On Budgeting in a Pandemic

November 21, 2020 Pace LaVia

It would be a massive understatement to say that it’s challenging to ascertain an accurate annual budget for a Commonwealth the size of Massachusetts when there’s a global pandemic raging and literally no one knows what the future holds. The state has been running on a stopgap budget since the beginning of Fiscal 2021 (beginning of July) while lawmakers fumble with vacillating revenue projections.

The much-dreaded second wave of Covid-19 cases is blowing up the state’s unemployment numbers once again. And there’s talk of another statewide shutdown casting increased uncertainty about whether or not revenue projections are accurate.

Nonetheless, both houses of the state legislature have finally passed a $46 billion budget for fiscal 2021.

Also now in question is the ambitious Transportation and Climate Initiative. In its current state, the proposed measures were based on pre-pandemic travel statistics. But travel in the state has plummeted due to emergency measures — and more are on the horizon.

The initiative, intended to reduce carbon emissions, was this close to being signed, sealed, and delivered. However, Governor Baker and some of the other governors of the Northeast and Mid Atlantic states taking part in the pact are now questioning the wisdom of passing a program that was based on an economy that now seems like a past life.

It’s a mad, mad world.

Let’s have a look at this and other news from around the state.

Politics

Senate Approves $46B Budget

Last week, the Mass. House of Representatives approved a $46 billion budget proposal. This week, the Senate has approved its version of the budget. According to Senate leaders, the proposed budget — an increase of about 5.5% over the prior fiscal year — is centered around an effort to build a more equitable economic recovery by making investments in early education and childcare, food security, housing support, and public health.

Although the budget is for the fiscal year that began back on July 1, due to uncertainty of the economic impacts of the pandemic, the state has been running on a temporary budget.

Governor Baker is expected to sign off on the final budget.

Massachusetts Officially Breaks Turnout Record by Nearly 300,000 Votes

All of the ballots for the 2020 election have been tallied and certified and the grand total of voters fell just short of a record-breaking 3.7 million. To be exact, 3,657,972 ballots were cast in the election — or about 76 percent of the number of registered voters — busting the previous record set in 2016 by about 300,000 votes.

Earlier this year, in response to the pandemic, lawmakers expanded early and mail-in voting, methods which accounted for almost 2.6 million ballots. Secretary of State Bill Galvin has voiced his support for making expanded mail-in voting options permanent.

Economy

Unemployment On the Rise Again

This past October, the Massachusetts unemployment rate fell to its lowest level since June — down to 7.4 percent, from 17.7 percent in June. However, along with Covid-19 cases, unemployment claims are again on the rise.

According to the latest data from the U.S. Labor Department, more than 60,000 Mass. residents filed first-time claims last week. That number, which is more than 10,000 higher than the previous week, includes both traditional unemployment claims as well as independent contractors and gig workers who have been filing under emergency rules.

The higher numbers are being attributed to business closings due to new restrictions imposed in early November including a stay-at-home advisory and a 9:30 p.m. curfew for most activities.

More than six percent of the Massachusetts workforce was receiving unemployment compensation at the end of last month. That’s one of the highest rates in the country.

More Economic News:

Transportation

Baker Voices Pessimism on Transportation and Climate Initiative

Gov. Charlie Baker and fellow governors taking part in the Transportation and Climate Initiative are reevaluating support of a controversial carbon tax. The program is a regional pact between 11 Northeast and Mid-Atlantic states designed to reduce greenhouse gas emissions.

Last Tuesday during a press conference at the State House, Baker pointed out that travel patterns have shifted as more people work from home.

Baker stated:

"We're living at a point in time right now that's dramatically different than the point in time we were living in when people's expectations about miles traveled and all the rest were a lot different… Modeling, I think, is an import part of figuring out how people feel about the cost-benefit associated with the program and the product and it's certainly something that we think is an important part of helping states make decisions."

Meanwhile, advocates of the measure are still urging its passage. Earlier in the day, more than a dozen Massachusetts environmental, health and transportation groups joined 200 organizations in penning a letter to Northeast governors, including Baker, urging them to launch the Transportation and Climate Initiative program. Additionally, Mass. Director of Transportation Chris Dempsey said the program would "address climate change and improve the quality of life of Massachusetts residents."

