Massachusetts Senate Democrats plan to press forward with a big increase in state spending on the normal budgeting timeline, even because the chamber’s finances chief cautioned that “all bets are off” if federal Medicaid cuts materialize.
The Senate Methods and Means Committee on Tuesday plans to roll out a $61.32 billion finances for fiscal yr 2026, calling for a 6.3% enhance in spending that is lower than the 7.4% bump Gov. Maura Healey sought and the 6.6% the Home proposed however nonetheless greater than twice the speed of progress as final yr.
The draft finances invoice, which shall be up for debate within the Senate beginning Might 20, doesn’t characteristic any tax will increase and as an alternative pays for spending that may’t be lined with anticipated progress in tax revenues by leaning on greater than $1.2 billion in one-time funding. The spending will increase whole greater than $3.6 billion, however the invoice doesn’t name for and withdrawals from the state’s wet day fund, which has an estimated $8.2 billion stability.
A lot of the spending progress is, as budget-writers put it in a abstract, “functionally non-discretionary.” A $2.34 billion enhance in MassHealth accounts for almost two-thirds of the entire progress over the fiscal yr 2025 finances Healey signed final summer time, and the Senate Methods and Means proposal additionally requires $533 million extra on different well being and human companies packages, $460 million extra on Chapter 70 college support and $237 million extra for the Group Insurance coverage Fee that gives well being protection to public employees.
All different non-surtax spending would enhance by a mixed $59 million underneath the invoice.
“Except we wish to slash companies and packages that we offer to our residents, there’s very, little or no extra that we will do on any of those line objects,” Senate Methods and Means Committee Chair Michael Rodrigues instructed reporters.
“Sixty-five % of that progress is simply in MassHealth,” he later added. “Suppose nursing houses, long-term take care of seniors, well being take care of seniors, for disabled, for low-income people. That is the driving force, and until we wish to begin lowering companies to our residents, I do not see any method that we will — we have scrubbed it clear.”
Senate budget-writers have a distinct imaginative and prescient for one-time revenues than the governor, who proposed a collection of tax will increase that had been dropped within the Home finances and subsequently ineligible to emerge within the Senate draft.
Their invoice requires redirecting roughly $600 million from capital positive factors tax collections above a sure threshold towards the state’s unfunded pension legal responsibility, about $166 million greater than the Healey and Home budgets. The Senate Methods and Means plan additionally requires pulling $350 million in what Rodrigues described as “ARPA funds which have but to be contracted out,” a rise of $150 million over the opposite two finances drafts.
Beacon Hill officers agreed to plan on spending about $1.95 billion in income from the voter-approved surtax on rich Bay Staters, cash that may solely go towards transportation and training investments.
The Senate Methods and Means invoice would direct two-thirds of the pot to training, funding so-called C3 grants to early training suppliers, a part of a faculty support enhance outlined underneath the Scholar Alternative Act, continuation of free college meals for all college students, and prices of free group faculty that Massachusetts launched in final yr’s finances.
The remainder would go towards transportation. Between surtax and different {dollars}, the Senate Methods and Means Committee finances would supply the MBTA with $500 million and the state’s 15 regional transit authorities with a mixed $214 million, together with funding to cowl fare-free service.
Altogether, Senate Democrats are proposing a significant funding injection for the T, which is dealing with a finances hole that would imperil service enhancements, however one with considerably much less cash than Healey and the Home envisioned.
Rodrigues stated his crew “imagine[s] that is sufficient cash.”
“It is very, very important investments within the MBTA. We imagine it is sufficient cash, on high of the $1.4 billion that the MBTA will get in helps from the one cent on the penny on the gross sales tax,” he stated. “We wish to be certain that our spending, whether or not it is Honest Share {dollars} or normal obligation {dollars}, has regional fairness. There are 14 or 15 different RTAs across the commonwealth that service residents of the commonwealth. We wish to be certain that they’ve assets to supply transportation companies for them additionally.”
