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The House Budget for FY 2015:
Analysis of Amendments Adopted During Debate

May 6, 2014

For detail on all funding increases passed during the House amendment process, please download this SPREADSHEET.

During three days of budget debate the House made only modest changes to the budget put forward by the Ways and Means Committee. Overall, the House added $143.9 million in amendments, about a third of one percent of the budget. The final House Budget, like the Governor's proposal, makes incremental efforts to address major challenges, but does not make the type of substantial progress in expanding opportunity in all of our communities that could be achieved with new revenue invested effectively. The House adopted amendments affecting most areas of the budget, including the following:

  • Child Welfare received an additional $7.7 million in funding, mostly to support the hiring of additional social workers. This should allow reductions in the number of cases each worker needs to manage and therefore increase the department's capacity to protect vulnerable children. This is a step forward. But it is only one of many steps that would be needed to support all of our families in crisis, protect all of our vulnerable children, and give them the opportunity to thrive. The final funding level in the House is essentially the same as that proposed by the Governor in January.
  • Youth Jobs and related programs received $6.2 million in increased funding during floor debate. The total funding level for these programs in the final House budget, however, remains $7.7 million below current funding levels.
  • MassHealth received an additional $44 million during floor debate, directed to increasing reimbursement for the state's safety net hospitals that serve large numbers of low-income patients, and for nursing homes. The federal government will reimburse Massachusetts for half of this total.

The sections that follow describe the most significant changes between the Ways and Means budget proposal and the final House version. For more details on the Ways and Means budget, see our earlier analysis.

EDUCATION

Early Education & Care

During budget debate, the House adopted two amendments increasing the proposed appropriation $4.8 million above the House Ways & Means proposal. The Income Eligible Wait List received an increase of $2.5 million. This still leaves the House appropriation $5.0 million below the Governor's proposal of $15.0 million. Services for Infants and Parents received an additional $2.3 million in House debate bringing it essentially level with the FY 2014 budget and the Governor's proposal. For a full description of this account, see the MassBudget Children's Budget.

Overall, Early Education & Care receives $16.1 million more than the current FY 2014 budget. However, this proposal is $14.2 million less than the Governor's, and significantly less than what is needed to provide support to all kids who need it. For more information on the costs of providing early education and care to all three and four year old children in Massachusetts, see MassBudget's new report - Building a Foundation for Success.

One other amendment within the Office of the State Auditor (0710-0000) eliminated a proposed audit of the Department of Early Education and Care.

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K-12 Education

Several K-12 education programs received small increases during House floor debate, detailed in the table below. Connecting Activities and Adult Basic Education received the two largest increases, bringing funding for both roughly in line with the Governor's proposal and with FY 2014 levels.

All told, House support for K-12 education would still be roughly $100 million below pre-recession levels (FY 2009 GAA, adjusted for inflation). For more detail, please see the Education sections of MassBudget's Children's Budget and Budget Browser.

For more detail on HWM education proposals that did not receive increased funding during floor debate, including Chapter 70 education aid, please see the K-12 Education section of our HWM Budget Monitor available HERE.

The House passed an amendment that would convene a foundation budget review commission (FBRC) to review the state's approach to determining district foundation budgets. The Governor's budget also proposed convening a FBRC. Design of the FRBC is very similar across these two proposals with some differences in commission membership and their reporting timelines. The foundation budget was designed more than twenty years ago and many of its underlying assumptions are increasingly out of date. Further, there is new evidence on what works best in schools that ought to be considered when reforming the foundation budget.

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Higher Education

Several Higher Education programs received small increases during House floor debate, detailed in the table below. Overall the House budget proposes a third year of continued reinvestment in public higher education, building on progress begun in FY 2013 and continued this year. Even with the House's proposed $65.1 million increase over FY 2014, however, funding for higher education would still be 22 percent below FY 2001 levels.

For more detail on the HWM budget for programs that did not receive increased funding during the House debate, please see the Higher Education section of MassBudget's HWM Budget Monitor HERE.

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Youth Development

During its floor debate on programs that help at-risk youth, the House added $6.2 million in FY 2015. For a full list of amendments that increased funding for youth development programs please see the chart below. Total funding for youth development programs in the House budget, however, is still S7.7 million less than current funding in FY 2014 and $10.5 million less than the Governor's proposal for FY 2015.

