2015 SWM Budget.html

The Senate Ways and Means
Committee (SWM) budget takes small, smart and well-targeted steps
towards addressing big challenges. Like the proposals from the Governor
and House, however, it doesn’t
propose solutions at the scale of the challenges we face. The types of
major investments in our people and communities that could
substantially expand economic opportunity, help all of our children to
thrive, and strengthen our economy in the long run, would require
significant new tax revenue — something none of this year’s budget
proposals call for.

The SWM budget does include a
number of initiatives that will immediately help children and adults
across the Commonwealth, and ultimately strengthen our economy by
allowing more of our people to realize their full potential as
individuals and as productive members of our community:

  • An increase of $17.5 million
    to provide child care to approximately 3,000 of the more than 41,000
    children waiting for care. Research overwhelmingly shows that early
    education and care plays a critical role in helping children,
    especially the most vulnerable children, to succeed in school, and in
    life.
  • Several efforts to address
    the crisis at the Department of Children and Families. In addition to
    modest increases in funding that will make it possible to reduce to a
    somewhat more manageable level the number of families and children each
    social worker will be responsible for monitoring and helping, SWM also
    proposes a $3.9 million increase in funding for home visiting programs
    for young families. This reflects an important insight: that helping
    children at risk of abuse or neglect will likely require not just
    strengthening DCF, but also supporting families before they become
    involved with the Department. Bringing that strategy to scale would be
    costly, but could save resources in the long run, and have a
    transformative effect on the lives of children who currently face the
    greatest obstacles to success.
  • An increase of $12.5 million
    in funding for affordable housing vouchers. This is significantly more
    than was proposed by the Governor or House. The problem of homelessness
    requires not just sheltering families when they become homeless, but
    also increasing access to affordable housing so that families can keep
    a roof over their heads for the long term. This proposed increase
    addresses that reality.
  • An additional $16.2 million
    in new funding for substance abuse programs at the Department of Public
    Health, including a new program to support the creation of drug- and
    alcohol-free homes. This will allow people in recovery to get necessary
    supports so that they can successfully return to productive lives in
    the community.

This Budget Monitor provides an
overview of the Senate Ways & Means budget, with discussion of
how it compares to other FY 2015 proposals and to historic funding
levels.

Early Education & Care

The Senate Ways & Means
FY 2015 budget proposal of $541.3 million for programs and services
administered by the Department of Early Education and Care (EEC) is a
$25.5 million increase over current FY 2014 spending. As the table
below outlines, the FY 2015 SWM proposal provides slightly more funding
for services and supports for Income Eligible children than either the
House or Governor’s proposals.

All three proposals are
significantly higher than FY 2014, but the SWM proposal provides $17.5
million for children on the wait list in FY 2015, $2.5 million more
than the Governor and $7.5 million more than the House. The Governor’s
proposal limited wait list spending to infants, toddlers and preschool
children on the Income Eligible Wait
List
and projected that funding
would provide care for about 1,700 children. The SWM proposal opens
funding to school-age children for wrap-around care as well as full day
care for infants, toddlers, and preschool children. Because school age
children need fewer hours of care, the average cost per child for the
SWM proposal is less than the Governor’s. SWM projects that the $17.5
million Wait List
proposal would provide services to around 3,000 more kids.

Although funding increases help
EEC support more kids with subsidies, wait lists remain high. The
number of kids waiting for a subsidy through the Income Eligible
account remains around 40,000 and does not appear to be shrinking
significantly. Although not documented publically, about 1,000 kids in
foster care are waiting for care through the Supportive Child Care
account. Supportive care provides early education and care
opportunities to children in the care of the Department of Children and
Families, the primary child welfare agency serving kids who have been
abused and neglected.

Initiatives introduced by the
Governor received a mixed response from SWM. SWM did not fund IT costs
to embed the Quality Rating and Improvement System (QRIS) into EEC’s
current computer system. QRIS is a rating system used by EEC to measure
the quality of early education and communicate guidance to providers.
The Governor proposed $2.5 million. SWM provides $1.0 million for the
K1 Classroom Grant Program, $1.0 million less than the Governor. This
grant would fund new pre-k classrooms in cities and towns around the
state with a goal of increasing school readiness and improving 3rd
grade reading. Gateway cities and districts with struggling schools
receive preference. The House did not provide funding for either of
these initiatives.

The Children’s Trust Fund’s Healthy
Families Home Visiting Program

receives $14.5 million, approximately $4 million more than FY 14
current spending and both previous FY 2015 proposals. This program
provides home visits for first-time parents under the age of 21. The Universal
Pre-Kindergarten
program
receives just $6.5 million. The Governor and House provided $7.5
million for this program, level with FY 2014 spending.

For more information on these
early education and care programs, see the MassBudget Children’s
Budget
.

SWM also provides $385,000 to
continue an assessment of EEC which began in FY 2014. The FY 2014
budget appropriated $500,000 to hire a nonprofit research organization
to undertake a 2 year assessment of the services administered by EEC.
Goals of the assessment include identifying promising practices in the
administration of subsidies, evaluating the businesses process involved
in service delivery, and measuring the effectiveness of the current
system in meeting the needs of children and families. Neither the
Governor nor the House provided new funding for this assessment in
their FY 2015 proposals.

K-12 Education

The SWM budget provides some
modest increases to K-12 education programs. All told, however, these
increases are roughly in line with annual cost growth and do not
represent significant new investments or expansions. Further, when
looked at over a longer time horizon, total SWM support for FY 2015
would still be below pre-recession
levels—about $80 million less than in
the FY 2009 GAA, adjusted for inflation. For more detail, please see
the Education sections of MassBudget’s Children’s
Budget
and Budget
Browser
.

Two SWM proposals for K-12
grant programs are of particular note. First, in order to help schools
better address substance abuse and mental health issues, the SWM budget
creates a new $5.0 million grant program for hiring Substance
Abuse Counselors
. Second, the
SWM budget proposes $70.3 million for Regional
School Transportation
, a large
increase of $18.7 million over FY 2014 levels. The Governor and House
proposed $51.5 million and $53.5 million respectively.

In March, to help cities and
towns better plan for their local FY 2015 budgets, both the House and
Senate passed local aid resolutions committing the legislature early in
the budget process to specific funding levels for Chapter
70
education aid and
Unrestricted General Government Aid (UGGA). The SWM proposal reflects
this commitment, funding Chapter 70 aid at $4.40 billion, which is
$99.5 million, or 2 percent, over FY 2014.

