- Charles D. Baker, Governor
- Karyn E. Polito, Lieutenant Governor
To the Honorable Senate and House of Representatives,
We are pleased to submit our Fiscal Year 2021 (FY21) House 2 budget recommendation, our sixth proposal of the Baker-Polito Administration. This fiscally-disciplined submission continues to build on our partnership with the Legislature and our collaborative efforts to ensure spending is consistent with recurring tax revenue. Steady economic growth and fiscal responsibility have allowed critical investments in key areas – including support for local municipalities, education, transportation, health care, housing, substance misuse treatment and prevention, behavioral health, and the environment.
The Administration recommends $44.6 billion in gross spending, an increase of 2.3% over Fiscal Year 2020 projected spending, excluding transfers to the Medical Assistance Trust Fund.
This budget fully funds the first year of the Student Opportunity Act, adding a total of $355 million in new spending for initiatives laid out in this comprehensive education legislation. This includes $303.5 million in funding in Chapter 70 education aid to local cities and towns for a total investment of $5.480 billion. House 2 supports $23.2 million for additional charter school tuition reimbursement, $17.3 million in additional support for special education circuit breaker reimbursement for cities and towns, and $10 million for the new Twenty-First Century Education Trust fund which will supplement $12.6 million for Targeted Assistance to close achievement gaps in low-performing schools.
To help train 20,000 new workers in skilled trades and technical fields over four years, House 2 recommends $8.4 million in additional funding for transforming vocational high schools into Career Technical Institutes. This high-impact initiative will increase student demand, involve businesses in program development and credentials, reduce barriers to licensure to empower mid-career professionals to become vocational teachers, and create incentives for completion and post-graduate employment.
House 2 deepens investments the Administration has made in transportation agencies across the Commonwealth including the Massachusetts Department of Transportation (MassDOT), the Massachusetts Bay Transportation Authority (MBTA), and Regional Transit Authorities (RTAs). House 2 provides $216.7 million more in funding for these transportation entities compared to the FY20 budget to help ensure they can continue to deliver modern, safe, reliable, and effective transportation options.
Consistent with immediate past budgets and our efforts to support our municipal partners, House 2 recommends a 2.8% increase in unrestricted local aid – equal to the consensus revenue tax growth for FY21. This increase will provide cities and towns throughout Massachusetts with a total investment of $1.160 billion in unrestricted general government aid. House 2 supports $4 million for Community Compact-related programs including best practices and regionalization and efficiency grants, as well as $3 million for district local technical assistance. These programs continue to support all 351 cities and towns with access to grant funding and resources to deliver quality services to their residents.
House 2 includes a $310 million increase to the Stabilization Fund, which currently has an all-time high balance of $3.46 billion, representing more than 10% of the amount of tax revenue collected in Fiscal Year 2019. We are proud of our partnership with the Legislature to increase the balance of the Stabilization Fund threefold since 2015, and this significant achievement will provide a substantial buffer for essential services in the event of a future economic downturn.
To continue combatting the opioid epidemic, the FY21 budget recommends $328.3 million in funding across numerous agencies to support prevention, intervention, treatment, and recovery efforts to reduce substance misuse and to promote recovery.
Lastly, this budget proposal incorporates the Part B individual income tax rate’s decreasing from 5.05% to 5% effective January 1, 2020.
We are pleased with the collaborative relationship we have with the House and Senate as we recommend fiscally-disciplined budgets that fund critical priorities and programs throughout the Commonwealth. We look forward to working closely with you on this budget proposal.
Sincerely,
Charles D. Baker Karyn Polito
Governor Lieutenant Governor
