Budget Season in November and a New Economic Development Recovery Plan

After an 8 month delay due to COVID-19, budget season is finally upon us. On October 14th, the Baker-Polito Administration filed a revised FY21 Budget (revised H2). The proposed budget includes updated line item allocations for FY21. 
Similar to the normal budget process, the House and Senate will now review the Governor’s revised proposal, although the exact process and timeline is not yet clear. The Joint Committee on Ways and Means held an invitation only hearing on October 21st for Administration officials. You can see a recording of the hearing here. Since the current interim budget expires on October 31st, the Governor has also filed a one month interim budget to give the Legislature additional time to act. See here and below for additional details:
  • The revised budget is a $45.5 billion plan that would increase spending beyond what was originally proposed in January. This is despite a projected loss of $3.6 billion in state tax revenues in FY21. The proposed increased spending is driven in large part by the growth in the state’s MassHealth program. 
  • To close the gap between falling tax revenues and rising spending levels, the Governor’s budget leans heavily on one-time revenues, including more than $1.8 billion in federal funding and a $1.35 billion withdrawal from the state’s $3.5 billion “rainy day” fund. The proposed reliance on federal revenue assumes Congress eventually passes another COVID relief package. If this does not happen, this would drastically impact proposed funding levels.
  • The revised budget also proposes $100.7 million in new funding to small business recovery programs that would invest $35 million in small business grants targeted at minority, women, and veteran-owned businesses, $35 million for community financial institutions, and $15 million for small business capital improvements.
  • All MWA priority workforce items (except for one) were level funded.
  • See here for detailed information pertaining to the revised budget including: the governor’s message, proposed budget levels, revenue forecast, and other pertinent information.

We encourage you to reach out to your Representative(s) and Senator(s) to express the importance of workforce funding in the FY21 budget. Check back often for updates as this highly unique process unfolds.

In addition to releasing a revised FY2021 budget, the Baker-Polito administration also unveiled last week a $774 million Economic Recovery Plan which includes over $15 million to help get people back to work. Some of the funding includes what the Governor proposed in his revised H2 budget and programs previously announced through CARES Act funding. Many of the items included in the plan will be funded using CARES Act funding. More details to come but the new money is training dollars. You can read the press release here. The most relevant section for workforce development includes the following funding:

  • $10.4 million to engage Massachusetts employers by expanding workforce partnerships with large employers in target sectors to create aligned statewide training-employment pathways;
  • $9.2 million to subsidize internet for low-income populations, and to expand hot spots in unserved and underserved communities;
  • $3.2 million to modernize MassHire virtual pathways to assess and connect UI claimants to appropriate services and supports;
  • $2 million to bolster manufacturing training by purchasing a standardized virtual training program to increase workforce for the manufacturing sector; and
  • $300,000 to supplement $8.4 million toward Career Technical Institutes in H.2 to help close the skills gap for skilled technician jobs and align training to industry needs.
  • An additional $54 million will be available to support workforce recovery efforts through existing programming such as the Skills Capital Grants program, the Workforce Competitiveness Trust Fund, and the Workforce Training Trust Fund.
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