Analyzing-the-Governor’s-Budget-for-FY-2019






OVERVIEW


The Governor’s Fiscal Year (FY) 2019 budget proposal
level
funds much of state government, includes some targeted initiatives
— including an expanded earned income tax credit (EITC) and
new services for people struggling with and recovering from mental
illness — and proposes small reductions in funding, after
accounting for inflation, for higher education and other areas.



The budget proposes an increase in the state EITC from 23 percent to 30
percent of the federal amount. The EITC is a refundable tax credit that
increases the incomes of lower-income working families. Research has
found that in addition to helping families make ends meet, the EITC can
have
long-term positive effects on children: improving their performance in
school and leading to higher lifetime earnings. The increase to 30
percent of the federal amount would increase the EITC for families by
up to $460 a year.



To improve mental health services, the budget proposal allocates $84
million towards creating a new model of service delivery for adults.
This model aims to provide more coordinated, standardized, and
consistent treatment that would be better aligned with health care
systems. It would seek to provide more comprehensive care, particularly
for people with co-occurring substance use disorders.


The budget funds the state’s colleges and
universities at
levels that don’t keep pace with inflation. Since FY 2001,
state funding for higher education has declined substantially, leading
to rising tuition and fees for students and higher debt levels for
graduates. The proposed funding levels in the Governor’s
budget won’t make up for lost ground and will likely lead to
continued tuition and fee increases.



Compared to recent budgets, this proposal reduces reliance on temporary
revenue sources and temporary savings, but doesn’t end those
practices. It counts on $260 million from an employer assessment to
help fund MassHealth that is scheduled to end after this year (enacted
in response to an historic trend of MassHealth paying for the health
care costs of increasing numbers of private sector employees). The
budget also relies on $65 million from one-time state tax payments by
multi-national corporations as a result of the federal tax changes
— these payments would otherwise likely have been made in
future years.


The rest of this Budget Monitor examines the
Governor’s
proposals for major state programs in greater detail. Links from the
Table of Contents below allow readers to jump quickly to specific
sections. Each section also provides links to our on-line budget tools
including our
Budget Browser
(which provides funding information for
every account in the state budget going back to FY 2001) and, where
applicable, to our Children’s Budget.



TABLE
OF CONTENTS















































Overview Early
Education
K-12
Education
Higher
Education
Environment
& Recreation
MassHealth
& Health Reform
Mental
Health
Public
Health
State
Employee Health Insurance
Child
Welfare
Disability
Services
Elder Services
Juvenile
Justice
Transitional
Assistance
Other
Human Services
Transportation
Housing Economic Development Law
& Public Safety
Local
Aid
Libraries Revenue
(tax & non-tax)
Summary
Chart









EDUCATION



Early Education


Quality early education and care helps prepare our young
children for
success in education and allows them to thrive. Early education and
care also provides critical support for working parents with young
children, by offering safe and reliable care for kids while parents
provide for their families.



The Governor’s Fiscal Year (FY) 2019 budget proposal
allocates $590.9 million to early education and care. The total amount
of early education funding in the Governor’s proposal is a
modest increase of $13.9 million (2.4 percent) above current FY 2018
levels, roughly in line with the expected inflation rate.



There have been significant long-term cuts in early education and care
since state tax cuts in the late 1990s and early 2000s. Funding for
early education and care in the Governor’s FY 2019 budget is
$168.2 million (22.2 percent) below what was available in FY 2001,
adjusting for inflation (see chart below).





bar graph: Early education funding down 22 percent since 2001





Unlike the past several state budgets, the
Governor’s FY 2019
proposal does not include specific line items dedicated to reducing
waitlists for early education and care or to improve quality by
increasing the rates paid by the state to child care providers.
However, the Governor’s FY 2019 budget maintains the rate
increases that took place in FY 2018 and increases funding to provide a
full year of these higher reimbursements. For more detail see
Analyzing
the State Budget for FY 2018.
Larger allocations in the main
subsidy
accounts proposed by the Governor for FY 2019 may promote some
improvement in program quality for young children and families by
further increasing salaries for teachers at some child care centers.