For more details on the HWM Committee budget for programs in this subcategory that did not receive increased funding during the House debate, please see the Youth Development section of MassBudget's HWM Budget Monitor HERE.

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ENVIRONMENT & RECREATION

During its floor debate the House added about $5 million to the budget for environment and recreation programs. For a full list of amendments that increased funding for programs in this spending category please see the chart below.

The House included the Governor's proposal to fund a new initiative to prepare the state for the effects of climate change. While the Governor suggested providing $2.0 million for this new program, the House budget funded it at half that.

The final House budget also includes $3.0 million more for parks and recreation programs overseen by the Department of Conservation and Recreation (DCR). Of this, $2.1 million is added to the state parks account; the majority of this additional funding earmarks funding for specific recreation facilities around the state. During its debate the House also approved $700,000 in total additional funding for beaches in metropolitan Boston. This additional funding, which includes $200,000 added to the beaches account and $500,000 added to the account that funds state parks, will be used by DCR to staff and maintain these public beaches.

For more details on the HWM Committee budget for programs that did not receive increased funding during the House debate, please see the Environment and Recreation section of MassBudget's HWM Budget Monitor HERE.

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HEALTH CARE

MassHealth (Medicaid) & Health Reform

During floor debate, the full House added funding to three MassHealth line items. The House added a small amount of money - $160,000 – to the central Medicaid office to improve health care access in Martha's Vineyard and at a hospital in western Massachusetts.

The House also added $20.0 million to funding for MassHealth Senior Care. The increase to the Senior Care line item would cover an increase added into the House budget proposal for an additional $20.0 million in rates for nursing homes. The House further specifies that if the federal government does not provide partial reimbursement for this increase, there will be a reduction in the nursing home base rate, but the state will provide a one-time supplemental payment to make up the difference.

The House included a $22.2 million increase to the MassHealth Fee-for Service line item also to increase provider rates. The House added language to provide $200,000 in rates for a hospital with neonatal intensive care, and an additional $22.0 million in reimbursement for hospitals providing care to low-income patients.

The final House budget includes language added during debate designed to protect the affordability of health care for some low-income residents. Specifically, the budget proposal includes wording limiting health insurance co-payments and other out of pocket health care costs for very low-income persons.

The House added language during debate requiring that the Executive Office of Health and Human Services review and report on the financial impact of the delays in implementation of the Affordable Care Act due to the technical malfunctions of the Health Connector website. This report would be complete by the end of July 2014.

In order to track all the major changes to the organization of health care (such as the FY 2014 phasing out of the Commonwealth Care program and its replacement by the ConnectorCare program), MassBudget, in conjunction with the Mass. Law Reform Institute and the Mass. Medicaid Policy Institute, publishes detailed briefs about MassHealth and health reform finance over the course of the budget debate. The brief analyzing the House budget will be published within the next few weeks.

For more detail on House MassHealth and Health Reform proposals that did not receive increased funding during floor debate, please see the MassHealth and Health Reform section of MassBudget's HWM Budget Monitor.

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Mental Health

During floor debate, the full House added $5.5 million to funding for mental health services, including $45,000 for a juvenile firesetter program in Western Massachusetts, $260,000 for forensic mental health services, and $5.2 million for adult mental health.

The House budget also includes several other initiatives that are intended to shore up coordination of the Commonwealth's behavioral health services. Although House Ways and Means included an outside section requiring hospital emergency rooms to collect and report data on mental health or substance abuse visits, the full House deleted this provision. Instead, the final House budget creates a task force to analyze existing data already collected by current emergency departments. The full House expanded an outside section proposed by HWM that would create a task force charged with examining barriers to the delivery of comprehensive and cost-effective behavioral health care. Amendments added by the full House state that among the charges of this group would be to make recommendations about increasing the capacity of crisis stabilization programs, and to require the Dept. of Mental Health to better provide for patients who require hospitalization soon after discharge from a continuing care facility.

For more detail on House mental health proposals that did not receive increased funding during floor debate, please see the mental health section of MassBudget's HWM Budget Monitor.

