The Commonwealth of Massachusetts' FY2024 Budget Process for ACEC/MA Members

The annual state budget season moved to the next phase on the evening of May 25 as the Senate unanimously approved a nearly $56B spending plan that ramps up spending while setting aside $575M for a tax relief plan that will be unveiled separately.

Senators voted 40-0 to finalize their rewrite of the FY2024 budget first proposed by Gov. Maura Healey and already approved by the House. The next step will be the formation of a conference committee, to be announced next week, comprised over both Senators and Representatives that will work out the differences between the two legislative versions, ahead of the July 1 start of fiscal year 2024.

That conference committee process will decide the fate of some of the most notable parts of the budget, including how it divides $1B in new income surtax revenues and whether to give undocumented students access to in-state tuition at public colleges and universities.

Over the course of three days of deliberations, senators packed tens of millions of dollars more onto the budget's bottom line, mostly through earmarks for infrastructure projects and community organizations in their individual districts.

The Senate approved more than 400 amendments, collectively adding $82.2 million in spending and pushing the bottom line to about $55.9 billion, a Senate Ways and Means Committee spokesperson said.

Notable additions senators made include funding for kits to test whether drinks have been spiked amid a worrying rise in cases, another attempt to study congestion pricing and other transportation cost questions, and a tweak to a House-backed push to revive and make permanent an eviction diversion policy.

The Senate also diverged from the House on its approach to tax relief. The House approved a tax relief bill (H 3770) -- estimated at a $587 million impact in FY24 and $1.1 billion once it fully takes effect over several years -- before tackling its budget bill. Senate Democrats were not ready to move ahead on tax relief so the Senate Ways and Means Committee instead factored in $575 million to cover tax relief in a bill that still has not yet emerged.

Even without tax relief baked into the annual state budget, its specter loomed over much of the deliberations. Democrats successfully defended their push to prevent new surtax revenue from making it easier to trigger the kind of automatic tax rebates that taxpayers received late last year.

The Massachusetts Senate began debate on its FY2024 budget proposal on 5/23/23.

Status of amendments

Senators filed 1049 amendments to the Senate Ways and Means Committee's FY12024 budget proposal by the May 12 filing deadline.

Amendments are here.

Senate debate is planned to begin on May 23

The timing of this release continues the fall back into the typical timetable used to develop the Commonwealth’s budget after Governor Healey was given additional time to file her first budget.

The Legislature and Administration had previously agreed to base the FY24 budget development on the belief that state tax revenues are expected to rise 1.6% over the next fiscal year, or 4.1% when accounting for the $1 billion the administration expects to bring in from millionaires tax. To date, both Governor Healey and the House of Representatives used this expected revenue figure to develop their versions of the budget. Last week, however, the Department of Revenue announced that the state collected $4.782 billion in taxes in April, which is $1.435 billion or 23.1% below the most recent monthly benchmark projection. Ultimately, with only two months left in the fiscal year, the state so far has collected $703 million less than expected in tax revenues. Since the announcement, Governor Healey has attempted to portray a continued sense of optimism, saying that FY24 budget proposals should already factor in an economic slow down and that “we have the money there to make the investments in our people.” Senate leadership has not made any statements on how April’s revenue numbers will impact Senate budget debate or any tax reform proposal.

 With the release of the Senate Ways and Means budget, Senate members will have until the afternoon of Friday, May 12 to file amendments and a combination floor/remote debate is scheduled to begin the week of May 22, 2023.

This plan is about $3.4 billion, or 6.5 percent, larger than the fiscal 2023 state budget signed by Gov. Charlie Baker last summer. The plan is $300 million over what Gov. Maura Healey proposed, and $400 million under the House's budget.

The Senate Ways and Means Committee voted 16-0 to recommend the spending plan, an indication that the proposal will likely sail to passage when it hits the Senate floor later this month.

Both the House and Healey's budgets had factored in a companion tax relief bill, which the governor estimated could have a $1 billion impact to state revenue next fiscal year. The House factored in $587 million next fiscal year for tax relief and up to $1.1 billion after a two-year phase-in period.