With the House, Senate, and
Governor all making identical proposals, this is almost certain to be
the final Chapter 70 plan for FY 2015. Specifically, this joint plan:

  • Calculates district
    foundation budgets using updated enrollment and inflation data.
  • Includes all
    pre-kindergarten students currently attending public schools in
    district foundation budgets, meaning they are counted when calculating
    state aid. Currently, districts can only count towards their foundation
    budgets up to two times as many regular education pre-kindergarten
    students as they have special education pre-kindergarten students.
    Further, these regular education students must be learning alongside
    special education students in an inclusive setting. This funding
    proposal would lift the cap for FY 2015 and allow districts to count
    towards foundation pre-kindergarten students in non-inclusive settings.
    As with all grade levels, students can only count towards foundation if
    they are not charged tuition for attending.
    Since enrollment counts are set for calculating FY 2015 foundation
    budgets, this policy change would only cost a modest $2.3 million in
    its first year. If continued for future years, however, this change
    could significantly increase the provision of public early education.
  • Phases-in an additional
    portion of the formula reforms planned in the 2007 budget, but slowed
    due to the ongoing fiscal crisis. Specifically, the budget provides 50
    percent effort reduction and 35 percent downpayment aid. For more
    information on the reforms of 2007, please see MassBudget’s Demystifying
    the Chapter 70 Formula
    .
  • Provides a minimum $25 per
    pupil increase over FY 2014 aid for all districts that wouldn’t
    otherwise receive an increase of this amount.

Additionally, the SWM budget
includes language allowing all districts to begin a four-year phase in
of counting health care costs
for retired teachers
towards
satisfying their net school spending requirements. This provision is
also in the House budget. Districts that counted retiree health care
costs in FY 1994, when the current Chapter 70 formula was first
implemented, have been allowed to continue including them towards net
school spending every year since. Districts that did not include
retiree health care costs in FY 1994, however, have had to count it
separately. While this change would equalize district spending
requirements, it would have the ultimate effect of allowing many
communities to spend less on public education.

The SWM budget does not include
a provision in both the Governor’s and House budgets that would
convene a foundation budget
review commission
to review the
state’s approach to determining district foundation budgets. The
foundation budget was designed more than twenty years ago and many of
its underlying assumptions are increasingly out
of date
. Further, there is new
evidence on what works best in schools that ought to be considered when
reforming the foundation budget.

Among other K-12 education
programs, the SWM budget provides:

  • An increase of $5.0 million
    for Charter
    School Reimbursements
    , up to
    $80.0 million. This proposal would still fall short of fully funding
    the reimbursements formula, which DESE estimates would require $104
    million. Charter reimbursements have not been fully funded since FY
    2012.
  • It is important to note that the Legislature is currently considering a
    supplemental spending bill that would increase charter reimbursements
    by $27.6 million for FY 2014.

  • An increase of $7.9 million
    for the Special
    Education Circuit Breaker
    , above
    what both the Governor and House proposed. The SWM Committee projects
    that its circuit breaker funding level is sufficient to fully fund the
    reimbursement formula.
  • Level funding for METCO.
  • Level funding for Innovation
    Schools
    . This account was funded
    at $1.0 million for FY 2014 and the Governor proposed an increase to
    $4.6 million for FY 2015. The House proposed elimination of funding.
  • A cut of $499,000 for Extended
    Learning Time Grants
    . Both the
    Governor and House proposed increases.
  • A cut of $1.0 million for Adult
    Basic Education
    .
  • A cut of $3.9 million for Kindergarten
    Expansion Grants
    . The House
    proposed level funding and the Governor proposed an increase of $3.1
    million.

Additionally, the SWM budget
projects an automatic transfer of $771.5 million in sales tax revenue
to the School Modernization
and Reconstruction Trust Fund
,
which is used to help school districts pay for school construction and
renovation projects. When someone pays the Massachusetts sales tax, one
percent of the retail value of the purchase goes to this fund.

Higher Education

The SWM budget proposes a third
year of continued reinvestment in public higher education, building on
progress begun in FY 2013 and continued this year. Driven largely by
state level income tax cuts that cost the state roughly $3.2 billion
annually, and by the lingering effects of the Great Recession, higher
education was cut
by roughly a third
between FY
2001 and FY 2012 (adjusted for inflation).

While the SWM budget proposes a
higher education increase of roughly $31 million over FY 2014, both the
Governor and House proposed even greater increases: $53.4 million and
$65.1 million respectively. Lower funding for three programs largely
explains these differences. They are:

  • Supplemental funding for Community
    Colleges
    , directed through a new
    funding formula, is not included in the SWM budget. Both the Governor
    and House proposed funding of $13.2 million. Without supplemental
    funding through this new formula, community college campuses are each
    roughly level funded in the SWM budget.
  • State
    Universities Incentive Grants
    ,
    which receives no funding in the SWM budget. Both the Governor and
    House proposed roughly $8.0 million to support projects at state
    universities that advance goals of the Commonwealth
    Vision Project
    .
  • Science,
    Technology, Engineering and Mathematics (STEM) Starter Academy
    ,
    which was proposed by the House as a new program in community colleges,
    funded at $4.8 million. Neither the Governor’s nor the SWM budgets
    propose funding for this program.

    Additionally, the SWM budget proposes making permanent the STEM
    Council, which currently functions under an executive order of the
    Governor. In addition to making the council permanent, SWM proposes
    expanding its scope to include the arts, renaming it the STEAM
    Council
    . The House budget also
    proposed making this council permanent but did not include arts in its
    purview, so this will need reconciliation in conference committee.

Appropriations to each of the
three campus types are detailed in the table below. It is important to
note that starting in FY 2012, all campuses began retaining tuition
payments from out-of-state students, rather than remitting that revenue
back to the state. MassBudget adds in an estimate of these payments for
FY 2012 to the present, allowing for more accurate year to year
comparisons. Additionally, MassBudget adds collective bargaining
accounts and other programs located at particular campuses to their
respective campus totals.

The SWM proposal follows
through on a commitment made through the FY 2014 budget to increase
funding for UMass
by $40 million in FY 2015 (due to MassBudget adjustments, this total
differs slightly from the UMass increase shown in the table above). If
this increase is met, UMass has committed to freezing student tuition
and fee increases for FY 2015.

The SWM budget proposes an
increase of $1.0 million for the State
Scholarship Program
. The House
also proposed a $1.0 million increase, whereas the Governor proposed
roughly level funding.

Youth Development

Youth Development programs aim
to help young people find their path to a promising career. They foster
engagement in the community, provide training or employment, and
prevent violence or other antisocial behavior.

The SWM Committee budget
recommends spending $31.8 million on Youth Development programs in FY
2015 which is $2.9 million more than the final House budget. (Each line
item in the chart below is described in the Youth Development section
of MassBudget’s Jobs
& Workforce Budget

here: http://workforce.massbudget.org/youth-development)
The SWM Committee’s budget is $4.9 million less than FY 2014 current
funding for these combined programs and $7.7 million less that the
Governor’s FY 2015 proposal.

