United States: Governor Baker Files FY2017 Budget, Economic Development Bill; Speaker DeLeo Outlines Agenda

With Beacon Hill off and running in the new year, Governor Charlie Baker and House Speaker Robert DeLeo this week unveiled key parts of their policy agendas for 2016. As part of his second budget proposal since assuming office, Baker on Wednesday proposed targeted investments in local aid, substance abuse prevention, child welfare, and charter schools, while closing a projected budget gap and holding the line on taxes. The following day, the Governor filed economic development legislation containing a $500 million expansion of MassWorks infrastructure grants. Addressing his colleagues in the House, Speaker DeLeo identified passing an energy bill, lifting the charter cap, and regulating Uber and Lyft as his key priorities for the coming year. These developments, detailed in this alert, set the stage for an active legislative session throughout the first half of this year.

Governor Baker's FY2017 Budget Proposal

On January 27, Baker unveiled a $39.559 billion budget for FY2017. The Governor's budget proposal limits spending growth to 3.5 percent over FY2016 levels and closes a projected $635 million budget gap, which his administration attributes to the growth of non-discretionary programs, including local aid, MassHealth, and Chapter 70 Education Aid. The plan relies on a revenue estimate of $26.86 billion in state tax revenue, a 4.3 percent growth over the FY2016 tax revenue projection. We have outlined the budget's highlights below:

Health and Human Services:

  • While the state continues to try to find ways to contain health care costs, MassHealth spending growth is held under Baker's plan to a gross projected increase of 5 percent over FY2016.
  • In response to the Commonwealth's opioid epidemic, the budget provides funds for an additional 150 adult residential recovery opioid treatment beds and allocates more than $140 million for investments affecting prevention, intervention, treatment, and recovery services at the Department of Public Health.
  • Funding for the Department of Children and Families is increased by $30 million. This includes $12 million for 281 new hires.

Local Aid

  • Unrestricted General Government Aid (UGGA) to cities and towns is increased by $42 million to $1.021 billion.
  • Local aid programs receive $5.92 billion in total, a $135 million or 2.3 percent increase over FY2016.


  • Chapter 70 school aid is increased by $72.1 million, or 1.6 percent, to a total of $4.58 billion.
  • Over $100 million is dedicated to funding for charter school reimbursements to local school districts, a $20.5 million increase over FY2016. The budget fully funds all increases in FY2017 for charter school tuition payments that are higher than those in FY2016.
  • The budget maintains level funding for other education-related local aid accounts, including special education and regional school transportation.
  • $18.6 million is allocated for a redesigned "quality kindergarten grants" program to assist communities in providing tuition-free, full day kindergarten in 270 districts across the Commonwealth.


  • As requested by the MBTA Fiscal and Management Control Board, the budget directs $187 million in additional contract assistance to the MBTA, sustaining the 53 percent ($64 million) increase made in FY2016. This brings total state assistance to the MBTA to nearly $1.2 billion.
  • An extra $500,000 is provided for reforms at the Registry of Motor Vehicles to reduce wait times and make IT enhancements.

Workforce Development and Job Training

  • An additional $3.1 million is provided in funding for career technical education and STEM programs, bringing the total state investment to $17 million.
  • $12 million is allocated for the Department of Transitional Assistance to provide employment services through the Pathways to Self-Sufficiency Program.


  • For his second straight budget proposal, Baker does not propose any new taxes or fees.
  • The budget proposes corporate tax reforms that, according to Baker, will save Massachusetts business more than $67 million in income taxes when implemented in four years.
  • The budget restores a $7 million per project cap on the state's film tax credit that was lifted in 2007. It also makes the credits unrefundable, which the administration projects will generate $43 million in savings beginning in FY20 2018. Baker proposes investing these savings in affordable housing credits and corporate tax relief.


  • Funding for the budget relies on $253 million in one-time budget solutions, down from $1.2 billion in FY2015. This decrease is consistent with Baker's commitment to reducing the state's reliance on one-time revenue sources.
  • The budget also plans for a $206 deposit into the state's Stabilization Fund. Should the Mass Gaming Commission issue a license to Region C in FY2017, an estimated additional $76.5 million will be deposited into the fund.

Economic Development Legislation

The following day, Baker filed economic development legislation that would allocate $918 million in capital investments to programs across the Commonwealth. Titled "An Act to Provide Opportunities for All," the legislation's provisions range from growing the popular MassWorks infrastructure grants program by $500 million to allowing farmers to sell their beer at farm stands. Announcing the bill at a press conference Thursday morning, Baker called it a key step to implementing his administration's recently released economic development plan, and said it was informed by thousands of conversations held with stakeholders across the state.

