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Budget Monitor:
The House Budget Proposal for FY 2013

May 3, 2012
  • Table of Contents
    • Overview
    • Education
    • Environment & Recreation
    • Health Care
    • Human Services
    • Infrastructure, Housing & Economic Development
    • Law & Public Safety
    • Local Aid
    • Other
    • Revenue

Overview

In three days of streamlined debate, the Massachusetts House of Representatives took up the proposals offered by the Ways and Means Committee, passed a series of amendments, and finalized its own budget proposal for Fiscal Year 2013.

Among the most significant changes, the House Final Budget (House) partially restores funding for Public Health programs—programs which would have been cut by $20 million under the House Ways and Means budget (HWM). It also allocates additional money for Law & Public Safety, Mental Health, and Environment & Recreation. Part of what made these small increases possible were new, lower insurance rates for Commonwealth Care and state retiree health care.

Despite these changes, the basic outlines of the House budget largely mirror the Ways & Means proposal. Both rely heavily on temporary revenue to fill the state's $1.3 billion deficit. And for that reason, both stand in contrast to the Governor's proposal, which included temporary revenue as well as new, ongoing revenue from taxes. In particular, the House final budget includes:

  • Approximately $685 million in temporary revenue—including $400 million from the state Stabilization Fund (the "rainy day" fund).
  • Cuts and savings of roughly $560 million.

The pie charts below show how this approach to filling the budget gap compares with the Governor's earlier proposal.

comparison chart

There are no new taxes in the House budget. A small amount of new, ongoing revenue (colored orange above) is made available through enhanced tax enforcement and increased fees, but unlike the Governor—who proposed increasing the cigarette tax and ending the sales tax exemption for candy and soda—the House would not raise any revenue from new taxes.

The House budget does include a significant amount of temporary revenue (colored light blue). Much of that revenue was also in the Governor's plan, including $400 million from the "rainy day" fund and $45 million from the deferral of a corporate tax break.

In addition, the house relies on $140 million in temporary revenue that was not in the Governor's Budget. The bulk of that comes from cancelling a requirement that $110 million be left unused during the fiscal year (and carried over into the FY 2014 budget.)

On the spending side (colored dark blue), the House budget includes a few funding increases, but also some new cuts—on top of the $3 billion in cuts and savings which have been enacted over the last four years.1 Notably, Early Education & Care and Public Health will receive less money than they did in FY 2012 (as described above, the cut to Public Health will not be as deep as it would have been under the HWM proposal)

These are clear cuts—simple reductions in the number of available dollars—but a number of other programs are being funded below their maintenance needs. For instance, even though MassHealth is slated to receive a 4.8% increase in funding for FY 2013, this is nearly $300 million less than would be required for the program to continue as is. The House budget relies on new savings initiatives to fill this gap without cutting MassHealth services.

Among the programs receiving additional funding is K-12 education. On top of the maintenance increases specified in the state funding formula, the House Budget guarantees each school district a minimum $40 per pupil increase over FY 2012. This guarantee raises education spending by $18.5 million over the Governor's proposal. But as our fuller analysis shows, it also has the effect of making the funding formula more regressive.

The sections that follow analyze the House budget in greater detail, but it is important to keep in mind the bigger fiscal story—which is not just about one year's budget deficit but about the regular deficits that the Commonwealth has been facing for many years now.

There are two basic reasons that Massachusetts continues to find itself in a fiscal crisis.

  1. The lingering effects of the Great Recession, which has sapped state revenues even as it has increased the number of people relying on core safety net services.
  2. The structural budget problems that the state has faced since cutting taxes in the late 1990s. Those tax cuts and other declines in tax receipts over the last fifteen years cost the state over $3 billion in annual revenue. 2

These are some of the broader forces that have shaped the House budget as a whole, and with it the many, specific proposals that we analyze in our various sections (available through the Table of Contents dropdown above).


Note: The FY 2012 Current total includes funding in the GAA plus any supplemental budgets passed during the year. The FY 2013 budget includes adjustments to allow for year-to-year comparisons. All numbers use the Consumer Price Index (CPI-U) to adjust for inflation.

* In order to make an accurate comparison across fiscal years, this total includes an adjustment to account for the increased use of the Group Insurance Commission by municipalities for their employees' health benefits.

1See MassBudget's, "Fiscal Fallout," available at http://www.massbudget.org/report_window.php?loc=Final_Cuts_20July_2011.html.

2For more detail, see footnote 2 of Massbudget's FY13 Budget Preview, available at: .http://massbudget.org/report_window.php?loc=fy13_budget_preview.html

Education

Under the House's final Fiscal Year (FY) 2013 budget proposal, the broad MassBudget category of Education would see an increase of $251.2 million over current FY 2012 levels. Of this total, $12.6 million was the result of House amendments to the initial House Ways and Means (HWM) budget proposal, with this additional funding spread pretty evenly across several accounts. Please see the table below for a full listing of items that received additional funding through these House floor amendments.

Total funding for Education is slightly above the Governor's budget proposal, although distribution among education programs differs across these proposals. Of the House budget's proposed increase, $163.8 million comes as new Chapter 70 education aid, most of which is driven by state law, but part of which results from a new $40 per pupil minimum increase provision not included in the Governor's budget. The House proposal includes $11.3 million for a new Homeless Student Transportation line item, which is not funded by the Governor. Conversely, the House budget does not fund two of the Governor's proposed new K-12 grant programs for schools in Gateway Cities. The House budget proposes some governance reforms to the community college system that are similar to, yet not as comprehensive as, reforms proposed in the Governor's budget.

Early Education & Care

The FY 2013 House budget closely follows the HWM proposal making only two changes to funding for early education and care programs. The House increases funding for Head Start $500,000 to $8.0 million. The HWM proposal matched the Governor level funding Head Start at $7.5 million. Healthy Families Home Visiting program is the only other program increased from the HWM budget from $10.2 million to $10.5 million matching FY 2012 funding. The House also adjusts how programs qualify to be a Universal Pre-Kindergarten Program utilizing the Department of Early Education and Care's (EEC) Quality Rating and Improvement System (QRIS) standards adopted in December 2010. Previously programs were accredited by varying organizations.

The House budget matches HWM and the Governor's proposal of $434.7 million for child care subsidies, a decrease of $8.1 million from FY 2012 levels. Most of the funding within Early Education & Care funds three separate child care programs: 1) TANF-Related Child Care for children of families served by or transitioning from Transitional Aid to Families with Dependent Children (TAFDC); 2) Supportive Child Care for children in Department of Children and Families (DCF) care; and 3) Low-Income Child Care for other children of low-income working families. For the third year running the Governor proposed consolidation of these categories, which would empower the Department of Early Education & Care (EEC) to transfer money across these accounts at will. The House budget keeps the categories distinct, maintaining current procedures that require EEC to provide documentation to the House and Senate Ways and Means committees 30 days before making any transfer.

The table below shows the House proposed appropriation for the three programs in comparison to the Governor's proposal and FY 2012. TANF-Related Child Care receives the biggest cut, almost $7 million. EEC projects that this level of funding will be insufficient in FY 2013. Because this is an entitlement program, funds will need to be added during the year if there is a shortfall. This could be accomplished through a transfer from the Low-Income Child Care program or through a legislative increase.

Low-Income Child Care also suffers a reduction of $1.0 million. Access for new income-eligible families has been closed for most of FY 2012 and the House proposal will continue to exclude new families for FY 2013. The waitlist for Low-Income Child Care, already over 30,000 families, will likely continue to grow in FY 2013.

The House budget also proposes a 25 percent ($200,000) reduction to the Reach Out and Read Program compared to FY 2012. The Governor's proposal level funded this program at $800,000. Reach Out and Read promotes early literacy and school readiness by partnering with doctors to give out free books and encourage families to read together.

The House budget breaks from the Governor's Gateway Cities Education Agenda by not including the new $575,000 Gateway Cities Early Literacy Programs line item. The program would target professional development to family child care providers and other family members. This program is administered by the Executive Office of Education and therefore does not show up within the MassBudget subcategory of Early Education & Care.

Most other accounts within Early Education & Care received small increases or decreases compared to current FY 2012 levels. It is worth noting that even small increases in nominal terms are often insufficient to keep pace with inflation and are tantamount to a cut.

K-12: Chapter 70 Aid

The FY 2013 House budget funds Chapter 70 education aid to cities, towns, and regional school districts at $4.15 billion, which is $18.5 million greater than the Governor's proposal and $163.8 million above current FY 2012 levels. No changes were made to the HWM proposal during the House's amendment process.

The Governor's Chapter 70 proposal, which served as the basis for the House proposal, roughly funded the formula outlined in state law, using updated enrollment, inflation, and municipal revenue growth factor measures, helping school districts keep up with the rising cost of providing baseline services.1 The Governor's proposal (and the House proposal) also partially phased in one of the reforms planned as part of the FY 2007 budget—reducing by 15 percent the gap between a district's preliminary contribution and its target for those districts that are currently above their targets. 2 This partial phase-in results in a little more than $10 million in additional Chapter 70 aid for these districts. Fully phasing in effort reduction for these communities, bringing their required contributions down to their targets, would cost roughly an additional $110 million in Chapter 70 aid.

Additionally, however, the House budget builds onto the Governor's proposal by adding a provision that guarantees each school district a minimum $40 per pupil increase over their FY 2012 aid allocation. This added minimum increase provision results in an extra $18.5 million for Chapter 70 aid over the Governor's proposal. While increasing education aid statewide will help offset cuts of recent years, spending this additional money through a minimum increase across-the-board raises distributional concerns. The Chapter 70 formula is designed to consider varying needs of different student populations and the varying ability of cities and towns to raise local tax revenue. Across-the-board increases do not account for these wide variations in communities across the Commonwealth. For more information on how the Chapter 70 formula works, please see Demystifying the Chapter 70 Formula, available HERE.

The graph below shows the House distribution of this additional $18.5 million above the Governor's proposal and breaks it out based on wealth using the state's combined measure of local property and income wealth designed for calculating required contributions. For this analysis we cluster all Massachusetts districts into five wealth quintiles, with least wealthy communities on the left-hand side ("Lowest 20%") and the most wealthy communities on the right ("Highest 20%). As the graph shows, the House budget's minimum $40 per pupil increase provision distributes more of this money to higher-wealth districts than to lower-wealth ones.

Finally, this statewide year-to-year increase looks somewhat smaller when Education Jobs Fund revenue is built into FY 2012 and FY 2013 amounts. The Education Jobs Fund is a federal stimulus program that provided money to Massachusetts schools for use in FY 2011, FY 2012, and the first quarter of FY 2013—money that was distributed through the Chapter 70 formula. Of a total $200.5 million grant amount for these three years, $66.6 million was used in FY 2011 and $116.7 million has been claimed for FY 2012, leaving a projected $17.2 million for use during the first quarter of FY 2013. After combining this federal revenue with the House proposal's state contribution, the total amount available to districts for FY 2013 ($4.17 billion) represents an increase of $64.3 million over total amounts for FY 2012 ($4.11 billion).

K-12: Non-Chapter 70 Aid

The House budget funds non-Chapter 70 programs for elementary and secondary education at $542.2 million. This funding level is $7.7 million above the Governor's proposal and $30.7 million above current FY 2012 levels. House floor amendments added $8.3 million to the HWM proposal, with this additional funding spread across 14 accounts. Please see the table at the top of this Education section for a full listing of items that received additional funding through these House floor amendments.

Most of the programs within the MassBudget category of K-12: Non Chapter 70 Aid are grant programs distributed to individual schools and/or school districts to advance specific priority initiatives. The House budget provides funding for a few new programs, cuts some programs, and provides level-funding or modest increases to a few others. For more detail please see the comprehensive line item table at the end of this subcategory.

New K-12 education programs included in the House budget include:

  • Homeless Student Transportation funded at $11.3 million. Federal law provides that homeless students living in temporary housing outside of a city or town where the family lived prior to becoming homeless may choose to remain enrolled in the school district of origin. The federal law requires that transportation be provided so that students can continue attending the school district of origin, and this new line item, not included in the Governor's budget, would help reimburse host and sending school districts for these transportation-related costs.
  • Programs for English Language Learners in Gateway Cities, for summer English learning camps for students who are not yet fluent in English, funded at $2.6 million. This funding level is $1.2 million below the Governor's proposal.
  • Gateway Cities Career Academies, funded at $500,000. The Governor proposed$1.0 million for this new program. The initial HWM proposal did not include any funding for it.
  • Financial Literacy Programs, for competitive grants that fund high school financial literacy programs, funded at $250,000. This initiative is not funded in the Governor's proposal. The program would begin with a 3 year pilot in 10 public high schools, with participation in the pilot limited to schools in gateway cities.
  • Advanced Placement (AP) STEM funded at $1.8 million to fund a competitive grant program designed to increase participation and success in high school Advanced Placement courses that prepare students for work in science, technology, engineering, and mathematics. A House floor amendment added $750,000 to the initial HWM proposal of $1.0 million. The final House budget level is $650,000 below the Governor's proposal of $2.4 million.

The Governor's budget included funding for two other new initiatives to support schools in gateway cities that were not funded in the House budget—Gateway Cities Student Support Centers and Gateway Cities Early Literacy Programs.

A few programs under the House proposal receive increases over current FY 2012 levels. These include funding:

  • The Special Education Circuit Breaker at $221.6 million, an increase of $8.5 million over FY 2012. The Governor proposed essentially level funding from FY 2012. Even with this one-year increase, the House proposal represents a 9.8 percent cut from the FY 2009 GAA inflation-adjusted level of $245.7 million.
  • Regional School Transportation at $45.4 million, an increase of $1.9 million over the FY 2012. The Governor proposed level funding. Even with this one-year increase, the House proposal represents a 30.6 percent cut from the FY 2009 GAA inflation-adjusted level of $65.5 million.
  • Kindergarten Expansion Grants at $24.9 million, an increase of $2.0 million over FY 2012 levels. The Governor proposed funding these grants at an additional $1.0 million over the House proposal.
  • Youth-Build Grants at $2.0 million, an increase of $700,000 over FY 2012 levels. The initial HWM budget proposed $1.0 million in funding, but a House floor amendment increased this to $2.0 million. The Governor also proposed $2.0 million in funding.