The state budget funds programs
that keep our air and water clean, maintain fish and wildlife habitats
and support parks, beaches, pools and other recreation facilities. The
SWM Committee recommends spending $194.7 on these programs in FY 2015,
an increase of $5.4 million above the current FY 2014 budget. The SWM
budget is $1.6 million less than the House budget and $3.1 million less
than the Governor’s proposal. Between FY 2001, when $3 billion in tax
cuts were being implemented, and FY 2014 funding for environment and
recreation programs has fallen almost 35 percent in inflation-adjusted
dollars.

Of the cuts to state funding
for environment and recreation, the largest have been to the Department
of Conservation and Recreation (DCR) which oversees the state’s
beaches, parks, pools and other recreation facilities. Between FY 2001
and FY 2014 the parks and recreation budget has been cut almost in half
(43 percent) in inflation-adjusted dollars. This has forced DCR to cut
back on maintenance and staffing of its recreation facilities and to
shorten the season when many state parks, beaches and pools are open to
the public. In its budget the SWM Committee recommends increasing
funding for state beaches and
employees
who work at recreation
facilities by $1.4 million above the current FY 2014 budget to $14.1
million. It recommends reducing funding for state parks by $1.3 million
below FY 2014 current spending to $41.6 million.

In addition to funding for
parks and recreation the SWM Committee’s budget for environment and
recreation programs also:

  • Does not expand the bottle
    bill to water, juice, coffee and tea drinks. The Governor’s budget used
    $4.0 million from this proposed expansion to increase state support for
    redemption centers
    to $4.4 million. The SWM budget recommends level-funding support for
    these centers at $375,000. The House recommends providing these centers
    with $500,000 in FY 2015.
  • Includes $200,000 in a new
    account to fund a state
    climatologist
    . In his FY 2015
    budget the Governor recommended hiring a state climatologist at UMass
    Amherst to research climate change and educate the public about the
    issue. His budget also recommended providing $2.0 million to a new
    account within the Executive Office of Energy and Environmental Affairs
    to help the state adapt to climate change. While the SWM budget does
    provide funding for a climatologist, it does not include funding for
    climate change preparedness. The House budget, by contrast, provides
    $1.0 million in funding for climate change preparedness but does not
    recommend the hiring of a climatologist.

MassHealth (Medicaid)
& Health Reform

The Fiscal Year (FY) 2015
budget proposal from the Senate Committee on Ways and Means (SWM)
includes $14.5 billion for the state’s Medicaid program (MassHealth)
and for other publicly-subsidized health insurance and related programs.

Funding for MassHealth Managed
Care (4000-0500) is $4.8 billion, the same as in the Governor and House
proposals. Unlike the Governor or House, however, SWM includes language
similar to the language in the FY 2014 budget that would ensure that
managed care capitation rates get adjusted based on changes in provider
rates.

Funding for MassHealth Senior
Care (4000-0600) is $3.1 billion, $36.8 million less than in the
Governor’s proposal and $54.3 million less than the amount proposed by
the House. Funding for MassHealth Fee-for-Service (4000-0700) is $2.4
billion, $18.8 million less than in the Governor’s proposal and $19.9
million less than the amount proposed by the House. SWM does not
include increased provider rates for nursing homes or for safety net
hospitals, as included in the House budget.

All of the budget proposals
have differed in their recommendations for adult dental coverage.
Unlike the House budget, SWM restores coverage for adult dentures, and
specifies that this coverage should be in place by April 1, 2015. This
is a benefit that the Governor’s budget had proposed to cover starting
in January 2015. SWM also asks for a report to the Legislature on the
status of adult dental coverage, and how that coverage compares to
coverage in 2010. SWM also requires that the coverage for adult dental
fillings not be eliminated over the course of the fiscal year.

SWM added a new provision that
would allow eligible inmates or persons awaiting trial to be enrolled
in MassHealth. While in prison, their membership would be suspended,
but if they then required inpatient medical care outside of the prison
walls, the MassHealth membership could immediately be re-instated. This
would allow the Commonwealth to receive federal reimbursement for the
costs of medical care outside of the prison. Currently, medical costs
for inmates are borne by the state through the Department of
Corrections. Moreover, because it would be easy to re-instate suspended
coverage, this would eliminate gaps in coverage for people once they
are released from prison.

An outside section added by SWM
requires the Executive Office of Health and Human Services to report to
the Legislature on how the MassHealth Program will operate to stay
within its appropriations. This is similar to language included in the
FY 2014 budget.

MassBudget, in conjunction with
the Mass. Law Reform Institute and the Mass. Medicaid Policy Institute,
publishes detailed briefs about MassHealth and health reform finance
over the course of the budget debate. The brief analyzing the Senate
budget proposals will be published after the Senate budget debate, and
will provide a fuller discussion of these issues.

Mental Health

SWM, like the House, recommends
more funding for mental health services than did the Governor. The SWM
FY 2015 budget proposal includes $731.3 million for mental health. This
is $2.2 million more than recommended by the House, $18.9 million more
than recommended by the Governor, and $23.5 million (3 percent) more
than FY 2014 current appropriations.

SWM recommends $87.6 million
for children’s mental health services, $2.4 million more than FY 2014
current appropriations, and roughly equal to the House recommendation.
Included in the line item funding children’ mental health is language
that earmarks $3.1 million for the Mass. Child Psychiatry Access
Project, and language requiring commercial insurers to be assessed for
the cost of those services. This earmark and language, while not in the
House budget proposal, was included in the FY 2014 budget.

SWM also recommends a total of
$432.6 million for adult mental health services, $13.5 million more
than the current FY 2014 appropriation total.

The SWM budget includes several
provisions to support community-based programming. SWM creates a new
line item (5046-0005), directing $10.0 million for at least 100 new
community placements for adults who are ready for discharge from the
state’s continuing care facilities. The federal Affordable Care Act
(ACA) includes a provision that allows states to receive additional
federal revenue if they commit to shifting Medicaid spending to
non-institutional care. Also within funding for adult mental health
services, SWM includes language similar to what was included in the FY
2014 budget that would maintain funding for the state’s community-based
clubhouse program. This provision was not included in the House budget.

The SWM budget proposal
includes language that would ensure funding for at least 671 inpatient
beds by the end of the fiscal year (an increase from the FY 2014
budgeted total of 626 beds). Language also requires that of that total,
there would be 260 adult continuing care inpatient beds by April 2015,
of which 45 of those inpatient beds would be at Taunton State Hospital.

Public Health

The SWM FY 2015 budget proposal
includes $571.0 million for public health. This is $4.3 million more
than recommended by the House, $10.0 million more than recommended by
the Governor, and $15.8 million (3 percent) more than FY 2014 current
appropriations.

