Massachusetts legislature enacts budget that includes free community college, free transit rides, legal online lottery

JULY 19, 2024…..Lawmakers sent Gov. Maura Healey an overdue state budget Friday afternoon that pitches a bevy of statewide policy changes baked into a $58 billion spending plan for fiscal year 2025.

The compromise budget was filed Thursday night, the product of about a month and a half of private negotiations among a group of six lawmakers. The House voted 154-3 to accept the negotiated budget and the Senate followed suit with a unanimous 40-0 vote. Republican Reps. Nick Boldyga, Marc Lombardo and Alyson Sullivan-Almeida cast the three votes of dissent.

Procedural and final votes sent the budget to the governor’s desk at just after 3:30 p.m., 19 days into the fiscal year that it is meant to cover. State government has been operating since July 1 on an interim budget meant to hold the state over for the month of July.

Healey will have 10 days to review the budget before signing it and returning any amendments and vetoes. With formal sessions set to end for the year on July 31, the late budget means House and Senate Democrats may have left themselves a tight window to field any budget measures vetoed or returned by the governor with proposed amendments.

The branches passed the budget during rare Friday sessions and then broke for the weekend, with plans to come back next week to try to make a dent in a pile of legislative priorities that have been awaiting attention while the budget was being negotiated.

“I think this budget is one that we can all be proud of. We are sending her excellency, the governor, a budget that is balanced, thoughtful and forward-thinking; one that tackles the difficult new issues of our time, but also make sure we are protecting the programs that some of our most vulnerable populations rely on,” House budget chief Rep. Aaron Michlewitz said Friday as the House took up the conference committee report.

The $58 billion budget (H 4800) would increase spending about $1.97 billion, or 3.5 percent, over the fiscal 2024 spending plan Healey signed last summer and uses just more than $1 billion in one-time revenues to support the outlays. And it is loaded down with policy provisions — authorizing free community college, free rides on regional transit agencies, and legal online Lottery sales to fund a permanent Commonwealth Cares for Children grant program that launched during the pandemic with federal dollars.

The Mass. Taxpayers Foundation said the compromise budget includes $25.7 million more in spending than was approved by the House in April and $16.5 million more than what the Senate approved in May. But it is still $36.1 million leaner in spending than the original fiscal 2025 proposal from Healey.

The House and Senate budgets were in more than 95 percent agreement on spending, but the conference committee had to reconcile about $1.4 billion in proposals that were unique to one branch or the other, MTF said. Unlike previous years, conferees did not adopt the higher of the two branches’ funding levels for all accounts, which MTF attributed to “the more constrained revenue picture facing budget writers.”

“How do you deal with the fact that we are passing a budget that’s $2 billion more than last year and we have $208 million less in tax revenue this year, and not dipping into reserve funds,” Senate Ways and Means Chairman Michael Rodrigues said as he explained some of the accounting at work beneath the budget’s surface. “We do that in a number of ways. One of which is … we choose to use $375 million that would normally be transferred into the [stabilization] fund at the end of FY 25 in the FY 25 operating budget. Keep in mind, as I also said, the stab fund continues to grow because even with that diversion, we are still looking to make a couple-of-hundred-million-dollar investment into the Stabilization Fund that will bring that balance up to over $9 billion.”

The budget agreement marks the first time that lawmakers in both branches have been on the same page about allowing the Mass. Lottery to sell its products online, something that Treasurer Deborah Goldberg has been pushing for essentially since taking office in 2015.

Goldberg chairs the Lottery Commission and said the budget’s online authorization “allow the Lottery to keep pace with its competition and reach newer audiences.” The treasurer has been warning for years that the roughly $1 billion a year that the Lottery generates for the Legislature to dole out as local aid to the state’s 351 cities and towns could be at risk as the offline Lottery faces stiff competition for younger gamblers from online sports betting, daily fantasy sports and casinos.

“We are prepared to implement a safe and reliable iLottery that will produce significant resources for critical childcare services, which are so desperately needed across the state,” Goldberg said Friday. “We are excited to get to work!”

Mark William Bracken, executive director of the Mass. Lottery, echoed Goldberg’s excitement and said his team is “ready and prepared to offer our players a modern lottery experience in a safe and accessible environment.”

The conservative Mass. Fiscal Alliance said the budget that lawmakers sent to Healey on Friday is “riddled with concerns,” pointing to the increase in state spending, the uneven distribution of surtax revenues between education and transportation initiatives, and the slew of policy riders Democrats pinned into the spending plan.

“Once again, the Massachusetts legislature is the last state in the country to pass its annual budget, and once again it is the largest budget in state history,” spokesman Paul Craney said. “House and Senate leaders also included multiple new and costly programs at a time when state revenue collections have been underperforming and a new billion-dollar migrant crisis is growing. Long term, this will be very difficult to fix unless these same big government spenders decide to cut the spending priorities they are passing in this budget.”

On X, Lombardo noted that Democrats released the large budget plan Thursday night. 

“Few if any House members will read this doc before voting yes. I expect all @massgop reps to vote no for process alone, never mind billions in new gov programs & funding for illegal migrants,” he wrote.