A quick look at the Senate budget proposal: What does it mean for spending, taxes, housing?      

By IMG Public Affairs Team

This week the Massachusetts State Senate’s Committee on Ways & Means (SWM) put forth a $57.99B FY25 state spending proposal, making significant investments in education, mental and behavioral health, transportation, and more.  

The Senate’s proposal comes two weeks after the House of Representatives approved its own version of the budget, and around two months after Governor Maura Healey submitted her proposed budget.  

The full Senate will consider the Committee’s budget proposal later this month, before starting to work with House colleagues on a final spending plan for next year.  

Below are some of our key takeaways and items we are watching.  

TOP LINES   

  • The Senate’s FY25 proposal spends approximately $1.9B (3.4%) more than the FY24 General Appropriations Act.   
  • This is the second year that revenue will be allocated from the Fair Share amendment, which provides an additional revenue stream for investments in education and transportation – this year, $1.3B was allocated in Fair Share revenue.  
  • The Senate budget does NOT propose new tax increases and would not withdraw funds from the state’s Commonwealth Stabilization (“Rainy Day”) Fund.   
  • The Senate plan matches proposals from the House and Governor Healey to use $375M in above-threshold capital gains revenue to support the operating budget.  
  • To increase spending levels above and beyond FY24, the SWM budget relies on $1.15B in one-time resources and new revenue-generating initiatives, including: 
    • $100M through the re-direction of certain gaming revenues 
    • $100M from the adoption of a tax amnesty program 
    • $60M generated by tax fairness and modernization initiatives 

HOUSING    

  • The Senate budget proposal invests $1.14B in housing programs, a $66M increase from FY24 and $4.5M (.4%) more than the Governor’s budget, though it is $9.7M (.8%) less than the House.  
  • Key differences in the Senate’s plan for housing investments include:
    • Provides: 
      • $115M for assistance to local housing authorities
      • $110.8M for assistance for homeless individuals.
      • $57.3M for the HomeBASE program
    • Eliminates funding for Shelter Workforce Assistance 

WANT TO GO DEEPER?     

  • The initial Senate budget includes novel proposals that are not in the Governor’s budget suggestion nor the House’s approved budget, such as cost-free community college and grants for fare-free service for regional transportation authorities, but excludes other items included in the other budget drafts, such as the creation of an online lottery.   
    • These novel provisions, as well as initiatives included by the House but not the Senate, will be negotiated by the conference committee. But first, the Senate budget debate and consideration of amendments will take place. We expect a final Senate budget at the end of May.
  • Like the budgets put forth by the Governor and the House, the Senate plan includes less than half of the projected FY25 cost for the state’s Emergency Assistance Shelter System. 
    • It will be interesting to see where legislators land on how much to spend on this program, and how the state will address this critical issue moving forward. Senate Ways & Means Chairman Michael Rodrigues has previously noted a desire to, “keep the pressure on the administration to make programmatic changes, to make it more efficient and affordable.”
  • We have seen positive indicators over the last two months in state revenue collections following nine months of below benchmark collections. Budget writers will continue to carefully monitor these numbers as they finalize a FY25 spending bill.  

WHAT WE’RE WATCHING 

Mass Taxpayers Foundation has in-depth SWM FY25 Analysis  

The following media outlets provided insight on the priorities of the Senate budget proposal and its differences with the House’s proposal:  


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