Beacon Hill faces the fiscal reckoning of that ‘big beautiful bill'

Boston Globe

6 days ago

'With President Trump and congressional Republicans making drastic cuts to the services and programs that the people of Massachusetts rely on, there is significant economic uncertainty surrounding this budget,' Healey noted in the
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An executive branch hiring freeze, announced in May, will remain in place for the next year and a 2 percent raise for thousands of executive branch managers scheduled to go into effect in January has been canceled for now at an estimated savings of $17 million.
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Also taking a hit will be one health care perk for state employees. 'The high-cost of GLP-1 weight-loss drugs have put extraordinary pressure on the [Group Insurance Commission],' Healey noted in her message, 'and like other states, we believe it is the right time to scale back coverage of those drugs to only those patients for whom the medication is medically necessary.' The savings from that move are estimated at $27.5 million.
And while the governor vetoed 28 specific line items totaling $130 million, she also filed a supplementary budget that same day totaling $130 million — $100 million in a 'flexible pool of resources' that the administration could tap later in the year and $30 million for a housing preservation and stabilization fund. Both are contingent on 'federal spending decisions.'
But Healey's big ask in that newly filed budget bill is for authority to cut not just from the budgets of executive agencies — she has that already — but to be able to trim spending from other accounts, including local aid and quasi-public agencies. Executive agencies account for only about 55 percent of state spending, according to Gorzkowicz.
The enhanced powers she is seeking would only kick in if revenues — either tax revenues or federal revenues — fall short by more than $400 million. And it would be for this fiscal year only, something that might make it more palatable to legislative leaders in the event the state is truly up against a budgetary crisis.
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But the administration is also looking for permission to use capital dollars funded by state bonds to pay the salaries of some Department of Transportation employees currently employed with federal dollars, if those federal funds are cut. Sorry, but that's just a bridge too far in the contingency budgeting process.
There are reasons — millions of dollars in reasons — why the state is currently prohibited from paying employees, transit employees in particular, with capital money, starting with its utter fiscal irresponsibility. It's rather like instead of paying the plumber who just unclogged your drain, adding his bill to your mortgage and paying it out over the next 30 years or so. The interest adds up.
And the state has been here before — covering the operating cost of everything from personnel to paper clips — by paying for them with long-term bonds. There was a time not that long ago when the state positively binged on the practice — bonding the salaries of some
'These personnel expenses crowd out investments in capital as every dollar in the capital budget used to fund personnel costs results in one less dollar available to fund capital investments,' according to a budget document filed back then by the administration of Governor Deval Patrick. (Much of the increase was attributed to the previous administration of Governor Mitt Romney.) 'Funding these employees on the capital budget is also more expensive than funding them on the operating budget due to the interest expense incurred on the related borrowings.'
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Hence the
But apart from that ill-advised budgetary sleight of hand, Healey and her team are the ones best positioned to respond in real time to a fiscal crisis. Lawmakers, who continued to lard up the budget and its companion allocation of Fair Share proceeds with
As surely as back to school season follows summer, a new fiscal reality looms this fall. Massachusetts needs to be ready for it.
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