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Testimony for the House and Senate Ways and Means Committees, the Joint Committee on Revenue, and the Executive Office of Administration and Finance Economic Roundtable
We’re clearly in a budget crisis. Which is extremely troubling at this time, when we need real, comprehensive relief for families and individuals — so many of our neighbors, young and old, are struggling with accessing basic necessities and keeping healthy and well.
Our Commonwealth’s budget – how we raise revenue through taxes and fees, and how we spend that revenue – is the clearest picture of our shared values. Considering the revenue side picture is crucial, but the other side of the ledger is just, if not more important.
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.
States rely on borrowing to manage their finances in good times and bad. Yet borrowing is not a substitute for raising the revenue needed for an economic recovery. Policymakers should look to raising progressive new revenues paired with limited borrowing to avoid cuts to critical public spending.