April Revenue Collapse Swings State Budget Into Red

Source: State House News Service, Chris Lisinski, 5/3/23 3:22 PM

MAY 3, 2023.....[Coverage Developing] State tax revenues collapsed well below expectations in April, shifting the year-to-date performance from about $870 million in the black to, by one measure, $703 million in the red.

The Department of Revenue announced Wednesday it brought in $4.782 billion in April, typically the strongest month of the year for tax collections. That's $2.163 billion less than in April 2022, a drop of 31.2 percent, and $1.435 billion or 23.1 percent below the most recent monthly benchmark projection.

"That's a pretty substantial shortfall, and it really does change the tax trajectory for the fiscal year," said Evan Horowitz, executive director of the Center for State Policy Analysis at Tufts University. "I don't think it imperils state spending or the solvency of the current fiscal year, but I do think it means there's not going to be a lot of money to play around with at the end of the year. It really does tighten the rings of this fiscal year."

The development means state officials, who have been engaged in a prolonged era of spending growth, now face the kind of spending management decisions that some in elected office on Beacon Hill have never faced and which haven't surfaced since the budget tensions of Gov. Charlie Baker's first term.

Through 10 months of fiscal 2023, Massachusetts has collected $703 million less than state budget chieftains originally expected to haul in by this point when they crafted benchmarks for the cycle, a reversal from the roughly $870 million above original benchmarks the state reported through March.

"The decrease in April revenues largely represents a previously understood exposure to the fiscal year 2023 budget from capital gains and the timing of taxpayers' use of pass-through-entity credits that we are reviewing closely and will continue to monitor over the final two months of the fiscal year," Administration and Finance Secretary Matthew Gorzkowicz said in a statement. "We remain confident in our ability to work with our partners in the Legislature to adjust and utilize available resources to manage the budget and close the fiscal year in balance."

Gorzkowicz and the Healey administration did not announce any immediate budget decisions. The secretary signaled he does not currently believe they will need to execute budget cuts, known as 9C cuts, to manage the shortfall. Without offering specifics, the administration also speculated about using "one-time funding sources generated by prior year surpluses."

The sudden, precipitous drop after more than two years of rapid revenue growth alters the atmosphere on Beacon Hill, where lawmakers and Gov. Maura Healey have been pursuing aggressive increases in state spending and sizable new tax relief.

With only two months remaining in the fiscal year, it could be difficult to trim state spending in a meaningful way.

Massachusetts had more than $7 billion stashed away in its "rainy day" long-term savings fund as of March 14, according to figures House Democrats presented last week, and state government could tap into that money to paper over gaps this year.

The House last week approved a $56.2 billion state budget for fiscal year 2024. Their plan is built on the assumption that Massachusetts will collect $41.4 billion in tax revenue next year, which legislative and Healey administration budget chiefs agreed to in January, as well as the initial impacts from a tax relief bill whose eventual size could grow to $1.1 billion annually.

Senate Democrats are expected to roll out and then approve their own budget bill this month, and they have avoided committing to a specific timeline for a response to the House's tax relief proposal. Healey administration officials said the governor's tax relief plan "remains sound, reasonable and affordable fiscal policy" and that they don't currently plan to revisit the revenue estimates being used to build the fiscal 2024 state budget.

[Alison Kuznitz contributed reporting]

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05/03/2023

On the evening of April 26, the House voted 156-0 evening to send the Senate a $56.2 billion state budget (H 3900) for FY2024 that's predicated on hundreds of millions of dollars of tax relief tied up in a separate bill. During budget deliberations this week, representatives crafted two final mega-amendments packaging together hundreds of individual changes and earmarks dealing with energy, environmental affairs and housing (Consolidated Amendment "F") and labor and workforce development (Consolidated Amendment "G"), then approved them with a single vote each.

The House added roughly $120 million in spending over the course of its three-day deliberations. The House's budget proposal would legalize online Lottery sales and direct revenue from that gambling expansion toward early education and child care grants. Democrats also lined up behind a measure that will make it harder for state tax revenues, bolstered by a new surtax on higher earners, to trigger the kind of automatic taxpayer rebates that caught Beacon Hill by surprise last summer.