The final House budget cuts Adult Basic Education (ABE) by $779,000 from current FY 2012 levels. The Governor proposed level funding. ABE received $3.0 million a FY 2012 supplemental budget, bringing funding for these educational programs for adult learners—including GED, basic literacy, English for speakers of other languages, and citizenship classes—up to its current level of $30.7 million. The initial HWM budget proposed a deeper cut, but a House floor amendment restored some funding. This House amendment also added a $150,000 earmark for Operation A.B.L.E. of Greater Boston. ABE has been cut significantly over the past few years, with the House final proposal representing 10.1 percent cut from FY 2009 GAA inflation-adjusted levels.

The House budget proposes $3.9 million, level funding from the current FY 2012 budget, for three literacy-related programs—Bay State Reading Institute, Literacy Programs, and Reading Recovery. The Governor proposed rolling Bay State Reading into Literacy Programs, and total funding for all three was also level under the Governor's proposal. Without adjusting for inflation, the real value of funding for these programs continues to decline. The House proposals combined represent a 15 percent cut from FY 2009 GAA inflation-adjusted funding levels.

The House budget proposes to fund Connecting Activities—providing summer work opportunities for high school students—at $2.8 million, as did the Governor, which is slightly above current FY 2012 levels. The initial HWM budget proposed $2.0 million in funding, but this cut was reversed through a House floor amendment.

Additionally, the House budget shifts the $1.0 million Temporary Emergency Food Assistance line item (7051-0015) into the Emergency Food Assistance Program (2511-0105) as an earmark.

K-12: School Building

The House budget projects a contribution to the School Modernization and Reconstruction Trust (SMART) of $689.4 million, which is higher than current FY 2012 levels but below the Governor's projection. There were no changes to this projection from the HWM budget. Each year the Commonwealth is required to contribute to this trust an amount equal to one out of every 6.25 cents brought in through the state sales tax. Both the House and the Governor's budgets project increases in sales tax receipts due to anticipated economic recovery during FY 2013. The Governor's projection is $9.8 million higher, however, because of his proposed elimination of the sales tax exemption for candy and soda.

Higher Education

The full House added a very small amount—$3.5 million in funding across four accounts—to the HWM proposal for programs within the MassBudget category of Higher Education. Please see the table at the top of this Education section for a full listing of items that received additional funding through these House floor amendments.

The FY 2013 House budget funds the full MassBudget category of Higher Education at $1.0 billion, an increase above the current FY 2012 funding level of $954.7 million. The additional funding in FY 2013 is driven mostly by costs faced by the colleges and universities to pay for salary adjustments set by recent collective bargaining agreements. The FY 2013 House budget represents an inflation-adjusted cut of 14 percent from pre-recession levels (FY 2009 GAA). Cuts are even deeper when looked at over the last decade, with proposed FY 2013 funding representing a 30 percent cut from FY 2001.

Starting in FY 2012, all campuses of public higher education began retaining tuition payments from out-of-state students, rather than remitting that revenue back to the state. MassBudget adjusts upwards the campus allocations by these projected amounts so that one can compare reasonably the level of resources available at an individual campus to that of previous years when this tuition was remitted to the state.

As with the Governor's proposal, the House proposal includes $49.2 million in collective bargaining accounts that cover labor costs at each of the campuses. While this spending shows up in separate reserve accounts, where possible MassBudget builds these dollars into campus totals in order to reflect more accurately the level of state budget resources being used to run these campuses ($5.7 million for line item 1599-4419 goes towards a bargaining unit covering both state universities and community colleges and cannot be broken out across these two types of campuses). The table below summarizes funding totals for each of these campus types.

The House and Governor's proposals for community colleges differ both in terms of overall funding levels and in terms of policy reforms advanced through the budget. The Governor proposed significant changes to the state's community college system, centralizing budget and leadership control over community colleges under the Board of Higher Education (BHE). The Governor's consolidation of funding for the state's 15 community colleges into one Massachusetts Community Colleges line item was coupled with an additional $10.4 million in funds for FY 2013 that is not included in the House proposal. The Governor also called for community colleges to focus more specifically on job training and seeks to standardize the system statewide, easing the process of transferring credits across campuses.

While the House budget does not replicate the Governor's full governance consolidations, it does include language in Outside Sections that is similar in nature to the Governor's reform package. Related House reforms include:

  • Expanding the Board of Higher Education's role in selecting community college presidents. The Governor's proposal, by contrast, gave the BHE full authority to select presidents.
  • Giving the Governor authority to appoint each community college board chair. The Governor also proposed this reform.
  • Requiring the Commissioner of Higher Education to develop a new community college funding formula that is based in part on performance. Language instructs that workforce development goals be among the performance metrics included.
  • Increasing the Performance Management Set Aside incentive program from $2.5 million to $7.5 million. House budget language includes an earmark stating that no less than $5.0 million of this account be spent on community college initiatives aimed at improving completion rates, promoting the adoption of more standard course offerings, and consolidating and coordinating administrative procedures across the campuses.

The House and Governor's funding proposals are almost identical for UMass and the state universities, except that the House budget eliminates separate funding—$497,000 in FY 2012—for the Collins Center for Public Management at UMass Boston. Additionally, during floor debate the House added $75,000 to the UMass line item, with this full increase offset by a new $75,000 earmark for the Clemente Course in the Humanities, which provides college-level humanities courses to low-income adults.

The House budget proposes $87.6 million for the State Scholarship Program, which is $58,000 above the Governor's FY 2013 proposal and equal to current FY 2012 levels. It is important to note, however, that line item language directs the Massachusetts Education Finance Authority (MEFA) to contribute $1.0 million in addition to the state's $87.6 million appropriation, bringing total resources for scholarships under the House proposal up to $1.1 million above the Governor's proposal. Since current FY 2012 language also includes a $1.0 million contribution from MEFA, total resources under the House budget are right in line with those currently available for FY 2012.

Among the cuts proposed in the House budget is elimination of the $635,000 Nursing and Allied Health Education Workforce Development program, which helps recruit new nurses. The Governor's budget also eliminated this program.

Please see the table below for more information on Higher Education line items funded either in FY 2012 or FY 2013. This table includes tuition retention adjustments for each of the campus line items, but separates out collective bargaining accounts in the first three rows.


1For more information on the Governor's FY 2013 Chapter 70 proposal, please see the K-12: Chapter 70 Aid section of MassBudget's recent FY 2013 Governor's Budget Budget Monitor, available online at: http://www.massbudget.org/report_window.php?loc=budget_monitor_governor_fy13.php

2For more information on the 2007 reform plan, please see the November 2006 MassBudget paper Public School Funding in Massachusetts: Where We Are, What Has Changed, and Options Ahead, available here: http://www.massbudget.org/file_storage/documents/Public_School_Funding-Where_We_Are_What_Has_Changed_-_FINAL.pdf

Environment & Recreation

During its floor debate, the House added $3.8 million in funding for environment and recreation programs to its Fiscal Year (FY) 2013 budget. The House recommends spending $168.1 million on these programs which is $5.8 million more than the FY 2012 budget and $12.7 million less than the Governor's FY 2013 recommendation. In part the House budget is lower than the Governor's because it does not provide the same level of funding for recycling and redemption centers as the Governor's proposal. In his budget, the Governor proposed expanding the bottle bill to include water, juice and other non-carbonated drinks and to provide $5.3 million of these funds to support recycling and redemption centers. (See the Environment section for more details.) Since the onset of the state fiscal crisis in FY 2009, funding for Environment and Recreation programs has fallen by 26 percent in inflation-adjusted dollars.

Environment & Recreation line items

Environment

Environment & Recreation line items

The environment budget for the state supports programs that keep the air, water and land clean. It includes funding to clean hazardous waste sites, support recycling and redemption centers to reduce waste going to landfills and to support environmental police. During its floor debate, the House added funding for some programs and included earmarks in other accounts. While the House budget proposes spending $1.6 million (2.3 percent) more than the FY 2012 current budget, inflation increases the cost of providing the same level of services from one year to the next meaning that the House funding level likely represents level funding or a slight cut. The House budget recommends spending $10.9 million less than the Governor's FY 2013 budget.

The amendments adopted in the environment budget include:

  • An additional $400,000 for the Department of Environmental Protection to a total of $25.3 million. This amount is $231,000 more than the Governor's FY 2013 proposal and is $641,000 more than the FY 2012 current budget.
  • $100,000 more for the redemption centers to $375,000. While this amount is $100,000 more than the current FY 2012 budget it is $5.2 million less than the amount proposed by the Governor. In his FY 2013 budget, the Governor's proposed providing recycling and redemption centers with $5.5 million and funding this increase by using some of the $20.0 million raised through his proposed expansion of the bottle bill to include water, coffee and juice drinks.

In addition to adding funding to the environment budget, the House also passed a number of amendments that provided earmarks to particular programs. Among the most notable is an amendment that directs that $1.6 million of the $3.1 million for toxic use reduction funding be earmarked for the Toxic Use Reduction Institute at U Mass Lowell. This earmark is also included in the FY 2012 current budget.

Like the Governor's proposal, the House proposal increases funding for hazardous waste cleanup by $1.2 million over the current budget to $13.2 million. Even with this increase, funding for cleaning up hazardous waste sites has fallen by 25.8 percent in inflation-adjusted dollars since the onset of the fiscal crisis.

Environment line items

Fish & Game

Fish & Game

State fish and game programs include Massachusetts fisheries, wildlife habitats and other natural sites in the state. Much of the funding that supports fish and game programs comes from the revenues the Department of Fish and Game receives through the sale of licenses for hunting, fishing, boating and other activities.

During its floor debate the House increased funding for fish and wildlife programs above the HWM recommendation including:

  • $500,000 to purchase wildlife habitat bringing the total funding to $1.5 million. This amount, which is $500,000 more than the FY 2012 budget, is the same amount recommended in the Governor's FY 2013 budget proposal.
  • $500,000 in additional funding for the Division of Fisheries and Wildlife bringing total funding to $10.5 million. This is about $500,000 more than the current budget and in line with the Governor's FY 2013 proposal.
  • $23,000 in additional funds for riverway protection and restoration programs to a total of $417,000.
  • $10,000 in additional funding for the Department of Fish and Game bringing the total to $656,000. The amendment states that this increase will be provided to cover the cost of transfer a parcel of state land to the town of Halifax.

Fish & Game line items

Parks & Recreation

Parks & Recreation

The state's parks and recreation budget supports state parks, urban parks, beaches, pools, spray pools and the employees who work at these facilities. It also funds parkways and dams managed by the Department of Conservation and Recreation (DCR). In its budget the House adopted $2.2 million in amendments for parks and recreation bringing total funding to $74.2 million. Even though the House budget recommends an increase in FY 2013 compared to the FY 2012, since the onset of the fiscal crisis funding for state parks and recreation has fallen by $34.5 million or 31.7 percent in inflation-adjusted dollars.

During its debate the House adopted amendments including:

  • $1.2 million in additional funding for state parks and recreation to $41.8 million. Of this increase, the House amendment identifies $675,000 in earmarks for several DCR facilities in the state. The House amount $374,000 is below the FY 2012 current budget and $2.1 million more than the Governor's proposal. Since the onset of the fiscal crisis, funding for state parks and recreation has fallen by $13.9 million or 50 percent in inflation-adjusted dollars. The successive years of cuts to DCR has hampered the agency's ability to adequately care for and staff many parks and recreation facilities throughout the state.
  • $1.0 million in additional funding for the state parks retained revenue account bringing the total to $10.0 million. Like the Governor's, the House budget consolidates six retained revenue accounts into a single account. The House budget provides $10.0 million which is $1.6 million more than the FY 2012 current budget but $4.1 million less that the Governor's proposal. (It is important to note, as mentioned above, that the House budget recommends providing the state parks account with $2.1 million more than the Governor's proposal.) The line item chart below redistributes the funds back into each retained revenue account to allow for a better year-to-year comparison.
  • Two small increases in funding including an additional $50,000 for the Office of Dam Safety and $5,000 for lighting for DCR parkways. This $5,000 increase is an earmark to test low energy lighting in Natick.

Other notable items in the House budget for parks and recreation includes:

  • Increased funding over the FY 2012 current budget for beaches, pools and seasonal employees working at DCR facilities by $845,000 to $12.5 million. The House budget requires that all beaches, pools and spray pools be open and staffed from Memorial Day through Labor Day.
  • Increased funding for DCR administrative account by almost $467,000 above the FY 2012 budget level of $3.3 million. The House budget is $350,000 less than the amount proposed in the Governor's FY 2013 budget.
  • An infrastructure fund to provide loans and grants to communities to for flood control projects including dams, seawalls and retaining walls. The House budget did not provide any funding for this new fund.

Parks & Recreation line items

Health Care

The final House budget contains a total of $15.2 billion for health care programs, about $4.0 million less than the initial HWM budget and 4.8 percent higher than current FY 2012 spending. During budget debate the House approved amendments adding a total of $164.7 million in spending to the initial House Ways and Means (HWM) budget proposal for Fiscal Year (FY) 2013; however, the largest of the changes, a $95.0 million increase for the Group Insurance Commission (GIC), reflects higher costs attributable to an increase in municipalities choosing to provide health insurance for their employees through the GIC. Since municipalities reimburse the GIC fully for these costs, MassBudget adjusts the spending totals presented here to remove these costs, bringing the total spending added to the House budget during debate to $69.7 million. At the same time, the House also approved reductions in budget transfers to the Commonwealth Care Trust Fund (CCTF) and the State Retiree Benefits Trust Fund totaling $73.7 million, due to new lower projections for the programs paid for by these funds. (See below for details on changes made during the budget debate.)

