Oct 09, 2024
BOSTON, Mass. (SHNS)--Gov. Maura Healey's plan to use $225 million of income surtax revenue to help balance last year's budget runs afoul of the will of the voters to only use those funds on new transportation and education investments, according to a coalition that is urging the Legislature to take a different approach. "The MBTA is facing an operating budget deficit of over $600 million in the upcoming fiscal year. The Commonwealth has over 600 structurally deficient bridges. The Commonwealth also needs to expand our EV charging infrastructure to meet our climate goals and address rural infrastructure for communities that rely on mostly gravel roads to get around," the coalition of more than two dozen groups wrote in a letter Tuesday to House and Senate budget chiefs. "Diverting $225 million from the Education and Transportation Fund only hinders our ability to address these investments moving forward." Massachusetts budget official predicts slow revenue growth through next year The governor's proposal is part of a supplemental budget expected to advance this fall to close out fiscal 2024. That fiscal year ended June 30 and was noteworthy because of a softening in non-surtax tax revenues coupled with spending increases and a surge in collections from the 4 percent surtax on annual household income above $1 million. Leaders of Transportation for Massachusetts, the Conservation Law Foundation, the LiveableStreets Alliance, the Massachusetts Public Health Alliance, TransitMatters, the Massachusetts Bicycle Coalition and many others signed the letter. The groups noted the state's $8.8 billion Stabilization Fund is set to pass the $9 billion mark with a deposit recommended by the governor, and she has proposed depositing $600 million from a tobacco settlement and another $265 million into the a Transition Escrow Fund. "These three deposits to savings accounts total over $1.1 billion that could be used to close out FY2024 without using revenue from the Transportation and Education Fund," the groups wrote to Rep. Aaron Michlewitz and Sen. Michael Rodrigues. The coalition added, "We believe that shifting funds from the Education and Transportation Fund to backfill accounts that were previously funded by the General Fund sets a bad precedent for future budgets. Using the Fair Share dollars to balance budgets rather than make new investments in transportation and education moving forward risks damaging public trust. We believe a much better approach would be to use funds from the Stabilization Fund, as historically has been done, to close out prior year’s budgets." In her $714 million closeout budget proposal, Healey said she wants to use the "surplus" surtax collections to support spending on child care grants, universal school meals, early education and care provider rates, and Massachusetts Department of Transportation operations. The governor noted "budgetary challenges" last fiscal year that prompted her team to revise revenue estimates midyear and make unilateral spending cuts. Even with those moves "after adjusting for surtax, FY 24 revenues were $233 million below the FY24 revised benchmark, and $322 million below FY23 collections," the governor wrote to lawmakers last month. Healey also noted that even with the $225 million transfer, there would be a "substantial surplus" of unappropriated surtax funds "that we look forward in the coming session to working with the Legislature to allocate in the most efficient and impactful way." In their letter, the groups emphasize their belief that surtax revenues be used only to "add to existing transportation dollars above current allocations" and that surtax allocations "should be transparent to the public." "The Governor’s approach in her closeout supplemental budget does not use Fair Share dollars to make new investments in transportation, and is not transparent in how much funding out of the $225 million is going to each account" referenced in her bill, the coalition said. The next move is up to Michlewitz and the House Ways and Means Committee, which has had custody of Healey's bill (H 5049) since Sept. 12.
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