Paul Craney, of the conservative Massachusetts Fiscal Alliance, on the other hand, called the initiative "elitist" stating, quote: "Climate alarmists that are still pushing the regressive TCI gas tax scheme need to understand that the world we live in now is not the same world we lived in when TCI was first introduced."

Studies have shown transportation is the largest source of air pollution in Mass. accounting for more than 40 percent of the state’s greenhouse gas emissions. However, with a massive reduction in travel, Baker believes those numbers need to be reevaluated.

Official estimates put the increase in gas prices due to the measure at between 5 and 17 cents per gallon in the first year.

Governors in New Hampshire, Connecticut, and Vermont are also voicing concerns about the plan. An agreement was originally expected by the year's end. However, with support waning, the fate of the initiative is unclear.

Read all about it at MassTransitMag.com.

More Transportation News

Energy

At the Third Annual Mass EVolves R ecognition Ceremony, held this week, several companies and higher education institutions across Massachusetts were recognized for their work in promoting the expanded use of electric vehicles in their communities and across the state.

To receive recognition, MassEVolves participants are required to create and execute an EV Action Plan. The plan must outline steps being taken to help Massachusetts residents gain greater access to electric vehicles.

Participants Recognized for 2020 MassEVolves program:

Analog Devices
AstraZeneca
Bard College at Simon's Rock
Boston University
Braintree Electric Light Department
Bristol Community College
EMD Serono Research
Energy New England
Hampshire College
Holyoke Community College
Millipore Sigma
Tufts University
University of Massachusetts Amherst
University of Massachusetts Dartmouth
University of Massachusetts Boston
University of Massachusetts Medical School
Woods Hole Oceanographic Institution
Worcester Polytechnic Institute
Worcester State University

More Energy News

Real Estate

The median home prices for single-family properties and condos in Massachusetts hit record highs for October. According to a report released Tuesday by The Warren Group, single-family home sales are up 27 percent and the cost of a single-family home rose 17 percent. The median price of a home in Mass. is now $455,000. The median price of a condo went up 10.8 percent to $410,000 with a rise in sales of 17 percent year-over-year.

Tim Warren, CEO of The Warren Group had this to say about that:

“Despite higher COVID-19 infection rates, consumers across Massachusetts continued their real estate buying binge in October. Strong demand from buyers, scant supply from sellers, and rock bottom interest rates continued to push the median single-family home price higher, and it has now been above $450,000 for four consecutive months.”

Read all about it in Real Estate News.

More Real Estate News

Business

Although the House of Representatives approved sports betting in its economic development bill, the Senate has nixed the notion. The proposed amendment to legalize sports betting in the state was expelled without a roll call vote.

The amendment, proffered by Minority Leader Bruce Tarr would have allowed licensed casinos, racetracks, and online operators to take bets on sporting events.

Experts estimate the annual revenue from sports betting in Massachusetts might have ranged from about $20 million to $35 million. For comparison, casino and slot parlors in the state currently average about $21 million in revenue each month.

The dead amendment had earmarked revenue from application fees to be used to create a new economic recovery fund.

More Business News

Cannabis

Hemp Farmers Eyeball Marijuana Dispensary Sales

The 79 licensed hemp farmers and 19 hemp processors in Massachusetts are anxious to get their products onto marijuana dispensary shelves in the state. They’ve been lobbying for the inclusion of a budget amendment to allow them to do just that.

However the proposal “carries complex policy implications that highlight the unusual regulatory system governing different aspects of the cannabis plant,” according to Commonwealth Magazine.

Currently, the FDA prohibits the use of CBD in foods and dietary supplements. Furthermore, the state Department of Agricultural Resources prohibits the sale of raw hemp flower which is commonly used for smoking, vaping, and cooking because it could easily be confused with marijuana (which is now legal for all adults).

On a related note, as we reported last week, earlier this month it was announced that state-licensed dispensaries had passed the $1 billion mark in cannabis sales.

Commonwealth Magazine has more on this story.

More Cannabis News

More of the Latest Massachusetts News

Video: Mass. Gov. Charlie Baker's coronavirus update Wednesday, Nov. 18