While overall FY 2013 spending on health programs rises compared to FY 2012 in the final House budget, the increase is not spread evenly across programs—spending on MassHealth and other health reform programs that provide health coverage to low-income people increases, largely as a result of enrollment growth and health inflation, and funding for mental health programs rises at about the rate of inflation, although the increase does not come close to restoring the funding that mental health programs have lost since FY 2009. Meanwhile, spending on health insurance for state employees declines slightly, and although the House approved amendments restoring a significant portion of the funding for public health programs that was cut in the initial HWM budget, final proposed FY 2013 spending remains lower than FY 2012, and well below FY 2009 levels.

MassHealth (Medicaid) & Health Reform

The House increased funding for three MassHealth line items by a total of $45.3 million during budget debate, and approved a reduction of $53.7 million in the amount that will be transferred from the General Fund to the Commonwealth Care Trust Fund (CCTF). The House also approved amendments that add a variety of provisions governing MassHealth funding and other aspects of the MassHealth program. Proposed spending on MassHealth and Health Reform programs totals $12.65 billion in the final House budget, an amount that is slightly less than the amount the Governor proposed. The proposed spending level represents an increase of 6.1 percent over current FY 2012 spending (taking into account supplemental spending expected to occur during FY 2012, the increase is 4.6 percent).

The bulk of spending in this category goes to pay for MassHealth programs that provide health coverage for over 1.3 million people in Massachusetts (including Medicaid, which covers nursing home and other care for the elderly). Another significant portion is transferred to the CCTF and used to support the Commonwealth Care program that provide coverage to about 175,000 people with incomes above the cut-off for MassHealth coverage. Enrollment in these programs has risen steadily during the recent economic crisis, and more than one in five people in Massachusetts now depend on them for health coverage. Other spending in this category supports safety net hospitals, helps elderly and disabled people pay for prescription drugs and funds activities of the Division of Health Care Finance and Policy. Most of the spending in this category is eligible for federal reimbursement, generally at a rate of 50 percent of the state's spending.

MassHealth (Medicaid)

During floor debate the House approved the following changes to the HWM budget:

  • An increase of $30 million for supplemental rates for nursing homes, and language earmarking $2.8 million of these funds for a MassHealth Nursing Facility Pay-for-Performance Program that provides grants for initiatives that involve nursing home staff in quality improvement efforts. The increase brings funding for supplemental rates to $318.5 million, the same level included in the FY 2012 budget, using funds that were carried over from FY 2011 (the FY 2012 budget also contained similar earmark language). The Governor's FY 2013 budget did not include this increase.
  • New provisions in the MassHealth administrative account that a) require supplemental rate payments for certain pediatric hospitals, in recognition of higher costs associated with their patient case mix; b) maintain FY 2012 rates for McInnis House, a medical respite program for the homeless; c) prohibit limits on hospital inpatient-outpatient case-mix adjustment appeals; and d) authorize funds for the Office of Health Equity within the Office of Health and Human Services (HHS). The House also approved an increase of $14.8 million for the MassHealth Fee-for-Service account that is sufficient to pay for the pediatric hospital and McInnis House rate payments, but does not cover the cost of the limit on case-mix appeals (estimated at $8.0 million).
  • An increase of $500 million for a new MassHealth Operations line item, bringing total proposed funding to $1.0 million in the final House budget.
  • A requirement that MassHealth assign more MassHealth members who don't select a managed care organization (MCO) plan on their own into both MCOs and the MassHealth Primary Care Clinician (PCC) plan on an equal basis until a Managed Care Advisory Committee created in 2010 has filed its report.
  • Language requiring HHS to contract for an analysis of children with complex care needs in the MassHealth program that makes recommendations for serving such children within MassHealth's Medical Home Initiative.
  • Language requiring HHS to determine which public assistance programs could share data with MassHealth in order to facilitate the enrollment of children and parents into MassHealth programs, as well as language reenacting FY 2012 budget provisions that require MassHealth to verify U.S. citizenship through a social security data match, and to begin verifying immigration status through the Systematic Alien Verification for Entitlements (SAVE) system.

After taking these changes into account, the final House budget includes a total of $10.99 billion in funding for MassHealth programs, or 5.3 percent over current FY 2012 spending, somewhat higher than the Governor's proposed increase of 4.9 percent. This difference is largely due to the adoption of the nursing home rate and fee-for-service appropriation increases during House debate; aside from these line items the final House budget for MassHealth is largely identical to the Governor's FY 2013 spending plan. (Note that shifts in funding among programs can make it difficult to compare individual line items to previous years; for instance, the proposed drop in Commonhealth funding is the result of a move of some of this funding to the MassHealth managed care line item.)

HWM Committee budget documents suggested that the initial HWM budget proposal relied on the same set of savings strategies that the Governor assumed in his House 2 budget proposal. These included $544 million in savings from a variety of activities, including changes in provider rates, initiatives to strengthen long-term care services, and efforts to promote program integrity; in addition the House expects to realize $45 million in revenue from activities designed to draw down additional federal Medicaid reimbursement revenue (for a detailed discussion of the Governor's MassHealth savings and investment initiatives, see The Governor's House 2 Budget Proposal for FY 2013 at http://www.massmedicaid.org/~/media/MMPI/Files/FY2013H2_BudgetBrief_v7.pdf.). The spending increases and language adopted during House budget debate will reduce projected savings by around $22.8 million, although the increases are offset by a reduction in funding for the CCTF (see below).

Finally, while the Governor's budget dedicated $2.0 million to a new operations line item (4000-1602) to improve the MassHealth enrollment and redetermination processes, the final House budget appropriates only $1.0 million (including $500,000 added during debate), an amount that is unlikely to be sufficient to address the caseload backlog at MassHealth. Likewise, the House budget includes $750,000 for another new line item for activities related to implementation of the Affordable Care Act, such as efforts to promote integrated care models, well below the $3.13 million appropriation proposed by the Governor. And although the House budget appears to provide a higher level of funding for MassHealth administration, it also includes language earmarking administrative funds for Hale Hospital. The FY 2012 budget contained $2.4 million in a reserve account for the hospital, but the Governor did not include funding in his FY 2013 budget proposal.

Commonwealth Care Trust Fund

The CCTF receives transfers from the state's General Fund, as well as revenue from a portion of the cigarette tax, from assessments on certain employers who do not provide insurance and from penalties paid by people who can afford insurance but do not purchase it. These resources are used to pay for the Commonwealth Care insurance program for low-income people who are not eligible for MassHealth. The HWM budget originally proposed a transfer of $795.0 million from the General Fund to the CCTF, in addition to an assumed transfer of $120.0 million in tobacco tax revenue, for a total of $915.0 million. However, shortly after the release of the HWM budget, the Connector—which operates the Commonwealth Care program—announced new contracts with health plans that include an average per member spending drop of 5 percent. Accordingly, the final House budget reduced the CCTF transfer by $53.7 million, to $741.3 million in FY 2013. This funding is expected to be adequate to cover enrollment growth, including the reinstatement of legal immigrants following a state Supreme Judicial Court decision that found the state's exclusion of this group unconstitutional. The Connector is expected to have sufficient funds for the planned enhancement of the smoking cessation benefit for Commonwealth Care members.

Other Health Reform and Safety Net Spending

Also included in the final House budget are:

  • A transfer of $186.9 million from the General Fund to a new Delivery System Transformation Initiatives (DSTI) Trust Fund that will provide incentive payments, in accordance with the state's MassHealth waiver agreement with the federal government, to providers for activities that support the development of new payment and health delivery systems, such as better management of chronic conditions and medical home infrastructures at seven safety net hospitals. (A similar transfer for FY 2012 is included in a supplemental budget currently before the legislature.) The MassHealth Fee-for-Service line item also sets aside $20 million for similar activities at hospitals that are not eligible to receive DSTI funds, and $3 million for Community Health Centers.
  • An authorization for the Division of Health Care Finance and Policy to spend $2.0 million from federal reimbursement funds in order to move management of Health Safety Net claims for uncompensated care to MassHealth.
  • A slight decrease in funding for the Prescription Advantage program, which reflects reduced utilization of the program due to changes made by the federal health reform law that will provide increased Medicare coverage for costs that are now covered by the Prescription Advantage program.
  • Language (also included in the Governor's budget) that would allow the administration to restructure MassHealth benefits. Like the Governor's plan the final House budget does not include restoration of adult dental benefits for MassHealth and Commonwealth Care enrollees.
  • The final House budget provides an increase of $5.0 million for Information Technology (IT) services at HHS agencies (this funding goes to other agencies besides MassHealth and the Division of Health Care Finance). The Governor proposed an increase of $18.6 million for these services, an amount that is estimated to be necessary to cover the costs of maintaining existing HHS IT systems in FY 2013.

Mental Health

During its budget debate the House approved amendments that raised overall spending on Department of Mental Health (DMH) programs by $9.2 million and added language governing the use of funds. Approved amendments include:

  • An earmark within the adult mental health and support services line item for an increase of $500,000 for DMH funded clubhouses, and a commensurate increase to the line item appropriation
  • Additional funding for forensic services, including juvenile clinics.
  • Language requiring that the FY 2012 level of funding for jail diversion programs in municipalities that provide equal or matching funds from public or private sources be maintained in FY 2013.
  • Increased funding for DMH hospitals and, in apparent response to concern over the proposed closure of Taunton State Hospital, new language requiring DMH to maintain capacity for 30 inpatient beds in southeastern Massachusetts and establishing a special commission to review and evaluate state's inpatient mental health care system.

After accounting for changes made during the budget debate, the final FY 2013 House budget includes a total of $673.1 million for mental health programs, a funding level that is slightly higher than that contained in the Governor's FY 2013 spending proposal, and that represents an increase of 3.4 percent over FY 2012 spending. However, the final House budget's proposed FY 2013 funding level for mental health programs remains nearly $59.0 million, or about 8.1 percent, below what was allocated in FY 2009, after adjusting for inflation. Cuts since 2009 have affected programs that support education, employment, and clubhouse programs, as well as reducing beds at DMH facilities.

Funding for two core DMH line items—those providing treatment and support to children and adults in the community—rises by $5.8 million and $10.8 million respectively and, after taking into account $8.5 million added during budget debate, funding for DMH facilities rises by $14.8 (see line item table below for detail). When considering increases to individual mental health line items, it is necessary to keep in mind that the FY 2012 budget included the one-time use of contributions from mental health trust funds to support many of these programs. Language in the FY 2012 budget specifically allowed use of the trust funds for in-patient or community services and authorized transfers of funds to the adult services and DMH facilities line items. The availability of the trust funds meant that the budget appropriations for the line items were lower in FY 2012 than they would have been if the $10 million in trust funds had flowed more directly through them, and conversely the FY 2013 increases for these programs appear larger. After accounting for the use of trust funds, the overall increase for these three line items is about 3.9 percent compared to FY 2012.

The final budget appropriation levels for individual line items are generally very close to those contained in the Governor's spending plan, with one exception. The Governor's budget proposed an increase of just over $1.0 million (or 13.1 percent) for a Forensic Services Program that assists mentally ill people who have recently been released from prison and other correctional facilities, the amount projected to be necessary to maintain existing services. While the House added $200,000 to the initial HWM plan to level fund this program, final House funding remains well below the Governor's proposal.

Finally, in addition to language added to the DMH facilities line item during debate (see above) the final House budget also includes provisions that set criteria for moving DMH clients from in-patient facilities to residential services in the community (for instance, clients must be deemed clinically suited to receive care in the community), and includes language requiring that clients transferred to a new DMH facility due to closure of another facility receive a level of care equal to or better than that received at the closed facility.

Public Health

During debate of the FY 2013 budget the House approved an additional $15.2 million for public health programs. Many of these amendments restored funding that the HWM budget cut compared to FY 2012 (and compared to the Governor's proposed FY 2013 budget); some amendments provided increases for line items that received level funding in the initial HWM budget that will help these programs keep pace with inflation (for further details, see the table and discussion below). However, the adopted amendments do not fully restore the $20.5 million in cuts from FY 2012 public health spending proposed in the HWM budget.

After accounting for changes made during the budget debate, the final House budget appropriates $518.4 million for public health programs, nearly $10 million lower than the amount proposed by the Governor.1 Funds go to a wide range of public health programs that protect the health of the general public in Massachusetts, for instance by responding to public health emergencies and ensuring that health professionals and facilities are properly licensed; the Department of Public Health (DPH) also operates several public hospitals. Beyond these basic functions, more than half of DPH state budget funding goes to programs that promote health and wellness and prevent disease in specific populations. The fiscal crisis has hit all these programs hard. Between FY 2009 and FY 2012 overall funding for public health declined by $111.3 million, or 17.5 percent, after adjusting for inflation. The funding level proposed in the final House budget would bring that decline to 18.4 percent.

Substance Abuse and Smoking Prevention Services

During budget debate the House restored funding for a family intervention and treatment program for young adults with substance abuse problems, which the HWM budget proposed to eliminate in FY 2013, and also added $2.0 million to the appropriation for step-down recovery services. These two programs receive funding in the final House budget that is level compared to FY 2012 and the Governor's budget. However the House did not restore funding, also cut in the HWM budget, for a jail diversion program for non-violent offenders with addiction problems. The Governor provided $2.0 million for this program in his budget, the same amount it received in FY 2012. The House also increased the main substance abuse treatment line item by $1.0 million during debate, and earmarked some of these funds for specific treatment programs; the final House appropriation represents an increase of 3.6 percent over FY 2012 spending. Finally, during debate the House increased authorization for DPH to retain revenue from unclaimed lottery prizes to pay for a compulsive gamblers treatment program from $1.0 million to $1.8 million.

