State Representative Joseph McGonagle, together with his colleagues in the Legislature, voted unanimously on July 9 to pass the state’s $48.07 billion budget for Fiscal Year 2022 (FY22). This budget maintains fiscal responsibility, does not cut services and makes targeted investments to address emerging needs, safeguard the health and wellness of the most vulnerable populations and ensure residents will benefit equitably as the state recovers from the impacts of the COVID-19 pandemic.
Just like in the House budget, McGonagle was able to secure money for Everett through communications upgrades to police departments, fire departments and the construction of a boat house for community use on the Malden River. These were determined to be top priorities for the city in the upcoming year.
“I am truly thankful that my amendments made it through deliberations and into the final product,” said McGonagle. “As COVID-19 cases continue decreasing, it is relieving and hopeful to see Everett and the Commonwealth as a whole begin to move forward. Not only do we address the issues facing the Commonwealth right now, but we are also investing in our future through the Student Opportunity Act, clean energy development and many other projects. I am very grateful to House Speaker Ron Mariano, House Ways and Means Chairman Aaron Michlewitz and Senate President Karen Spilka for their diligent work on this budget.”
“As we recover from uncertain times during the COVID-19 pandemic, the Legislature is proud to deliver a budget that thoughtfully grows the Massachusetts economy, spurs job training and employment opportunities, expands services and programs, and invests in our long-term priorities, such as growing our Stabilization Fund and implementing the Student Opportunity Act,” said Speaker of the House Ronald Mariano. “I am proud of my House colleagues and would like to thank Chair Michlewitz, Vice Chair Ferrante and Assistant Vice Chair Donato for their diligent work during this process. I would also like to thank Senate President Spilka and her colleagues in the Senate for their hard work and collaboration.”
Taking into consideration strong tax revenue performance in Fiscal Year 2021, the final FY22 conference report increases revenue assumptions by $4.2 billion over the December consensus revenue projection for a new tax revenue projection of $34.35 billion. The FY22 budget does not make a withdrawal and instead transfers funds into the Stabilization Fund, projecting an estimated balance of approximately $5.8 billion for this crucial “rainy day” fund at the end of the fiscal year.
Notably, the Legislature provides substantial funds in the FY22 budget to invest in the Commonwealth’s long-term obligations. Prioritizing funding for education, the new Student Opportunity Act Investment fund was funded at $350 million (M) to be utilized in the coming years for the implementation of the state’s landmark Student Opportunity Act (SOA). Additionally, a supplemental payment of $250M was transferred to the Pension Liability Fund to reduce the Commonwealth’s pension liability.
“As we vote on the final FY2022 budget, we mark a capstone to a volatile 16-month odyssey we have seen since the pandemic first struck the Commonwealth, but thankfully this roller coaster is letting us exit off today at a peak and not a valley. We have come out of the last year and a half in a stronger fiscal situation than anyone could have ever imagined. For us to be in this favorable of a situation is a testament to the fortitude and resolve of the Legislature,” said State Representative Aaron Michlewitz, who is chair of the House Committee on Ways and Means. “The investments made in this budget will go a long way to improve the economic outlook for the Commonwealth in an efficient and equitable manner.”
As a cornerstone of the Commonwealth’s equitable recovery, the FY22 budget protects access to educational opportunity and charts a path forward for students, families, educators and institutions. The budget maintains the Legislature’s commitment to implementing the SOA by FY 2027. The conference report proposal fully funds the first year of the SOA consistent with the $5.503 billion local aid agreement reached in March, amounting to an increase of $220M over FY21. Despite the uncertainty created by the pandemic, this increased level of investment represents a one-sixth implementation of SOA rates and ensures that school districts across the Commonwealth have adequate and equitable resources to provide high-quality educational opportunities for all students. The FY22 budget also includes a $40M reserve consistent with the March local aid agreement to provide additional aid to districts experiencing increases in student enrollment compared to October 2020.
