Read the statement by Marie-Frances Rivera, president of the Massachusetts Budget and Policy Center (MassBudget), on the Senate Ways and Means Committee’s Fiscal Year (FY) 2021 Budget.
Read the statement by Marie-Frances Rivera, president of the Massachusetts Budget and Policy Center (MassBudget), on Governor Baker’s revised Fiscal Year (FY) 2021 Recommendation.
Massachusetts could face a $5 billion budget hole; Baker administration takes tax hikes off the table for now
The Senate and House chairmen of their respective chambers’ budget committees, Michael J. Rodrigues and Aaron Michlewitz, prepared to host a virtual roundtable with experts to determine how dire Massachusetts’ financial picture is.
“There’s a budgetary crisis happening,” said Marie-Frances Rivera, president of … Massachusetts Budget and Policy Center.
The Massachusetts Budget and Policy Center decided not to prepare a revenue estimate number for this hearing, said its president, Marie-Frances Rivera, citing “all the uncertainty and variables.” In April, MassBudget said that if patterns from prior recessions hold and there is some limited growth, fiscal 2021 collections could land between $5 billion and $5.7 billion shy of the estimates budget writers agreed to in January.
“We think that there’s a budgetary crisis that’s happening and we all have to be just fully aware and eyes-open about that,” Rivera said Wednesday. “There’s danger because all of the public goods that we’re relying on to guide us through this public health economic crisis, whether it’s health care, whether it’s housing people, whether it’s educating our young people, a lot of these are in jeopardy and the needs are growing.”
According to the News Service, Massachusetts Budget and Policy Center, a state finance think tank, says its time for lawmakers to consider other ways to fill budget gaps, other than borrowing money.
They include tapping into the state’s $3.5 billion reserves and adopting “new policies to increase revenue.”
Translation: raising taxes.
The original unemployment system was limited in various ways and covered only about half of the actual American workforce, according to Phineas Baxandall, a social insurance expert at the Mass. Budget and Policy Center. The expansion Congress passed during the shutdown made payments last longer, made them much more generous, and allowed more workers to qualify, including part-time workers, independent contractors, and the self-employed.
“The Commonwealth should pair limited use of borrowing and withdrawals from the Rainy Day Fund with new policies to increase revenue, thus avoiding budget cuts which would deepen and prolong the recession,” says the report, which came out today. It specifically argues against relying mostly on borrowing to plug holes in the budget, and cites a 2015 study by the Congressional Budget Office looking at the Great Recession, which found that “for every additional dollar of revenue raised from taxes (which are used to support public spending during a recession), economy activity drops by less than a dollar.”
In other words, MassBudget contends, raising taxes in the last economic downturn proved to have a net positive impact on the economy. Of course, that idea is sure to meet resistance from the state’s wealthier residents who will likely shoulder the burden of those taxes, and it will be up to lawmakers to decide both who will benefit from the recovery from the pandemic, and who will have to pay for it.
In a report published Tuesday, the left-leaning Massachusetts Budget and Policy Center argues that policymakers can maintain state spending on public services and programs despite the devastating financial impacts of the COVID-19 pandemic if they limit deficit financing, tap into the state’s $3.5 billion reserves and adopt “new policies to increase revenue.”
“Collecting additional progressive taxes to protect Massachusetts public spending against cuts will advance economic recovery by ensuring that more funds will be spent now on goods and services in Massachusetts. This is a clear lesson from the Great Recession,” Phineas Baxandall, MassBudget’s senior policy analyst who wrote the report, said. “A 2015 study by the Congressional Budget Office examining the Great Recession found taxes have a net positive impact on the economy when they are used to support public spending during a recession. For every additional dollar of revenue raised from these taxes, economy activity drops by less than a dollar.”
Hardship is widespread, but Black, Latinx, indigenous and immigrant families have been particularly hard hit, with the crisis exacerbating long-standing inequities in health care, education, employment, and housing that stem largely from structural racism. Our community partners have shared countless stories about the persistent trauma facing kids and families in their communities. We must act now.
The country and commonwealth that I love and care for support people who are going hungry, losing their homes and jobs. Federal policymakers must act, by ensuring that all those who need it get direct cash and other supports to meet their basic needs. Additional federal aid is a clear-cut solution to keep people safe and get our economy back on track.
The federal government must step in to assist those in need during pandemic, not play political games (Letters)
The Republican and MassLive, September 21, 2020
With 11.3% unemployment, MA has one of the highest rates in the nation. Almost 1 in 12 Massachusetts adults with children say they can’t afford enough food for their kids, and 1 in 7 renters are behind on rent, according to a new report from the Center on Budget and Policy Priorities. Hardship is widespread, but Black, Latinx, Indigenous, and immigrant families have been particularly hard hit, with the crisis exacerbating long-standing inequities in health care, education, employment, and housing that stem largely from structural racism. Our community partners have shared countless stories about the persistent trauma facing kids and families in their communities. We must act now.