| The Senate Ways and Means Committee on Thursday unanimously approved a $41.42 billion fiscal year 2019 budget proposal, touting the spending plan’s “robust and critical investments” in education, an “innovative approach to drug pricing” and a focus on children.
The fiscal 2019 budget plan (S 4) represents a 3 percent increase in state spending over the current year’s budget and is based on the consensus revenue agreement that state tax revenue will grow by 3.5 percent in fiscal 2019, significantly less than tax revenue growth so far this fiscal year.
Senate Ways and Means Chairwoman Karen Spilka, who is expected to ascend to the Senate presidency in July, said the budget plan recognizes “that when all people in the commonwealth are given the opportunities to participate in Massachusetts’ economy – as well as the tools to succeed – we all benefit.”
The release of the Senate budget, which will be debated beginning May 22, comes at a point when it appears the state is more flush with cash than in the past two fiscal years. Since the passage of federal tax reform in November, tax collections have spiked, leaving the state with $809 million more this fiscal year than it had anticipated. The size of a potential state budget surplus, and of supplemental spending needs, remains unclear.
Spilka said the budget represents “a cautiously optimistic approach” to spending given the state’s fiscal picture.
The Senate’s budget includes about $61 million more in spending than Gov. Charlie Baker’s budget plan (H 2) and $97 million less in spending than the budget (H 4401) amended and adopted by the House. The Senate’s budget plan calls for $1.1 billion in unrestricted local aid, matching proposals from the governor and the House.
Senate President Harriette Chandler called the Ways and Means Committee’s plan “an effective, robust budget” that represents “a clear declaration of support for children and families, statewide transportation, health care, education and our most vulnerable populations.”
Senate Minority Leader Bruce Tarr called the Ways and Means Committee budget proposal “a reasonable starting point for the work the Senate must do to chart a proper course for the coming year.” But he also cautioned that maintaining fiscal health and discipline will require government reforms, of which there seldom few in the House or Senate budgets.
Education was a central theme of the press conference the Ways and Means Committee held to unveil its budget. Spilka said the budget tries to fund education for people of all ages and backgrounds because education is “the fundamental building block of individual and shared success.”
To tackle the rising costs of pharmaceutical drugs, the Senate budget plan includes an annual prescription drug spending target and authorizes the secretary of health and human services to seek rebates from drug companies, changes that Spilka said are expected to deliver $40 million in savings. Ways and Means Committee aides said the hope is that the changes will lead to a 6 percent cut in MassHealth pharmacy spending.
The Senate budget anticipates an $88.5 million deposit into the state’s “rainy day” fund. Fiscal watchdogs have cautioned Beacon Hill that officials have not set aside enough reserves during the state’s prolonged recovery and that its inadequate reserves could easily be drained in a recession.