A separate Substance Abuse Services Fund that was created in order to fund an expansion of treatment facilities and case management for people who have been civilly committed and have substance abuse disorders received a $10.0 million transfer from the General Fund in FY 2012. While neither the final House or Governor's budget includes an additional transfer in FY 2013, statutory language governing the Fund allows spending from it through the end of FY 2013, at which point it will sunset. Any additional ongoing costs related to the expansion will need to be included in future budgets.

Also approved during budget debate was an increase of $250,000 for smoking cessation programs, which the HWM budget had level funded. In contrast, the Governor's proposed an increase of $1.7 million. The Governor provided a slight increase for these programs and used $51.2 million in new revenue from a proposed elimination of the sales tax exemption for soda and candy to help fund them. This line item has been cut by $9.5 million since FY 2009, after adjusting for inflation.

HIV/AIDS

During debate the House added $500,000 to the HIV prevention and treatment line item, bringing funding for this program to the same levels as both FY 2012 and the Governor's FY 2013 budget proposal.

Disease Prevention and Children's Health Programs

During debate the House added $990,800 to the Health Promotion and Disease Prevention account, and added language naming the disease programs that receive funding (there are no actual earmarks, however). This addition means that the final House FY 2013 budget includes level funding of $3.4 million compared to FY 2012 for these programs, compared to the $15.7 million they received in FY 2009, after adjusting for inflation. The Governor's budget also proposed level funding for these programs, which include cancer screening, cardiovascular risk education, and care coordination for high-risk populations. While some disease prevention activities may now be covered by health insurers, particularly as more Massachusetts residents have gained coverage under the state's health reform law, it is clear that these programs have been hit especially hard in recent years.

Other amendments restored $69,000 in funding for a newborn hearing screening program, the same level that the Governor proposed, added $200,000 for school-based health programs, along with language allowing the use of funds in non-public schools, and also added language allowing domestic violence funds to be used for class-room based programs on this issue.

Family Planning

During budget debate the House approved an additional $200,000 for family health services, which include family planning services and HIV counseling and testing. The final House appropriation for FY 2013 is slightly higher than the FY 2012 funding level.

Early Intervention

The House approved an additional $1.3 million for Early Intervention (EI) services, which the HWM budget had funded at the same level as the Governor's FY 2013 budget proposal, bringing total FY 2013 funding for this program to $31.3 million in the final House budget (after adjusting for the transfer of $4.3 million that has been shifted to a MassHealth line item). Like the Governor's plan, the House budget also assumes a shift of $4.3 million in Early Intervention costs to a MassHealth line item that will now pay for them; taking this into account, proposed spending for Early Intervention services is $31.3 million. The initial HWM appropriation was expected to cover the cost of maintaining the program; the increase approved during debate may help support a rate increase for providers.

WIC

The final House budget follows the Governor in proposing an increase of $1.8 million, or 7.5 percent, in the amount that the Women, Infants and Children (WIC) nutrition program is authorized to retain and spend from revenue it receives from infant formula rebates and other federal measures. The increase is expected to cover the costs of maintaining the current level of services.

Youth Violence Prevention

During budget debate the House approved an additional $500,000 for a violence prevention grant program within the Department of Public Health, bringing total FY 2013 funding to $1.5 million. The House also added $100,000 to HWM's initial $1.8 million appropriation for Youth at Risk grants, along with language specifying that programs get an amount of funding that is no less than what they received in FY 2012. The Governor's budget level funded these programs at $1.7 million. However the final House budget eliminates a "Safe and Successful Youth Initiative" (contained in a separate Health and Human Services line item) that provides youth violence prevention grants targeted to high-risk communities. The latter program received $10.0 million in funding for FY 2012 in a supplemental budget, and the same level of funding in the Governor's proposed FY 2013 budget. When these three programs are taken together, funding in the final House budget is $9.3 million lower than the level proposed by the Governor.

State Laboratory and Communicable Disease Control

The final House budget provides $11.7 million in funding for the State Laboratory that is operated by DPH, slightly less than the Governor's proposed appropriation of $11.8 million. The Governor's budget assumed a shift of $1.5 million in costs to the State Police Crime Laboratory line item, and while the House budget provides no information on such a shift, outside sections of the HWM budget indicate similar plans to consolidate DPH lab work with state police crime lab. Thus we assume a similar transfer for the purpose of comparing funding levels between the HWM and Governor's budget plans; after taking this shift into account the proposed appropriation represents level funding compared to FY 2012.

Public Health Hospitals

During budget debate the House increased funding for DPH hospitals by $4.3 million, bringing the proposed FY 2013 appropriation to the same level as that proposed by the Governor. This funding levels represents an increase of 3.6 percent over current FY 2012 spending in this area. The final House budget also includes an increase in the amount of federal revenue that the Western Massachusetts Hospital can retain for its own budget.

State Employee Health Insurance

During debate of the FY 2013 budget, the House approved an amendment adding $95 million to the Group Insurance Commission (GIC) line item that funds health insurance premium and plan costs for GIC members. This entire increase will be used to cover the added costs of covering employees of municipalities that have exercised the option to provide health coverage through the GIC. Because these costs are fully reimbursed by the municipalities and do not require the use of state resources, MassBudget removes them from calculations of state budget spending. The House also reduced the amount that will be transferred from the General Fund to the State Retiree Benefits Trust Fund, in accordance with new, lower projections for retiree health insurance costs.

The final House budget proposes total funding of $1.3 billion for the state share of health benefits provided to active and retired state employees, as well as a group of retired municipal teachers, through the Group Insurance Commission (GIC). As with the other state health insurance programs such as MassHealth and Commonwealth Care, the state has employed a number of strategies to hold down cost increases in recent years, and plans to continue these strategies in FY 2013. The difference between the House FY 2013 budget and the Governor's spending plan for this area is the result of updated enrollment and cost projections; the HWM budget also includes language requiring an audit of beneficiaries claimed as dependents of state employees who are eligible for GIC coverage.

Most funding for state employee health costs comes in the form of an appropriation for the costs of current employees, plus a transfer from the General Fund to the State Retiree Benefits Trust Fund that supports the cost of health coverage for retired employees. As the table above shows, funding for active and retired employee health costs appears to decline substantially compared to FY 2013. However, the final House budget follows the Governor in proposing the use of $40.0 million in existing balances in a Group Insurance trust fund to pay for state employee health costs in FY 2013; when this one-time resource is taken into account, there is a smaller decline in funding. (These one-time resources come from a fund that holds federal revenue resulting from the state's participation in an early retiree reinsurance program created by the national health care reform law.) The GIC recently announced that average premium increase for next year will be 1.4 percent, the lowest since 1999. The House budget does not appear to adopt the Governor's proposal to use $4.0 million from trust fund balances to pay for wellness and smoking cessation programs for state employees.

During budget debate, the House reduced the amount that they HWM budget had proposed to transfer from the General Fund to the State Retiree Benefits Trust Fund (SRBTF) by $20 million, due to lower estimates of the costs of retiree health insurance. The SRBTF will also begin to receive a portion of revenue from the annual tobacco settlement payment made to the state (in recent years this revenue has been deposited in the General Fund for use in the budget). In FY 2013 10 percent of the tobacco settlement payment, or $27.6 million, will be deposited in the Fund. The share will increase by increments of ten percentage points each year, until 2022, when 100 percent of the payment will go into the fund. In addition, 5 percent of any future capital gains revenue beyond $1 billion will also be deposited in the fund (other capital gains revenue beyond this limit will go into the Stabilization, or Rainy Day, Fund). In both cases these new revenues will help reduce the unfunded liability related to future health benefits promised to state employees.


1MassBudget includes funding for youth violence prevention programs under the Executive Office of Health and Human Services along with other Department of Public Health programs. We also adjust for certain transfers of funding to other departments (see line item chart for more detail).

Human Services

Although there were numerous proposals to amend the House Ways and Means (HWM) budget proposal, relatively little new funding was added to human services programs which form a crucial part of the Commonwealth's "safety net" for the state's most vulnerable residents. The FY2013 House budget follows much of the budget proposed by HWM. Funding for vulnerable children and families, already severely below pre-recession levels receives no increase in funding while transitional assistance, disability services, and elderly services receive very slight increases over the HWM budget proposal. In most instances, FY 2013 funding is essentially level with FY 2012, with several important programs experiencing significant cuts, and others barely staying level with FY 2012 when considering the impacts of inflation. Notwithstanding budget changes, the amendment which resulted in the most contentious debate concerned the eligible uses of cash assistance benefits on Electronic Benefit Cards (EBT). The House places significant restrictions on how participants can use their cash assistance benefits. Participants would no longer be able to use their EBT cards for such things as hiring a lawyer to defend against an eviction or for purchasing makeup for a job interview.

Children, Youth & Families

The House makes no funding changes to the HWM's budget proposal for Children Youth and Family programs. Instead the House adds two earmarks, calls for a new commission and issues new policy requirements. The Department of Children and Families (DCF, formerly DSS) receives $751.7 million in the House budget, compared to $744.3 million in FY 2012 and $770.9 million recommended by the Governor. The biggest policy change forwarded by the House pertains to regulations ensuring an independent, timely and fair administrative hearing system at the Department of Children and Families (DCF). DCF is not actually meeting the requirements of its current systems with wait times for fair hearings and subsequent decisions being much longer than what is stipulated in regulations. Under the new policy, DCF must implement new regulations reducing these wait times and will have to submit quarterly reports to the chairs of the joint committee on children, families and persons with disabilities showing how long clients had to wait for fair hearings, appeals and decisions.

The House also adds two earmarks to Services for Children and Families that were present in the FY 2009 final budget. Filed in separate amendments, the Children's Cove Cape and Islands Child Advocacy Center receives an unspecified amount while the Children's Advocacy Center of Bristol County receives no less than $200,000.

The House proposes a commission be formed studying and making recommendations concerning services for unaccompanied homeless youth age 22 and under. The focus will include, but not be limited to, an analysis of: the barriers to serving unaccompanied youth who are gay, lesbian, bisexual, and transgender; the barriers serving youth under age 18; and barriers to accurately counting the population of unaccompanied youth. Serving on the commission will be commissioners from multiple state agencies, members of the Senate and House, youth advocates, and three youth who have experienced homelessness. A report to the Governor will be due March 2013 outlining recommendations for better serving these youth.

The House upheld the most significant decrease eliminating funding for regional and central administration. This line item, funded at $9.3 million in FY 2012, and funded at $10.2 million by the Governor, funds contracts for "lead agencies" across the state that have specific oversight and service coordination responsibilities within the social service system. Proponents of lead agencies note the important coordination function they fill between DCF social workers, families and other professionals involved in a child's case. However, critics claim that lead agencies duplicate work done in the past by social workers and that funding should be spent on services instead of another layer of administration. The House budget also funds DCF central administration at $65.7 million, essentially level with FY 2012 funding and $3.7 million less than in the Governor's proposal.

The House also funds group care at $197.7 million, $2.5 million less than in the Governor's proposal and $1.6 million more than FY 2012 current funding. Similarly, social workers are funded at $166.2 million in the House proposal, $2.7 million less than in the Governor's proposal and $4.1 million more than FY 2012 funding. In these two accounts, the difference between the House proposal and the Governor's proposal is the amount added in FY 2012 by supplemental funding added in October that was intended to restore funding for positions for social workers that were cut in FY 2011. The Governor's budget had included these amounts in order to fully-fund these restored positions for the full year. Even though these line items are funded less than in the Governor's proposal, the increase over FY 2012 funding should allow the department to begin implementing a statewide initiative to standardize and increase human service provider rates across various departments, including a rate increase for foster care providers.

Family support and stabilization services receive $44.6 million in both the House and Governor's budget proposals, which is a 12.1 percent increase over FY 2012 current funding levels, and the relatively largest increase throughout the department. Even though there are more children receiving kinship-based care and support than those in out-of-home placements, family support funding has historically lagged well behind funding for out-of-home care.

No changes were made during floor debate to the budget for the Department of Youth Services (DYS). The House budget allocates a total of $154.7 million, a 6.1 percent increase over FY 2012 current funding levels. This total includes an increase in funding for residential services for the detained population, from $18.3 million in FY 2012 to $20.8 million ($556,000 less than recommended by the Governor), and an increase in residential services for the committed population, from $98.7 million in FY 2012 to $102.6 million ($227,000 less than recommended by the Governor). The Administration does not anticipate a significant change in departmental caseload in FY 2013, but these increases over FY 2012 funding levels will support an across-agency initiative to standardize provider rates for the various human service agencies.

Like the Governor, the House includes $2.1 million in a new line item to provide state funding in the Department of Youth Services for an alternative lock up program. This program—which up until now had been funded only with limited federal dollars—is designed to provide a safe (non-police) environment for alleged juvenile offenders awaiting court appearance. Current federal law restricts police departments from holding juveniles for more than six hours, and in any case many police department facilities do not have appropriate holding areas for children. This funding will allow for the Department to manage funding for the four existing community-based secure and appropriate placements for children awaiting arraignment. Previously, these federal grants had been managed by the Executive Office of Public Safety.

The House budget proposal does not follow the Governor's recommendation to fund a data-sharing initiative among the agencies providing services to children, youth and families. The Governor had proposed $3.0 million for this initiative within the Executive Office of Health and Human Services, but the House does not include this funding.

Disability Services

During floor debate, the House added only a small amount to the HWM budget proposal for services for people with disabilities. The budget for the Department of Developmental Disabilities Services administration increases $200,000—a very slight increase to $62.3 million, and still below the Governor's proposal of $63.2 million. Independent Living Assistance and the Massachusetts Commission for the Deaf and Hard of Hearing also receive increases of less than 1 percent over the HWM budget with the latter now matching the Governor's proposal.

Compared to other human services, funding for services for the disabled fared relatively well in the House budget. Nevertheless, even with the House proposed increase in funding levels, there is concern that the Commonwealth's budget for persons with disabilities is not able to keep pace with the anticipated need for services felt by the growing numbers of young adults leaving special education and needing extensive support services in the community. The Administration has repeatedly stated a commitment to community-based services, but some of the line items funding community-based supports for persons with disabilities have been cut substantially over the past few years, even with a shift in funding away from the state-run institutions. Adults with disabilities seeking employment are particularly hard hit by ongoing funding reductions in services.