The Governor’s FY 2019 budget provides $235.8 million for
Supportive
and TANF Child Care,
$13.7 million (6.2 percent) above
current FY 2018 levels.
Supportive and TANF Child Care provides
subsidies to children under the care of the Department of Children and
Families and those receiving Transitional Aid to Families with
Dependent Children (limited cash assistance along with work training
programs for low-income families).



The Governor’s FY 2019 budget provides $270.1 million for
Income Eligible Child Care
, $14.7 million (5.8 percent) above
current
levels. Income Eligible Child Care provides subsidies for low- and
moderate-income families not eligible for other child care assistance.
With insufficient funding to meet child care needs across the state,
the waitlist for these subsidies contained over 23,300 kids in October
2017.



In his FY 2019 proposal, the Governor proposes eliminating the
Commonwealth
Preschool Partnership Initiative
(which was funded at
$200,000 in FY 2018). This program helps existing early education
providers — including school districts — expand
access to services, particularly for 3-year-olds.



For information on funding for early education programs going back to
FY 2001, please see MassBudget’s Budget Browser here.



K-12 Education


Providing an excellent education to all children in
Massachusetts
supports future generations in the Commonwealth while contributing to a
strong, knowledge-driven economy. Chapter 70 education aid is the main
program for delivering state support to local districts across
Massachusetts, and ensuring that schools have sufficient resources to
serve all students. For further background on the state’s
education funding system, see
Demystifying
the Chapter 70 Formula
.



The Governor’s Fiscal Year (FY) 2019 budget proposal
increases Chapter 70 Aid
and Reserves
by $118.6 million (2.5 percent)
to $4.87 billion. This increase is roughly the same as the 2.6 percent
($118.9 million) increase in FY 2018.



In determining the Chapter 70 allocations to cities and towns for FY
2019, the Governor’s budget took into account several updates
to last year’s calculations. The Governor’s FY 2019
Chapter 70 proposal includes an annual inflation factor of 2.6 percent,
as determined under Chapter 70 law. This is more than twice the FY 2018
rate. This Chapter 70 proposal also estimates that statewide student
enrollment will decline by 0.4 percent in FY 2019. Finally, the Chapter
70 proposal guarantees a minimum increase of $20 per student for
districts that would not otherwise receive additional aid. This minimum
aid increase accounts for roughly $9 million of the additional proposed
Chapter 70 funding.



The Governor’s FY 2019 budget continues modest steps to
implement some of the recommendations of the 2015 Foundation Budget
Review Commission (FBRC). The FBRC found that schools across the state
are significantly under-resourced relative to the
Commonwealth’s estimate of the costs of educating children,
called the “foundation budget.” This situation
limits the capacity of schools across the state to help all children
succeed.



The foundation budget is based on estimated costs for each element of a
school budget as determined in the Education Reform Act of 1993 and
adjusted mostly for inflation since then. The FBRC found that
components in the formula fail to reflect actual costs and student
needs in several areas, especially employee health care, special
education, as well as supports for English Language Learners and kids
in poverty.



The Governor’s FY 2019 budget partially addresses one of
these problem areas by increasing the foundation rates for employee
benefits (the category which includes health care for school employees)
by between 5 and 11 percent depending on grade level and student
category. This is higher than the standard 2.6 percent inflation factor
used in the rest of the formula. The increase proposed by the Governor
for FY 2019 would generate roughly $24 million in new aid for school
districts. This remains an incremental step relative to fully
implementing the FBRC recommendations. For example, according to the
Department of Elementary and Secondary Education (DESE), changes in FY
2018 and proposed for FY 2019 would collectively implement one-quarter
of the commission’s health care-related recommendations. FBRC
recommendations in the areas of special education, English Language
Learners, and kids in poverty have not been implemented.