The SWM budget proposal puts an
emphasis on funding for substance abuse treatment, with a total of
$109.9 million budgeted for substance abuse services. Substance abuse
funding in the SWM budget is $13.5 million more than in the Governor’s
budget, and $8.9 million more than in the House budget proposal.

Language in an outside section
of the budget creates a substance abuse helpline within the Department
of Public Health. This toll-free telephone number would provide
information for people of all ages about inpatient and outpatient
substance abuse treatment resources. The budget also includes language
requiring the department to develop a website providing up-to-date
information about treatment and transitional support services across
the Commonwealth, particularly regularly-updated information about
facilities with open beds.

SWM also creates two new line
items to fund substance abuse treatment. SWM appropriates $500,000 to a
new program for the voluntary accreditation of Sober Homes. These
community-based residences are drug- and alcohol-free transitional
housing for people in recovery. There is also language in outside
sections of the budget establishing the language creating these homes.

There is also $10.0 million for
a new non-budgeted Substance Abuse Services Fund to support expansion
of substance abuse treatment. Dollars allocated to this fund would be
available for substance abuse treatment and services.

Other than in substance abuse
programming, there are no major public health initiatives in the SWM
budget. The SWM budget includes:

  • $20.5 million for
    administrative public health functions, $1.7 million more than in FY
    2014;
  • $180.3 million for the
    public health hospitals, $3.1 million more than in FY 2014;
  • $67.6 million for maternal
    and early childhood programs (such as early intervention and the WIC
    Supplemental Nutrition Program), almost level with FY 2014
    appropriations;
  • $4.0 million for smoking
    prevention and cessation programs, level with the FY 2014 amount. (It
    always bears noting that in FY 2001, funding for smoking prevention
    programs topped $69 million when adjusted for inflation; tax cuts and
    changed priorities stripped funding from these services);
  • $8.6 million for youth
    violence prevention programming, $5.3 million or 38 percent below FY
    2014 funding levels;
  • $24.8 million for health
    care access program, including $12.4 million for school-based health
    programs, $4.9 million for family health/family planning, and $1.5
    million for dental health. The department’s health care access programs
    are funded at roughly the same amounts as in FY 2014.

$77.2 million for prevention
and wellness programs, including $13.0 million for the state laboratory
programs, $4.0 for suicide prevention, and $3.3 million for health
promotion and disease prevention programs. This total is almost the
same as the amount in FY 2014.

Housing

The state housing budget funds
affordable housing and provides shelter to low-income homeless families
as well as homeless individuals. The SWM budget recommends spending
$375.4 million on affordable housing which is only slightly less than
the FY 2015 budget adopted by the House and is $30.2 million less than
the Governor’s proposal for FY 2015. The SWM budget is $71.1 million
less than FY 2014 current spending.1
As described below the SWM budget recommends reducing funding below FY
2014 current spending for shelter and short-term housing supports while
providing an increase for rental vouchers.

The number of low-income
families who have become homeless and are eligible for assistance from
the state has grown despite recent efforts to restrict these families’
access to shelter and other supports. Over the last several decades,
the state steadily cut funding for the Massachusetts Rental Voucher
Program (MRVP). The number of vouchers dropped from about 20,000 the
late 1980s to fewer than 5,000 by the mid-2000s. This reduction in
support for low-income renters, along with economic downturns like the
Great Recession, has coincided with an increase in the number of
low-income homeless families needing shelter. (See MassBudget’s Shelter
and Housing for Homeless Families
.)

As the number of low-income
homeless families has grown, the state has significantly increased
funding for shelter even though it has also restricted families’ access
to shelter. FY 2014 current funding for the Emergency
Assistance
(EA) program, which
provides shelter to low-income homeless families including those living
in hotels and motels, is $155.1 million; another $6.2 million is
pending before the Legislature in a supplemental budget. The SWM budget
recommends $136.9 million for EA, a reduction of $24.4 million below
the amount the state is expected to spend in FY 2014 if the funding
pending in the supplemental budget is approved. The SWM budget proposal
for EA is $3.4 million less than the final House budget and $42.7
million less than Governor’s FY 2015 recommendation. The SW M budget
merges the EA family shelter account with the one that helps homeless
families living in hotels and motels.

To help low income homeless
families avoid shelter, the FY 2012 budget created HomeBASE
to provide short-term housing supports including rental and housing
assistance. (For more details please see MassBudget’s Children’s Budget
here: http://children.massbudget.org/homebase.) The SWM budget reduces
funding for HomeBASE to $24.2 million reflecting the fact in the
current fiscal year, 5,000 families will no longer receive rental
assistance provided by the program. Like the House budget, the SWM
proposal increases assistance to help homeless families move into
housing from $4,000 to $6,000 for one year. The SWM also budget also
requires that the Department of Housing and Community Development
(DHCD) develop a plan to determine the maximum amount a family would
need to secure stable housing; this plan could allow families to access
as much as $8,000 in housing assistance in one year.

The SWM Committee, while
providing lower funding for EA in FY 2015 than either the Governor or
the House, recommends an increase for MRVP
of $12.5 million above FY 2014 current spending to $70.0 million. This
level is $9.5 million above the final House budget and $12.5 million
above the Governor’s recommendation for FY 2015. In recent years the
state has increased MRVP funding allowing the state to increase the
number of vouchers to about 8,000. Many of the new vouchers created in
recent years have been provided to families in shelter or who are
losing their HomeBASE subsidies. The SWM Committee estimates its budget
will allow the state to fund at least 1,000 new vouchers in FY 2015.
The budget stipulates that these new vouchers be used to help reduce
waitlists for the program rather than move families from EA shelters.
Even with this increase, the budget funds far fewer than the 20,000
vouchers it supported in the late 1980s and early 1990s.

Among other housing programs,
the SWM budget recommends:

  • $42.0 million for shelter
    and assistance to homeless individuals

    including the Home and Healthy
    for Good Program
    . This amount is
    $2.4 million less than the House and $244,000 less than the current
    budget.
  • $10.5 million for RAFT
    which is $500,000 more than the current FY 2014 budget but $500,000
    less than the House proposal. RAFT provides one time funds of up to
    $4,000 to help low-income families avoid homelessness. The SWM budget,
    like the House budget, does not continue funding, included in the FY
    2014 budget, that provides up to 7 days of temporary lodging for
    low-income families who are about to become homeless but are ineligible
    for EA.
  • $64.0 million for state subsidies
    to public housing authorities

    which is $400,000 less than the FY 2014 current budget and is close to
    the House recommendation.
  • Level funding the alternative
    housing voucher
    (AHV) program
    for people with disabilities at $3.5 million and for the voucher
    program for Department of Mental Health

    (DMH) clients at $4 million. The House and Governor both recommended
    level funding AVH but provide additional funding for vouchers for DMH
    clients.
  • $2.4 million for housing
    services and counseling
    , a
    $650,000 increase above the House recommendation but $250,000 less than
    the current budget.
  • No funding for the new Secure
    Jobs Pilot
    which received
    $500,000 in the House budget. This initiative is a one year
    demonstration project designed to link families served by EA, HomeBase,
    MRVP and RAFT with workforce supports.
  • Allowing the Department of
    Housing and Community Development (DHCD) to withdraw up to $20.0
    million from the General Fund to pay for FY 2015 startup costs and
    energy assistance provided through the Low Income Home Energy
    Assistance Program (LIHEAP).
    LIHEAP, which is largely funded through the federal budget, helps
    low-income households pay their energy bills. Outside Section 89 of the
    Committee’s budget requires that once DHCD receives its federal LIHEAP
    funds, it must reimburse the General Fund for any amount it withdrew
    for the program.

