Novick Reports: Consensus Revenue Hearing

On Monday, December 5, the House and Senate Committees on Ways and Means met jointly with the Secretary of Administration and Finance Kristin Lepore for a hearing regarding revenue for fiscal year 2018. The determinations set after the hearing determine next year's budget. 

They heard testimony from the Massachusetts Department of Revenue, Treasurer Deborah Goldberg, the Massachusetts Taxpayers' Foundation, the Beacon Hill Institute, and professors in public policy and economics from Northeastern University and University of Massachusetts--Dartmouth. The projections in growth ranged from a low of 2.65% from the Massachusetts Taxpayers' Foundation to a high of 5.2% from the Beacon Hill Institute, with the Department of Revenue projecting 3.5% and Professor Clayton-Matthews projecting 3.7%.

There was repeated discussion of economic growth not carrying through in revenue growth. There was also considerable, nearly unanimous concern regarding the impact of the incoming federal administration on the economy, with the exception of Dr. Tuerck of the Beacon Hill Institute, who felt the ending of the Affordable Care Act requirements along with fewer restrictions on electrical generation would both be a boon to the economy. This sanguine view was not shared by others, who saw reasons for concern in the possible drop in health care, the suggested rollback of Medicare, the cutting down on immigration, and the international trade situation. 

When asked what were the most significant needs of the state economy, Professor Goodman of UMass highlighted transportation infrastructure and K-12 education. He specifically mentioned the Foundation Budget Review Commission laying out the structural deficit in state education and warned of a potential for a new lawsuit should the state not take action. He also described the "significant amount of slack" between graduates and companies in the skillset students need for work.