FY 2019 will be the third year that Massachusetts has used the
Economically
Disadvantaged
metric for calculating the number of
students in poverty served by districts across the state. In this
process, the number of kids considered economically disadvantaged is
determined by certifying kids through their enrollment in other public
services including MassHealth, Temporary Aid to Needy Families (limited
cash assistance and work training for low-income families), SNAP (food
stamps), and if they meet other criteria such as being in foster care.



Implementation of this new process initially caused a drop in statewide
poverty headcounts compared to prior years. To offset that drop, the FY
2017 and FY 2018 budgets increased the amount of funding directed to
each economically disadvantaged student. DESE and other agencies have
now made significant progress in identifying more students
participating in various state programs as economically disadvantaged.
The Governor’s FY 2019 budget reflects that over 339,000
students in poverty have been identified, up 7.8 percent from 315,000
in FY 2018. Identifying additional students in poverty would tend to
increase aid, particularly for districts serving the lowest-income
families. However, the Governor’s FY 2019 budget reverses
some of the policy changes of the prior two years by lowering the
amount of funding included in the formula for each economically
disadvantaged student by around 5 percent (about $200 per student).
This counteracts some potential aid increases that could have arisen
from the improved identification of kids in poverty.



The Governor’s FY 2019 proposal includes $15.0 million for
the Chapter 70 Reserve
(Foundation Reserve One Time Assistance)
. This
specific funding is intended to support districts who had an influx of
2,400 students from Puerto Rico and the U.S. Virgin Islands after
recent natural disasters. This funding, which would provide
supplemental aid for FY 2019, is not directed to be included as part of
future Chapter 70 calculations. The ordinary Chapter 70 Formula should,
however, account for these students in calculating Chapter 70 aid for
FY 2020 if they remain enrolled. Additionally, this reserve would not
provide immediate assistance to districts who are already serving
affected students in the current 2017-2018 school year. However, the
Legislature is addressing this in a forthcoming FY 2018 mid-year
supplemental funding bill.



The Governor’s FY 2019 proposal provides $862.6 million to
the Massachusetts
School Building Authority
(MSBA) to support district
construction and renovation projects across the state. This amount is
$16.0 million (1.9 percent) above current FY 2018 levels, less than the
expected inflation rate.



The Governor’s FY 2019 budget provides $80.5 million to
Charter
School Reimbursements
, in line with current FY 2018 levels.
When fully-funded, this program is intended to reimburse 100 percent of
outgoing student funding in the first year and 25 percent of this
amount for each of the following five years. However, according to
recent FY 2018 projections from DESE, the same funding level only
supported about half the amount called for by the formula, leaving a
$73.4 million gap. This gap has increased from $56.1 million in FY
2017. This underfunding means that only 71 percent of first-year
outgoing student funding has been reimbursed in FY 2018, with no
reimbursements available for students who left in any of the prior
years. Without additional aid, these gaps may continue to rise as
additional charter school seats are added and districts claim more
reimbursements from the fund. For additional detail on charter school
funding, recent proposals to alter the reimbursement system, and the
impact of recent underfunding, see Charter
School Funding Explained
.



The Governor’s FY 2019 budget proposal creates a new
line-item for Early
College Programs
funded at $3.0 million. Early
college programs typically involve high school students simultaneously
enrolled in college, earning credits towards a higher education degree
while finishing their K-12 education. The initiative proposed by the
Governor has an emphasis on serving underrepresented students and those
pursuing science, technology, engineering and math (STEM) coursework,
which is often connected to high-growth fields in the economy. DESE and
the Department of Higher Education jointly oversee the components and
quality standards for early college programs in the Commonwealth.



The Governor’s FY 2019 budget proposal provides $291.1
million in support for the Special
Education Circuit Breaker
, $9.9
million (3.5 percent) above current levels. The circuit breaker
reimburses school districts for a portion of their costs for educating
students with severe disabilities.



The Governor proposes eliminating several small K-12 grant programs in
FY 2019, including:




The Governor proposes significant cuts relative to current levels for
several of K-12 grant programs in FY 2019, including:




For information on funding for all education programs going back to FY
2001, please see MassBudget’s Budget Browser here.