The Massachusetts Senate will consider their version of the budget bill in May, likely after they also roll out a counterproposal on tax relief that could inform the spending plan's bottom line

Massachusetts State Representatives filed a total of 1566 amendments to the FY2024 budget proposal by the deadline of 5 pm on April 14, 2023.  The House is expected to group the amendments into bundles and then vote on the bundles. 

On April 24, the House will convene a full formal session to begin its days-long work on the $56.2 billion fiscal 2024 budget (H 3900) rolled out by the House Ways and Means Committee. Top House Democrats proposed a spending bill about $700 million larger than Gov. Healey's $55.5 billion budget, weaving in authorization for online Lottery sales to fund child care investments, an expanded no-cost phone calls program in prisons and jails, and different local aid levels. Representatives filed 1,566 amendments to the budget, most of them seeking earmarks for their districts. The House's budget sessions typically feature little action on the floor, and representatives instead make decisions behind closed doors about which amendments to approve and reject before attaching those changes using only a handful of consolidated mega-amendments. Roll calls are set to begin with the start of session at 11 AM.

House Ways and Means Issues Budget Proposal for FY2024

Bill is now H.3900

On April 13, 2023, House Speaker Ronald Mariano and House Ways and Means Chair Aaron Michlewitz officially released the House’s proposed budget for Fiscal Year 2024 (FY24). The proposed spending plan is about $700 million larger than what Governor Maura Healey filed and would reflect an increase of nearly $3.74 billion or 7.1 percent over the fiscal 2023 state budget enacted last summer. Their plan factors in a $587 million cost next fiscal year from a tax relief proposal that House Democrats unveiled on Tuesday and plan to advance on Thursday.

Budget Amendments are due on Friday. The House plans to begin budget debate during the week of April 24, 2023.

Like Governor Healey, House leaders plan to spend the $1 billion in revenue from a new surtax on high earners equally between education and transportation investments. Both bills would segregate surtax revenues into an Education and Transportation Fund, and Chairman Michlewitz said his committee’s budget proposal would deploy that money "100 percent on top of existing appropriations" rather than use it to replace other spending levels.

House leaders recommended about $6.58 billion in Chapter 70 aid for schools, which they said would fully fund the third year of the K-12 funding reform law known as the Student Opportunity Act, plus a $7.86 million supplement to provide a minimum aid increase of $60 per pupil. On unrestricted general government aid (UGGA) that state government steers to cities and towns, House Democrats proposed $1.25 billion, or about $5 million less than the Governor proposed.

For transportation, the House budget would steer $250 million in surtax money toward MBTA capital investments and $65 million toward a T workforce and safety reserve while also deploying $5 million toward the rollout of means-tested fares.

Both the Governor's budget bill and the House Ways and Means bill would segregate surtax revenues into an Education and Transportation Fund, and Michlewitz said his panel's budget proposal would deploy that money "100 percent on top of existing appropriations" rather than use it to replace other spending levels.

House officials say 1.25 percent of their budget would go toward state environmental agencies, a new spending milestone in the wake of several major climate and clean energy bills that have won approval on Beacon Hill in recent years.

House leaders sought new investments in other higher education initiatives, including $50 million of surtax money to expand the High Demand Scholarship program to offer assistance to students pursuing "in-demand" professions. The bill also mirrors Healey's proposal to put $20 million toward a new MassReconnect program that would cover unfilled community college costs for adults older than 25 without a degree.

House Democrats proposed about $6.58 billion in Chapter 70 aid for schools, which they said would fully fund the third year of the K-12 funding reform law known as the Student Opportunity Act. That's about as much in Chapter 70 funding as Healey sought, though the House bill also features an additional $7.86 million supplement to provide a minimum aid increase of $60 per pupil.

The House bill funds charter school reimbursements at $230 million ($13 million less than Healey's budget), regional school transportation at $107 million ($10 million more) and the special education circuit breaker at $506 million ($3 million more).

When it comes to unrestricted general government aid for cities and towns, often referred to as UGGA, House Democrats proposed $1.25 billion or a 1.6 percent increase over the current fiscal year, mirroring the projected growth in state tax revenues next year.

