Just before the close of the fiscal year, the House and Senate reached an agreement on a $39.146 billion state budget for FY17. Due to a recently identified $750 million drop in projected state revenue, the budget, which was crafted by a conference committee led by Representative Brian Dempsey and Senator Karen Spilka, increases spending by just $650.3 million, or 1.7%, above FY16 levels. The plan spends less than the $39.5 billion budgets proposed by the House and Senate and the $39.6 billion budget proposed by Governor Charlie Baker in January.

The budget process was thrown into turmoil after estimates of expected tax revenues were sharply lowered in the weeks since the conference committee began negotiating over the final FY17 budget. The gap forced the conference committee to revise the House and Senate plans, ultimately scaling back the $1.1 billion spending increase proposed in these budgets by approximately $413 million. Many officials have attributed the revenue gap to volatility in the stock market.