The Education Jobs Fund, a $10 billion federal grant fund to be spent during the FY 2011 school year for the retention and creation of education jobs in elementary and secondary schools, will provide approximately $204 million to Massachusetts and fund an estimated 2,900 jobs in the state.
FMAP and an Education Jobs Fund: State Fiscal Relief To Strengthen the National Economy, Reduce State Budget Cuts, and Create Jobs
Last week the US Senate passed a bill that would approve extended state fiscal relief from the federal government, and the US House is reconvening today to vote on the extension. The legislation would provide approximately $655 million to Massachusetts — $450 million in enhanced Medicaid (FMAP) reimbursements, which is $250 million less than the $700 million originally anticipated, and another $205 million in funding for education through a new Education Jobs Fund.
The amount of state and local taxes paid in Massachusetts as a share of state personal income remained well below the U.S. average in Fiscal Year 2008, according to the U.S. Census Bureau’s newly updated survey of State and Local Government Finances.
This Budget Monitor examines each category of the budget, describing the FY 2011 post-veto spending levels, and comparing them to the FY 2010 budget and to recommendations from earlier in the budget process.
In economic development legislation under consideration in the House, there are proposals for new corporate tax breaks. This Facts At a Glance provides information about the provisions. (Updated July 13, 2010)
During its budget debate, the Senate added about two-tenths of 1 percent to the budget’s bottom line. The Senate did not adopt any new taxes or appropriate money from the stabilization fund. The modest increases approved were paid for by identifying revenues that are expected to be available but were not counted on in the Senate Ways & Means proposal (for example, the final Senate budget, relying on recent trends, assumes that revenue from the lottery will be approximately $21 million higher in FY 2011 than had been anticipated).
The Senate Ways & Means (SWM) budget proposal addresses a budget gap of close to $3 billion by recommending significant budget cuts and relying heavily on assistance from the federal government. It does not include the Governor’s tax reform proposals, or other new taxes. Also unlike the Governor’s proposal, it does not draw on the state “Rainy Day” fund. It does, however, rely on some other temporary state revenue sources and some one-time savings.
The most significant theme from the House budget debate is how little happened. Facing a budget gap of approximately $3 billion, it would have been irresponsible for the House to adopt significant spending amendments without offsetting revenue — and it did not. The House could have reduced the severity of budget cuts by adopting revenue measures, but it chose not to do so.
The House Ways & Means (HWM) budget proposal relies primarily on budget cuts and federal assistance to address a budget gap of approximately $3 billion. The HWM proposal recommends over $1 billion in budget cuts and more than $1.5 billion in temporary revenue from the federal government, primarily stimulus funds from the American Recovery and Reinvestment Act (ARRA).