The House budget directs new funding to the Department of Developmental Services, increasing funding above both the FY 2012 current funding total and the Governor's budget recommendation. The House budget included $10.0 million more than the Governor for the respite (family supports) program, bringing funding up to $51.0 million, an increase of $4.5 million over FY 2012 current funding levels. For many families with disabled children, the respite program is the only source of support for afterschool recreational programming or for specialized caregiving. Although this is a significant increase in funding for these community-based supports, funding in the House budget still does not restore the respite program to pre-recession funding levels.

The House also increases funding for services for young developmentally disabled adults Turning 22 in FY 2013. This line item receives $6.0 million, compared to $5.0 million in the FY 2012 budget and in the Governor's proposal. Even with this increase, however, funding is still 27 percent below pre-recession funding levels. The Turning 22 line item supports the entry of young developmentally disabled adults into the adult service system from the special education system, and constraints on this funding limit the number of adults who will receive services as well as the services that they will receive in the future.

The budget proposal from the House for community day and work services is $2.5 million less than the Governor's proposal. The House does not follow the Governor's recommendation to incorporate funding for transportation for the developmentally disabled into the community day and work services line item. Like in previous years, the House funds a distinct line item, and increases the funding by $2.0 million over the FY 2012 total to $13.6 million. The availability of transportation is one of the key determinants of whether a disabled adult is able to maintain employment or take part in community activities. (The line item breakdown below adjusts for this type of transfer in order to allow for more accurate year-to-year comparisons.)

The House follows the Governor's funding proposal for community residential supports for developmentally disabled adults, funding them at $788.1 million, a $31.3 million increase over FY 2012 funding levels. However, the House includes a separate line item for $400,000 in funding for the final year of the Rolland Court Monitor. According to the Administration, funding for community residential supports is sufficient to provide full residential funding for the young adults entering into the developmental services system, meaning that it should be sufficient to maintain current services for the anticipated FY 2013 caseload.

For adults with other types of disabilities, the House budget essentially maintains current funding levels, but these levels do not necessarily keep pace with inflation or anticipated need. (We adjust funding for the central office for the Mass. Commission for the Blind to reflect a shift of funding for the administration of SSI benefits for the blind from that office to the Department of Transitional Assistance—see discussion below.)

Elder Services

House amendments resulted in an increase in funding of just over $1.1 million for elder services. The Congregate Housing Program received a $107,000 increase over HWM and now matches FY 2012 funding of $1.7 million. The full House added funding to Councils on Aging, bringing the total to a small increase over both the FY 2012 current total and the Governor's proposal. The House also builds on budget increases for community-based long term care services for elders. Funding levels are higher compared to both the FY 2012 current funding levels and the Governor's budget proposal. These home care services, which include a wide variety of supports such as homemakers and transportation assistance help keep the Commonwealth's frail elders in their homes as long as possible. Even with the increases, however, because of anticipated increasing need, the Commonwealth will still need to maintain wait lists for services. (For information on nursing home funding or the Prescription Advantage program, see the MassHealth & Health Reform section of this Budget Monitor.)

Community-based long term care services include:

  • $133.5 million for home care case management and services (no change from HWM and same as the Governor's proposal)
  • $47.8 million for enhanced home care for the frailest and most vulnerable elders ($500,000 more than HWM; $1.3 million more than the Governor's proposal)
  • $17.3 million for elder protective services, which investigate elder abuse and neglect, and provide money management supports to prevent financial exploitation (no change from HWM; $622,000 more than the Governor's proposal)

The House further increased funding for the elder nutrition program by $50,000. HWM had put back in $1.5 million that had been cut by the Governor's budget proposal, preventing what could have resulted in the loss of 240,000 free or reduced-price meals for elders. For some elders, the elder lunch programs—which are often run by local councils on aging—are the only guaranteed healthy meal or opportunity for socialization.

Transitional Assistance

House amendments resulted in a small increase in funding for transitional assistance services compared to the HWM budget proposal. The Employment Service Program receives a $1 million increase over HWM also resulting in a $1 million increase over both FY 2012 and the Governor's proposal. Even with the increase, this program has been cut 72.6 percent in inflation adjusted dollars since FY 2009. The Department of Transitional Assistance administration and Caseworker Salaries and Benefits also receive increases over the HWM budget proposal, but are still less than the Governor's proposal.

Although the budget moved through amendments with startling speed, one of the most contentious debates on the house floor concerned the use of Electronic Benefits Transfer (EBT) cards. The full House budget uses language introduced in the HWM budget restricting the use of EBT cards for a number of products and services. The House places new restrictions on where EBT cards can be used to access cash assistance. The House also introduces a new commission to study and report on the development of a fully cashless EBT system. A final report would be due by December 31, 2012 which includes drafts of legislation that could be used to implement recommendations.

For entitlement programs like transitional assistance, funding levels are significantly affected by anticipated caseload levels. The House budget for Transitional Assistance for Families with Dependent Children (TAFDC) grants, and for the other cash assistance programs assumes a slight drop in caseload in FY 2013. Grants are funded at $322.8 million in the House budget, compared to $318.9 million in the Governor's budget and $324.2 million in the FY 2012 current budget. Two significant additions to the House budget are the restoration of the clothing allowance to $150 and the rent allowance of $40. The clothing allowance, a one-time payment made in September to help pay for back-to-school clothing, was reduced in the HWM budget to $75. The $40 per month rent allowance was eliminated in the HWM proposal.

The House follows the Governor's funding proposal with a drop in funding for Emergency Aid to Elders, Disabled and Children (EAEDC) from $89.0 million in the FY 2012 budget to $88.3 million in FY 2013. This funding level is based on an assumed drop in caseload.

Funding for the state supplement to Social Security Income (SSI) increases from $222.2 million in FY 2012 to an equivalent of $229.1 million in the House budget proposal. Like the Governor, the House also includes in its funding an $8.1 million transfer of funding for the SSI supplement for clients of the Mass. Commission for the Blind (MCB), which in past years was separately accounted for within MCB. In FY 2013, the House follows the Governor's recommendation to consolidate the funding for these two groups of people, shifting the administration of the program from the Social Security Administration to the University of Massachusetts Medical Center. The University already contracts with the state to handle substantial administrative responsibilities for various health and human service programs, and the state anticipates that it will recognize some administrative savings from this consolidation. (The line item breakdown below adjusts for this type of transfer in order to allow for more accurate year-to-year comparisons.)

Unlike the TAFDC or EAEDC caseloads, the Administration anticipates that the SNAP (Food Stamp) caseload will continue to rise as it has over the past years. Growing caseloads added to an already overburdened work force will add to delays low income families and individuals in Massachusetts experience attempting to get access to these essential safety net benefits. The House proposes $3.1 million for efforts to increase food stamp participation ($111,000 less than proposed by the Governor), as well as $1.2 million (level with the Governor's proposal) for a small state supplement to SNAP benefits for certain working families.

Other Human Services

House amendments for veterans further increased funding from FY 2012 levels. Overall though, the House proposal still falls short of the Governor's budget proposal. The House further increases veteran's benefits $220,000 bringing the total increase over FY 2012 to $5.2 million - still $1.7 million less than the Governor's proposal. The House also matches the Governor's proposal for two programs HWM had not funded - Train Vets to Treat Vets ($125,000) and Veterans' Pension Recovery ($96,500).

The House does not follow the Governor's recommendation to consolidate funding for services for homeless veterans. The House proposal for the Department of Veterans Services Administration changes funding from a small cut to a small increase over both FY 2012 and the Governor's proposal.

Funding for the Emergency Food Assistance Program in the House budget is $13 million, $500,000 more than HWM. This appears to be a $1.5 million increase over the Governor's budget proposal and FY 2012 current budget totals, but is actually a $500,000 increase combined with a transfer of funds for food pantries previously administered by the Department of Elementary and Secondary Education. The increase matches a 4 percent increase in food prices as determined by the regional consumer price index, but does not address the growing demand for emergency food assistance.

Infrastructure, Housing & Economic Development

The final House budget for Fiscal Year (FY) 2013 proposes a decrease of $36.4 million from current FY 2012 levels for programs within the MassBudget category of Infrastructure, Housing & Economic Development. Much of this reduction is driven by a one-time deposit of $38.0 million into the Infrastructure Development Fund in FY 2012 that is not replicated in the House budget for FY 2013. In total, the House proposal is almost identical to the Governor's.

The full House added $12.9 million across several programs to the initial House Ways and Means (HWM) proposal for FY 2013. In many instances, a given line item increase is coupled with the insertion of earmark language that specifies precisely how a given state agency must spend that increase. One House amendment, for example, added 11 separate earmarks to line item language for the Massachusetts Office of Travel and Tourism. In FY 2012, line item language for this office only included one earmark.

The FY 2013 House budget, much like the Governor's proposal, limits low-income families' access to the Emergency Assistance (EA) and to HomeBase programs but provides additional funding for some housing programs, particularly the Massachusetts Rental Voucher Program (MRVP), Residential Assistance to Families in Transition (RAFT), and subsidies to public housing authorities.

The House budget proposes near level funding overall for transportation related line-items, with the majority funding operations and debt service costs at the MBTA.

Economic Development

The full House added $10.7 million in funding to the HWM proposal for programs within the MassBudget category of Economic Development. Many of these increased funding levels were coupled with line item earmarks that narrowly prescribe how the new funding is to be spent. The increase of $1.2 million to the Massachusetts Office of Travel and Tourism, for instance, is claimed entirely by the combined effect of 11 new earmarks added to the account's line item language. Please see the table at the top of this section for a full listing of items that received additional funding through House floor amendments.

In addition to these line item increases, the House added language in an Outside Section directing $10.0 million of surplus funds coming out of FY 2012, if any, to go into the Massachusetts Life Sciences Investment Fund. Neither the Governor's nor the HWM's proposals included funding for this account.

The FY 2013 House budget for Economic Development reflects a reduction of $31.2 million from current FY 2012 levels, although this reduction is driven mostly by a one-time deposit of $38.0 million into the Infrastructure Development Fund in FY 2012. If it weren't for this one-time increase to the FY 2012 budget, the House proposal would actually show an increase of $6.7 million over current FY 2012 levels. The final House proposal is $1.5 million higher than the Governor's. Please see the comprehensive line item table at the end of this section for specific detail.

The House budget maintains a reorganization of economic development programs that was initiated through the FY 2012 budget.1 A new agency, the Massachusetts Marketing Partnership (MMP), now coordinates efforts to promote the state domestically and internationally as an attractive, competitive, and innovative state in which to do businesses. The House proposal increases total funding for the MMP by $1.0 million over FY 2012 levels, and is $177,000 above the Governor's. For detail on related line items, please see the note "MMP" in the table at the end of this subcategory.

This year's economic development reorganization also identified the Massachusetts Office of Business Development (MOBD) as the lead business development agency, and the House budget continues this arraignment, increasing funding by $87,000. The Governor proposed increasing funding by $131,000.

The FY 2012 budget also reassigned line item numbers for programs administered by the Executive Office of Labor and Workforce Development. The House budget continues the new line item structure and proposes to fund these programs in total at $24.2 million, a decrease of $150,000 from current FY 2012 levels. The House proposal is $824,000 below the Governor's. For detail on related line items, please see the note "LWD" in the table at the end of this subcategory.

Finally, the House budget does not follow the Governor's proposal to direct up to $10.0 million of FY 2012 surplus funds to help recapitalize the Workforce Competitiveness Trust Fund (WCTF). Since this Governor's proposal would have still been contingent upon the existence of sufficient surplus money at the end of FY 2012, it does not show up in MassBudget totals for the Governor's FY 2013 budget. The WCTF was created by the Workforce Solutions Act/Economic Stimulus Bill of 2006 and funds workforce training programs in a range of employer, nonprofit, and vocational settings.

Housing

During its debate on the Fiscal Year 2013 budget, the full House added $2.2 million to housing programs for a total of $373.8 million. This amount is $1.1 million less the Governor's FY 2013 proposal and is $2.7 million more than the FY 2012 current budget. With the onset of the Great Recession, as many low-income families lost their jobs and homes, they sought help from the state-supported family shelter system causing state spending on housing to increase.

During its budget debate the House increased funding for two accounts:

  • $200,000 in additional funding for the Home and Healthy for Good program to $1.4 million. This amount is $800,000 less than the Governor's FY 2013 proposal and $200,000 more than the current FY 2012 budget.
  • $2.0 million in additional funding for subsidies to the state's public housing authorities to $64.5 million. This is $2.0 million more than the current FY 2012 budget but is $2.0 less than the Governor's proposal for FY 2013. In its budget the HWM Committee level-funded the public housing account but included language encouraging local housing authorities to renovate their family units in order to make more housing available for low income homeless families. It is possible that this funding increase may allow these authorities to begin making some of these renovations. It is important to note, however, that these subsidies have been level-funded since the onset of the fiscal crisis in 2009, while costs have increased. As a result, housing authorities may need to use this additional funding to maintain current services for existing tenants. In its amendment the House also added two $50,000 earmarks which are neither in the Governor's budget nor the FY 2012 current budget.

