July 8, 2006
GOVERNOR ROMNEY SIGNS $25.2 BILLION FY 2007 STATE BUDGET
Reduces spending by $573 million to maintain fiscal discipline
Governor Mitt Romney today signed into law a $25.249 billion FY 2007 state budget that increases state aid for local communities, adds more money for education and provides funding for historic health care reform. The Governor also reduced spending by $573 million in order to maintain fiscal discipline.
Romney commended the Legislature for adopting his proposal to significantly increase local aid by distributing 100 percent of annual Lottery revenue to cities and towns. He also praised lawmakers for agreeing with him to direct more money to Chapter 70 school aid through a revised formula that is more equitable and rewards communities that are rapidly growing.
And for implementing the new health insurance law, which requires all individuals to purchase insurance by July 1, 2007, the budget Romney signed provides approximately $275 million in additional funds.
But Romney said the overall level of spending growth in the budget “is simply too high.” He lamented the fact that it relies on $550 million in rainy day funds at a time when the state is experiencing record high revenue collections.
“Rainy day funds should not be spent during periods of robust revenue growth to support a level of spending that is not sustainable,” Romney said. “We are repeating the mistakes of the past, and it would be irresponsible to allow this budget to become law without making significant reductions.”
The Governor reduced spending by $573 million, including $459 million in line item reductions and $114 million in excessive payments to hospitals and community health centers. With Romney’s vetoes, the growth from FY 06 to FY 07 is kept at 5.6 percent, as opposed to 7.5 percent under the Legislature’s budget.
Romney vetoed $112 million in election-year spending for pet projects, so-called “legislative earmarks” which bypass the normal procurement process, but he let stand items that he felt had good justification, such as grants to private organizations that work with at-risk youth.
One of the biggest vetoes was $31 million in state assistance to the Turnpike Authority for private development purposes, which is beyond the scope of the costs the state agreed to pay in the Big Dig finance plan.
A major change proposed by Romney through an amendment to the budget is a requirement that all active and retired employees under 65 pay 25 percent of their health insurance premium for a savings of $73 million. Currently, active employees pay as little as 15 percent, and retirees 10 percent, of their premium.
Because it’s an amendment, the Legislature needs to vote on the health insurance change in order for it to become law.
The Governor struck an “outside section” of the budget that attempts to remove his newest appointee to the Turnpike Authority, Beth Lindstrom, and replace her with Jordan Levy, whose term expired July 1. Romney called that measure “an unconstitutional usurpation of the Governor’s appointment powers.”
Instead, in order to facilitate openness and transparency, Romney sent back an amendment requiring the Turnpike Authority directors to hold meetings at least once a month during normal business hours in a location that is convenient to the general public.
The Governor approved another outside section that allows commuters who spend more than $150 a year on tolls or MBTA passes to deduct up to $750 a year in commuting expenses from their state income taxes. Joint filers could claim up to $1,500.
Among areas seeing increases:
- Higher education accounts received a $63.2 million increase, or 6.9 percent, to $979 million;
- Non-education local aid is going up by $158.4 million over last year, to $4.8 billion, with the uncapping of Lottery revenues;
- Chapter 70 school aid is going up by $216.6 million, to $3.5 billion;
- Spending on the environment increases nearly $14 million, or 7.4 percent, to $200 million;
- District attorneys get an $8 million boost to $91.4 million, which is intended to help bring up the salaries of assistant district attorneys.
Language in the budget signed by Romney also makes changes to the state’s sex offender laws. Those changes require lifetime parole supervision for certain individuals who are convicted of failing to register. In addition, sex offenders when they register will now be required to provide secondary addresses of places where they reside for more than 14 days a year.
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