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Public Health

The full House added a total of $10.5 million to public health funding. As is often the case during floor debate, the full House directed much of the new funding to specific providers for specific purposes. For example, the full House added $2.1 million to the line item funding Youth-At-Risk Matching grants, and added language with specific amounts for specific agencies. The House also earmarked for specific providers the $1.1 million in total added to improve health care access at community health centers, school health, family health and dental health services. The House added $1.1 million for substance abuse and treatment services, $1.0 million for early intervention services, $360,000 for domestic violence and sexual assault prevention and services, $337,000 for other prevention and wellness services, and $120,000 to expand Hepatitis C screening. (There is also language in an outside section supporting expanded Hepatitis C screening.) An amendment adding $4.0 million to the public health hospitals line item also includes language dropped by HWM that would ensure that there be at least 120 inpatient beds at the Mass. Hospital School to the extent supported by the appropriation.

The full House also added several new outside sections related to substance abuse prevention and expansion of the regulation of controlled substances. There is language that would expand the role of the drug formulary commission to develop a drug formulary of abuse-deterrent opioids, and multiple sections expanding the regulation and monitoring of controlled substances. The House also included another outside section to create an Interagency Council on Substance Abuse and Prevention to expand and coordinate existing substance abuse programs across various state agencies. An additional outside section would create a commission to explore treatment alternatives for nonviolent offenders with substance addictions. This commission would also be charged with the exploring the options to expand the Commonwealth's drug specialty courts.

The House also added language in an outside section that would initiate a cross-agency effort to reduce the incidence of chronic diseases such as cancer, stroke, cardiovascular disease, diabetes, and mental illness. The intent of this initiative would to develop a plan to improve care coordination and reduce hospital readmissions associated with these identified conditions.

For more detail on House public health proposals that did not receive increased funding during floor debate, please see the public health section of MassBudget's HWM Budget Monitor.

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HOUSING

During its floor debate the House added $6.5 million to the affordable housing budget for FY 2015. For a full list of amendments that increased funding for housing programs please see the chart below.

Of this increase $5.1 million went to the Emergency Assistance (EA) program that provides shelter to low-income homeless families. The House also added a new pilot program within EA that provides nutritious foods to families who are being sheltered in hotels and motels in the western part of the state. Hotels and motels, while better than no shelter at all, provide little access to cooking facilities including refrigerators leaving parents with few options to provide healthy food for their children.

For more details on the HWM Committee budget for housing programs that did not receive increased funding during the House debate, please see the Housing section of MassBudget's HWM Budget Monitor HERE.

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HUMAN SERVICES

Child Welfare

During budget debate, the House adopted amendments providing increases to three line items for Child Welfare. Social Workers for Case Management received an increase of $5.0 million over the HWM proposal to $185.4 million. The final House proposal is $12.3 million over FY 2014 spending. Coupled with a $3.5 million increase over FY 2014 in DCF Administration, House Ways & Means estimates DCF will be able to hire over 250 new workers with the intention of maintaining safe caseload levels – currently considered to be 15 cases or less for each caseworker. Currently, many caseworkers have caseload levels of more than 20. Due to annual turnover, and the training needs of all of the newly hired caseworkers, it is not clear if this funding will be enough to ensure average caseloads of 15. All of the new caseworkers must first be trained, and then also begin with a lower number of cases.

The Child Welfare Training Institute, which provides training to new caseworkers, did not receive any increase in the House budget to account for all of the new caseworkers who will be hired in FY 2015. Both the Governor and House essentially flat fund the institute not even covering increases in costs due to inflation.

Two amendments introduced in the House Ways & Means proposal remain in the full House proposal. Outside sections 57 and 97 would subject current and prospective foster or kinship care providers to back ground checks requiring DCF to reject them as care providers if their record includes any of a number of offenses. For more information, see the Massachusetts Law Reform Institute's analysis of the House Ways & Means proposal (p 8).

Services for Children and Families received an increase of $1.2 million, largely tied to specific earmarks including:

  • $25,000 for a learning achievement program in Amherst
  • $50,000 to the Weymouth teen center
  • $250,000 for the Children's Advocacy Center of Bristol County
  • $100,000 for the Plymouth County Children's Advocacy Center
  • $140,000 for the Children's Cove Cape and Islands Child Advocacy Center
  • $75,000 for the Catholic Charities Laboure Center
  • $100,000 for the Fragile Beginnings program

The House also adopted an amendment requiring DCF to file two quarterly reports (December 2014, March 2015) with the legislature on the timeliness of fair hearings. Fair hearings allow children and families to appeal a DCF decision regarding child placement or a finding of neglect or abuse.

