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Policy Library

Initial Read on the FY18 Budget

February 16, 2017

We’re still in the early stages of discussions over the state budget for Fiscal Year 2018 (FY18), which starts on July 1, but this is nevertheless a good moment to review what’s gone on thus far.

The first official step in the process is for the Governor and the two houses of the Legislature to agree on a figure — known as the consensus revenue estimate — that represents the amount of money they expect the state to collect in taxes during the coming fiscal year.  This time, the figure is about $27.07 million, or 3.9% (just over $1 billion) more than they’re estimating in the current year (FY17), which is now more than half over.  If the estimate comes to fruition, it will represent a significant increase in revenue growth over the current and past fiscal years, during which state coffers have expanded at a rate of about 2.3%.

As reported by the State House News Service, Senate Ways and Means Chairwoman Sen. Karen Spilka said in a statement, “This conservative estimate reflects our cautious optimism about the Commonwealth’s economic position. Throughout the fiscal year 2018 budget process, we will continue to carefully monitor revenue performance to build a fiscally responsible, balanced budget that invests in the health and prosperity of people and communities across the state.”

Kristen Lepore, Secretary of Administration and Finance under Governor Baker, used the word “modest” to describe the projected growth, which she told State House News is “in line with testimony we heard in December” at the annual consensus revenue hearing.  And according to Sen. Spilka’s House counterpart, Rep. Brian Dempsey, “This Consensus Revenue agreement reflects continued stable growth and is in line with current economic trends.”

Unless there are major changes in the state’s fiscal outlook over the next few months — such as last spring, when legislators had to react, in the middle of the budget-drafting cycle, to news that revenues were plummeting well below projections — that figure of $27.07 million will be the final revenue amount that each of the three stakeholders (the Governor, the House, and the Senate) will use to draft their individual budget plans.

In fact, Governor Charlie Baker has already put forward his proposal, filing a bill with the House that’s known, in odd-numbered years, as H. 1, or “House 1.”  (In even-numbered years, it’s called H. 2.)  Although the two houses’ budget-writers are free to tear up the Governor’s budget and pursue their own priorities as they wish, that bill and the consensus revenue estimate set a tone for the debate that unfolds thereafter.

Here’s what we know so far on three of the BBA’s long-standing budget priorities:

Trial Court funding

The Governor provided for a 1% increase in appropriations for the Judiciary, for a total of $646.8 million.  This is slightly less than the courts’ maintenance-budget request of $649.5 million — that is, the amount they would need in order to merely continue providing the same level of services that they’re able to this year.  But the Legislature has been generous with court funding in recent years, and there is reason to hope that the budget that emerges from that body will fund the judiciary at a higher level — as has been the case lately.

Housing Court expansion

For the second year in a row, the Governor made funding available in his budget to cover an expansion of the state’s effective and efficient Housing Court, to provide statewide jurisdiction.  As we’ve written here previously, barely two-thirds of the state’s population currently has access to the Housing Court, which offers expert judges, trained mediation specialists, and a streamlined process dedicated to housing, homelessness, and municipal code-enforcement issues — not to mention that it boasts the lowest cost-per-case across all court departments.  We couldn’t get this expansion all the way through the budget process last year (it was dropped by the conference committee), but we are certainly trying again this year, and H. 1 is a good start.

Funding for civil legal aid

Walk to the Hill, held three weeks ago, is the big annual kick-off in the drive to support the line-item appropriation for the Massachusetts Legal Assistance Corporation (MLAC) — the state’s leading provider of funds for legal-services agencies.  If this year’s event is any indication, there’s reason for great optimism.  We have a great story to tell about civil legal aid, based on the findings of a 2014 BBA task-force report that demonstrated the positive return on investment the state achieves from such expenditures, which help low-income residents struggling with problems like domestic violence, threatened evictions, and an inability to secure the federal benefits to which they’re entitled.

But we will need to rely on that evidence, as well as the broad support enjoyed by civil legal aid both in the legal community — as shown by the 700+ attorneys who showed up at the State House for Walk to the Hill, to rally for MLAC and speak with their legislators — and in the Legislature — which has consistently provided increases over the past few years to try to close the justice gap that results when the number of people seeking legal help far outstrips the ability of the agencies to meet that need.  (Our report estimated that 64% of qualified applicants for legal aid must be turned away.)

I say we’ll need to rely again on those resources, because the Governor’s budget calls for only a 1% in the MLAC line-item (as with the judiciary — see above).  That comes out to $18.18 million, at a time when we are asking for an increase to $23 million.  We’ve done it before, though: The Legislature has come through with an aggregate 20% increase in funding over the past two fiscal years — a time when, as noted above, revenues have barely grown by 2% annually.

The next major step in the process doesn’t come until mid-April, when the House Ways & Means Committee will release its budget, triggering a flurry of amendments from the 160 House members seeking changes during the marathon floor debate.  And then the ball will be in the Senate’s court until they pass their own version of a budget in May.  Next comes a conference committee to reconcile the inevitable differences between the two houses’ budgets.  And when the conferees reach agreement, and their respective houses concur (typically a mere formality), that final legislative budget goes to the Governor for his signature, with the prerogative for line-item vetoes that the Legislature can then try to override.

Along the way, there will be plenty of opportunities for the BBA, and other groups, to advocate for their priorities.  So watch for action alerts on the budget coming from us, because we will likely be seeking your help in reaching out to your elected representatives in conjunction with our efforts.  And watch this space for regular updates, as the debate unfolds.  In the meantime, if you’re interested in a little more detail on the process, you can check out this Issue Spot podcast, which focuses on MLAC funding.

—Michael Avitzur
Government Relations Director
Boston Bar Association