Child Welfare

The FY 2015 SWM Budget proposal
for Child Welfare programs and services is $819.0 million, a 4.0
percent increase over FY 2014 levels and essentially level with both
the Governor and House budget proposals. Funding for programs
supporting our most vulnerable children remains over 10 percent lower
than pre-recession levels.

Multiple initiatives introduced
in the House proposal are not included in the SWM proposal. Initiatives
not included in SWM are:

  • $200,000 for an emergency
    review of DCF management, record keeping, and background check policies
    by the Office of the Child Advocate
  • Development of an IT plan to
    make it easier for case workers in the field to upload real-time data
    into the state system and to communicate with their supervisors.
  • Two amendments that would make
    it harder for DCF to place foster children with members of their own
    extended families. DCF would be required to reject families as care
    providers if their record includes any of a number of offenses, even if
    the nature of the offense is minor or many years in the past. For more
    information on these amendments, see the Massachusetts
    Law Reform Institutes’ analysis of the House Ways & Means
    proposal
    (p 8).
  • The Department
    of Children and Families (DCF) Administration

    receives $74.6 million, on par with the Governor and House proposals
    and 5.0 percent over FY 2014 current spending of $71.1 million. The SWM
    proposal includes language earmarking $1.0 million for general IT
    improvements and mobile technology solutions for social workers.
    Language also reinstates a requirement that DCF ensure the timeliness
    of fair hearing and file two quarterly reports (December 2014, March
    2015) with the legislature on the timeliness of fair hearings. Fair
    hearings allow children and families to appeal a DCF decision regarding
    child placement or a finding of neglect or abuse.

    Social
    Workers for Case Management

    receives $180.4 million, an increase of $7.3 million (4.2 percent)
    compared to FY 2014 current spending. This increase will allow DCF to
    increase staffing with the intention of reducing the caseload levels of
    case workers to no more than 15 cases. Currently, many caseworkers have
    caseload levels of more than 20. The proposed increase matches the
    Governor’s proposal, but is $5.0 million below the House proposal. Even
    the House proposal might not have been enough to achieve desired case
    load levels because of turnover and the time it takes to train new
    social workers, and the SWM proposal provides even less.

    A supplemental budget bill
    pending before the legislature does include language that would let DCF
    transfer funding from other accounts into the Social Workers line item.
    This could provide another source of funding to increase the number of
    case workers. However, the FY 2015 SWM proposal does not include this
    language and limits funding transfers to certain service accounts.

    The
    Child Welfare Training Institute
    ,
    which provides training to new case workers, is basically level with FY
    2014 spending. This opens up questions as to whether the training
    institute has the available resources to train the influx of new case
    workers supported by the increase in funding by SWM.

    Services
    for Children and Families

    receives an increase of $14.2 million over FY 2014 current spending to
    $265.4 million. A supplemental bill pending in the legislature would
    increase the FY 2014 appropriation by $4.0 million and approximately
    $10 million of the proposed increase in FY 2015 is tied to Chapter 257
    rate increases. Chapter 257 standardizes rates according to the
    services delivered by providers to make the system more efficient and
    fair. For the majority of services, this has meant an increase in the
    rates paid to providers. Thus, even at the same service level an
    increased appropriation must be provided to cover the increase in
    rates. Taken together, this account is essentially funded at a level
    that will provide the same level of services as FY 2014. For more
    information on Chapter 257’s rate standardization paid to contracted
    human and social service providers, see this Chapter 257 update.
    Multiple earmarks in the SWM proposal include:

    • $200,000 for the Children’s
      Advocacy Center of Bristol County
    • $100,000 for the Plymouth
      County Children’s Advocacy Center
    • $100,000 for the Children’s
      Cove Cape and Islands Child Advocacy Center
    • $75,000 for the Julie’s
      Family Learning program
    • $100,000 for the Fragile
      Beginnings program
    • $224,953 for the College
      Bound Dorchester Inc. program
    • $25,000 for a learning
      achievement program in Amherst

    The Transitional
    Employment Program (ROCA)

    receives $2.0 million in the FY 2015 proposal, the same as last year.
    ROCA supports youth aging out of the child welfare system, the juvenile
    justice system, parolees and other high risk youth. Programming teaches
    youth about work building positive work habits helping youth stay
    connected. In 2013 ROCA and the MA Executive Office of Administration
    and Finance launched a social innovation financing project to reduce
    recidivism among youth aging out of the juvenile justice system and
    keep them out of the adult criminal justice system. The program is
    initially funded with private investment with the state only
    reimbursing if the program meets certain performance goals. Like the
    Governor, SWM allocates $7.0 million for potential future payments to
    private investors if certain success benchmarks are met. The House
    proposal allocated only $250,000, the same as the projected spending
    level for FY 2014.

    Disability Services

    Disability services receives
    $1.71 billion, an increase of $172.4 million (11.2 percent) over FY
    2014 current spending, but $731,000 and $10.1 million below the House
    and Governor respectively. The major increase goes to Community
    Residential Supports
    which
    receives $991.9 million, an increase of $144.8 million over FY 2014
    current. Most of that increase is needed to cover Chapter 257 rate
    increases. Chapter 257 standardizes rates according to the services
    delivered by providers to make the system more efficient and fair. For
    the majority of services, this has meant an increase in the rates paid
    to providers necessitating an increased appropriation.

    Community
    Day and Work Programs
    receives
    an increase to $173.7 million, $11.8 million above FY 2014 and level
    with the House, but $5.5 million below the Governor’s proposal. This
    increase supports moving more clients into integrated work
    environments. SWM also provides $5.0 million for a DDS
    Employment First Reserve
    to
    further support the transition from sheltered workshops to
    community-based employment and day support programs.

