BOSTON – Following weeks of closed-door negotiations, the state Legislature passed a $40.2 billion budget Friday that bumps up local aid for cities and towns and schools without raising sales or income taxes.
The spending package, approved six days after the July 1 start of the fiscal year, includes modest increases for early education and substance abuse programs, as well as services for people with disabilities, but it also makes cuts to offset revenue shortfalls.
The House passed the budget 140-9. The Senate followed with a 36-2 vote.
Lawmakers were given little time to review the budget. The final version was filed with the House and Senate clerks Friday morning, leaving them only a few hours to thumb through the 327-page document before voting.
Senate Minority Leader Bruce Tarr, R-Gloucester, sought to delay a vote to give lawmakers more time to review it.
"We need to understand what's in that document before we take action on it," Tarr said in a speech on the Senate floor. "We should take the time to properly digest and analyze it."
Massachusetts was one of 11 states that started the fiscal year without a budget. Unlike others that faced potential shutdowns, a $5.5 billion stop-gap budget signed by Gov. Charlie Baker in late-June kept the state government running.
Lawmakers wrestled with lower-than-expected tax collections throughout the budget process, raising concerns about potential cuts. Overall tax collections in fiscal 2017, which ended June 30, fell below expectations by more than $400 million.
The shortfall rolled over into the current year, forcing lawmakers to cut spending on MassHealth and in other areas. Lawmakers also lowered revenue estimates for the current year by $733 million.
"It was a challenging budget," Rep. Brian Dempsey, D-Haverhill, chairman of the House Ways and Means Committee, told reporters at a briefing early Friday. "The reality is we need to live within our means, and we can only spend what we are projected to take in."
Despite the state’s fiscal woes, most cities and towns will see a boost in aid, money they use for everything from closing local budget shortfalls to hiring workers.
Lawrence gets an additional $736,268, bringing its annual allocation to more than $19.6 million. Haverhill will see a $368,547 boost, bringing its annual total to more than $9.8 million.
Salem stands to receive a $258,677 increase to $6.8 million; Gloucester would get a $149,764 increase to $3.9 million next year; and Newburyport would get an increase of $95,637 to more than $2.5 million.
Education funding also increases modestly under the spending package.
For example, Lawrence schools will get more than $180 million in Chapter 70 funding — a $2.1 million increase from the previous year.
Haverhill stands to get more than $52 million — a $2.8 million increase.
Overall, Chapter 70 education funding increases $119 million to $4.7 billion statewide.
Local aid to cities and towns is bumped up $40 million to $1.06 billion.
Other areas seeing increases include the Department of Children and Families, which gets a $61 million increase, and the Department of Developmental Services, which gets an additional $61.7 million, much of it to support the Turning 22 program that is designed to help young people with disabilities as they reach adulthood.
More than $132.5 million will be devoted to substance abuse programs, a slight increase from the previous year.
Rep. Linda Campbell, D-Methuen, said increases in municipal aid and local earmarks will give cities and towns more money to fight opioid abuse.
"Given that we had to cut, I'm glad that we were able to devote what little funds we have towards substance addiction," she said. "It's a huge problem in our communities."
Campbell said overall the budget cuts were "targeted and responsible."
The budget approved Friday also gives a green light to Baker’s scaled-down plans to charge employers to offset skyrocketing costs in the state’s Medicaid program.
A key provision of his budget proposal filed in January called for a $2,000 per-person fee on businesses with 11 or more workers that don’t provide insurance to at least 80 percent of their employees.
Baker says the fees are needed to offset the costs of hundreds of thousands of private sector workers who’ve signed up for government-backed insurance plans such as MassHealth, the state's Medicaid program, and the Health Connector.
Business groups resisted the proposed "fair share" assessment, saying it penalizes employers for health care decisions made by workers.
Baker filed a revised plan last month that instead increases an existing fee, called the employer medical assistance contribution, to generate about $200 million for health care costs this budget year.
For all employers, the contribution will go up from $51 to $77 per employee. Employers whose workers get public health benefits will pay up to $750 more per worker.
To lessen the blow, Baker proposed scaling back unemployment insurance rate increases. The rates will still go up, but employers will pay about $334 million less over the next two years than they otherwise would have.
Lawmakers included some of Baker’s scaled down plan in the final budget.
“We’re lessening the impact to the business community,” Dempsey said. “There’s still going to be an increase, but not by as much.”
Fiscal watchdogs say the state needs to find a way to reduce costs for MassHealth, which is jointly funded by the state and federal governments and covers about 1.9 million residents, including those with low incomes and people with disabilities.
Still, lawmakers didn’t include Baker’s other proposed MassHealth reforms in the final budget, including plans to seek a federal waiver to limit pharmacy benefits and to eliminate non-emergency transportation services for people enrolled in MassHealth’s CarePlus program.
Rep. Jim Lyons, R-Andover, voted against the final budget, saying it falls short of expectations to deal with MassHealth costs. It doesn't tackle the issue of full-time private sector workers signing up for government-backed insurance plans, he said.
"We understand what the problem is, but we're not solving it," Lyons said on the House floor. "We need to stop the problem now."
Baker has 10 days to review the budget and make vetoes.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at firstname.lastname@example.org.