Municipal leaders have been pushing for the state to expand UGGA beyond that tax revenue baseline, arguing that inflation and surging tax collections in recent years have left cities and towns behind.

Massachusetts Municipal Association Executive Director Geoff Beckwith asked lawmakers last month to approve $1.3 billion in UGGA, a 6.13 percent increase. 

Budget amendments are due on 

Governor Presents her FY2024 Budget Proposal on March 1, 2023

Governor Maura Healey introduced her FY2024 budget recommendation today. This budget bill is current known as H. 1

Governor's FY2024 Budget Recommendation

Healey Budget Shines Light On Transportation Agenda

MassTaxpayers Foundation Analysis

MassTaxpayers Foundation Summary of the Budget Proposal

Gov. Maura Healey's FY2024 budget is a $55.5 billion package described as a "downpayment" on the governor's goals of making Massachusetts a more affordable place to live, driving the state's decarbonization push and addressing the impacts of climate change, and preparing students for careers in an evolving economy.

The bottom line for fiscal year 2024 spending represents a 4.1 percent increase over the current year's budget as originally adopted last summer, exactly the same growth rate that the administration and lawmakers expect to see from state revenues in fiscal 2024 when accounting for $1 billion from the state's new income surtax.

That $1 billion from the surtax on income in excess of $1 million will go under Healey's plans towards education ($510 million) and transportation ($490 million) and Administration and Finance Secretary Matthew Gorzkowicz said that some of the investments the new governor's first budget (H 1) proposes in those areas "would be very challenging" to have made without the new revenue stream.

For transportation, the surtax revenues would go towards $181 million in MBTA capital investments, launching a $100 million municipal partnership program, providing $100 million for highway bridge maintenance and preservation, and making $25 million available in regional transit funding and grants.

The budget plan also ratchets up funding for the Executive Office of Energy and Environmental Affairs, which sits at the center of the state's efforts to reduce carbon emissions to a net-zero level by 2050 and to electrify buildings, vehicles and more.

EEA would get $543.6 million under Healey's budget -- an increase of $105.2 million or 24 percent that would allow the secretariat to hire 240 new staff members. The administration said it would be the first time that an annual state budget dedicates at least 1 percent of its total to EEA.

On the education side, Governor Healey is proposing to use the surtax money to pay for $100 million in child care grants to providers, $140 million in higher education capital funding, the $20 million free community college program the governor outlined earlier Wednesday, a $93 million expansion of a state scholarship program, a $59 million effort to stabilize tuition and fees at UMass and other public higher education institutions, and more.

Including the surtax investments, higher education would be in line for an increase of $371 million or 23 percent in the Healey budget. That includes a 3 percent increase to the base funding for each higher education segment, including the University of Massachusetts system.

"Governor Healey and Lt. Governor Driscoll have made a bold statement about the importance of the University of Massachusetts to the socio-economic future of the Commonwealth," UMass President Marty Meehan said. "These transformational investments would expand access to our world-class education and enhance the impact of our statewide research enterprise. On behalf of the UMass community of 74,000 students, 17,000 faculty and staff, and 500,000 alumni, we thank the Healey-Driscoll administration for their commitment to UMass.

After watching state revenues surge nearly 40 percent over the last two fiscal years, accommodating a nearly 11 percent increase in spending in the current budget, the administration and Legislature are preparing for a "slowcession" over the next year and a half -- not a downturn from the elevated revenue levels, but a definite handbrake on the eye-popping increases of recent years.

The budget proposes:

• a total of $8.36 billion for local aid programs, a $635 million or 8.2 percent increase over the final budget Gov. Charlie Baker signed for fiscal 2023. Along with $1.26 billion for general government aid (a $24.6 million or 2 percent increase), cities and towns would share $6.585 billion in Chapter 70 school funding (a $586 million or 9.8 percent boost) under Healey's plan.
• the Chapter 70 total it proposed represents full funding of the Student Opportunity Act school finance reform law passed in 2019 and, if enacted, would be the largest increase since at least 1999. The fiscal 2024 state budget will mark the third budget cycle for the Student Opportunity Act, which aims to address education equity gaps with $1.5 billion in new funds rolled out over a seven-year span.

