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
- 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
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
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
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
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
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.
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
levelsâ€”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
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
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
- 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
- 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
- A cut of $3.9 million for Kindergarten
Expansion Grants. The House
proposed level funding and the Governor proposed an increase of $3.1
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.
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.
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.
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
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 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
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
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
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.
& 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
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.
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.
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
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
- $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
- $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.
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
- $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
- $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
- $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.
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:
review of DCF management, record keeping, and background check policies
by the Office of the Child Advocate
make it easier for case workers in the field to upload real-time data
into the state system and to communicate with their supervisors.
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).
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.
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.
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.
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
- $224,953 for the College
Bound Dorchester Inc. program
- $25,000 for a learning
achievement program in Amherst
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 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.
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.
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
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.
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:
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.
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.
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.
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.
For entitlement programs like
transitional assistance, funding levels are significantly affected by
anticipated caseload levels. The
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
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.
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.
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
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.
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.
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.
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
In the sections below, we examine in closer detail the tax and non-tax
revenue proposals included in the SWM FY 2015 budget proposals.
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
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.
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
effectâ€”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
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.
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
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
The FY 2015 budget proposal
from SWM relies on several sources of non-tax revenues to balance the
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.
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.”
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.
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.
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.
Year 2015 Tax Expenditure budget: (pg. 35, item 1.610 and pg. 62, item