The final budget approved by the House of Representatives for Fiscal Year 2012 includes modestly more funding than recommended by the House Ways & Means Committee in several areas, but largely follows the HWM proposal in implanting deep cuts across state government.
The House Ways & Means (HWM) budget for Fiscal Year (FY) 2012, like the Governor’s proposal, relies primarily on budget cuts and savings to close a $1.9 billion gap between the cost for maintaining current services and the revenue expected to be available in FY 2012. The HWM budget cuts somewhat more deeply than the Governor’s proposal in health care accounts, most significantly by eliminating the Commonwealth Care Bridge program that provides health insurance to close to 20,000 legal immigrants.
This Budget Brief on the House Ways & Means proposals for MassHealth and related health care programs is the second in a new series being published by the Massachusetts Medicaid Policy Institute and produced by MassBudget in partnership with the Massachusetts Law Reform Institute. These fact sheets will be published at each stage of the budget process, examining and explaining the proposals put forth by the Governor, the House, and the Senate.
Proposed legislation (H.R. 1) that funds the federal government through the final six months of Fiscal Year 2011 (FY 2011) cuts funding for non-security discretionary programs by $66 billion, or an average of 14.3 percent. Economists warn that these reductions in federal spending, including grants to states, could increase unemployment and weaken the national economy in the short-term. They will also significantly decrease funding for programs that invest in our state’s long-term economic health and in the well-being of our residents.
This Budget Brief on the Governor’s proposals for MassHealth and related health care programs is the first in a new series being published by the Massachusetts Medicaid Policy Institute and produced by MassBudget in partnership with the Massachusetts Law Reform Institute. These fact sheets will be published at each stage of the budget process, examining and explaining the proposals put forth by the Governor, the House, and the Senate.
In the coming fiscal year (Fiscal Year 2012) the state is facing a budget gap of approximately $1.9 billion between the cost of providing current services and the revenue projected to be available. The Governor’s budget (House 1) proposes closing this gap with a combination of deep cuts, significant reforms, limited use of reserve funds and other temporary revenues, and modest revenue initiatives.
Quality, Cost, and Purpose: Comparisons of Government and Private Sector Payments for Similar Services
We count on government to do many important things–things we can’t do alone–like provide good schools, protect our environment, promote public safety, and offer a safety net for those facing misfortune. In fact, we frequently take these essential functions for granted. Furthermore, we hope and expect that our investments in these shared priorities will be made as efficiently as possible. But are they? Occasional gross misuses of tax dollars often make the news–as they should. We need to hold government to a high standard and demand that waste is attacked and eliminated. But how can we really know whether our government is spending money wisely in general? (Click here to read the report.) And Read the related op-ed in the Boston Globe, “Look at what the state is doing right.”
While projecting Chapter 70 state education aid ahead of the formal budget process is always an inexact science, the precarious economic recovery and the termination of most federal recovery aid make predicting the Fiscal Year (FY) 2012 budget particularly challenging. Of the $4.07 billion in Chapter 70 aid distributed in FY 2011 $221 million is federal recovery money–$21 million from the State Fiscal Stabilization Fund and $200 million from the Education Jobs Fund–none of which will be available for FY 2012. In addition to this uncertain revenue picture, a set of other variables further complicates projecting Chapter 70 funding, leading us to run a few separate projections, outlined in four sections of this paper.
This Budget Brief examines the condition of state finances as the budget process begins for the fiscal year that starts on July 1, 2011. Walking readers through the steps involved in calculating a state budget gap, the brief projects a $1.78 billion preliminary budget gap facing the Commonwealth in FY 2012.
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.