The House also adopted amendments to the line-item language that governs how the money within each account is spent. These amendments include:

  • Strengthening language within the Department of Housing and Community Development's (DHCD) administrative account to ensure that homeless families or those who are at risk of becoming homeless will not be considered ineligible for state housing subsidies or rental assistance if they have received temporary bridge funding through programs like the rapid rehousing assistance provided through the federal Recovery Act. In its amendment the House also added $325,000 in earmarks for certain communities but did not increase the total funding for the department above the $6.7 million recommended in the House Ways & Means (HWM) budget.
  • Extending the amount of time that a family is eligible to stay in a family shelter through the Emergency Assistance (EA) program to 9 months which is an increase of 1 month above the amount recommended by the Governor's and HWM budgets. The current FY 2012 budget does not limit how long a low-income homeless family can live in a shelter if they have no other place to live. The limitation in the House budget, like the Governor's and HWM proposals, could force homeless families, who have nowhere else to move, out of shelters once they exceed their stay beyond 9 months. In its amendment the House also added a requirement that DHCD provide a report to the Legislature on how the benefit and eligibility changes to EA have affected low-income homeless families and how much the state has saved as a result of these changes.
  • Allowing a family being served by HomeBase to continue to receive services for up to 6 months after their income exceeds the limit of 115 percent of poverty. Both the Governor's and HWM budgets proposed that families stop receiving benefits from this program no more than 3 months from the time their income exceeded the maximum income eligibility.
  • Loosening the HWM budget's requirement that the additional 923 vouchers created through the $10.0 million increase in funding for the Massachusetts Rental Voucher Program only be used to provide rental assistance to homeless families living in hotels and motels. The amendment adopted by the House gives DHCD more discretion in providing the vouchers to families who are residing in an EA shelter as of April 1, 2012, are eligible for MRVP and have the resources to pay monthly rent. The amendment requires that any shelter vacancies created when a family moves to a rental apartment be made available to families living in hotels and motels. The House amendment seems to restrict the availability of the additional vouchers only to families who are in EA shelters prior to the April date. The additional vouchers will not be available to low-income homeless families seeking shelter after April 1, 2012, or to other low-income renters who are eligible for MRVP including homeless individuals, the elderly, or people with disabilities.

In its budget the House also passed an amendment creating a commission to study the issue of youth who are homeless and no longer in the care of a parent or guardian. For a discussion of this amendment please see the Children, Youth and Families subcategory of the Human Services category.

The FY 2013 budget passed by the House, much like the Governor's proposal, limits low-income families' access to the Emergency Assistance (EA) and HomeBase programs but provides additional funding for some housing programs, particularly the Massachusetts Rental Voucher Program (MRVP), Residential Assistance to Families in Transition (RAFT) and subsidies for public housing authorities (see discussion above). The House budget differs from the Governor's budget in that it creates a new line-item to support families served through EA who have to stay in hotels and motels because the state's family shelters are full and it does not provide funds for the regional network of organizations that support homeless families and individuals.

Since the onset of the economic crisis in late 2008, demand for shelters funded through EA has increased substantially as many families have lost their jobs and their housing. The FY 2010 GAA limited access to EA by lowering eligibility from families living at or below 130 percent of poverty to the current threshold of 115 percent of poverty. The FY 2012 budget lowered eligibility further by requiring that most families eligible for EA be served by the newly-created HomeBase program that provides rental assistance and one-time housing supports for homeless families served by EA. Many of these families would no longer be able to stay in EA shelters unless they were unable to immediately find housing through HomeBase. Early into FY 2012 demand for HomeBase far exceeded the $38.6 million appropriated in the GAA. Even with mid-year increases of $19.1 million, DHCD closed HomeBase to new families seeking rental assistance.

In its 2013 budget the House recommends reorganizing funding for EA by separating funding for the state-run family shelters from the funding that the state pays to hotels and motels who are housing homeless families. The House budget provides:

  • $88.9 million for EA family shelters. The House budget states that families served by EA 'shall include' families who lose housing due to domestic abuse, fire or other natural disaster, those who are evicted through no fault of their own, or because the housing in which they are living is unhealthy or unsanitary. While the House budget seems to allow EA to serve other low-income homeless families that do not fall into these categories, the Governor's proposal restricts EA only to this subset of families. The House amended the HWM proposal to limit these families' stay in shelter to 9 months (see above for a description). Low-income families, who have been unable to find permanent housing but have received services from EA for 9 months, will no longer have access to shelter.
  • $16.6 million for a new EA hotels and motels account that supports families who are living in hotels and motels because the family shelters are full. In documents accompanying its budget, HWM stated that the new line item will help the state keep track of homeless families living in these alternative shelters as it works to reduce this population.2 As noted above, the House budget requires that additional funding for MRVP be used to help homeless families living in shelters move into permanent housing.
  • The House budget, when combining funding for both EA and the EA hotels and motels accounts, provides a total of $105.6 million for EA shelter to eligible homeless families. This is $5.2 million higher than the Governor's FY 2013 proposal for EA but $13.2 million less than the FY 2012 current budget. Like previous budgets, the House budget hopes that by increasing supports for housing (described below) the demand among low-income families for shelter will fall and the state will have to appropriate fewer funds to EA. It is important to note however, that despite the state's best efforts to provide housing assistance to low-income families and reduce demand for shelters, each year since the onset of the economic crisis, the Legislature has had to supplement funding for EA.

Like the Governor, the House provides $83.4 million in FY 2013 to the HomeBase program which was created in the FY 2012 GAA to help families eligible for EA to find permanent housing. The House level is $25.4 million more than the FY 2012 current budget though it is likely that much of this funding will be used to support families who are already enrolled in the program. Because of the high demand for rental assistance when HomeBase first opened, DCHD closed it to new families in late October 2012. Like the Governor's proposal, the House budget seems to restrict HomeBase rental assistance to families who are already enrolled. It also drops the number of years they can receive this assistance from 3 to 2 years. HomeBase will still provide one year's worth of housing assistance, of no more than $4,000, to families who are moving out of EA shelters and into permanent housing. There is some question whether the $4,000 will be sufficient to help many of these families, who are extremely poor, stay in housing over the long term.

As the House 2013 budget restricts services under both EA and HomeBase, it does increase funding above the FY 2012 current budget for key housing support programs including:

  • $10.0 million in additional funds for MRVP to $46.0 million. As noted above, the House budget requires that DHCD create at least 923 vouchers with this additional funding and to help families living in EA shelters or hotels and motels to move into permanent housing. Unlike the original HWM budget which required DHCD to provide vouchers only to homeless families who are sheltered in hotels and motels, the House budget gives the department the discretion to provide the vouchers to families living in shelters that are able to move into rental housing and remain there over the long term.
  • $8.5 million in additional funds for RAFT for a total of $8.8 million. The House budget requires that the bulk of RAFT funds be used much like HomeBase housing assistance to provide one-time funds of no more than $4,000 to prevent low-income families from becoming homeless or to help them secure permanent housing. While the House budget requires that DHCD establish that this one-time assistance will help these families remain housed and not become homeless, there is question whether this assistance will be sufficient to help many families, who are living close to poverty, stay in housing over the long term.
  • $2.0 million in additional funding for the state public housing authorities. The Governor's budget recommended providing the authorities with an additional $4.0 million above the FY 2012 budget to help renovate additional units to provide permanent housing for homeless families. The House includes language directing housing authorities to renovate family units if the renovations cost less than $20,000.

Transportation

The final FY 2013 House budget mirrors the Governor's budget proposal providing $1.13 billion for transportation lines items and operating transfers. No changes were made to the HWM proposal during the House's amendment process. This funding level represents a small decrease (0.7 percent) from current FY 2012 funding levels, though when cost growth is taken into consideration, we can assume the result is a somewhat larger decline in actual purchasing power.

The large majority ($946.8 million) of the budgeted amount goes to fund the Massachusetts Bay Transit Authority (MBTA), both for debt service costs and to help support annual operating costs (see line item details, below), while a much smaller amount ($15.0 million) is provided to the state's 14 non-MBTA Regional Transit Authorities.

The remaining portion of the total ($165.2 million) is provided to the Massachusetts Transportation Trust Fund (MTTF). This amount is equivalent to the Governor's proposal and represents a decrease of $14.9 million from current FY 2012 funding levels. The MTTF helps fund Massachusetts Department of Transportation (MassDOT) functions. These functions include maintaining and improving state roads, highways, and bridges; maintaining and improving airports and rail and transit lines; administering the Registry of Motor Vehicles (RMV); and covering specific transportation-related debt service costs. This annual transfer of funds to MassDOT through the MTTF represents only a portion of the total MassDOT budget, which receives additional funds from highway and bridge tolls, gas and sales tax revenues, RMV fees, and other sources.

Commercial Regulatory Entities


1For more detail on the FY 2012 reorganizations please see MassBudget's Budget Monitor: The Fiscal Year 2012 General Appropriations Act available online at: http://www.massbudget.org/report_window.php?loc=FY12_GAA.html

2The Executive Summary accompanying the House Ways and Means Committee budget is available here: http://www.malegislature.gov/Budget/FY2013/House/WaysAndMeans/ExecutiveSummary

Law & Public Safety

The House adopted amendments adding $27.9 million to the House Ways & Means Committee (HWM) total for Law & Public Safety accounts (see amended line item lists by subcategory, below). Notable changes to the HWM budget include the following:

  • A $7.5 million increase for courts and legal assistance accounts, with the Chief Justice for Administration and Management receiving the large majority of this increase and the Massachusetts Legal Assistance Corporation receiving much of the remainder. (The CJAM manages the seven trial courts and their employees, and oversees the Department of Probation and the Office of the Jury Commissioner.)
  • A $5.0 million increase for law enforcement accounts, with the large majority of this increase going to the Shannon Grant program and much of the remainder to the Department of State Police Operations.
  • A $12.4 million increase for prison, probations and parole accounts, with $10.0 million of this increase going to the Department of Corrections and most of the remainder going to retained revenue accounts for a small number of Sheriff's Departments.
  • A $2.8 million increase for the Department of Fire Services Administration.

In total, the FY 2013 House budget provides $2.37 billion in funding for Law and Public Safety accounts, an amount that is 0.8 percent less than proposed by the Governor, but $48.7 million or 2.1 percent above current FY 2012 budget levels.1 Taking general cost inflation into consideration, this small increase represents something closer to level-funding relative to current year appropriations. The House total for these programs, however, is 13.1 percent below (adjusted for inflation) the amount provided in the FY 2009 General Appropriations Act (GAA) - the last state budget to be enacted before the effects of the Great Recession became widely evident here in Massachusetts. Apart from the amendments made to the HWM budget, the most notable elements of the final House FY 2013 budget include the following:

  • The House maintains the effort undertaken in the FY 2012 budget to shift indigent defense funding toward public defenders and away from the use of private bar attorneys, with a goal of decreasing and controlling overall indigent defense costs. The Governor, by contrast, proposed pushing these changes beyond the FY 2012 reforms, shifting still more dollars toward public defenders and away from private bar attorneys.
  • As in past years, the House does not adopt the Governor's recommendations to consolidate parole and probation functions within a new Department of Re-entry and Community Supervision.
  • Similarly, the House again chooses not to adopt the Governor's recurring proposal to consolidate funding for the seven trial courts into the Office of the Chief Justice for Administration and Management (CJAM).

Courts & Legal Assistance

Courts & Legal Assistance

The House FY 2013 budget adds $7.5 million to the HWM budget for Courts & Legal Assistance, providing a total of $625.5 million.2 This amount is 4.7 percent more than current FY 2012 funding levels, but 0.3 percent below the Governor's FY 2013 budget proposal.

Among the largest adjustments made by the House to law and public safety accounts is the $6.0 million increase provided to the Office of the Chief Justice for Administration and Management (CJAM). The CJAM manages the seven trial courts and their employees, and oversees the Department of Probation and the Office of the Jury Commissioner.

The House also added $1.0 million to the Massachusetts Legal Assistance Corporation (MLAC) account, matching the $12.0 million proposed by the Governor and $1.5 million more than current FY 2012 levels. MLAC provides low-income people with legal information, advice and representation on critical, non-criminal legal problems.

Courts & Legal Assistance Line Items

The House budget does not adopt the Governor's recurring proposal to consolidate most funding for the seven trial courts into the Office of the Chief Justice for Administration and Management (CJAM), instead providing an independent appropriation to each court. The House budget provides $216.8 million for the seven trial courts, an increase of $14.7 million or 7.3 percent over current FY 2012 funding levels.3 Within this overall increase, the House shifts funding considerably among the individual court accounts relative to current FY 2012 funding levels. The House provides increases for the Juvenile Court, Housing Court, Probate & Family Court, and Boston Municipal Court, and decreases funding for the Superior Court, District Court, Land Court. The HWM budget provides $209.8 million for the CJAM in FY 2013, a 6.2 percent increase over current FY 2012 amount.

The House FY 2013 budget maintains the changes made in FY 2012 that moved indigent defense funding in the Commonwealth toward a greater reliance on salaried public defenders (PDs) employed by the state and away from the use of independently employed private bar attorneys (PBAs). The FY 2012 GAA stipulated that 25 percent of the indigent defense caseload would be handled by public defenders (the figure in FY 2011, prior to the funding shift, was just ten percent), and allocated funding for PDs and PBAs accordingly. The House FY 2013 budget provides a similar allocation between PDs and PBAs: $63.7 million to PDs (through the Committee for Public Counsel Services) and $98.9 million to PBAs (through the Private Counsel Services account). These amounts are little changed from current FY 2012 funding levels, a 0.8 percent increase and 2.1 percent decrease respectively. By contrast, in his FY 2013 budget, the Governor proposed a further push toward reliance on PDs, advocating for a 50/50 split of the indigent caseload between PDs and PBAs. The Governor proposed increasing PD funding by $25.4 million over current FY 2012 levels and reducing funding for PBAs by a similar amount.

Overall, spending on indigent defense is little changed (1.0 percent less) under the House FY 2013 budget relative to current FY 2012 levels, and is just 1.2 percent less than the Governor's proposed amount.4 Compared to the 2009 GAA, however, funding for indigent defense in the HWM budget is reduced by 16.3 percent, adjusted for inflation.

Courts & Legal Assistance

Law Enforcement

Law Enforcement

The House FY 2013 budget adds $5.0 million to the HWM budget for law enforcement accounts, providing a total of $337.8 million.5 This total is 3.5 percent more than current FY 2012 funding levels, but 2.1 percent below the Governor's FY 2013 budget proposal. Relative to the FY2009 GAA (adjusted for inflation), the House FY 2013 total for law enforcement accounts represents a 24.1 percent decline in funding.

