WITH LESS THAN TWO weeks until the start of the new fiscal year, a group of House and Senate negotiators are trying to hash out differences between two versions of a roughly $61 billion budget, against the backdrop of national economic turmoil. 

This week on The Codcast, CommonWealth Beacon reporter Jennifer Smith talks with Doug Howgate, president of the Massachusetts Taxpayers Foundation. During state budget season, the business-backed think tank releases analyses of budget proposals from the governor, the House, and the Senate, plus dives into the thousands of amendments lawmakers pitch before final budgets are hammered out in each chamber. 

Massachusetts’s fiscal year runs from July 1 to June 30, but timely budgets are a modern rarity in the Bay State. If July starts without an annual spending plan, it will be the 15th year in a row that Beacon Hill misses its deadline and uses a stopgap process to fund the state while the budget is finalized.  

Both chambers took “relatively similar tacks” to revenue and spending, Howgate noted. The Senate version calls for a 6.3 percent increase in spending, and the House offered up a 6.6 percent increase over last year. Both are less than the 7.4 percent bump sought by Gov. Maura Healey, but still more than twice last year’s growth rate – a “pretty strong rate of spending growth,” Howgate said. 

The lawmakers are working from a revenue estimate including $16 billion in federal funding, despite looming but still unsettled federal budget cuts. 

On the local revenue side, lawmakers are still tweaking the amount of money dedicated to either education or transportation generated by the Fair Share amendment, or millionaires tax. This surcharge on incomes over $1 million, passed by ballot question in 2022, is now generating enough money that lawmakers can allocate some of it to the operating budget while also adding to a rainy day fund and a fund for one-time infrastructure costs. They set the surcharge spending cap at $1.95 billion this year, $650 million above last year’s spending cap. 

Between a 2025 supplemental Fair Share budget and the current annual budget, the House and Senate budgets do not split the surtax funding equally. The governor and the House want to create a roughly 50-50 split between transportation and education, while the Senate remains more heavily weighted toward education spending. 

This is creating parallel negotiations between the supplemental spending bill and the annual budget, Howgate notes, both of which are in conference committees with a handful of senators and representatives trying to reach consensus largely out of the public eye. 

“Obviously one of the common critiques of conference committee is it’s not transparent, and people can’t see it,” said Howgate, who was budget director at the Senate Committee on Ways and Means between 2010 and 2014. “I will say, and I’m biased because I worked in this process, it’s hard for me to envision how you end up with good honest compromise conversations on some of these tough issues [if] folks [have] everything they say be in the public record.”  

During the Codcast, Howgate discusses major differences between the House and Senate plans (6:00), why some parts of the process always happen behind closed doors (2:10), and the future of the wealth surcharge split between education and transportation (10:30).