The budget invests in higher education, allocating $571M for the University of Massachusetts system, $315M for community colleges and $291M for state universities. The budget also includes $130M in scholarship funding and funds the community colleges SUCCESS Fund (Supporting Urgent Community College Equity through Student Services) at $10.5M and the STEM Starter Academy at $4.75M.
The budget also includes large investments in labor and economic development, such as the creation of a trust fund dedicated to job training for the offshore wind industry to be administered by the Massachusetts Clean Energy Center. This budget makes an initial deposit into this fund of $13M to establish and grow technical training programs in the public higher education system and vocational-technical institutions. The fund will also prioritize grants and scholarships to adult learning providers, labor organizations and public educational institutions to provide workers with greater access to these trainings.
Other education investments include:
- $388.4M for the Special Education Circuit Breaker, reimbursing school districts for the high cost of educating students with disabilities at the statutorily required 75 percent reimbursement rate
- $154.6M for reimbursing school districts at 75 percent for costs incurred when students leave to attend charter schools
- $82.2M for regional school transportation
- $50M for Adult Basic Education
- $27.9M for the Metropolitan Council for Educational Opportunity program
- $6M for Social Emotional Learning Grants to help K-12 schools bolster social emotional learning supports for students, including $1M for a new pilot program to provide mental health screenings for K-12 students
- $4M for Rural School Aid
This budget supports working families by addressing the increasing costs of caregiving for low-income families by converting the existing tax deductions for young children, elderly or disabled dependents and business-related dependent care expenses into refundable tax credits. These tax credits will benefit low-income families that have little or no personal income tax liability and cannot claim the full value of the existing deductions. The conversion to a refundable tax credit would provide an additional $16M to more than 85,000 families each year. Coupled with the expanded Child Tax Credit and the Child and Dependent Care tax credits under the federal American Rescue Plan Act, these credits will help lift families out of poverty and support low-income working parents and caregivers across the Commonwealth.
The FY22 budget builds on the success of last year’s efforts to tackle “deep poverty” with a 20 percent increase to Transitional Aid to Families with Dependent Children (TAFDC) and Emergency Aid to the Elderly, Disabled and Children benefits over December 2020 levels, ensuring families receive the economic supports they need to live, work and provide stability for their children. Further, the final budget repeals the asset limit for TAFDC. Traditionally, asset limits on assistance programs further expose those who are already financially vulnerable to greater economic hardship. While families are recovering from the impacts of COVID-19, it is vital to make assistance programs accessible and effective, and removing the asset limit allows families to save for education, job training, reliable transportation, home expenses and other emergency needs.
Other children and family investments include:
- $30.5M for Emergency Food Assistance to ensure that citizens in need can navigate the historic levels of food insecurity caused by COVID-19
- $7.5M for grants to Community Foundations to support communities disproportionately impacted by the pandemic
- $5M for the Secure Jobs Connect program, providing job placement resources and assistance for homeless individuals
- $4.2M for the Office of the Child Advocate, including $1M for the establishment and operation of a state center on child wellness and trauma
- $2.5M for Children Advocacy Centers
To help families get back to work, the FY22 conference report includes $820M for the early education sector, including $20M to increase rates for early education providers, $15M for Massachusetts Head Start programs, $10M for the Commonwealth Preschool Partnership Initiative to expand public preschool and $9M to cover the cost of fees for parents receiving subsidized early education in calendar year 2021.
The FY22 budget provides resources to help with housing stability, including $150M for the Massachusetts Rental Voucher Program to expand access to affordable housing, $85M for grants to local housing authorities, $22M for the Residential Assistance for Families in Transition Program and $8M for Housing Consumer Education Centers to help administer nearly $1 billion in federal housing relief.
The budget makes the state’s film tax credit permanent and requires an increase in the percentage of production expenses or principal photography days in the Commonwealth from 50 percent to 75 percent. The film tax credit was set to expire in January 2023. The budget also includes a disability employment tax credit for employers that hire employees with a disability.