Higher Education


Higher education is an important factor in the success of the
Massachusetts economy. In fact, 2016 saw our state reach a historic
milestone: the first time

the majority of any state’s
workforce had a bachelor’s degree or higher.
Our
system of
public higher education, comprising three
“segments”—the University of
Massachusetts, the state universities, and the community
colleges—has played a large role in this accomplishment.
Adequate state funding is necessary to help ensure that quality
postsecondary education is affordable and accessible for all who want
to pursue it.


The Governor is proposing a total of $1.19 billion in Fiscal
Year (FY)
2019 higher education spending, an increase of $6.9 million, or just
0.6 percent, over projected FY 2018 spending—less than the
expected rate of inflation. From FY 2001 through FY 2017, state higher
education funding per student dropped sharply, after adjusting for
inflation. Over the same period, tuition and fees at the
state’s public colleges and universities have more than
doubled, and students and families have taken on much larger shares of
the cost of higher education. More students are graduating with higher
levels of student debt. A budget increase that doesn’t even
keep up with inflation will not reverse these trends.


Campus
Funding


The governor proposes a 1.0 percent increase in direct funding
for the
state’s college and university campuses, including a 0.9
percent increase for the community colleges and 1 percent each for the
other two segments of the Massachusetts public higher education system.
(These percentages and the figures in the following table are adjusted
to account for the fact that all community colleges, as well as all
state universities except the Massachusetts Maritime Academy and the
Massachusetts College of Art and Design, send back—or
“remit”—their in-state tuition revenues
to the state’s General Fund. An Outside Section of the
Governor’s budget proposal would create a task force to look
at these tuition retention and remission policies.)





table: Higher education funding by segment





By comparison, the average tuition increase from the 2016-17
academic
year to 2017-18 was 5 percent across the four-year campuses (the
University of Massachusetts and the state universities) and 4 percent
at the community colleges.



State Scholarships



The governor proposes adding
$7.1 million in scholarships for community
college students
, which the Governor describes as the
amount needed to
cover “all unmet need for students to cover tuition and fees
at the Commonwealth’s 15 community colleges.” This
represents a doubling of state scholarship funding for community
colleges. Overall, other scholarship funding in the
Governor’s FY 2019 remains flat when compared with FY 2018
appropriations, and is down 28.6 percent from FY 2001 after adjusting
for inflation.



For information on funding for all higher education line items going
back to FY 2001, please see MassBudget’s Budget Browser here.



ENVIRONMENT
& RECREATION


The state budget funds programs that keep our air, water, and
land
clean; maintain fish and wildlife habitats; and staff and maintain our
parks, beaches, pools, and other recreational facilities. The
Governor’s Fiscal Year (FY) 2019 budget proposes spending
$205.0 million on environment and recreation programs, which is $4.9
million or 2.5 percent more than the current FY 2018 budget.



Some highlights of the Governor’s FY 2019 budget for
environment and recreation programs include:



For information on funding for environment &
recreation
programs going back to FY 2001, please see MassBudget’s
Budget Browser
here
.



HEALTH
CARE



MassHealth (Medicaid) and Health
Reform


The Commonwealth provides health insurance to about 1.9
million people,
including more than 650,000—close to half—of the
state’s children. In addition, the state budget funds
payments to health providers, such as  hospitals that serve
large numbers of low-income patients and nursing homes, to help pay for
care for patients on publicly subsidized health insurance.



To hold back cost growth in the program, the Administration proposes
two primary initiatives. The Governor proposes eliminating MassHealth
coverage for some low-income adults, and reforms coverage and pricing
for pharmaceutical drugs. These proposals are described in more detail
below.



MassHealth Program and Administration



Funding for MassHealth in the Governor’s budget proposal is
$16.29 billion, with $16.13 billion for the MassHealth program, and
$160.1 million for program administration (see table). This is a $216.6
million or 1.3 percent (gross) increase over projected spending in FY
2018. These totals differ from the totals presented by the
Administration, as MassBudget’s totals continue to include
the costs of the Community Choices program, which the
Administration now includes in its funding totals for the Department of
Elder Affairs.