Central to the bill is its $500 million in new funding for MassWorks grants, without which Baker said the program would not have money to run next year. The program funds municipal infrastructure improvements, often in connection with a private development opportunity that leads to new jobs. In 2015, the program granted $85.6 million to 46 communities. Secretary of Housing and Economic Development Jay Ash, who spoke alongside Baker, said this new reauthorization would grow the program by 30 percent, following a 40 percent budget increase last year.

Much of the bill focuses on connecting cities and towns to development opportunities. It allocates $25 million to a new site assembly and pre-development fund, which Lieutenant Governor Karyn Polito said is important because smaller towns are not always prepared for development. Polito, who is known for her extensive travel throughout the state, said this measure would advance the administration's priority of bringing economic growth to all 351 municipalities, not just Boston. The existing Brownfields Redevelopment Fund, which helps clean up and develop contaminated sites, would receive another $75 million. The state's economically distressed Gateway Cities would have access to $50 million in new funding for redevelopment projects, through MassDevelopment's Transformative Development Fund.

Baker also announced funding to grow the state's "innovation economy," particularly for manufacturing and technology companies. The bill makes available $118 million in matching grants to support federally-funded research collaborations between academia and the manufacturing industry. Another $25 million would go to the state's Scientific and Technology Research and Development Matching Grant Fund. Start-ups and local entrepreneurs would benefit from $25 million in funding for the construction of "maker spaces" and other collaborative work environments.

Turning the focus from companies to people, Baker cited measures to promote workforce development and affordable housing. Over five years, $75 million would go to equipment for vocational education programs. The bill also allocates $25 million to incentivize the construction of smaller, cheaper "starter homes" and housing development in denser downtown areas.

Combined, Ash said these wide-ranging initiatives would strengthen Massachusetts' economic "ecosystem." Noting the recent relocation and expansion of global companies like General Electric, IBM and Amazon, Baker touted his administration's successes to date while calling the bill a key step toward further growing the state's economy.

Speaker DeLeo's Address

In his annual address to the House of Representatives on January 27, House Speaker Robert DeLeo outlined his priorities for the coming year on energy, education, and innovation. The Speaker reiterated his opposition to new taxes or fees, promised legislation on energy and raid-hailing companies, Uber and Lyft, and aligned himself with supporters of lifting the cap on charter schools.

While House and Senate lawmakers remain deadlocked on a solar bill and mull over comprehensive energy legislation, the Speaker broadly addressed the subject of energy, saying the House will pass a bill this year. DeLeo promised that the legislation "will promote resource diversity and cleaner energy, contain costs and ensure that we maintain a reliable electric grid."

The Winthrop Democrat strongly ruled out raising taxes or fees in the FY2017 state budget, a goal Baker shares. He also aligned himself with the Governor on expanding charter schools, saying "Districts that want charters should be given the chance to pursue them, or any other option they may deem necessary, in order to do right by their students." The Speaker indicated he will continue to pursue a Senate-first strategy for lifting the charter cap. While legislators consider various options, advocates continue to push for a November ballot question that would raise the charter cap.

Although he did not mention the MBTA, DeLeo weighed in on another hot-button transportation issue: the regulation of Uber and Lyft. The Speaker said that the House will consider legislation in February allowing these popular ride-hailing companies to exist in Massachusetts. "We will find a way to make companies such as Uber and Lyft part of the permanent landscape in Massachusetts while keeping in mind the benefit that competition from taxicabs and livery companies bring to the marketplace," DeLeo said.


While Baker and DeLeo continue to strongly oppose new taxes, Senate President Stan Rosenberg has critiqued this position and stated his belief that additional revenues are needed to properly invest in transportation and education. Rosenberg has alleged that there is "underinvestment" in these areas and said that state officials have "choked off the revenue stream" in recent years. On Thursday, January 28, the Legislature's Revenue Committee voted 12-4 to endorse a $1.9 million tax on incomes above $1 million as part of a proposed constitutional amendment.

The budget process will develop throughout the first half of this year, as the House and Senate are set to release their budget proposals for the next fiscal year later in the spring. Meanwhile, Baker's $918 million economic development legislation marks his first big step in implementing the economic development plan he released in December, advancing that document's goals of spreading redevelopment activity, job opportunities, and high-tech innovation across the Commonwealth.

ML Strategies will continue to monitor and report on developments in the budget process, Baker's economic development agenda, and policy proposals coming out of the House and Senate.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.