    Community
    Transportation Services
    receives
    an increase of $2.5 million (19.1 percent) to $15.5 million, $400,000
    less than the House and Governor. Respite
    Family Supports
    receives $52.4
    million, essentially level with FY 2014 spending, but $2.5 million
    below the House and Governor. For many families with disabled children,
    the respite program is the only source of support for afterschool
    recreational programming or for specialized caregiving.

    SWM does not fund for an
    initiative introduced in the House that would provide $1.0 million for
    a new pilot program for individuals to participate in a community based
    employment program.

    The SWM proposal for programs
    and services administered by the Massachusetts Rehabilitation
    Commission (MRC) and the Massachusetts Commission for the Blind (MCB)
    is quite similar to the House and Governor with increases over FY 2014
    projected spending of:

    • $3.4 million (28.2 percent)
      to $15.7 million for Head
      Injury Treatment Services
      .
    • $1.3 million (11.0 percent)
      to $13.1 million for the MCB
      Turning 22
      program.

    Elder Services

    The SWM proposal funds Elder
    Services at $248.1 million, $12.7 million more than FY 2014 spending,
    but approximately $6 million below the House and Governor. Elder
    Enhanced Home Care Services

    receives a $10.1 million increase over FY 2014 to $63.1 million, level
    with the House and Governor. This increase will avoid wait lists for
    home care for the elderly allowing over 5,000 elderly to remain at home
    instead of living in a nursing home.

    Two programs which receive less
    than proposals from the House and Governor include:

    • Elder
      Home Care Purchased Services
      at
      $99.8 million, an increase of $1.0 million over FY 2014, but $4.6
      million below the House and Governor.
    • Supportive
      Senior Housing
      at $4.2 million,
      level with FY 2014, but $1.3 million below the House and Governor.

    SWM proposes $500,000 for a Home
    and Community Based Services Policy Lab

    which would analyze and recommend improvements to programs providing
    long term home and community-based services.

    VSWM proposes $11.5 million for
    Grants to Councils on Aging,
    $1.0 million above both current spending and the Governor’s proposal,
    and $115,000 below the House.

    Juvenile Justice

    The Department of Youth
    Services (DYS) receives significant increases in a few of their
    programs, nearly matching increases proposed by the Governor and the
    House. The increases will allow DYS to accommodate 17 year olds in the
    juvenile system. Previously, 17 year olds were treated as adults.
    "Raise the Age"
    legislation passed in 2013 places these kids into the juvenile system
    with appropriate services. These youth will also be safer as youth face
    a much higher risk of being assaulted, including being the victims of
    sexual assault, when they are held with adults. Increases over FY 2014
    which will help support these 17 year olds include:

    • $25.7 million for Detained
      Youth
      , an increase of 4.0
      percent ($995,000), $304,000 less than the House, and $440,000 less
      than the Governor.
    • $118.4 million for Residential
      Services for Committed Youth
      , an
      increase of 6.2 percent (6.9 million), $289,000 more than the House,
      level with the Governor.

    Non-Residential
    Services for Committed Youth

    actually gets cut slightly to $22.7 million, $253,000 below FY 2014
    spending. This proposal is level with the Governor and $86,000 more
    than the House.

    Transitional Assistance

    For entitlement programs like
    transitional assistance, funding levels are significantly affected by
    anticipated caseload levels. The
    "entitlement" part
    means that any qualified person who applies must receive the service.
    Funding for these then is directly tied to how many people qualify and
    apply. These caseload levels have dropped over the past calendar year.
    For more detailed information on caseload levels for transitional
    assistance accounts, see "Research and
    Statistics" on the DTA home page. The caseload for
    Transitional Assistance for
    Families with Dependent Children (TAFDC)

    dropped from 52,659 in December 2012 to 46,546 in December 2013. That
    trend has continued this year with the caseload dropping further to
    45,190 in April 2014. The decrease in caseloads has led to a decrease
    in the projected spending amount for FY 2014 and the proposed funding
    levels for FY 2015 in the Governor, House and SWM proposals.

    The FY 2014 GAA budget funded TAFDC
    grants at $302.0 million. The Governor’s FY 2015 proposal provided
    $263.8 million while the House provided $255.7 million. SWM proposes a
    further decrease to $253.2 million, 16.2 percent below FY 2014 current
    spending, based on projections that the caseload will continue to fall.
    It is important to note that under this program, grants given to
    qualified families have lost significant value over time due to
    inflation. Instead of decreasing the appropriation, SWM could have
    proposed increasing the value of the grant to help these children and
    families pay for basic necessities. For a more in depth analysis of the
    grants value, see TAFDC:
    Declines in Support for Low-Income Children and Families
    .

    The current proposal could also
    have used these savings to provide increases to other programs that
    help low income children and families, such as child care and job
    training. Instead, the SWM proposal provides the Employment
    Services Program
    with just $4.4
    million, a cut of $3.3 million from FY 2014 current spending, and $6.4
    million below the House proposal. This program provides TAFDC
    recipients with education, occupational skills and the employment
    support services needed to acquire and retain jobs. Under the SWM
    proposal, this program is 85.8 percent below FY 2009 GAA inflation
    adjusted levels.

    Emergency
    Aid to the Elderly, Disabled and Children (EAEDC)

    receives $88.4 million, $4.8 million below FY 2014 spending, but
    $834,000 more than the House proposal. EAEDC is a cash assistance
    program individuals who are disabled, caring for someone who is
    disabled, 65 or older, in a Mass. Rehab program, and children who are
    not able to get TAFDC benefits.

    The Department
    of Transitional Assistance Administration

    receives $62.7 million, 3.0 percent below FY 2014 current spending of
    $64.6 million, but $1.6 million above the House. The clothing
    allowance, a one-time payment made in September to TAFDC recipients to
    help pay for back-to-school clothing, remains at $150. This allowance
    has also lost significant value over time due to inflation. A rent
    allowance of $40 per month is not included in budget language.

    Local Aid

    In March, to help cities and
    towns better plan for their local FY 2015 budgets, both the House and
    Senate passed local aid resolutions committing the legislature to
    funding Unrestricted General
    Government Aid (UGGA)
    at $945.8
    million. The FY 2015 SWM budget reflects this commitment, which is
    $25.5 million above FY 2014 levels. The Governor, by contrast, proposed
    level funding.

    UGGA is a form of local aid,
    money that flows from the state budget to city and town budgets,
    helping them fund vital local services such as police and fire
    protection, parks, public works, and schools (UGGA comes in addition to
    direct school support that districts receive from Chapter 70 aid).

    Driven largely by state level
    income tax cuts that cost the state roughly $3.2 billion annually and
    by the lingering effects of the Great Recession, UGGA has been cut
    dramatically since FY 2001. Specifically, the SWM budget’s proposed
    spending level is $779.4 million, or 45 percent, below FY 2001 levels,
    adjusted for inflation. For more information on the history of how
    general local aid has been distributed, please see MassBudget’s paper
    Demystifying General Local Aid in Massachusetts.

