July marks the beginning of a new fiscal year for our state, and with that comes the Massachusetts state budget.
Massachusetts House and Senate leaders have agreed to a $40.2 billion FY2018 budget, but just because the Conference Committee has come to an agreement doesn’t mean the budget is set in stone. To understand the process and the news coverage, we’ve created a guide to help decipher some of the language.
Fiscal Year (FY)
Massachusetts’ fiscal year runs from July 1st to June 30th. However, the budget making process takes from January to June to negotiate a final bill the Governor drafts and submits a budget bill to the House of Representatives. Then, the House and Senate write and pass their own bills, respectively. Then, a six-member Conference Committee is formed to negotiate the differences between the two houses. Once approved by both chambers the budget is sent to the Governor for approval where he has 10 days to sign the bill.
Both the House and the Senate appoint three members to Conference Committee. The Conference Committee is tasked with negotiating the differences between the House and Senate budget proposals and coming up with one budget to put on the Governor’s desk.
Line-items are arguably the most important aspect of the budget because they are the units by which a budget is built. A line-item is identified by an 8-digit number representing a specific program, a broader sector, or both. For example, funding for a specific healthcare organization and for the overall healthcare industry could be included in the same line-item.
The Legislature passes the budget with an understanding that there could be insufficient revenue to pay for the authorized spending. Therefore, during the year, the Governor Baker may announce 9C cuts to defund proposed spending that there is no longer sufficient funds to support – thus balancing the budget. However, 9C cuts can only be made to executive branch agencies.
Budget jargon is important for anyone who touches policy work to comprehend, and hopefully you will now feel comfortable utilizing some of this language or at least, navigating the headlines!