She also telegraphed her plan to ask lawmakers to allocate $20 million to create MassReconnect, a program that will "offer students last-dollar financial support to cover the cost of tuition, fees, books and supplies as well as provide funding for career and wraparound support services to encourage retention and degree-completion."

The governor's budget (H 1), which will be referred to the House Ways and Means Committee, will propose $46.9 million for early college and innovation pathways, a $14.4 million increase over this year's budget. The administration estimates that under its early college plans more than 18,000 students in the 2023-2024 school year will have the opportunity to earn up to 12 college credits before graduating. The pathways program will enroll more than 10,000 students in courses across "priority industries" including IT, engineering, health care, life sciences and advanced manufacturing, the administration said.

And Healey earlier this week also rolled out a tax relief and reform package that could swell to cost as much as $1 billion annually.

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03/01/2023

Healey Outlines Local Aid Levels Ahead of Budget Rollout

After Pushing for Boost, Munis Praise Proposal as "Strong First Step"

Local officials and then the general public got a preview of the first Healey-Driscoll state budget on February 23 when the administration shared preliminary local aid estimates based on the spending bill (H 1) that Healey will file by March 1, 2023. It was the first detailed look at some of the ways in which the new governor and her administration plan to make some of her priorities and campaign promises reality, and it offered an early check-in on the relationship between the new administration and the 351 cities and towns of Massachusetts.

The governor's fiscal year 2024 budget will propose a total of $8.36 billion for local aid programs, which the administration said would be a $635 million or 8.2 percent increase over the final budget Gov. Charlie Baker signed for fiscal 2023. Along with $1.26 billion for general government aid (a $24.6 million or 2 percent increase), cities and towns would share $6.585 billion in Chapter 70 school funding (a $586 million or 9.8 percent boost).

Both the House and Senate will rewrite the budget before sending a final version back to Healey in the early summer months.

The Healey administration said the Chapter 70 total it will propose represents full funding of the Student Opportunity Act school finance reform law passed in 2019 and, if enacted, would be the largest increase since at least 1999.

"The Student Opportunity Act calls for a historic investment in our schools, our students, our educators and their futures. Additionally, these funds will help cities and towns support their first responders, public works, youth violence prevention programs, housing production, cybersecurity and more," Healey said in a statement.

The governor's statement added, "Lieutenant Governor Driscoll and I know that predictability and transparency from state government is essential for municipal leaders to serve their communities -- and we're committed to delivering just that."

Administration officials released the local aid preview while Healey is on a family vacation in Florida and Lt. Gov. Kim Driscoll is visiting family in Georgia.

The fiscal 2024 state budget will mark the third budget cycle for the Student Opportunity Act, which aims to address education equity gaps with $1.5 billion in new funds rolled out over a seven-year span. Among the pledges that the governor made in her first appearance before the Massachusetts Municipal Association last month, she said she would fully fund the landmark 2019 K-12 education funding law.

"We know that the pandemic hit every student, every family and it widened disparities that existed in the first place," Healey said in January. "We need to really focus on getting our students back on track. Luckily, we have the Student Opportunity Act and federal aid that we'll rely on. The challenge is helping our school districts deploy those funds as quickly and as effectively as possible."

A budget brief produced by the Executive Office for Administration and Finance said that the governor's budget would also "recommend a temporary change to allow school districts greater flexibility to spend nearly $1.5 billion in expiring federal funds and better coordinate funding streams without facing state financial penalties." Much of the roughly $2.9 billion in federal Elementary and Secondary School Emergency Relief money provided to Massachusetts school systems remains unspent.

The first Healey budget will also fulfill another promise the governor made to the MMA: it will increase funding for school transportation reimbursement programs by $25.5 million or 24 percent over the current budget. The $97 million proposed for regional school transportation reimbursement would increase the state's reimbursement from about 80 percent to 90 percent of local costs, the $5.2 million for non-resident pupil transportation for vocational schools would increase the reimbursed share of those costs from less than 5 percent to 90 percent, and $28.7 million for homeless student transportation reimbursement would have the state footing 100 percent of those costs.

