GOV. CHARLIE BAKER has seen House Speaker Robert DeLeo’s offer of a barebones closeout budget deal to break a logjam on Beacon Hill and, like any confident poker player, raised the stakes a bit to pay for priorities that aren’t strictly speaking deficiency spending.
After a private meeting on Monday between Baker, DeLeo, Senate President Karen Spilka and a handful of other lawmakers, the officials were peppered with questions about what they were doing to move along a stalled bill to close out the books on fiscal 2019, which ended June 30.
It appears little progress was made at the meeting in resolving differences between the House and Senate, but Baker tossed some new elements into the discussion. DeLeo recently floated the idea of passing a bill that only includes enough spending to “ensure that no account would end FY19 in deficiency” along with time-sensitive policy riders, such as the scheduling of next year’s state primary.
Baker responded with a memo from Michael Heffernan, the secretary of administration and finance, outlining some budget line items that are deficient and others, such as $50 million for the MBTA, that aren’t.
“I think what we tried to do was respond to that at least in the spirit of that notion – which things fall into the category you would absolutely positively need to have,” Baker said. “I think our goal here is to try to be helpful in the process of trying to get to an answer here.”
There has been no suggestion that the MBTA ended fiscal 2019 in a deficit, but it has taken on a big and expensive challenge in the current fiscal year as the agency attempts to rapidly improve the infrastructure along subway lines.
The governor’s list of programs most in need includes $50 million for the MBTA to finance a flex force aimed at more swiftly completing those capital repairs. Baker didn’t suggest a $50 million supplement for the T until June 25, less than a week before the end of the fiscal year. Therefore, that funding request could hardly be considered a deficiency from fiscal 2019. But in his letter to legislative leaders, Heffernan wrote, “People, programs, and repairs are already in place and this funding is critical to the continuation of this work.”
Among the other items Heffernan listed as deficient are $30 million for interventions at underperforming schools, $16 million for treating men with substance abuse disorder, and tens of millions to test and treat water contaminated with man-made chemicals known as PFAS.
One great irony to the ongoing budget woes is the state is relatively flush with cash at the moment. If all the deficiencies that Baker addressed were shored up, the state would still be left with a $632 million surplus from fiscal 2019, according to Heffernan’s letter.
Senate Minority Leader Bruce Tarr said a lack of communication is the biggest reason why Spilka and DeLeo and their teams have failed to reach a compromise.
“There is a well-worn path to negotiating supplemental budgets and spending documents, and we should follow it,” Tarr told reporters. “I would say the big hang-up is lack of communication.”
While DeLeo gave the public a peek into his thinking by floating the idea of a bare-bones budget proposal, Spilka has been more secretive in her approach to the closed-door negotiations. She wouldn’t say what she has put on the table to try to break the impasse.
The $348 million in spending that Baker said is necessary in his letter is about half the $730 million in “spending and tax relief” he proposed when he filed the closeout budget bill in early September.
One major disagreement between the House and Senate closeout budget bills was the House’s inclusion of a provision to give Massachusetts corporations relief from a new federal law restricting the deductions they can claim on debt expenses. The loss of the deductions would cost businesses tens of millions of dollars unless the state law is changed.
The Senate did not include that tax change, and Senate Ways and Means Chairman Michael Rodrigues said the closeout budget bill was not the appropriate way to handle tax policy.
Baker had suggested including the tax relief in the closeout budget bill, and he suggested that his administration has been pressing lawmakers on that point.
“I know that the House and Senate both know where we’re coming from on that,” Baker said.
On Monday, standing alongside DeLeo and Baker after their meeting in the governor’s office, Spilka indicated there may be some flexibility in that area.
“That was the will of the senators at that time. So that’s what the Senate voted on,” Spilka said. “We have a lot in common. The House and Senate voted on many items, many issues, in common. And there’s some different.”