Gov. Charlie Baker has told House Speaker Robert DeLeo not to worry about deficient tax collections blowing a hole in this year’s state budget. And the powerful Winthrop Democrat is taking the governor at his word.

Not even DeLeo knows how Baker has been controlling spending to make sure that when the fiscal year ends in less than a month the books can be balanced.

Baker last July signed a nearly $39 billion budget that Baker’s team said called for a 1.3 percent boost in spending. The budget was largely drafted by Democratic legislative leaders who earlier this fiscal year packed spending back into the budget over Baker’s objections and then in December balked at the governor’s unilateral budget cuts, saying the governor had unnecessarily targeted their spending priorities.

But revenues in recent months have fallen short of the goals used to support fiscal 2017 spending, and Baker has repeatedly said he has been “nipping and tucking” the budget. Legislators have left budget decisions to the governor. And so far, the furthest the governor has gone to explain those efforts is to say that “things happen“ and his budget team has been trying to identify programs and agencies that won’t spend their full allotments for the year.

After 11 months of fiscal year 2017, tax collections have fallen short of budget projections by $439 million. For context, that’s almost four times the size of the $116 million increase in K-12 education made in the fiscal 2017 budget.

By the time tax collectors know June totals, it will be too late to pare back any more spending for the year.

Slow tax growth has also created uncertainty around fiscal 2018 budget deliberations. The six House and Senate lawmakers who hope to craft a budget agreement before July 1 met for the first time on Monday to begin negotiations.

A downward revision of revenue projections, accompanied by spending and other budget adjustments, is expected as part of the conference committee process. The budgets approved by the House and Senate anticipate 3.9 percent revenue growth in fiscal 2018.

DeLeo said in a statement that May revenues, which exceeded estimates by $30 million and broke a string a four straight months with sub-benchmark tax collections, did not alter his thinking about how to approach the fiscal 2018 budget.

DeLeo In The Dark On Spending

by Banker & Tradesman time to read: 2 min
0