A Message from the Governor

Title: Massachusetts State Seal - Description: A Latin inscription reads:  ENSE PEITT PLACIDAM SUB LIBERTATE QUIETEM
(617) 725-4000


January 24, 2018

To the Honorable Senate and House of Representatives,

We are pleased to submit our Fiscal Year 2019 (FY19) House 2 budget recommendation, the fourth annual proposal of the Baker-Polito administration. This fiscally responsible proposal once again builds on our collaborative work with the General Court to keep state spending in line with revenue growth, minimize our reliance on non-recurring revenues, and avoid tax or fee increases to balance the budget, while investing in key priorities including local aid, education, workforce development, substance misuse, mental health, housing, and transportation.

Our FY19 House 2 proposal anticipates a $96 million deposit into the Stabilization Fund, which would bring total reserves to $1.463 billion, an increase of over 30% since the Baker-Polito administration took office. House 2 also relies on less than $100 million in one-time revenue, a reduction of over 90% since Fiscal Year 2015 (FY15).

House 2 spends $40.9 billion, an increase of 2.6% over Fiscal Year 2018 projected spending. Through aggressive integrity measures at MassHealth, we have reduced the annual net growth of MassHealth spending from 10.6% in FY15 to 0.5% in this budget proposal for FY19. House 2 continues our progress to make MassHealth sustainable through an updated proposal for comprehensive coverage for non-disabled adults and innovative prescription drug transparency measures.

In 2015, we worked with you in the Legislature to increase the Commonwealth’s Earned Income Tax Credit from 15% to 23% of the federal credit, and this year we propose an additional change upward to 30% of the federal credit effective January 1, 2019, which will continue to support low-income working individuals and families.

Keeping our commitment to the Commonwealth’s cities and towns and consistent with immediate past budget years, House 2 increases unrestricted local aid by 3.5%, equal to 100% of the consensus revenue tax growth estimate percentage. This investment will provide municipalities with $1.099 billion in unrestricted general government aid.

Local education aid increases by $118.6 million, including $15 million for school districts that have seen significant enrollment of students from Puerto Rico and the U.S. Virgin Islands, and $24.3 million towards addressing the rising costs of healthcare for retirees, which was a major recommendation of the Foundation Budget Review Commission.

To address college unaffordability, the administration proposes $7.1 million to double the MassGrant program for community college students, which will cover all un-met need for students to cover tuition and fees at the Commonwealth’s 15 community colleges. House 2 includes $3 million in new funding for Early College programs, which will focus on partnerships between high schools and higher education institutions, and encourage students to enter STEM fields.

This budget builds on our efforts to fight the opioid epidemic with $5 million in new funding for education and prevention programs, as well as $3 million to support a new program model at the Massachusetts Alcohol and Substance Abuse Center. Since taking office, total annual spending for substance misuse and treatment services has increased by nearly 60%, not including spending for MassHealth services.

House 2 also includes $93.2 million in new funding at the Department of Mental Health, including $84 million for strengthened community-based services for adults.

The administration proposes to reduce the filing fee for forming a limited liability compact in half to $250, reducing the burden for business owners and entrepreneurs.

To save taxpayers from having to cover the costs of excessive sick time cash outs to state workers leaving employment, the administration is once again filing to cap accrued sick time for state employees, bringing the Commonwealth in line with other states and private sector employers.

We are appreciative of our strong collaborative relationship with the Legislature to pass responsible budgets and key priorities since taking office, and look forward to working with you in the coming months on this proposal.


Signature of Charles Baker   Signature of Karyn E Polito
Charles D. Baker
  Karyn E. Polito
Lieutenant Governor

top of page link top of page