The budget will also fully fund charter school reimbursements at $243 million and provide $7.5 million for rural school aid, a $2 million or 36 percent increase over fiscal 2023, the administration said.

Unrestricted General Government Aid (UGGA) would be funded at $1.26 billion -- $24.6 million or 2 percent more than the current budget, reflecting a slightly larger boost than the forecast 1.6 percent increase in general state tax revenues on which the budget will be based. Healey said on Twitter that her administration "wants to help cities and towns fund the essential services they provide every day at a higher rate than what we expect for revenue growth next fiscal year."

The Baker administration made it a practice to increase UGGA at the same rate as the projected increase in state tax revenue. Local officials last week told the administration that a similar increase in municipal support "won't cut it" this year. But while the 2 percent increase is still less than half of the 4.1 percent growth the state is expecting once projected revenue from the new surtax on income greater than $1 million is added to the equation, municipal officials were full of nice things to say about the new governor's first budget plan Thursday.

"The local aid that the Healey-Driscoll Administration is proposing to allocate to cities and towns is a strong first step in helping us meet the needs of all of our residents," Revere Mayor and Massachusetts Mayors' Association President Brian Arrigo, who made the "won't cut it" comment last week, said in a statement provided by the governor's office. "By fully funding the Student Opportunity Act, Governor Healey and Lieutenant Governor Driscoll are sending a clear message that they are ready and able to support municipalities in our efforts to offer every student a high-quality education. I'm also grateful to see the administration take action to address a number of challenges municipalities are currently facing, from the high cost of special education to the difficulties we face regarding student transportation."

The local aid budget brief that the administration circulated Thursday also alluded to an upcoming supplemental budget bill for fiscal year 2023 and said the administration will use it to propose "streamlining specific aspects of municipal accounting and local governance."

By letting cities and towns know nearly a week ahead of the full budget rollout what they might be able to expect from the state in the budget year that starts July 1, Healey was also making good on her January promise to local officials that they "will be the first to know" once the so-called cherry sheets were available.

"Good cities and towns don't happen by accident. As a former Mayor, I know that a strong partnership with the state is key," Driscoll tweeted Thursday afternoon. "We promised to let local leaders know what to expect from our budget so they can start planning to use it. Today, we followed through on that promise."

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02/23/2023

State Expecting Elevated Tax Revenues To Hold

1.6 Percent Growth Expected, 4.1 Percent When Surtax Included

State House News Service: JAN. 30, 2023.....The Healey administration and legislative budget managers agreed on Jan. 30 to build their upcoming state budget plans on the assumptions that they will have $40.41 billion in general state tax revenue to spend in the budget year that begins July 1 and an additional $1 billion in revenue from the state's new high-earner surtax that can be put towards education or transportation.

The fiscal year 2024 consensus revenue agreement announced Monday would represent 1.6 percent growth over the latest estimate for fiscal year 2023 tax revenue, or 4.1 percent growth when adding the $1 billion in projected revenue from the surtax on income greater than $1 million to the equation. The surtax revenue, by law, is supposed to only be spent on education and transportation initiatives.

"The Fiscal Year 2024 consensus revenue forecast lays the groundwork for a fiscally responsible FY24 spending plan that supports core services for residents and makes meaningful and sustainable progress in addressing the varied needs and issues facing the Commonwealth," Administration and Finance Secretary Matthew Gorzkowicz, who agreed to the growth figure with Ways and Means Committee chairs Rep. Aaron Michlewitz and Sen. Michael Rodrigues, said. "More importantly, the additional surtax revenue will allow for significant new investments in transportation and education that will make the Commonwealth more competitive, affordable, and equitable."

Gov. Maura Healey is expected to file her first annual budget proposal by March 1. The House and Senate will redraft Healey's spending blueprint and debate their own versions, likely in April and May. Fiscal year 2024 begins on July 1, but Massachusetts has rarely had its full-year budget in place by that date in recent years.

"I think really important and exciting news on the consensus revenue and what is an atypical year in terms of how these things are put together. So we're really pleased to be able to announce that today," Healey said Monday afternoon.