The Governor’s budget shifts costs for some people from
MassHealth in FY 2018 to ConnectorCare in FY 2019, which is funded
through the Commonwealth Care Trust Fund and the Health Connector. (See
further discussion of this proposal below.) The Administration
estimates that this shift will cost $85.0 million from the Commonwealth
Care Trust. The budget includes a
transfer of $130.8 million to this trust, as well as a transfer of
$128.5 million from tobacco excise revenue for a total of $259.3
million. The table below includes those transfers in order to better
align the Governor’s budget proposal for subsidized health
care for low-income adults in FY 2019 with funding in FY 2018.
Together, the Governor’s budget recommends an increase of
$364.2 million above FY 2018 total projected spending, or 2.2 percent.
These are gross totals, and do not reflect the increased federal
revenues the Governor states will come from this shift. (“Net
costs” reflect just the state costs after subtracting federal
reimbursement.)





table






To reduce costs to the state, the Governor proposes moving 140,000
low-income adults off MassHealth coverage and into subsidized
commercial coverage on the Health Connector
(“ConnectorCare”). These are non-disabled adults,
approximately 100,000 of whom are parents or grandparents under age 65
with incomes between 100 and 138 percent of the federal poverty level
who are raising children. This particular group of low-income adults
has been eligible for MassHealth coverage since
Massachusetts’ early health reforms in 1997. The other 40,000
the Administration proposes moving off MassHealth are low-income
childless adults who became eligible for MassHealth with the Medicaid
expansions under the Affordable Care Act (ACA).



Part of the financial rationale for this plan is due to differing
federal reimbursement rates for different types of health spending. In
general, the federal government reimburses Massachusetts for 50 percent
of its spending on the Medicaid/MassHealth program. (See
“What Is the Actual
State Cost of MassHealth in
2018?”
for further explanation of
federal reimbursement.) For
the low-income adults who became eligible for MassHealth under Medicaid
ACA expansion, the federal reimbursement is actually
higher—89.6 percent in calendar year 2018. Currently,
Massachusetts also receives federal reimbursements to subsidize both
co-payments and insurance premiums for low-income people who receive
health insurance through the Connector. Even so, the Administration
notes that switching these adults to the Connector from MassHealth
would save the state $60 million in FY 2019 in “net
savings” thanks to $108 million net in reduced spending at
MassHealth offset by a $48 million net increase in costs at the
Connector.



There are important distinctions between MassHealth and the subsidized
coverage offered at the Connector, and the Administration has stated
they intend to address some of these differences. Currently, there are
some benefits offered by MassHealth that are not part of ConnectorCare,
and there can also be higher out of pocket costs to ConnectorCare
members. Furthermore, the enrollment procedures are not as flexible on
the Connector.



The Administration has stated that they would work to smooth the
transition between the two health insurance systems. For example, the
Administration has stated that they would expand dental benefits for
low-income adults on ConnectorCare, which would benefit more than just
the adults moving from MassHealth, and they would reduce cost sharing.
The Administration has also said they would increase the income
threshold for ConnectorCare Plan Type 1 to 138 percent of the federal
poverty level so that these enrollees would be able to select at least
one plan with $0 premiums, $0 deductibles, and low co-payments so as to
better align with the MassHealth cost sharing structure. However, the
Governor’s budget language does not reflect those suggested
program modifications.



The Governor also proposed two major changes to prescription medication
purchasing, in order to control the ever-increasing costs of
prescription drugs in the MassHealth program. The Administration states
that just 30 high-cost drugs (1 percent) account for 30 percent of
MassHealth pharmacy costs, and total more than $600 million a year. The
first proposal is to expand the state’s capabilities in
negotiating prescription drug prices with the manufacturers and
increase transparency in prescription pricing. The budget includes
language that would allow the state to negotiate drug prices directly
with manufacturers, and implement what are known as
“value-based payment
arrangements”—meaning that payments would be based
on proven clinical effectiveness. If the manufacturer does not agree to
the negotiation, the law would require the manufacturer to publicly
disclose and justify their drug pricing.