A house amendment also calls for the Office of the Child Advocate to conduct a survey assessing problems faced by clients when dealing with DCF.

The Massachusetts Unaccompanied Homeless Youth Commission received $150,000 through an earmark included in the Executive Office of Health and Human Services account (4000-0300). This commission was introduced in the FY 2013 budget and also received $150,000 in the FY 2014 budget. The commission is continuing to try and determine the amount of need that exists and how to deliver services to homeless youth under the age of 24.

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Disability Services

The House adopted two small amendments providing $200,000 for disability services. The Department of Developmental Services received $100,000 for an earmark to Best Buddies Massachusetts. The Massachusetts Commission for the Deaf and Hard of Hearing also received $100,000.

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Elder Services

During budget debate, the House adopted amendments providing increases, mainly tied to earmarks, to four line items resulting in an extra $1.2 million for elder services.

Earmarks amongst the programs include:

  • 50,000 for the establishment of regional financial abuse specialist teams
  • $50,000 for the Stanley Street Treatment and Resource Center in Fall River
  • $750,000 for home delivered meals
  • $65,000 for a one time grant to the city of Everett
  • $50,000 for a one time grant to the city of Westfield

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Juvenile Justice

The Department of Youth Services received no additional funding over the House Ways & Means proposal. In FY 2015, DYS will continue its work accommodating 17 year olds in the juvenile system. Previously, 17 year olds were treated as adults. “Raise the Age” legislation passed in 2013 places these kids into the juvenile system with appropriate services tailored for a youth population.

Transitional Assistance

Transitional Assistance programs received two amendments. The Employment Services Program receives a large boost of $5.8 million bringing the total House appropriation to $10.8 million, over $3 million more than FY 2014 spending and the Governor's proposal. This program provides TAFDC recipients with education, occupational skills and employment support services. For more information about the services offered through this program, see the MassBudget's Workforce Budget.

Transitional Aid to Families with Dependent Children (TAFDC) received an additional $4.0 million in the full House proposal. This increase includes a $40 rent allowance for recipients in unsubsidized housing which was left out of the HWM proposal. This along with the $125 clothing allowance included in the HWM budget proposal provides parents with a much needed supplement to help clothe and house their families.

Funding for TAFDC is directly tied to caseload levels which have dropped over the past year, and are projected to keep dropping. The FY 2015 funding proposals in the table below are a result of the continued drop in projected caseload levels for FY 2015. However, it is important to note that under this program, grants given to families have lost significant value over time due to inflation. Instead of decreasing the appropriation, the House or Governor could have proposed increasing the value of the grant to help these children and families fight to stay out of poverty. For a more in depth analysis of the decrease in the value of TAFDC grants over time, see TAFDC: Declines in Support for Low-Income Children and Families.

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Other Human Services

During budget debate, the House adopted a number of amendments for veterans providing an additional $1.3 more than the House Ways & Means proposal. Earmarks for veterans include:

  • $30,000 for the Veterans' Oral History Project at the Morse Institute Library in Natick
  • $25,000 for the Vietnam Veterans Memorial in Worcester
  • $25,000 for the Veteran's Memorial Park in Roxbury
  • $90,000 for transitional housing programs in Chelsea
  • $85,000 to train three assistance dogs for veterans
  • $100,000 for Honor Flight New England
  • $300,000 for the Springfield Partners for Community Action's Veterans First Program
  • $100,000 for Soldier On
  • $75,000 for Martha's Vineyard Community Services
  • $50,000 for the New England Veterans Liberty House
  • $220,000 for the Soldier On shelter in Leeds
  • $200,000 for an elevator in the Women Veterans' living quarters in Boston

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LOCAL AID

One local aid program, the Municipal Regionalization and Efficiencies Grant Program, received increased funding during floor debate, bringing House funding roughly in line with the Governor's proposal. This program provides grants to help cities and towns improve their delivery of local services.

For more detail on local aid proposals that did not receive increased funding during floor debate, including Unrestricted General Government Aid, please see the Local Aid section of our HWM Budget Monitor available HERE.