    Additionally, the SWM budget
    proposes funding the Municipal
    Regionalization and Efficiencies Grant Program

    at $6.4 million, which is below current funding of $14.6 million but
    above the roughly $3.8 million proposed by both the Governor and House.
    This program provides grants to help cities and towns improve their
    delivery of local services.

    Transportation

    The SWM budget continues
    progress implementing last year’s long-term transportation finance law,
    which planned gradual transportation spending increases each year from
    FY 2014 through FY 2018. Specifically, the SWM budget increases
    transportation spending by $125.7 million over current FY 2014 levels,
    helping MassDOT modernize its infrastructure, investing in capital
    improvements at the MBTA and Regional Transit Authorities, and making
    progress towards ending the practice of borrowing money to pay for MBTA
    operating costs. Following the framework outlined in last year’s
    transportation finance law, the SWM proposal is very similar to both
    the Governor’s and House proposals.

    It is important to note that a
    significant portion of the state’s transportation-related capital
    spending shows up in separate debt service accounts, the largest of
    which is the Consolidated
    Long-Term Debt Service
    line
    item. For FY 2015, 51.73% percent of this $2.07 billion account is
    projected to cover transportation-related debt.

    Libraries

    The state budget supports
    libraries by providing funding for a number of programs including
    direct aid to local libraries; the regional library network including
    the interlibrary loan program; and, the talking book programs for the
    visually-impaired located in Worcester and Watertown. The FY 2015
    budget proposed by the SWM Committee recommends spending $26.7 million
    on all library programs; a $4.4 million or 20 percent increase above
    the FY 2014 budget. In its library budget, the SWM Committee recommends
    a $3.0 million increase, for a total of $10.0 million, for direct
    aid to local libraries
    . Even
    with this increase, state funding for all library programs will be 44
    percent lower, in inflation adjusted dollars, than it was in FY 2001.

    REVENUE

    As is true of the House and
    Governor’s budgets, the Senate Ways and Means (SWM) FY 2015 budget does
    not include any sweeping new revenue initiatives. Like the House, the
    SWM budget also excludes most of the new, ongoing tax changes proposed
    by the Governor.

    Nevertheless, the SWM budget —
    like the House and Governor’s budgets — does call for additional
    revenue beyond the amount agreed to in the Consensus Revenue Estimate.
    (To read more about the Governor’s tax package see MassBudget’s
    review of the Governor’s FY 2015 budget
    .
    To read more about the House’s revenue proposals see MassBudget’s
    review of the House FY 2015 budget
    .)
    All three budgets rely on additional tax revenue and non-tax revenue,
    both one-time and ongoing. Like permanent changes in spending levels,
    ongoing revenue changes affect the state’s long term fiscal condition,
    whereas temporary (one-time) revenue changes are useful for balancing
    the budget only in the current fiscal year (to read more about the
    state’s projected FY 2015 budget gap, see MassBudget’s
    FY 2015 Budget Preview
    ).

    Overall, SWM calls for some $36
    million less in total additional revenue than the House and $166
    million less than the Governor. While both SWM and the House rely on
    less one-time revenue than the Governor, it is important to note that
    SWM and the House each rely on (separate) accounting changes to fund
    the health care costs of retired state workers (“Other than Pension
    Employee Benefits” or OPEB costs) with non-General Fund revenues. In
    each case, the changes ultimately reduce deposits into the state’s
    Stabilization Fund. This complicates apples-to-apples comparisons of
    one-time revenue use between the SWM and House budgets on the one hand
    and the Governor’s budget on the other, because while the Governor is
    withdrawing more from the Stabilization Fund he also is depositing more
    into the fund. (See Non-Tax Revenue section for further discussion of
    OPEB funding.)
    In the sections below, we examine in closer detail the tax and non-tax
    revenue proposals included in the SWM FY 2015 budget proposals.

    Tax Revenue

    The Fiscal Year 2015 consensus
    tax revenue figure agreed to by the Administration, the House and the
    Senate is $24.337 billion, an amount 4.9 percent above the revised FY
    2014 revenue estimate of $23.200 billion. The Senate Ways and Means
    (SWM) FY 2015 budget proposal, like the House and the Governor’s budget
    proposals, relies on additional revenue to be drawn from on a
    combination of new tax and non-tax sources. Some of these additional
    revenues would come from ongoing sources while others would be
    one-time.

    Notable tax revenue proposals
    include a one-year delay of the FAS 109 corporate tax break, a shift in
    venue for smaller tax appeal cases (to reduce backlogs), and an
    extension of the state’s Historic Building Rehabilitation Credit. The
    SWM budget, like the House and Governor’s budgets, also establishes a
    new structure for redirecting large one-time tax settlements and
    judgments from the Stabilization Fund to the General Fund.

    FAS
    109

    The FAS 109 corporate tax break
    is a tax break that primarily affects about a dozen multi-state
    businesses. Delaying implementation of this tax break for another year
    (the tax break has been delayed on a one-year basis in prior budgets)
    would postpone the loss of an estimated $45.8 million in corporate
    income tax collections in FY 2015 (see Governor’s
    FY 2015 budget documents
    ). While
    the details of this tax law change involve technical and complex
    interactions among a corporation’s records for tax purposes and its
    public financial accounting records, the FAS 109 provision, in essence,
    is an attempt to offset certain costs to publically-traded companies
    resulting from the 2008 combined reporting tax reform package.

    As part of that package, rule
    changes were enacted that increased the cost of some tax liabilities of
    some companies operating in the Commonwealth. In certain cases, these
    rule changes would have required changes to a company’s existing
    financial statements. The FAS 109 tax break would allow
    publically-traded companies to claim a new tax break that would offset
    the impact to their financial statements resulting from the effects of
    combined reporting on deferred tax liabilities.

    The Department of Revenue (DOR)
    estimated that this provision would cost the Commonwealth $535 million
    during the period in which it was originally scheduled to be in
    effect—tax benefits were to be
    distributed equally across seven years, 2012-2018 (see DOR report to
    Legislature). DOR has estimated further that 88 percent (or $472
    million) of the total tax reductions associated with the FAS 109 tax
    break will accrue to just fourteen corporations. When this provision
    was enacted, the cost was unknown and a process was established that
    would allow an evaluation of the likely cost before the tax break would
    be implemented.

    TAX
    SETTLEMENT REDIRECTION

    Under current law, for any tax
    settlement or judgment that exceeds $10 million, the amount in excess
    of $10 million is transferred to the Stabilization Fund. In recent
    years, annual collections from these excesses have ranged from about
    $135 million to more than $420 million, thus directing significant
    resources to the Stabilization Fund.

