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.
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.
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.
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).