On Wednesday, January 25th, Governor Charlie Baker announced a $40.508 billion budget for FY2018 that increases state spending by a projected $1.65 billion, or 4.3 percent, over FY2017 levels. The budget proposal, Baker’s third since assuming office, is the first in state history to exceed the $40 billion mark. It relies on a forecasted $27 billion in state tax revenues next year, a 3.9 percent growth over the FY2017 tax revenue projection, as well as another $187 million from other proposed tax changes.

Baker’s budget includes a $997 million spending increase for MassHealth, a $117 million increase in education spending, a $29 million increase in debt service, and an over $40 million increase in unrestricted local aid. The plan also calls for reforms to the health insurance market, including an assessment on certain employers that do not provide health insurance to their employees and growth caps on providers, and tax policy changes aimed at responding to modern forms of commerce. We have outlined the budget’s highlights below...