Baker-Polito Administration
Files $1.6
Billion Fiscal Year 2021
Supplemental Budget
Legislation relies on $5 billion surplus; includes $1 billion for unemployment relief and proposal to support local nonprofits
BOSTON –
The Baker-Polito Administration today filed a final Fiscal Year 2021 (FY21)
supplemental budget proposal that aims to improve Massachusetts’ economic
competitiveness as the Commonwealth continues to recover from the COVID-19
pandemic. The $1.568 billon supplemental budget would provide $1 billion in
unemployment insurance relief for employers, support greater resources for
local charities and nonprofits and ensure that small businesses do not bear a
tax burden for assistance received through pandemic relief programs. The
legislation relies on a FY21 surplus of approximately $5 billion and would also
make critical investments in housing, human services, and education.
“Thanks to careful management
of the Commonwealth’s tax revenues and strong economic activity, Massachusetts
has an unprecedented surplus at the close of Fiscal Year 2021, and this
legislation ensures those resources are put to work to support local economies
and small businesses,” said Governor Charlie Baker. “Our proposal to
provide employers with unemployment insurance relief is fiscally responsible
and would provide much-needed support for businesses and workers across the
Commonwealth. By combining this bill with our $2.9 billion plan to spend a
portion of Massachusetts’ federal funds on urgent priorities like
homeownership, environmental infrastructure and job-training, the Commonwealth
has an opportunity to leverage significant resources to promote further
economic growth and support our hardest-hit communities.”
“This legislation provides an opportunity to reduce
significant burdens on our employers, enabling them to hire and retain workers
in communities across the Commonwealth,” said Lt. Governor Karyn Polito. “Thanks
to strong economic activity by consumers and businesses, Massachusetts has a
unique opportunity to leverage these surplus funds to further strengthen the economy and support our
communities. We look forward to working with our partners in the Legislature to
make these critical investments.”
The Administration’s
supplemental budget proposes dedicating $1 billion of Massachusetts’ FY21
surplus toward the Unemployment Insurance Trust Fund. This affordable proposal
would help stabilize the UI Trust Fund and lessen employers’ future UI
obligations. The legislation also includes language to make the federal
Paycheck Protection Program (PPP) loans, Economic Injury Disaster Loan (EIDL)
advances, Shuttered Venue Operators grants, Restaurant Revitalization Fund
grants, and state MGCC grants nontaxable for all Massachusetts recipients,
consistent with federal tax treatment.
The bill also proposes to
finally implement the income tax charitable deduction, a measure that was first
approved by voters nearly twenty years ago. Given the Commonwealth’s strong
fiscal situation, the proposal is fiscally responsible and would support greater
resources for the local charities and non-profits who supported vulnerable
populations through the pandemic.
“The
strong working relationship we enjoy with our colleagues in the House and
Senate allowed us all to approach an uncommon fiscal year thoughtfully and
deliberatively,” said Administration and Finance Secretary Michael J.
Heffernan. “We are fortunate to end FY21 with an impressive surplus buoyed
by rare federal activity. The Commonwealth must seize this opportunity to
implement sensible fiscal policies like finally implementing a tax deduction to
boost charity organizations that was approved by voters two decades ago, a
measure that is affordable and should be done now.”
At the close of FY21, the
Commonwealth’s Stabilization Fund now stands at a balance of $4.63 billion –
the highest level ever by more than a billion dollars. The $5 billion surplus
included more than $1 billion in excess capital gains deposited into the
Stabilization Fund; another $1.1 billion of the surplus made a planned
withdrawal from the Stabilization Fund no longer necessary.
In addition to the $1 billion UI transfer
proposal, the legislation also proposes additional investments necessary to
continue operating state government and invest in key priorities, including:
- $405 million for a collective bargaining reserve to fund the retroactive and
fiscal year 2022 (FY22) costs of agreements that are either in
place or anticipated but not yet signed, thus mitigating
pressure on the FY22 budget;
- $39 million to support rate increases for the human service
workforce;
- $20 million to support the workforce in Chapter
766-approved special education schools;
- $17 million to support an additional 800 temporary
individual shelter beds throughout FY22 and pay for a one-time six-month
10% increase in provider rates, ensuring the Commonwealth’s individual
shelter system has the resources necessary to protect vulnerable
populations;
- $5 million to pilot an evidence-based permanent supportive
housing model for individuals experiencing homelessness, creating fast and
sustainable pathways out of homelessness and;
- $3 million in supplemental campus support for
Quinsigamond Community College and Worcester State University as it
absorbs nursing students displaced by the closure of Becker College.
The legislation
also includes several other policy proposals including:
- Allow
survivors of servicemembers who die in training incidents to be eligible
for a Medal of Liberty;
- Grant
MassHealth the authority to directly negotiate rebate agreements
for certain medical supplies and other non-drug products;
- Extend
the municipal vulnerability preparedness grant
program to tribes and other regional and local entities who
are not municipalities; and,
- Allow
civil service evaluations to be in an electronic format and provide
greater flexibility in administering civil service evaluations.
To read the Governor’s filing letter, click here.
