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MTF: VETO OVERRIDES LIKELY TO FORCE REOPENING OF BUDGET .: The State House News Service

MTF: VETO OVERRIDES LIKELY TO FORCE REOPENING OF BUDGET

By Michael P. Norton
STATE HOUSE NEWS SERVICE

STATE HOUSE, BOSTON, OCT. 18, 2017....Beacon Hill officials frequently tout their hands-on budget management as a strength, but a new report casts doubt on the state's approach as Gov. Charlie Baker and the Legislature struggle to tie up loose ends on a fiscal year that ended nearly three months ago.

"The state's FY 2017 experience is not a template for ongoing budget success," the Massachusetts Taxpayers Foundation wrote in a brief released on Tuesday. "Overestimating likely tax revenues while simultaneously underestimating spending needs has now hamstrung the state budget for three consecutive years."

The foundation, which monitors state budget developments, said it hopes the likelihood of a fiscal 2018 deficit developing is reduced because the three-month-old budget is based on a major springtime reduction of estimated tax revenue and a $100 million setaside account to address underfunded line items.

"However, if all of the Governor's spending vetoes are overridden without an offsetting increase in tax collections, we are likely to see a repeat performance of the FY 2017 budget balancing act," the foundation concluded.

Most of Gov. Charlie Baker's $320 million in budget vetoes are holding up as November nears; the House has voted to override all $320 million, but most of those overrides remain under review in the Senate. The Senate could take up additional veto overrides during a formal session planned for Thursday.

Democratic legislative leaders maintain the budget they sent Gov. Baker in July was balanced and that his vetoes were not necessary.

Baker in July signed a $39.4 billion budget, after accounting for his line item vetoes.

MTF reported that underfunded spending and overly optimistic revenue assumptions resulted in a $922 million gap in the fiscal 2017 budget. One-time revenues, increases in non-tax revenues and reversions - or not spending appropriated funds - are among the main solutions to the gap, MTF said. Final non-tax revenue and reversion information is unavailable, according to MTF, which estimated reversions at more than $350 million and non-tax revenues at $225 million.

The House and Senate this month are trying to pass a closeout fiscal 2017 budget, an effort that's become entangled in procedural disagreements and conflicts between branch leaders over language intended to ban bump stocks, or devices attached to guns to accelerate the speed of discharges.

Tax collections have nosedived in the second half of the last two fiscal years. Three months into fiscal 2018, collections are running $124 million above budget benchmarks and Administration and Finance Secretary Michael Heffernan this month opted for no change in the fiscal 2018 revenue estimate.

END
10/18/2017


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