on what to expect in fiscal 2018.

The report said some economists believe as much as a $1 billion will need to be taken out of the budgets passed by both the House and Senate — not surprising given tax collection trends — but DeLeo said the same day that no final decision had been made.

— Matt Murphy

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