    Similar to the House and
    Governor’s budgets, the SWM budget proposes a new structure that would
    redirect the typical excess amount collected annually from these large,
    one time settlements and judgments to the state’s General Fund for
    direct appropriation to state programs and services. The structure
    proposed by SWM would direct an estimated $203.5 million in ongoing
    revenue to the state budget in FY 2015. This proposal is very similar
    to the Governor’s, but slightly different than the House proposal. The
    House proposal uses a five-year average rather than five-year median to
    calculate the amount transferred from the Stabilization Fund to the
    General Fund (this produces a somewhat higher estimated gain to the
    General Fund in FY 2015, $240 million rather than $203.5 million).
    Additionally, the SWM proposal clarifies that the calculated five-year
    median amount will be transferred to the General Fund even in years
    when total excess collections fall below the calculated median.

    While the new structure(s) may
    simplify state budgeting, providing a more predictable stream of
    revenue to the General Fund, it is important to note that these
    proposals do not generate new revenue. Instead, they simply redirect to
    the General Fund revenue that otherwise would have been deposited in
    the state’s Stabilization Fund. The proposed changes, therefore, would
    reduce future growth of the Stabilization Fund.

    TAX
    REVENUE ENHANCEMENTS

    The SWM FY 2015 budget also
    relies on an additional $12 million in revenue enhancements from a
    proposal to shift more small tax appeal cases from the state’s primary
    Appellate Tax Board (ATB) process to a separate track within the ATB
    designed to handle these smaller claims in a less formal and speedier
    fashion. By reducing the backlog of cases pending before the ATB – and
    by allowing the ATB to focus on cases involving larger tax liabilities
    and requiring its formal procedural rules – the Department of Revenue
    estimates that the Commonwealth can collect additional revenue in FY
    2015.

    HISTORIC
    BUILDINGS REHABILITATION CREDIT

    The SWM budget extends for
    another five years a tax credit that otherwise would have expired in
    December 2017. While this change will not affect the state’s FY 2015
    fiscal position, it will impact state finances in future fiscal years.
    Capped at a total cost of $50 million annually, the Historic Buildings
    Rehabilitation Credit (HBRC) typically costs the Commonwealth between
    $45 million and $50 million a year in forgone tax revenues.2

    Non-Tax Revenue

    The FY 2015 budget proposal
    from SWM relies on several sources of non-tax revenues to balance the
    budget.

    There are three main types of
    non-tax revenue: federal revenues, which are mostly reimbursements from
    the federal government for state spending on the Medicaid (MassHealth)
    program; departmental revenues, which are fees, assessments, fines,
    tuition, and similar receipts; and other revenues, which are mostly
    funds that the state draws from an assortment of non-budgeted trusts.

    FEDERAL
    AND DEPARTMENTAL REVENUE

    Compared to FY 2014, and like
    in the Governor’s and House budget proposals, the FY 2015 SWM budget
    shows a significant increase in federal revenue. These revenues will
    come to the Commonwealth as a partial reimbursement for increased
    spending on MassHealth and health reform expansions with the
    implementation of the federal Affordable Care Act (ACA).

    With the ACA, there will be a
    large increase in enrollment in the publicly-subsidized health
    insurance programs that bring in federal reimbursement. At the same
    time, provisions in the ACA allow for Massachusetts to receive an
    enhanced reimbursement rate for many of these enrollees, as well as
    additional reimbursement for some current enrollees. The SWM budget
    proposal reduces funding for these programs compared to the proposals
    from the Governor and the House, thereby also reducing the amount of
    federal reimbursement the Commonwealth will receive. In addition, SWM,
    the House, and the Governor all anticipate $32.2 million in revenues
    from increased federal reimbursements from the TANF program and the
    soldiers’ homes, and also $13.0 million realized in FY 2015 by delaying
    certain payments to hospitals into the next fiscal year.

    Unrelated to the ACA and other
    healthcare revenues and expenditures, SWM does not include the $24.2
    million in increased departmental revenue associated with the
    Governor’s proposal to expand the state’s “bottle bill.”

    TRANSFERS
    FROM TRUSTS AND OTHER SOLUTIONS TO BALANCE THE BUDGET

    Like the Governor and House,
    the SWM budget anticipates $53.5 million in one-time revenue from
    gaming licenses, and $20 million in new ongoing revenue from slot
    parlors. Also like the Governor and House, SWM anticipates $10.0
    million that will be available as one-time revenue from unused funds
    remaining in various off-budget trust funds.

    The SWM proposes withdrawing
    $140.0 million from the state’s Stabilization (“Rainy Day”) Fund in
    order to balance the budget. This is a one-time revenue source. SWM
    also proposes balancing the budget with the continued withdrawal of
    interest earned by the Stabilization Fund.

    Although not included in the
    chart above, the SWM budget changes the way in which the state funds
    its liability to the State Retiree Benefits Trust ($75.9 million),
    redirecting money that would otherwise go to the Stabilization Fund. In
    FY 2012, the state passed a law directing that an annually increasing
    share of the funds from the Master Tobacco Settlement go into the State
    Retiree Benefits Trust in order to help pay these costs. The SWM budget
    proposes language changing this formula. The SWM’s proposal recommends
    that the Commonwealth meet its obligation with 50 percent of capital
    gains tax revenues that would otherwise go to the Stabilization Fund
    ($61 million in FY 2015). The effect of this is reducing the state’s
    deposit into the Stabilization Fund. In FY 2015, SWM also proposes the
    remainder of the transfer to the State Retiree Benefits Trust would
    come from unused appropriations for debt service. If that is not
    enough, the balance would come from the Master Tobacco Settlement funds
    deposited into the General Fund.

    Note:
    MassBudget’s budget total is higher than other commonly-presented
    budget totals, in large part because we include “pre-budget” transfers
    in our budget totals, which in FY 2015, adds approximately $3.6
    billion. These transfers include tax revenues dedicated to the MBTA and
    to school building assistance, the cigarette excise tax dedicated to
    the Commonwealth Care Trust Fund, the state contribution to the pension
    system, and the transfers to the Workforce Training Fund and to the
    State Retiree Benefits Trust (when designated). We also make several
    adjustments in order to allow for more accurate across-year comparisons
    of budget totals.


    1The
    FY 2014 current budget also provides $20.0 million in funding for
    LIHEAP a program largely funded through the federal budget to help low
    income people pay their energy bills. If the Legislature provides state
    funding to supplement the federal LIHEAP payments it generally does so
    in a supplemental budget during the fall or early winter.

    2Fiscal
    Year 2015 Tax Expenditure budget: (pg. 35, item 1.610 and pg. 62, item
    2.610): http://www.mass.gov/dor/tax-professionals/news-and-reports/state-budget-documents/tax-expenditure-budget/

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