MassBudget: SWM Committee's FY 2020 budget follows Governor's in revenue, includes slightly more education funding
Massachusetts Budget and Policy Center
May 16, 2019
Senate Ways and Means Committee's FY 2020 budget follows Governor's in revenue, includes slightly more education funding
The Senate Ways and Means (SWM) Committee's Fiscal Year (FY) 2020 budget proposal goes further in boosting K-12 education funding than other proposals this budget cycle. But, constrained by the lack of substantial, new revenue, the Committee had to propose less funding or relatively small increases in other areas such as child care assistance for low-income families, elder services, and other areas, as discussed in MassBudget's analysis.
The SWM budget proposal includes a more comprehensive approach to reforming the public K-12 education funding formula than the Governor and House proposals. However, funding levels in the SWM budget are still somewhat less than the most comprehensive plans being debated currently by policymakers. Updating the funding formula can help ensure that students across Massachusetts, particularly disadvantaged kids, receive a high-quality education.
Further, the SWM Committee proposes to fund the Attorney General's Fair Labor Division (FLD) at $4.5 million, which is 8 percent less in total funding than FY 2001 (adjusting for inflation), but is 17 percent less when adjusted for job growth in Massachusetts since then. The FLD enforces the state's wage and hour laws, including minimum wage, overtime, and earned sick time. This funding decrease could weaken many of the increased worker protections and benefits passed in recent years.
Regarding revenue, the SWM Committee included many of the new tax proposals first presented in the Governor's FY 2020 budget. (The House, by contrast, includes only the Sales Tax Modernization proposal.) These include a new tax on opioid manufacturers and another on vaping products. Unlike the Governor, the SWM Committee directs these new revenues to off-budget funds dedicated to combating and treating addiction, rather than to the General Fund from which most budgetary appropriations are made. Like the House and Governor, the SWM budget also relies on pre-existing sources that recently have begun generating revenue (like taxes on marijuana sales and "Airbnb rentals"). While inclusion of these various types of additional revenue may appear to boost the Commonwealth's ability to invest in a range of priorities, in fact, the new revenues would mostly serve to back-fill substantial anticipated revenue losses from several already-scheduled tax cuts. These cuts - along with other, non-tax revenue losses - will impact state collections in FY 2020 and beyond.
As is true of the House budget, most additional revenue in the SWM budget comes from a variety of consumption taxes, which hit low-income earners the hardest, and will make the state's tax system more upside-down than it already is.
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