Law Enforcement line items

Among law enforcement accounts, the largest adjustment made by the House to the HWM budget is the $3.5 million increase provided to the Shannon Grant program, bringing total FY 2013 funding for this program to $5.5 million. The HWM FY 2013 budget provided $2.0 million for Shannon Grants, well below the $8.0 million in current FY 2012 funding for the program. The Governor, meanwhile, has proposed continuing current FY 2012 funding levels in FY 2013. Shannon Grants help fund anti-gang and youth violence prevention efforts undertaken by law enforcement, community-based organizations, and government agencies in communities throughout the Commonwealth.

Relative to the HWM budget, the House budget also provides an additional $1.0 million for the Department of State Police Operations, earmarking this money for payroll costs associated with state police directed patrols in communities through the Commonwealth. Overall, in the House budget, funding for the state police (and related line-items) totals $273.9 million, an increase of $11.4 million or 4.3 percent over current FY 2012 funding levels, but 0.5 percent less than proposed by the Governor.

Similar to a proposal in the Governor's FY 2013 budget, in the House budget funding for various types of drug testing are consolidated from the Department of Health, the UMass Medical School and the District Attorney's Office into the State Police Crime Laboratory. The House adds $456,000 to the amount provided in the HWM budget, earmarking $200,000 for the state's pre-existing requirement that all convicted felons undergo DNA testing, with results stored in a state database. Adjusting to take these changes into account, the House provides an increase for the lab of $598,000 or 4.6 percent above current FY 2012 funding levels.6

Law Enforcement

Prisons, Probation & Parole

Prisons, Probation & Parole

The House FY 2013 budget adds $12.4 million to the HWM budget for prisons, probation, and parole accounts, providing a total of $1.21 billion.7 This total is 0.7 percent more than current FY 2012 funding levels, but given general year-to-year price inflation, this translates into a small decrease in real funding for these programs. The House total is 1.1 percent below the Governor's FY 2013 budget proposal, and is 11.7 percent below the FY 2009 GAA (adjusted for inflation).

Prisons, Probation & Parole Line Items

Among prisons, probation and parole accounts, the largest adjustment made by the House to the HWM budget is the $10.0 million increase provided to the Department of Corrections (DOC), bringing total FY 2013 funding for this line item to $536.0 million.8 Looking at all DOC related accounts,9 the House FY 2013 budget provides $547.5 million, a 2.9 percent increase over current FY 2012 funding levels. This amount is $1.5 million or 0.3 percent less than the amount recommended by the Governor and $23.6 million or 4.1 percent less than appropriated in the FY 2009 GAA (adjusted for inflation). Language in the House budget directs the DOC to fund the Massachusetts Alcohol and Substance Abuse Centers from the DOC appropriation.

The House budget does not adopt the Governor's renewed call to consolidate probation and parole functions within a new Department of Re-entry and Community Supervision (the Governor made a similar proposal in his FY 2012 budget, which the Legislature chose not to adopt).10 Instead, the House continues to provide funding directly for each of these functions, with probation services accounts receiving $135.5 million and parole programs receiving $18.1 million. These amounts represent a cut of 2.4 percent and an increase of 0.1 percent respectively, relative to current FY 2012 funding levels. Compared to the FY 2009 GAA, the House FY 2013 budget represents a decline in funding of 23.9 percent for combined probation and parole services, adjusted for inflation.

The House adds a total of $2.0 million to the amounts provided by HWM to several County Sheriffs' Departments (CSDs) and related accounts. In total, for the fourteen CSDs and their related accounts, the House provides $502.3 million, or 0.6 percent less than current FY 2012 funding levels. The House provides 2.3 percent less than the Governor suggests in his FY 2013 budget recommendations.

Prisons, Probation & Parole

Prosecutors

Prosecutors

The House provides funding for prosecutors that is essentially identical to that provided by HWM, though the House shifts funding between a number of District Attorneys' offices. The House provides prosecutors with a total of $139.8 million, a 1.3 percent increase from current FY 2012 levels.11 When inflation is taken into account, this translates into a modest decrease for these programs overall. The amount provided by HWM is 1.0 percent more than was recommended by the Governor in his FY 2013 budget proposal, but is $16.2 million or 10.4 percent less than was appropriated in the FY 2009 GAA (adjusted for inflation), the last state budget to be enacted before the effects of the Great Recession became widely evident here in Massachusetts.

Prosecutors Line Items

In the House budget, most of the eleven District Attorneys' (DAs) offices see a modest increase of 2.4 percent over FY 2012 funding levels. The Middlesex, Norfolk and Northwestern DAs receive smaller increases of 1.3 percent, 1.0 percent, and 0.4 percent respectively. The Hampden DA receives a cut of 0.7 percent. The Office of the Attorney General (AG) would receive $22.3 million, a modest decrease in funding of 2.9 percent and an amount equivalent to that proposed by the Governor. The House follows the Governor in proposing a new initiative within the AG's office for Litigation and Enhanced Recoveries. According to the Governor's budget documents, this initiative would fund "existing and future litigation devoted to obtaining significant recoveries for the Commonwealth."12 The House provides $1.0 million for this initiative while the Governor recommended $1.8 million.

Other special units within the AG's office (e.g., Medicaid Fraud Control Unit, Wage Enforcement Program, Worker's Compensation Fraud Unit, etc.) are either level-funded or very close to their current FY 2012 funding levels. Given general year-to-year price inflation, in actuality these amounts likely represent a small decline in real funding for these programs.

Prosecutors

Other Law & Public Safety

Other Law & Public Safety

This subcategory covers an array of departments and programs including the Executive Office of Public Safety; the Department of Fire Services; the Massachusetts Emergency Management Agency, elevator and boiler inspections; nuclear safety; and the state's Military Division. Overall, the House increases the HWM budget for these accounts by $3.0 million, providing $50.7 million for other law and public safety functions in FY 2013. This total represents a $1.3 million or 2.4 percent decline in funding from current FY2012 levels, and an 11.7 percent decline relative to the FY 2009 GAA (adjusted for inflation), the last budget to be enacted before the full effects of the Great Recession became evident here in Massachusetts.

Other Law & Public Safety Line Items

Looking at House amendments to the HWM budget, the large majority of the $3.0 million increase goes to the Department of Fire Services Administration, with the House earmarking $1.3 million for the Commonwealth's Hazardous Material Response Teams and another $1.2 million for the Student Awareness Fire Education program. The House earmarks a further $175,000 for a variety of critical incident stress management programs.

The House adds $275,000 to the Executive Office of Public Safety and Security (EOPSS), providing $2.2 million or essentially level-funding in FY 2013 relative to current FY 2012 funding levels. The House directs that $75,000 of the EOPSS appropriation go toward funding the special commission established in 2011 to study the state's overall criminal justice system. The Commission is directed to examine—among other things—the state's prison system, including issues of prisoner classification and overcrowding; the state's county jails and sheriff's departments; operations of the probation and parole systems; and the role that mental health and substance abuse issues play in recidivism rates. The goal will be to provide recommendations for cost reductions coupled with improvements to overall public safety and better outcomes for inmates upon their release.

The House, like HWM, provides $10.0 million for the state's Military Division an increase of 6.7 percent over current FY 2012 levels. For the Massachusetts Emergency Management Agency, the House (again following HWM) provides $2.4 million or 7.1 percent more than current FY 2012 levels.

Other Law & Public Safety


1This total includes MassBudget adjustments to FY 2013 funding amounts to align with FY 2012 line item structures in order to make a proper apples-to-apples comparison between the two years.

2This total includes MassBudget adjustments to FY 2013 funding amounts to align with FY 2012 line item structures in order to make a proper apples-to-apples comparison between the two years.

3This total includes trial court justices' salaries, funding for the Office of the Jury Commissioner, and two related retained revenue accounts.

4This indigent defense total includes line items 0321-1500, -1510, -1518, and -1520.

5This total includes MassBudget adjustments to FY 2013 funding amounts to align with FY 2012 line item structures in order to make a proper apples-to-apples comparison between the two years.

6HWM provides $15,074,646 to the State Police Crime Lab account. To allow for proper apples-to-apples comparisons among years, however, MassBudget shifts $1,519,139 million (the amount identified by ANF as the actual cost shift associated with this consolidation in the Governor's FY budget) out of the State Police Crime Lab account and back into corresponding public health and UMass Medical School accounts. Taking these adjustments into account, the House FY 2013 budget provides an additional $598,000 to the State Police Crime Lab.

7This total includes MassBudget adjustments to FY 2013 funding amounts to align with FY 2012 line item structures in order to make a proper apples-to-apples comparison between the two years.

8To maintain the ability to make apples-to-apples comparisons between years, where appropriate MassBudget adjusts account figures to conform to prior year line-item structures. Here, based on HWM FY 2013 budget language included in the DOC line-item and ANF estimates, MassBudget reduces the DOC account (8900-0001) by $10.0 million and assigns $5.0 million to the Massachusetts Alcohol and Substance Abuse Centers account (8900-0002) and $5.0 million to the DOC retained revenue account (8900-0050).

9Including 8900-0001, -0002, -0006, -0045, -0050, and -1100

10To maintain the ability to make apples-to-apples comparisons between years, where appropriate MassBudget adjusts account figures to conform to prior year line-item structures. Here, based on information from the Governor's budget office, for the Governor's FY 2013 budget MassBudget reallocates funding from the proposed Department of Re-entry and Community Supervision (8940-0100) and other related accounts back to the primary probation (0339-1001) and parole (0339-1003) accounts.

11This total includes adjustments to FY 2013 funding amounts to align with FY 2012 line item structures in order to make a proper apples-to-apples comparison between the two years.

12Governor's FY 2013 Budget website: http://www.mass.gov/bb/h1/fy13h1/brec_13/act_13/h08100061.htm?q=0810-0061

Local Aid

The Fiscal Year (FY) 2013 House budget proposes to fund the MassBudget category of Local Aid at $932.4 million, a cut of $4.1 million from current FY 2012 levels. House floor amendments resulted in two new earmarks for programs in Plymouth County, which were coupled with $950,000 in increased funding over the House Ways and Means (HWM) proposal.

The vast majority of MassBudget's Local Aid category funds general local aid provided to cities and towns, helping them fund vital local services such as police and fire protection, parks, and public works. General local aid has been cut dramatically over the last several years, and while the House budget funds general local aid at the same $899.0 million level as the FY 2011 and current FY 2012 budgets, this would represent the third year in a row of not making inflation adjustments that correct for the rising cost of providing local services. MassBudget treats education aid separately in our Education section, although cities and towns often use a portion of their general local aid to help fund education as well.

Local Aid Line Items

The House budget proposes two changes to the Community Preservation Act (CPA). Under the CPA, cities and town can opt into the program and pass a property tax surcharge of up to 3 percent. When the act was first passed, the state provided a 100 percent match to the revenue raised by cities and towns through the surcharge. Local communities would then use these funds for open space preservation, affordable housing and historic preservation. As the economic crisis hit, the state's contribution, which is provided to local communities from revenue raised through the deeds recording fees, has diminished considerably. In its most recent notification, the Department of Revenue (DOR) estimates that it will provide a 22 percent match to cities and towns in FY 2012. The House budget would increase total state funding for the CPA by allowing the state to transfer up to $25 million of surplus state funds from the FY 2012 budget, if sufficient surplus funds exist, to the fund managed by DOR. It is important to note that if the state does not have surplus funds at the end of the current fiscal year, there will be no money to transfer into the fund. The House budget also provides more flexibility for how CPA funds can be spent, allowing cities or towns to renovate existing recreational facilities rather than requiring them to use the funds only to purchase new open space. While allowing CPA money to be spent on recreational renovation projects may be desirable, particularly for urban communities with little passive open space, this new flexibility represents a departure from the original intent of the program. Finally, the House also allows cities and towns to borrow for CPA projects (open space, affordable housing and historic preservation) using the revenues raised through the CPA surtax to pay for bonds.

General Local Aid

General Local Aid

The FY 2013 House budget funds Unrestricted General Government Aid (UGGA) at $899.0 million, which is $65.0 million above the amount guaranteed in the Governor's proposal and equal to current FY 2012 levels.

Both the FY 2012 GAA and the Governor's FY 2013 proposal fund UGGA at a baseline level of $834.0 million. On top of this, the FY 2012 budget directed 50 percent of all unexpended balances from general fund spending coming out of FY 2011 (up to $65.0 million) to supplement UGGA appropriations for FY 2012. Unexpended FY 2011 fund balances proved sufficient to fund the full $65.0 million amount, meaning that cities and towns in FY 2012 will receive the same total UGGA appropriation of $899.0 million that they received in FY 2011. Similarly, the Governor's FY 2013 proposal directs $65.0 million of any FY 2012 budget surplus to supplement its baseline $834.0 million appropriation. It is possible, yet far from certain, that under the Governor's FY 2013 proposal surplus funds would prove sufficient to provide this additional $65.0 million once again. Under the House proposal, however, this amount would be guaranteed.

It should be noted that even if UGGA is funded at the full $899.0 million in FY 2013, this nominal level funding is tantamount to a cut since no inflation adjustment would have been made over the last two years to keep up with rising costs. Furthermore, general local aid has been cut dramatically since FY 2001. Under the House proposal, general local aid would see a cut of 37 percent when comparing FY 2013 to FY 2008 inflation-adjusted levels. For more information on the history of general local aid, please see MassBudget's recent paper Demystifying General Local Aid in Massachusetts, available here.