Rodrigues stated he envisions the annual state finances as a greater automobile to fund operational prices, which he believes lean extra towards training than transportation. The Senate on Thursday may also take up a mid-year spending invoice placing to make use of about $1.3 billion in obtainable surtax income, and Rodrigues stated he thinks a “supp” like that’s higher to fund “non-recurring” capital packages, particularly in transportation.
Taken collectively, the Senate Methods and Means Committee’s fiscal 2026 finances and forthcoming supplemental finances would direct 58% of the mixed surtax {dollars} towards training and 42% towards transportation.
Rodrigues stated his eventual objective is “to be as near balancing” the funding break up.
“It is going to take a few years for it to settle out,” he stated. “We’re hoping to be across the 50-50 vary.”
The Senate Methods and Means finances would fund one other yr of faculty support will increase specified by the funding reform legislation often known as the Scholar Alternative Act. It requires $7.3 billion in Chapter 70 support, a big increase over the governor and the Home payments, and rising minimal support to $150 per pupil.
Senators additionally proposed $31 million to totally fund the Pappas Rehabilitation Heart for Youngsters in Canton and $4.8 million for the Pocasset Psychological Well being Heart on Cape Cod, two amenities that Healey sought to shut in cost-cutting maneuvers earlier than hitting pause amid blowback.
Rodrigues described the finances invoice as “policy-light,” although it does characteristic language designed to stop brokers charges from being handed alongside to tenants. The same Senate-backed provision died final yr in housing invoice talks with the Home, and Home Democrats are actually pushing for their very own model of the restriction.
The Senate Methods and Means invoice doesn’t embody one other Home coverage rider that will hit the brakes on the Healey administration’s proposed reforms to the admissions course of at vocational and technical faculties.
In contrast to the Home, whose finances would level-fund unrestricted normal authorities support (UGGA) at fiscal 2025 ranges, the Senate proposed a 2.2% enhance that mirrors Healey’s spending plan.
Senators could have till the top of the week to file amendments to the annual finances invoice, and debate will start on Tuesday, Might 20. Historically, the Home approves a finances in April adopted by the Senate in Might, and a personal crew of negotiators hash out a compromise someday after the July 1 begin of the fiscal yr.
Policymakers and advocates have been vocalizing considerations for months about potential finances upheaval stemming from the Trump administration, which has moved to slash federal spending, together with on Medicaid, partly to realize tax reduction.
“In the event that they make important reductions in Medicaid reimbursements, all bets are off, as a result of that’s over a billion {dollars} a month, I feel, in MassHealth reimbursements to the commonwealth of Massachusetts,” Rodrigues stated.
The Westport Democrat stated he had “conversations” about turning again to the COVID-era playbook, when lawmakers used a sequence of interim budgets to maintain state authorities funded and punted their annual finances invoice into the autumn to offer them extra time to navigate pandemic upheaval. For now, he stated, it is most “prudent to maneuver ahead and to cross a finances based mostly upon details that we all know now.”
“It is so unsure. We hear from consultants, there is no method [Trump’s] going to the touch Medicaid, as a result of Medicaid reductions will in all probability damage so-called pink states greater than us, as a result of we’ve got such a excessive share, highest share within the nation, of our inhabitants that has medical insurance,” Rodrigues stated. “Then there are other people that say, you realize, he is liable to do something, and it may change at a second’s discover. So we have simply received to remain calm, keep targeted, and be open-minded sufficient that we is likely to be again on the desk in a number of months.”
Final week, Senate President Karen Spilka recommended finances revisions may develop into crucial later within the yr relying on how potential federal cuts unfold.
Spilka instructed reporters Monday that budget-writers are navigating “an unsure second.”
“Issues change, not week-to-week, neglect about even month-to-month or week-to-week [or] day-to-day — it is hour-to-hour. So it is inconceivable to know the true stage of the chaos that is happening,” she stated. “We will solely produce a finances based mostly on what we all know, what we do know, when and the way. What we have no idea is that the federal authorities may determine to punish this state financially for being who we’re, and that, to me, is among the many worst punishments attainable.”
