|Governor Presents $34.8B Budget for Fiscal 2014|
|03:44PM / Wednesday, January 23, 2013|
Gov. Deval Patrick presented a $34.8 billion budget on Wednesday that includes significant increases in education, transportation and municipal aid funding.
BOSTON — Gov. Deval Patrick on Wednesday filed a $34.8 billion fiscal 2014 budget, up 6.9 percent over this year that includes increases for education, transportation, job creation and municipal aid.
To balance a budget the governor describes as consistent with "pre-recession" budgets, he is proposing to increase cigarette taxes by $1 and repeal the sales tax exemptions on soda and candy; lower the sales tax from 6.25 percent to 4.5 percent, and raise the income tax to 6.25 percent, and institute reforms in performance and efficiency of state services.
He's also betting on $83 million in gaming revenues from expanded gaming, as well as new sales tax revenue through an agreement Amazon ($26.2 million), tax enforcement and a bottle redemption bill to include sports drinks and bottled water ($24 million).
Proceeds from the cut in the sales tax will be dedicated to a public works fund that will support the transportation plan laid out last week, as well as the school building fund and other public infrastructure and will be off limits for any other purpose.
"This is a growth budget that makes investments in education and transportation to grow jobs in the near-term and strengthen our commonwealth in the long-term," said Patrick in a statement. "Each of us has a stake in promoting opportunity and prosperity throughout the commonwealth, and each of us should contribute to improving it. And the number of new reforms we have also proposed continues our work to improve government performance and achieve savings."
The proposed budget would provide universal access to early education for children across the state, from birth through age 5; fully fund K-12 education and allow for extended school days in high-need schools; make college more affordable and accessible for high school graduates; and allow community colleges to expand their efforts to provide students with the knowledge and skill training needed to succeed in the workplace.
The administration will invest a total of $6.79 billion in education, including more than $550 million in new targeted investments that will bring Chapter 70 funding to $4.39 billion, the highest in state history.
Transportation will see a $269 million increase in the operating budget recommendations to begin to fund the needs highlighted in the state Department of Transportation's "The Way Forward: A 21-st Century Transportation Plan."
Included in the budget is the elimination of the Massachusetts Bay Transit Authority's structural operating deficit and enhancements in services; sustainably funding Regional Transit Authorities, beginning the $13 billion Accelerated Transportation Program, including an additional $100 million for chapter 90 local road and bridge funding, targeted over the next decade.
The budget also calls for $75.5 million in additional funding for innovation and job creation, including $25 million for a Massachusetts Life Sciences Center (up $10 million over this year) and $25 million in life science tax incentives; $18.75 million from gaming license revenue to push the Advanced Manufacturing Futures Program created in the 2012 Jobs Bill; expansion of the MassWorks Infrastructure Program (also through gaming revenue) for an estimated $88.1 million in public construction this coming year; and consolidation of 240 state and local housing authorities into regional authorities.
Aid to cities and towns grows to 14.6 percent of the annual budget, or to $5.57 billion. Unrestricted Aid will be funded at $930 million, a $31 million increase over the original fiscal 2013 budget, including $100 million more in Chapter 90 (up from $200 million). That's a boon to cities and towns that have seen their aid vanish over the past few years.
As part of his tax reform, the governor also is recommending doubling the personal exemptions for every taxpayer and eliminating a number of itemized deductions; reinstating the deduction for life insurance and annuity interest; capping the film tax credit at $40 million per fiscal year and reforming the retiree health benefits system. He also put forward a plant to implement electronic tolling (saving an estimated $50 million annually); expand the network of Family Access Center; make changes to the way businesses participate in the state health-care system to reduce costs; and a review of state regulations.
The budget minimizes the use of the state's stabilization fund with a draw of $400 million, which will leave a rainy day fund balance in excess of $1 billion at the end of fiscal 2014, one of the highest rainy day funds in the nation. The governor's budget proposes to utilize only $555 million in one-time resources next year, down from $919 million in fiscal 2014.
In September 2011, Standard and Poor's upgraded the commonwealth's credit rating to AA+, resulting in all three of the state's credit ratings being just one notch below the highest possible rating and giving the commonwealth the highest credit ratings in its history.
Read the full press release and the details here.