Blue Mass Group

Reality-based commentary on politics.

What’s in the Governor’s Budget

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A budget is a statement of priorities; it describes what we want to do together as a Commonwealth in the coming year—and how we will pay for those things.

The top priorities in the Governor’s budget for this coming year are Education and Transportation. Both those areas will receive significant new funding, and there will also be additional funding for Health Care, Public Health, and Local Aid.

To pay for these, the Governor has proposed some significant changes to the tax system, including raising the income tax from 5.25 to 6.25 and lowering the sales tax from 6.25 percent to 4.5 percent. These changes—along with the others described in our “Revenue” section below—would raise about $850 million of additional tax revenue for 2014 while also making our tax system less regressive and more fair.

Ultimately, this money would be invested in a variety of areas across the budget. Some of the most prominent include:

  • Early Education & Care, where funding increases will help young children gain access to high-quality child care, which is essential to working parents and which has been shown to increase the long-term prospects of children.
  • Higher Education, which would make college more affordable by increasing public support for UMass, Community Colleges, and State Universities and by doubling the size of the State Scholarship Program
  • Transportation systems in Greater Boston and across the state, to help repair our roads and bridges and improve our bus, subway, and train service.

Even with this new revenue, however, there are areas where the Governor’s proposals may fail to meet important needs. In Housing, for instance, the Governor would continue to restrict low-income homeless families’ access to state-supported shelters, instead providing limited assistance to help these families secure permanent housing. There is a question whether that assistance is sufficient to ensure that families can stay in housing over the long term.

MassBudget’s new Budget Monitor shows how the Governor’s budget would affect core programs in state government, from health care and education to public safety and the environment–including information on tax revenues.

Check it out.

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  2. Health Care For All’s first-look analysis of the Governor’s budget is here.

    Our bottom line:

    Governor Patrick’s budget continues this administration’s strong commitment to ensuring access to affordable, quality health care for everyone in Massachusetts.

    Budgets have both a revenue side and a spending side. This budget uses both to improve the health of the Commonwealth and reduce health spending growth.

    The targeted revenue includes a long-overdue increase in the tax on cigarettes and other tobacco products, which will reduce the use of tobacco and swiftly bring improved health results. Making our tax system more fair (by simultaneously increasing income taxes, cutting many corporate tax expenditures, reducing the sales tax and increasing the personal exemption) will reduce the tax burden on lowest-income residents, which will directly improve their health.

    This revenue supports new spending targeted at restoring vital health benefits, like adult dental benefits for MassHealth members, repairing some of the damage done to our public health system, and beginning the process of implementing the delivery system transformations required to bring down health costs.

    Of course, one can’t have the spending without the revenue. As the legislature considers this budget, every revenue increase they scale back or reject will lead to corresponding cuts in services.

    More details in the full post.

    • and, in fact, wrote a warrant article in my town to prohibit the sale of tobacco products on educational campuses and at health care providers (including pharmacies*). The following year, we raised the age to buy up to 19, with the idea that it will make it much harder for high school kids to obtain cigarettes.

      BUT

      The tax as of 12/31/2012 was $2.51/pack, the 9th highest in the country (source: cigarette taxes by state). Neighboring states:
      ME $2.00 (11th)
      NH $1.68 (19th)
      VT $2.62 (7th)
      MA $2.51 (9th) [proposed: $3.51, making MA 2nd highest]
      RI $3.50 (2nd)
      CT $3.40 (3rd)
      NY $4.35 (1st) [in NYC the state+local is $5.85]

      So is there room for MA cigarette tax to go up? Sure. Sure would be nice to get New Hampshire to raise theirs though — border crossing for tax differential is very real, and for somebody who smokes a pack a day, the difference is already worth $300/yr. With the increase (and no change in NH policy), you’re looking at a $670/yr difference.

      P.S. Sales of cigarettes in MA have gone down by roughly 4.6% per year over the past 20 years, and were 224 million packs in FY11. (source: MA tobacco sales and tax information) This increase is worth an additional $200M+ a year in revenue.

      * CVS with prescription drugs: no cigarettes. CVS without prescription drugs: cigarettes OK.

        • Hell, even if they just *changed* the tax on alcohol so it was a function of price and not volume, it could at least not be so dang regressive.

          The tax in MA on a $1,000 bottle of Champagne is $0.14. Fourteen cents. [.70 cents/wine gallon, 750 mL ~= 0.2 gallons]. The tax in MA on a $25 bottle of Jack Daniels is $0.80. Eighty cents.

          With a 4.5% sales tax, the Champagne would have a $45.00 tax, and the whisky a $1.13 tax. Both changes, I think, would be for the better.

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