STATE HOUSE NEWS SERVICE
Gov. Charlie Baker has told House Speaker Robert DeLeo not to worry about deficient tax collections blowing a hole in this year’s state budget. And the powerful Winthrop Democrat is taking the governor at his word.
Baker last July signed a nearly $39 billion budget that Baker’s team said called for a 1.3 percent boost in spending. The budget was largely drafted by Democratic legislative leaders who earlier this fiscal year packed spending back into the budget over Baker’s objections and then in December balked at the governor’s unilateral budget cuts, saying the governor had unnecessarily targeted their spending priorities.
But revenues in recent months have fallen short of the goals used to support fiscal 2017 spending, and Baker has repeatedly said he has been “nipping and tucking” the budget. Legislators have left budget decisions to the governor. And so far, the furthest the governor has gone to explain those efforts is to say that “things happen” and his budget team has been trying to identify programs and agencies that won’t spend their full allotments for the year.
“The only thing I do know is that the governor stated, relative to this fiscal year anyways, that he felt he would be able to handle the issue without the necessity of us coming back as a House and a Senate and making further cuts, but beyond that I honestly don’t know,” DeLeo told reporters on Wednesday.
After 11 months of fiscal year 2017, tax collections have fallen short of budget projections by $439 million. For context, that’s almost four times the size of the $116 million increase in K-12 education made in the fiscal 2017 budget.
By the time tax collectors know June totals, it will be too late to pare back any more spending for the year.
Asked if he was concerned that legislative leaders are in the dark about how Baker has been slowing spending rates to ensure a balanced budget, DeLeo said, “I’m not sure if we’re at that point yet.”
“I still think he has ’til the rest of the fiscal year that monies that aren’t spent that he would have sufficient time, but I have not heard from, nor have I received any specific complaints from, any particular folks, any advocacy groups, or anyone interested in a line item that they were having an issue,” DeLeo said.
Slow tax growth has also created uncertainty around fiscal 2018 budget deliberations. The six House and Senate lawmakers who hope to craft a budget agreement before July 1 met for the first time on Monday to begin negotiations.
A downward revision of revenue projections, accompanied by spending and other budget adjustments, is expected as part of the conference committee process. The budgets approved by the House and Senate anticipate 3.9 percent revenue growth in fiscal 2018.
“That decision has not been made, but I will tell you that it is something that will have to be discussed based upon the latest figures that we have seen,” DeLeo said, referring to a reduction in the revenue base for next year’s budget.
DeLeo said that May revenues, which exceeded estimates by $30 million and broke a string a four straight months with sub-benchmark tax collections, did not alter his thinking about how to approach the fiscal 2018 budget.
“I still think we still have to have that discussion,” he said.