Massachusetts Senate Democrats on Tuesday unveiled a $47.6 billion spending plan for fiscal year 2022 that aims to repair the economic damage caused by the pandemic.
The Senate Ways and Means Committee budget calls for increasing state spending by $1.2 billion, about 2.6% more than the fiscal year ending June 30. It includes spending $1.8 billion more than the version Governor Charlie Baker proposed in January and $64 million less than the spending bill the House approved last month.
Senate President Karen Spilka said the budget bill “aims to put us on a stable fiscal footing and build a more inclusive and resilient Commonwealth for all of us.”
“While the COVID-19 pandemic and its economic aftershocks have frayed the fabric of our republic, this budget takes on the important but sometimes invisible work of sewing that fabric back together,” Spilka told reporters during a briefing.
Senators will kick off their annual debate on the bill on May 25 and are likely to table hundreds of amendments before the 2 p.m. deadline on Friday.
Like the House budget, the Senate budget proposal does not include any of the $4.5 billion Massachusetts is expected to receive from the U.S. bailout and relies on a conservative revenue estimate of $30.12 billion. dollars that Massachusetts is already on the verge of surpassing by hundreds of millions of dollars. dollars in the current fiscal year.
The Senate budget bill proposes a maximum withdrawal from the state’s “rainy day” stabilization fund of $1.55 billion, $50 million less than Baker proposed and $325 million less than the House proposed.
Senate Ways and Means Committee Chairman Michael Rodrigues said the proposed levy would leave that fund, which contained more than $3 billion before the pandemic, with more than $1.15 billion.
The Senate budget includes a handful of new revenue sources not considered by the House, such as authorizing debit card lottery payments that could raise $30 million, but it does not include any tax increases widespread for individuals.
A provision would change state and local taxes for flow-through entities. Rodrigues said Senate Democrats changed language on the subject that Baker included in his budget to make it “revenue-positive” for Massachusetts. The change, he said, would bring in $90 million in revenue to Massachusetts while saving those federal filers $1.18 billion.
Senate leaders also targeted several policy issues in their spending bill, including an overhaul of the state’s film tax credit program that contrasts with the House’s approach.
The tax credit is due to expire at the end of 2022 under current legislation. The Senate bill would push the expiration date back to Jan. 1, 2027 while implementing several changes to how it works, such as increasing the minimum amount of expenses in the state or principal photography days in the State of 50% to 75%, capping salaries eligible for the $1 million credit and eliminating the transferability of credits.
Rodrigues said these reforms are based on the recommendations of the Tax Expenditure Review Commission.
“The criticism of the existing movie tax credit is that too much of the money, tax credits and tax credit benefits go to out-of-state individuals and businesses “, said Rodrigues. “We want to see more profits made by Massachusetts residents and Massachusetts businesses.”
The House unanimously approved an amendment to its budget that permanently enshrines the film tax credit by eliminating the expiration date.
Another $16.3 million proposal in the Senate bill would convert a tax deduction for child care and dependents into a refundable credit, which Rodrigues said would provide an average credit of $190 to approximately 85,000 low-income families.
Like the House budget, the Senate proposal increases Chapter 70 education aid by about $220 million and calls for the implementation of one-sixth of the School Finance Reform Act of 2019 known as the Student Opportunity Act after the pandemic disrupted its original seven-year timeline.
The senators also called for the creation of a $40 million contingency fund to help school districts whose enrollment estimates — and therefore state aid projections — have been affected by COVID-19.