Cross-posted at The Eisenthal Report
The Worcester Telegram & Gazette reports this morning that Massachusetts House Speaker Sal DiMasi (D – Boston) and Senate President Therese Murray (D – Plymouth) have agreed on an increase in Chapter 70 local aid for fiscal 2008 that will be $20 million higher than the $200 million increase called for by Governor Deval Patrick.
According to the T&G, DiMasi and Murray agreed to a joint resolution on the matter “to discourage attempts…to increase local school funding amounts with floor amendments that would deviate from the agreed-upon total figure.”
The House budget for fiscal 2008 is likely to be released this month. With $20 million more in local aid than the Governor’s budget, it will bear watching how the House proposes to balance the budget in the face of a nearly $1 billion budget gap. House Speaker DiMasi has declared his public opposition to the closing of corporate tax loopholes; it is estimated that if these tax law changes are enacted, the Commonwealth of Massachusetts would realize $250 to $300 million in new revenues next year. To substitute for this measure, the Speaker reportedly favors additional spending reductions and transfers from financial reserves.
The budget that Governor Patrick submitted is already a lean budget – it proposes only $150 million in spending for new programs. Budgetary reductions contemplated by Speaker DiMasi would either come from this spending or from already existing programs. Boosting local aid at the expense of other programs could be politically difficult for the Speaker and his members.
If the House proposes funding the additional local aid from reserve fund transfers, this also could become politically difficult – for Governor Patrick. He might be forced to make a choice between allowing a reserve fund transfer that he views as fiscally irresponsible and a line-item veto of funding in an area that he has declared a high priority.
It is possible that the revenue estimates upon which the FY08 budget will be built could increase as actual revenues come in over the next few months. If this does not happen, it becomes all the more important for Governor Patrick to try to win on the issue of closing corporate tax loopholes.