Updated as of 1/22/20
Massachusetts government is funded on a fiscal year basis. Fiscal Year 2021 runs from July 1, 2020 - June 30, 2021. This page will give you updates on the FY2021 budget process. This page lists newest actions first.
|Link to House 2, the Governor's FY2021 Budget Proposal||
On January 21, 2020, Governor Charlie Baker gave the annual State of the Commonwealth address. One January 22, he announced his administration's proposed budget for FY2021. In his speech before an audience of federal, state, and municipal elected officials and other leaders seated in the House Chamber, the Governor called for action on several legislative proposals, including a landmark housing production bill and health care reform legislation. Governor Baker also announced a goal to bring the Commonwealth to net-zero emissions by 2050, recommitted his support for the multistate Transportation Climate Initiative (TCI), and previewed initiatives from his proposed FY21 budget.
On January 22, 2020, tThe Baker-Polito Administration filed its Fiscal Year 2021 (FY21) budget recommendation, a $44.6B balanced and fiscally-responsible proposal which fully funds the first year of the historic Student Opportunity Act, increases funding for the MBTA and the Commonwealth’s transportation system and helps train 20,000 more workers in skilled trades and technical fields by transforming vocational high schools into Career Technical Institutes.
The FY21 budget, known as House 2, is based on the $31,151B consensus tax revenue estimate which anticipates a 2.8% growth in total tax collections over revised Fiscal Year 2020 (FY20) tax estimates. House 2 recommends a total of $44.6 billion in gross spending, excluding the Medical Assistance Trust Fund transfer, approximately 2.3% growth over FY20.
The central themes of the Baker administration's sixth budget (H 2) are education and transportation, Administration and Finance Secretary Michael Heffernan said. Public schools would see $355M in new spending -- the first payment towards a $1.5B, seven-year overhaul of the state's public education funding formula -- and the budget newly directs $216.7M to the MBTA and other transportation agencies to address safety and infrastructure issues.
Baker's budget was built on the consensus agreement of his administration and lawmakers that the state will collect an estimated $31.15B in tax revenue during fiscal 2021 -- 2.8% growth, modest compared to recent years of higher-than-expected collections that resulted in large surpluses.
The governor's budget would increase overall state spending by 2.3% above the current fiscal year, according to the administration, and accounts for a $96 million reduction in tax revenue associated with the income tax rate having dropped to 5 percent, a reduction of $95M because of the state's new restrictions on the sales of vaping products, and another $64M reduction from the scheduled re-emergence of a charitable giving tax deduction.
Baker's spending plan assumes the state will pull in $282.7M in revenue from casino gaming, $146M in marijuana taxes and another $14M from Cannabis Control Commission license payments and fines.
Gov. Charlie Baker proposed in his annual budget to increase the per-ride fees on such ride-sharing services as Uber and Lyft to $1 per ride and to use much of the new funding to improve the safety and reliability of the MBTA.
The House is expected to introduce and debate its proposed budget in April, and the Senate is expected to do the same during the month of May. The 2021 Fiscal Year begins July 1, 2020.
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