Driven largely by state level income tax cuts that cost the state roughly $3.2 billion annually and by the lingering effects of the Great Recession, local aid has been cut dramatically since FY 2001. Specifically, the House budget for local aid is roughly 44 percent below FY 2001 levels, adjusted for inflation. For historic funding detail, please see the Local Aid section of our Budget Browser.

TRANSPORTATION

The House budget continues progress implementing last year's long-term transportation funding law, which planned gradual transportation spending increases each year from FY 2014 through FY 2018. These investments are designed to help MassDOT modernize its infrastructure, investing in capital improvements at the MBTA and Regional Transit Authorities, and making progress towards ending the practice of borrowing money to pay for MBTA operating costs. For detail on transportation proposals in the House budget please see the Transportation section of our HWM Budget Monitor available HERE. No transportation proposals received increased funding during floor debate.

ECONOMIC DEVELOPMENT

The state's economic development budget provides funding for business and workforce development and supports the arts, culture and tourism. During its debate on the budget for FY 2015, the House added $22.1 million in funding for these programs. For a full list of amendments that increased funding for economic development programs please see the chart below.

Of these increases, the Office of Travel and Tourism received $9.2 million in additional funding. A large portion of this increase supported specific projects that were earmarked in the budget during the amendment process. The House also provided the Mass Cultural Council with an additional $4.5 million and increased state support for local tourist councils by $4.0 million.

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REVENUE

During floor debate, the House adopted a number of amendments relating to revenue. These include a Tax Amnesty Program and the creation of two commissions to study specific elements of the tax code. Details of the House revenue budget elements that were adopted during floor debate follow, below.

Tax Revenue

The Fiscal Year 2015 consensus tax revenue figure agreed to by the House, the Administration and the Senate is $24.337 billion, an amount 4.9 percent above the revised FY 2014 revenue estimate of $23.200 billion. As was true of the HWM budget, the final House budget includes a number of tax provisions that provide additional revenue in FY 2015 and beyond, but excludes most of the new, ongoing tax changes proposed by the Governor. (To read more about the HWM revenue proposals and the Governor's tax package see Revenue section of MassBudget's HWM Budget Monitor.)

Tax Amnesty Program

In terms of total anticipated revenue, the House budget differs from the HWM budget primarily as a result of the Tax Amnesty Program adopted during floor debate. The House anticipates that this program will raise an additional $30 million in revenue during FY 2015.

Typically, tax amnesty programs are structured such that, during a limited period, taxpayers who have failed to file or have not paid the full amount of taxes due in years past are allowed to file and to pay their outstanding taxes without incurring penalties. Taxpayers are required to pay interest on the previously unpaid tax. Those taxpayers who already are the subject of a criminal investigation or prosecution related to their tax filings and/or payments are not allowed to participate in the program. The House proposal additionally bars anyone who participates in this amnesty program from participating in any future amnesty during the next ten years.

The Commonwealth has offered three tax amnesty programs during the last dozen years. The first of these occurred in 2002 and applied to almost every tax type, resulting in additional collections of $177 million in outstanding taxes and interest. The two more recent amnesty programs, in 2009 and 2010, were more limited in scope, focusing on individual and then business taxes, respectively. Each of these amnesties resulted in the collection of about $32 million.

While tax amnesty programs can result in the collection of taxes that otherwise may have gone uncollected, if such programs are offered too regularly, they can become part of some filers’ approach to tax planning. This has the potential to negatively impact collections on an ongoing basis, as filers delay or avoid paying their taxes, anticipating they will have the opportunity to settle up at a later date with no added penalty.

Commissions

The House budget establishes two commissions relating to tax revenues. The first will study the impact on state and local budgets of phasing out or eliminating the Inventory Tax, a term that includes the taxes applied to the tangible property and/or the net-worth of corporations operating in the Commonwealth (as opposed to the taxes applied to corporate income). The Inventory Tax Commission will look at potential fiscal impacts as well as employment and business effects.

The House budget also establishes a commission to study the fiscal, employment and business effects of creating a tax credit for manufacturers of medical devices.

Non-Tax Revenue

No changes were made during floor debate to the HWM proposals for non-tax revenue.

For information on non-tax revenue in the House budget proposal, please see the Revenue section of MassBudget's HWM Budget Monitor.