Thursday, May 17, 2018

MassBudget: Analyzing the Senate Ways and Means FY 2019 budget proposal

MassBudget  Information.
 Massachusetts Budget and Policy Center  Democracy.
May 15, 2018

Analyzing the Senate Ways and Means FY 2019 budget proposal

The Senate Ways and Means (SWM) Budget differs from the House budget only modestly: it makes somewhat larger investments in K-12 education, and provides less new funding for early education; it proposes to hold down pharmaceutical costs by allowing the Administration to negotiate rebates directly with the manufacturers, and sets a spending target; and it makes a few targeted new investments such as an initiative to improve or create accessible affordable housing units for renters with disabilities and an increase in funding for Regional Transit Authorities.
The Massachusetts Budget and Policy Center's latest Budget Monitor finds that, in important ways, the SWM and House Budgets are very similar. Both include several significant policy changes:
  • An increase in the state Earned Income Tax Credit (EITC) from 23 percent of the federal credit to 30 percent. The EITC is a tax credit that primarily benefits low- and moderate-income working parents and their families. Research studies have found that in addition to encouraging people to work and helping families to make ends meet, the EITC improves health outcomes for mothers and children, and boosts children's academic performance.
  • An initiative proposed by the Governor to increase funding for adult mental health services and to restructure and expand the primary adult services program. The goal of these reforms is to provide more coordinated, standardized, and consistent treatment that will better align with health care systems, and will be more comprehensive, particularly for people who also have substance use disorders.
  • A change to the rules for Transitional Assistance removing a restriction that bars families from receiving benefits for a child conceived while the family was receiving Transitional Assistance (the SWM budget makes this change effective January 1, 2019 while the House made the change effective in FY 2020).
There was also much that the House and SWM budgets were both not able to do, given revenue constraints. For example, both fund higher education at levels that will likely lead to continued cost increases for students. State funding for public higher education in Massachusetts is down 32 percent since FY 2001, and those funding reductions have led to increases in tuition, fees, and student debt. Both budget proposals also continue to rely on temporary solutions to balance the budget in FY 2019, suggesting that fiscal challenges will continue into FY 2020.
Read the full report here.
The Massachusetts Budget and Policy Center (MassBudget) produces policy research, analysis, and data-driven recommendations focused on improving the lives of low- and middle-income children and adults, strengthening our state's economy, and enhancing the quality of life in Massachusetts.

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