To ensure long-term fiscal responsibility, the FY22 budget repeals three ineffective tax expenditures as recommended by the Tax Expenditure Review Commission (TERC), namely the exemption of income from the sale of certain patents, the medical device tax credit and the harbor maintenance tax credit, effective January 1, 2022. TERC found that these tax expenditures are either obsolete, fail to provide a meaningful incentive or fail to justify their cost to the Commonwealth. TERC was created as part of a Senate budget initiative in Fiscal Year 2019.
The Legislature’s FY22 budget confronts the frontline health care impacts of the pandemic to navigate the challenges posed by COVID-19. It also sustains support for the state’s safety net by funding MassHealth at a total of $18.98 billion, thereby providing more than 2 million children, seniors and low-income residents with access to comprehensive health care coverage. It also invests $15M to support local and regional boards of health as they continue to work on the front lines against the ongoing impacts of the COVID-19 pandemic.
Understanding that the pandemic has been a stressor on mental and behavioral health, the FY22 budget invests $175.6M for substance use disorder and intervention services provided by the Bureau of Substance Addiction Services. It also invests $12.5M to support a student “telebehavioral” health pilot, public awareness campaigns, loan forgiveness for mental health clinicians and initiatives to mitigate emergency department boardings for individuals in need of behavioral health support, as well as $10M for Programs of Assertive Community Treatment grants to provide intensive, community-based behavioral health services for adolescents.
Other health care and public health investments include:
- $98.4M for children’s mental health services, including $3.9M for the Massachusetts Child Psychiatric Access Program (MCPAP) and MCPAP for Moms to address mental health needs of pregnant and postpartum women
- $25M for Family Resource Centers to grow and improve the mental health resources and programming available to families
- $56.1M for domestic violence–prevention services
- $40.8M for early intervention services to ensure supports are accessible and available to infants and young toddlers with developmental delays and disabilities, including funds to support health equity initiatives
To support economic development, the FY22 budget increases access to high-quality and reliable broadband – which is crucial for businesses, students and families – by moving the duties of the Wireless and Broadband Development Division to the Department of Telecommunications, which is working to facilitate access to broadband and has the institutional ability and knowledge to address broadband access issues. The budget also includes a $17M transfer to the Workforce Competitiveness Trust fund, $15.4M for Career Technical Institutes and $9.5M for One-Stop Career Centers to support economic recovery.
Other investments in economic and workforce development include:
- $15M for the Community Empowerment and Reinvestment Grant Program
- $6M for Regional Economic Development Organizations to support economic growth in all regions of the state
- $2.5M for the Massachusetts Cybersecurity Innovation Fund, including $1.5M for new regional security operation centers, which will partner with community colleges and state universities to provide cybersecurity workforce training to students and cybersecurity services to municipalities, nonprofits and small businesses
To protect residents of the Commonwealth, the FY22 budget codifies and expands the existing Governor’s task force on hate crimes to advise on issues relating to hate crimes, such as ways to prevent hate crimes and how best to support victims of hate crimes. The conference report makes the task force permanent and expands its membership to include members of the Legislature and an appointee from the Attorney General. The conference report also contains a provision that supports immigrants who are victims of criminal activity or human trafficking.
The budget also authorizes funds from the Massachusetts Cybersecurity Innovation Fund to be used for monitoring and detection of threat activity in order to investigate or mitigate cybersecurity incidents. To proactively combat threats and attacks, the budget provides funding for a public-private partnership with the goal of engaging educational institutions to jointly expand the training, employment and business development in cyber fields in Massachusetts through a combination of regionalized instruction and business outreach, state-wide shared resources, and real-life simulations for cyber training and business development.
Having been passed by the House and Senate, the legislation goes to Governor Charlie Baker for his signature. He has 10 days to review the budget, approve or veto the entire budget or specific parts or make changes – or to submit budget amendments to be considered by the Legislature.