Final Senate FY25 Budget

As the budgeting process unfolds for fiscal year 2025 in Massachusetts, Governor Healey, the House and the Senate have now presented their respective spending plans. Let's delve into the key highlights and differences between these two proposals.

After considering 1100 amendments and adding almost 500, the Senate increased their budget by almost $90 million at $57.9 billion. The Senate’s budget is roughly $10 million less than the House's, and both are lower than Gov. Maura Healey’s original plan which was $58.1 billion. Despite more modest state revenue expectations, this proposal invests heavily in community college and transit across the Commonwealth funded by the Millionaires Tax.

So what were the differences?

One of the significant distinctions in the Senate's budget is the emphasis on education and regional transportation. Senate President Karen Spilka (D - Ashland) acted on her longstanding want for free community college. As she told Politico Massachusetts Playbook, “the reason Massachusetts has done so well during some of the past recessions is because we have continued to invest in our strengths.” This proposal includes funding primarily early childhood and higher education. 

In contrast, the House has allocated $555 million to the MBTA, including $40 million for an MBTA Academy, which the Senate has omitted. Furthermore, the House has proposed $190 million for universal free school meals, whereas the Senate allocated $170 million. These differences highlight the varying priorities between the two chambers in supporting educational and transportation infrastructure as well.  

Key Policy Proposals: 

Education Funding Chapter 70 Education Aid: The Senate budget raises the overall amount of Chapter 70 education funding to $6.9 billion, an increase of $311 million over the current fiscal year. A significant increase in minimal new aid has been implemented, impacting 230 out of the 318 public school districts in the state, from $30 to $110 per child.  

Charter Schools: The budget effectively fulfills the state's statutory commitment under the Student Opportunity Act by allocating $199 million for mitigation payments to charter schools. 

Special Education: In line with the governor's proposed budget, $492 million is set aside for the Special Education Circuit Breaker account. To achieve the state's obligations, this amount leverages an additional $75 million from a fiscal 2023 closeout supplemental budget. 

Rural Schools: A raise in Rural School Aid of $2.5 million will bring the account's funding to $17.5 million. This funding program helps districts that are experiencing a decline in enrollment create regional school districts or regionalize services. 

School Transportation: About $99.7 million will be allocated as funding for regional school transportation help, an increase of $2 million over the present year. In addition, the budget keeps the current amount of money at $28.6 million for out-of-district vocational transportation and $1 million for the federal McKinney-Vento program, which provides transportation for homeless children.

Municipal and Infrastructure Support Unrestricted General Government Aid (UGGA): The Senate approved a 3% increase in UGGA, increasing the account by $38.1 million over the course of the fiscal year 2024. This increase supports essential municipal and school services. 

Local Roads and Bridges: In addition to $15 million for bridges and culverts, the budget provides $125 million in additional financing for municipal roads and bridges. 

Payments-in-Lieu-of-Taxes (PILOT): An increase of $1.5 million in taxes via PILOT for state-owned land, which is important for municipalities with significant amounts of state-owned property. 

Legislative Amendments and Task Forces Chapter 70 Working Group: Establishment of a Chapter 70 Task Force to study and recommend changes to the Chapter 70 formula. This group will consider matters including mandatory local contributions and the effects on minimum aid districts. 

MSBA Special Commission: The establishment of the MSBA Special Commission has the goal to assess and suggest ways to enhance the Massachusetts School Building Authority's capacity to satisfy both present and future demands for school facilities. 

Tax Title Foreclosure Process: The Tax Lien Foreclosure is an amendment that aims to safeguard towns and taxpayers while adhering to a U.S. Supreme Court decision on liens on properties due to nonpayment of property taxes. 

Noteworthy Earmarks: 

Senator John Velis (D - Westfield), received the most money from his requested amount of $5,040,000 and secured 83% of it at $4,175,000. Proposed additions that were approved include supplying a State Narcan Supply, creating a Irish Cultural Center of Western New England, and investing in Holyoke Community College. 

Senator Marc Pacheo (D - Taunton) initially requested $500,000, but instead received more at $750,000 for the Bristol County Superior Courthouse in Taunton.

On the other hand, Senator Michael Moore (D - Millbury) requested $252,183,000, and only received $746,000. This included allocating money for the CENTRO Food Pantry, Flint Pond Police Patrols, and Worcester Tree Replanting, Worcester Regional Strategic Opportunities Foundation & Removal of Invasive Plants in Grafton. 

An earmark that was not approved includes #894 by Senator Robyn Kennedy (D - Worcester). It requires the governor to apply for all federal authorizations from the US Department of Transportation in order to obtain a waiver allowing for tolls on any interstate routes within the commonwealth limits that do not currently have tolling. The chair of the Transportation Task Force, Monica Tibbits-Nutt, and Healey’s Secretary of Transportation, gave remarks regarding the group looking at adding tolls along the state’s borders, a raise in the payroll tax, as well as new fees on Uber and Lyft rides and package deliveries. However, these comments were looked negatively upon fellow members of the task force such as James Rooney, the president and CEO of the Greater Boston Chamber of Commerce and a key member of the task force who stated, "For the secretary to go out on her own and express such strong feelings is disappointing,” Rooney stated. “I plead guilty to talking about things that might be discussed, but without advocacy.” It was to the point even Governor Healey expressed her opinion for the way the chair had talked, and said, “That was a very poor choice of words. That’s not how we do things. That’s not how we operate.” 

Additionally, Senator Bruce Tarr (R - Gloucester) introduced amendment #810, which also failed in a 5 to 34 vote. The amendment proposed a sales tax holiday for the days of August 6, 2024 to August 19, 2024. Sales tax holidays are brief exemptions from sales tax that typically only apply to a select group of taxable products for a brief period of time.

Now what’s next?

Budget Negotiations and Deadlines: 

Senate Ways and Means Chair Michael Rodrigues (D - Westport) anticipates the budget will move to conference by mid week. The goal is to finalize the budget by the start of the next fiscal year on July 1, although this deadline is frequently missed. Rodrigues, alongside House Ways and Means Chair Aaron Michlewitz (D - Boston), is experienced in navigating these negotiations, having done so five times previously.  

The Massachusetts Senate's FY 2025 budget reflects a balance of progressive policies, with strategic investments in education and transportation, and careful negotiation to align with the House and Governor's priorities. As the budget moves through the chambers, the key differences and amendments will be crucial in shaping the state's financial and policy landscape for the coming year. 

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