Lawmakers approve $48B late budget

Jul. 9—BOSTON — Lawmakers on Friday signed off on a $48.1 billion late budget buoyed by an unexpected surge in revenue.

The spending plan, which emerged late Thursday from closed-door House and Senate negotiations, lands on Gov. Charlie Baker's desk more than a week after the July 1 start of the fiscal year. Both the House and Senate voted unanimously to approve the final budget.

Robust collections in recent months and a better-than-expected forecast for tax receipts — more than $4.2 billion above early estimates — not only offset pandemic-related shortfalls but prompted budget writers to expand spending by more than $300 million.

"We've been through a lot, and we have come out of the last year and a half in a stronger fiscal position than any of us could've imagined," House Ways and Means Chairman Aaron Michlewitz said in remarks.

The budget doesn't raise taxes and scraps a planned $1.5 billion drawdown from the state's "rainy day" fund. Instead it calls for another $1.1 billion in capital gains taxes to be pumped into the reserves, bringing the fund to a record $5.8 billion by next year.

The state's pension system would get a $250 million supplemental deposit under the spending plan.

Chapter 70 school aid would increase by $219.6 million to $5.5 billion. The plan also sets up a $350 million trust fund for the Student Opportunity Act, a law that requires the state to spend an additional $1.5 billion in K-12 education over the next seven years.

House and Senate negotiators also approved expansions of the state's historic rehabilitation tax credit; a new tax credit for hiring of disabled workers; and a plan to convert a child care tax deduction into a refundable credit that would allow more low-income families to qualify.

The spending package would also permanently extend the film tax credit, which is set to expire in 2023, but sets a new requirement that at least 75% of the filming and photography must be done in Massachusetts in order for a production to qualify.

Supporters of the program tout its economic benefit while others criticize the subsidy, the most generous in the country, as a giveaway to Hollywood.

Rep. Anne Margaret Ferrante, D-Gloucester, one of six lawmakers who crafted the final version of the budget and a longtime supporter of the tax credit, said making it permanent will create jobs and spur development of the film production industry.

"This industry is going to grow and this will be a game changer that will position us to be at the forefront of it," she said.

The provision faces a possible veto from Baker, who has been critical of the film tax credit. He has sought to eliminate it and divert savings into an expanded earned income tax credit.

The final budget also ditched a plan to raise fees for Uber and Lyft rides to drum up transportation funding.

The budget does not earmark money from state's $5.4 billion share of the American Rescue Plan Act, which the Legislature will decide how to spend later this year.

Despite its unanimous approval, not everyone was pleased with the budget.

Sen. Diana DiZoglio, D-Methuen, complained that it doesn't include several provisions she sponsored, including one seeking to resolve health care coverage issues for legislative staffers and another banning non-disclosure agreements.

She also bristled that lawmakers were given little time to review the 434-page document before it came up for a vote.

"We had less than 24 hours to read and review what may be the most significant bill we vote on this year," DiZoglio said in a Senate floor speech. "I'm deeply disappointed."

Massachusetts is just one of four states — including Wisconsin, Michigan and North Carolina — that hasn't approved a final budget for the next fiscal year, according to a tally by the National Conference of State Legislatures.

The state is running on a $5.4 billion supplemental budget meant to cover government expenses through July.

Baker has 10 days to sign the budget, veto it or return portions to lawmakers with recommended changes.

Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group's newspapers and websites. Email him at cwade@northofboston.com.