The governor referred back to the consensus revenue accord later in the same press conference Monday when asked about the future of Chapter 62F, the state tax revenue cap law that House lawmakers in particular have said they want to see changed.

"I don't know what the future looks like," she said. "I know that right now we're really pleased to be out with the consensus revenue number. We'll be having some discussions about upcoming budget and priorities and the like, and a lot of work to sort through in the immediate," Healey said.

Rodrigues said the revenue accord "provides a strong foundation for the Legislature and the Healey-Driscoll administration to develop a forward looking FY24 budget plan that upholds fiscal responsibility and meets the critical needs of our communities." Michlewitz said it "will allow the Legislature and the Healey-Driscoll administration to collectively construct a reasonable and appropriate budget for the upcoming fiscal year."

"By basing the budget on a judicious consensus revenue figure, the Commonwealth will be able to make the necessary investments that our constituents deserve, while at the same time enhancing the state's fiscal health," Michlewitz said.

The $40.41 billion revenue estimate that Gorzkowicz, Michlewitz and Rodrigues agreed to Monday, a day ahead of their deadline, is largely in keeping with the testimony they heard from economic and budget experts at a hearing last week.

The Department of Revenue forecasted fiscal year 2024 state tax revenue within a range of $39.838 billion to $41.017 billion, the Mass. Taxpayers Foundation projected that fiscal year 2024 state revenues will come in at $40.06 billion, and the Center for State Policy Analysis at Tufts University estimated that fiscal year 2024 state tax revenue will land at $40.2 billion.

While the official estimate of 1.6 percent growth is well below what Beacon Hill officials have projected in each of the last at least six years, it means that state revenues are expected to stay at their significantly elevated levels.

The consensus revenue growth estimates were for 3.5 percent in fiscal 2022 and 2.7 percent in fiscal 2023, but over those two years state tax revenues actually surged more than 15 percent and more than 20 percent, respectively. The fiscal year 2024 revenue estimate of $40.41 billion is more than $10 billion above the estimate that Michlewitz, Rodrigues and the Baker administration originally agreed to for fiscal year 2022 ($30.12 billion) in January 2021.

The state budget, which totals $52.7 billion for fiscal 2023, is supplemented by substantial federal revenues along with non-tax revenues like fees. The fiscal year 2023 bottom line represented an increase of $5.1 billion or 10.7 percent over the $47.6 billion annual budget passed for fiscal 2022.

Gorzkowicz, Michlewitz and Rodrigues also confirmed Monday the amounts of money that will be transferred to various entities that have over the years secured themselves dedicated budget carve-outs. The MBTA will get $1.463 billion ($138 million more than in the current year), the Massachusetts School Building Authority will get $1.303 billion (an increase of $138 million), and $27 million will flow to the Workforce Training Fund.

There will also be a $4.105 billion transfer to the state pension fund -- an increase of $361 million over the fiscal 2023 contribution -- which is expected to keep Massachusetts on track to fully fund its pension liability by 2036.

Gorzkowicz also announced Monday that he was upgrading the current year's revenue estimate by $151 million or about 0.4 percent, from $39.618 billion to $39.768 billion. The three top state budget officials said that $100 million of fiscal year 2023 revenue was earmarked Monday for use to "fully pay down" pension liabilities stemming from a 2015 early retirement incentive program that otherwise would not have been paid off until fiscal year 2027. That decision was announced as one made by "the secretary and chairs."

Through the first half of fiscal 2023, DOR has collected $17.789 billion, which is $56 million or 0.3 percent less than what was collected to the same period of fiscal 2022, but still $1.087 billion or 6.5 percent more had been expected during that time period.

"However, a significant portion of the above-benchmark performance is due to lower than expected credits claimed by [pass-through entity] members, which we do expect to reverse in the second half of this fiscal year," Revenue Commissioner Geoffrey Snyder said last week.

Gorzkowicz, Michlewitz and Rodrigues also agreed Monday to a 3.6 percent rate of potential gross state product growth for calendar year 2023. That figure is used to set up a health care cost growth benchmark under the 2012 cost containment law.

[Sam Drysdale contributed to this report.]

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01/30/2023