General Local Aid is down

While the House budget assumes that no casino-related revenue will be available to fund programs in FY 2013, the November 2011 casino law is expected to generate new general local aid revenue once casino licenses have been sold and facilities are up and running. While legalized casino gambling facilities will provide some new tax revenue, the state also expects lottery revenues to decrease somewhat as some gambling activity shifts from lottery sales to casinos. For both of these reasons, the new gambling law distributes a portion of future gambling tax revenue to cities and towns in the form of new general local aid. All tax revenue from the slots-only facility and 20 percent of tax revenue from the three full-scale casinos will go into a new Gaming Local Aid Fund and into a related Local Aid Stabilization Fund. Revenue distributed from these funds will be distributed to cities and towns as Unrestricted General Government Aid, but since UGGA funds have never been distributed using a formula, a policy decision will need to be made for distributing any of this new aid.

Other Local Aid

Other Local Aid

The House budget continues funding for the second year of a Municipal Grants reserve account. House floor amendments added $950,000 in funding and resulted in a few line item language changes, which include:

  • Inserting a $750,000 earmark to fund a pilot regionalization program in Plymouth County.
  • Inserting a $200,000 earmark to fund a 20% regional grant match for the Fire Chiefs Association of Plymouth County.
  • Deleting language in a $1.0 million earmark for a Department of Elementary and Secondary Education (DESE) grant program that had originally restricted this money to K-12 school districts whose Chapter 70 aid in FY 2012 as a percentage of their foundation budgets was less than their target Chapter 70 aid share. The $1.0 million DESE grant program earmark remains, but there is now no mention in the House budget of goals for the grant program and it is no longer restricted to a limited subset of districts.

The final House proposal for the Municipal Grants reserve account is $1.1 million below the Governor's and is $4.1 million below current FY 2012 funding level of $10.1 million. The Governor's $7.0 million proposal assumed that all funding would go towards municipal regionalization and efficiency efforts.

For the program's first year, the state received 100 applications for projects that involved 285 cities or towns. In March, the state ended up awarding 28 grants to fund projects that will involve 138 communities.

Local Aid Line Items

Other

Other Line Items Changed

Constitutional Officers

Constitutional Officers

This subcategory includes funding for the Secretary of State, the State Auditor, the Registrar of Deeds as well as various other offices and commissions. During its floor debate, the House adopted amendments increasing funding for two accounts including:

  • $500,000 increase in the account that provides information to voters in anticipation of the fall 2012 elections. The House total for this acccount is $1.9 million which is same amount recommended in the Governor's FY 2013 budget, $1.6 million more than the current FY 2012 budget and $600,000 more than the amount appropriated in FY 2011 for the elections in the fall of 2010.
  • $50,000 increase in funding for the Massachusetts Historical Commission to $800,0000. This increase will pay for a $50,000 earmark included in the amendment. The House total is $50,000 more than both the Governor's FY 2013 recommendation and the current FY 2012 budget.

The House budget includes a proposal in the Governor's FY 2013 budget to create a new account within the Special Investigations Unit at the Auditors Office. The FY 2013 House budget provides $469,000 for the new account, the same amount proposed by the Governor, to ensure that the public benefits programs supported by the state are distributed properly. The Election Division Administration, also received an increase of $3.6 million above the FY 2012 current budget to pay for the primary and general elections in the fall of 2012.

Constitutional Officers Line Items

Debt Service

Debt Service

The House FY 2013 budget makes no changes to the HWM budget proposal. It provides $2.42 billion for debt service lines items, an increase of $164.2 million or 7.3 percent over current FY 2012 levels, but slightly less than the Governor's FY 2013 proposal of $2.43 billion. The increase is driven by a $127.9 million (6.8 percent) increase in Consolidated Long-Term Debt Service. The House proposal for the Accelerated Bridge Program Debt Service, identical to the Governor's at $49.4 million, nearly doubles the current FY 2012 funding level of $25.2 million. (This debt service moves from line item 0699-0014 in FY 2012 to 0699-0016 in FY 2013. Also of note, funding provided for Central Artery/Tunnel debt service shifts from account 0699-2005 in FY12 to 0699-2004 in FY13.)

Debt Service

Executive & Legislative

Executive & Legislative

The House budget for FY 2013 recommends level funding for all but two programs within the Executive and Legislative subcategory. It includes a small increase in funding for the Office of Child Advocate bringing its total funding to $300,000. Also, now that redistricting is complete, the House budget does not provide funding for those accounts in FY 2013.

Executive & Legislative Line Items

Libraries

Libraries

The state supports public libraries in Massachusetts through a number of programs. The two largest are the Public Libraries Local Aid account which provides direct state aid to local libraries and the Regional Libraries account which supports regional library networks including the inter-library loan and electronic references resources. The state also provides funding for the Talking Book program which is housed in the Perkins School for the Blind serving the eastern part of the Massachusetts and the Worcester Public Library in the western part of the state.

During its debate the House adopted an amendment to increase funding for regional library networks by $100,000 to a total of $9.2 million. This amount is $100,000 more than both the current FY 2012 budget and the Governor's FY 2013 recommendation. Even with this increase, since the onset of the fiscal crisis funding for regional libraries has fallen by $9.1 million or 50 percent in inflation-adjusted dollars.

The House budget also provides increases to two other accounts above the FY 2012 current budget including an additional:

  • $84,000 for the Board of Library Commissioners for a total of $999,000.
  • $159,000 for the Talking Book Program at the Perkins School for the Blind for a total of $2.4 million.

Despite these increases, since the onset of the fiscal crisis in FY 2009, funding for libraries has fallen $14.6 million or 40.1 percent in inflation-adjusted dollars.

Libraries Line Items

Pensions

Pensions

The final House FY 2013 budget assumes, as did the Governor's proposal, an off-budget transfer of 1.55 billion dollars to the Pension Liability Fund. Annual pension funding is governed by state law (Chapter 32$sect;22C of the Massachusetts General Laws), which requires an annual transfer to the state Pension Liability Fund and sets out a funding schedule, which is periodically updated. The most recent update was contained in a section of the FY 2012 budget that extended the timeframe for paying down the state's pension liability to 2040 and set out a schedule of specific payments through FY 2017. The increase in funding compared to FY 2012 is in accordance with that schedule.

During budget debate the House adopted an amendment that would allow certain social workers employed by the Department of Children and Families to retire earlier with a full pension. The budget also contains outside section language specifying that the FY 2013 pension transfer is intended to cover the cost of providing retirees with a 3 percent cost-of-living in FY 2013. This provision, which is regularly included in the state budget, is calculated on a base that is defined in state statute. In FY 2012 the base was $12,000 per year, meaning that retirees could receive an increase of up to $360 per year. Recent pension reform legislation increased that base to $13,000 (an increase of $30 to $390 per year).

Other Administrative

Other Administrative

The Other Administrative subcategory includes accounts that cover a wide range of government activities. This subcategory includes one-time funding to help communities recover from major storms or floods, provides funding for various state commissions as well as for the Executive Office of Administration and Finance (A&F).

During its floor debate the House increased total funding for this category by slightly more than $2.3 million including:
  • $2.3 million increase for the Department of Revenue for a total of $82.7 million. This amount is $445,000 less than the Governor's FY 2013 recommendation and is about $2.3 million more than the current FY 2012 budget. Even with this increase, funding for DOR's administrative account since the onset of the fiscal crisis has fallen by $44.5 million or 35 percent in inflation-adjusted dollars.
  • $47,000 increase for the State Ethics Commission to $1.8 million.
  • $25,000 increase for the Massachusetts Commission against Discrimination to $1.3 million.
  • $24,000 increase for the Massachusetts Office on Disability.

In addition to funding increases, the House also adopted a number of other amendments including:

  • Direct the Inspector General to look into the feasibility of setting limits on executive pay at nonprofits and charities if those organizations receive at least 30 of their revenue from state funds.
  • Requiring that public charities with revenues greater than $5 million establish audit committees that will work with an independent auditor to make sure that the nonprofit's finances are in order. This committee is also responsible for responding to any complaints regarding a nonprofit's finances that may made by an employee of that organization.

The FY 2012 General Appropriations Act (GAA) created a new office of Commonwealth Performance, Accountability and Transparency (CPAT) within A&F. The House budget includes the Governor's FY 2013 budget recommendation to provide this office with an additional $150,000 to continue its efforts to enhance the functioning of state government. Last year CPAT was charged with improving the way that state agencies coordinate similar activities such as information technology, maximizing the grants from the federal government and assuring that the state delivers services in the most effective and efficient matter possible. CPAT was also charged with improving transparency. In 2011 it launched its new Open Checkbook program to give the public a better understanding of how the state spends its resources. In FY 2013 CPAT will continue to coordinate and improve government services by working with state agencies to develop strategic plans and goals that align with the Governor's priorities including lowering the achievement gap, creating jobs, and reducing state spending on health care.

The House budget does not include the Governor's FY 2013 budget estimation of $30.0 million in savings from reducing 400 positions within the Executive Branch.

The House budget also recommends consolidating funding for state office buildings into two accounts. The Office of Facilities Management, with $10.4 million in funding, would oversee all state office buildings but the State House. The House funding recommendation is $650,000 less than the Governor's recommendation. The House budget then consolidates State House operations, into two accounts and provides the same level of total funding for these accounts as the Governor's proposal. The larger, Bureau of the State House would receive $2.0 million in funding while the smaller State House Accessibility account would receive $138,000. In the chart below, MassBudget has redistributed funding from these consolidated line items into their original accounts in order to allow for year to year comparisons.

Both the Governor and the House budget proposals provide $6.0 for a particular salary reserve account within the Executive Branch. This reserve account has been set aside for collective bargaining agreements for several groups of state employees whose contracts have not yet been negotiated. In the chart below, MassBudget redistributes funding from this consolidated line item into the accounts where the funding is expected to be spent.

Other Administrative Line Items Other Administrative Line Items Other Administrative Line Items

Revenue

Unlike the Governor's budget, the House FY 2013 budget does not include revenues from new taxes on tobacco products or from the lifting of tax exemptions for candy and soda. Without these ongoing revenue sources, the House relies more heavily than the Governor on temporary revenues. This means that there will likely be a larger budget gap carrying forward to next year.

The final House budget assumes $33.1 million in new ongoing revenue (in other words, revenue that will continue beyond FY 2013), and $686.0 in new temporary revenue (that is, available only in FY 2013). Temporary revenues are useful for balancing the budget only in the current fiscal year.

Tax Revenues

During floor debate, various House members proposed a number of amendments that would have changed tax policy. The final budget passed by the House instead called for the study of these changes, including a review of their impact on the state economy, their impact on revenues, an analysis of how taxpayers at different income levels would be affected by the proposed changes, and other issues.

The House FY 2013 budget includes only two tax initiatives that bring in revenue. The larger of the two is the delay (for another year) of the "FAS 109" tax break provided to certain publically-traded companies as part of the 2008 combined reporting corporate tax reform package. Delaying this tax break will offer the Commonwealth one-time savings of $45.9 million in FY 2013.

The other tax initiative improves the Department of Revenue's enforcement abilities (through use of more powerful data-review software), bringing in an additional $22.3 million in revenue in FY 2013, revenue that is owed to the Commonwealth but that currently goes uncollected. This represents a new and ongoing revenue stream for the state.

Both of these initiatives were proposed by the Governor in his FY 2013 budget, as were other tax initiatives that the House did not adopt. For a more detailed review of the Governor's tax revenue proposals, please see MassBudget's updated Governor's Budget Monitor, available on our website: http://www.massbudget.org/report_window.php?loc=budget_monitor_governor_fy13.php§ion=10

Apart from the two initiatives outlined above, the House proposes no other sources for new or enhanced tax revenues in its FY 2013 budget. To bring its budget into balance, the House instead relies more heavily on other temporary non-tax revenues than does the Governor.

Non-Tax Revenues

The House budget includes a total of $13.5 billion in non-tax revenues: $8.0 billion in federal revenues, $3.3 billion in departmental revenues such as fees and assessments and approximately $2.2 billion in revenues from other sources, such as transfers from lottery receipts and from various trust funds. The House budget uses $640.1 million in temporary non-tax revenues. The House did not include the Governor's initiative to expand and modernize bottle redemption, which would have brought in approximately $22.3 million in new ongoing departmental revenues.

The major non-tax components of the House revenue proposal include the following items:

Agency Revenue Initiatives

The House seems to follow the Governor's proposals to increase a number of permitting and licensing fees charged by a various departments, changes that together would raise an estimated $10.8 million in ongoing revenue annually. Approximately half ($5 million) of the total would derive from selling advertising space on a limited number of state owned assets, such as vehicles.

Stabilization Fund

Like the Governor, the House relies on $400 million in funding from the state's Stabilization Fund (the "Rainy Day Fund"), and proposes transferring into the General Fund an estimated $9.1 million in anticipated interest earned by the Stabilization Fund. The Governor and the House also both make a required $100 million deposit into the Stabilization Fund which is the estimated amount of FY 2013 capital gains revenues in excess of $1 billion. Both the Governor's budget and the House budget also forego a statutory deposit from the "consolidated net surplus" of approximately $100 million into the Stabilization Fund.

Unused Balances

Unlike the Governor's budget, the House budget relies on an additional source of one-time or temporary revenue, in that the House foregoes the statutory "carry forward" from FY 2013 into FY 2014 of approximately $110 million from the consolidated net surplus. By not reserving these funds for the next year's budget, they become a one-time revenue source in the current year.

Finally, both the House and Governor's budgets rely on the use of unused balances in existing trust funds to pay for FY 2013 costs. While the Governor's budget identified $6.0 million in unused funds from various trusts, the House budget counts on $37.0 million. Both the Governor and House use $40.0 million to support the costs of the state employee health insurance from the Group Insurance trust; this one-time source of funds is, in essence, a source for one-time savings for the Commonwealth. Both budget proposals also count on $44.0 million from the existing balance in the Commonwealth Care Trust Fund that would be used towards the costs of the Commonwealth Care program and the Health Safety Net this year. These are all one-time resources that, if used in FY 2013, will help fill the budget gap in the current year, but once used will no longer be available to balance the budget in future years.