The second proposed change to prescription purchasing would be to
create what is known as a “closed formulary.”
Currently, federal law does not allow Medicaid programs to completely
exclude certain drugs from coverage. Massachusetts is seeking an
exemption from this prohibition, so as to exclude what the
Administration says are a small number of drugs that are particularly
high cost or that have no “proven clinical
efficacy” if the price and transparency negotiations are not
successful. The Administration states that they intend to create
protections for MassHealth members and a public process prior to
excluding any medication.



Other Health Subsidies and Related Spending



The budget also includes funding for other supplemental payments to
health safety net providers, funding for other subsidized health
programs, and other administrative and operational supports. In the
table below, the totals for the Medical Assistance Trust show budgeted
appropriations current as of this moment. The timing of operating
transfers into this trust (shown below) which are made up of provider
assessments and federal revenues, do not align with the state fiscal
year. The funding differences from year to year for other trusts also
in part reflect timing discrepancies or changing requirements based on
federal Medicaid waivers. The apparent large difference between FY 2018
and FY 2019 is simply due to the timing of the transfers. There will
likely not be a significant difference in spending from this trust for
FY 2019 compared to FY 2018.





table: Other health subsidies and related spending





The Governor’s budget proposal includes payments to
health
safety net providers through a variety of trusts, funded by a
combination of operating transfer appropriations, re-distributed
assessments on providers, and federal reimbursements. For example, with
the roll out of Accountable Care Organizations this year, funding for
the Delivery Systems Transformation Trust is no longer needed. The
Governor’s budget creates a new trust, the Safety Net
Provider Trust, funded with $167.6 million to provide supplemental
payments to health care providers based on a new initiative in the most
recent Medicaid waiver.



Moreover, as with other parts of the budget, the Governor’s
budget incorporates proposals to implement expanded and improved
behavioral health and expanded substance use disorder prevention and
treatment. In FY 2018, the state dedicated $47.0 million to a new trust
fund to support substance use treatment, supported by federal
reimbursement for the MassHealth program. The budget documents note
that the Administration plans to spend $30.0 million from this fund in
FY 2019. The Administration also expects that with this
year’s implementation of the restructuring of MassHealth into
Accountable Care Organizations, care coordinators will be responsible
for fully integrating and aligning behavioral health services with
medical care.



There is a $15.0 million increase in funding to the Health Information
Trust, made necessary with the transition of funding for the
state’s health insurance eligibility data system (HIX) from
the capital budget to the operating budget. This shift will also reduce
the federal reimbursement rates for this spending.


For information on funding for all MassHealth and Health
Reform
programs going back to FY 2001, please see MassBudget’s
Budget Browser here.



Mental Health


The Governor’s Fiscal Year (FY) 2019 budget includes
$870.0
million for the services of the Department of Mental Health (DMH), in
order to help ensure that people in the Commonwealth struggling with
and recovering from mental illness are able to become healthy, and live
and work successfully in the community. This is a significant increase
over FY 2018 projected spending—$93.2 million more, or an
increase of 12.0 percent. DMH provides supports to approximately 26,000
people—children as well as adults—through a network
of inpatient facilities, residential treatment programs, and community
support services.



Strengthening the state’s supports for behavioral health
services is a priority in the Governor’s budget proposal, and
this initiative is incorporated into funding recommendations for DMH,
as well as funding for MassHealth, the Department of Public Health, and
funding at the Department of Correction (included in the “Law
Enforcement” section of this Budget Monitor).



The Governor’s budget increases funding for adult mental
health services by $95.7 million, (21.4 percent) to $542.9 million over
the FY 2018 current budget (see table). The Governor allocates $84
million of this increase towards restructuring and expanding the
primary adult services program (formerly known as Community Based
Flexible Services) into a different model called Adult Community
Clinical Services (ACCS). The Administration states that this new model
will provide more coordinated, standardized, and consistent treatment
that will be better-aligned with health care systems, and will provide
more comprehensive treatment, particularly for people who also
have  substance use disorders.





table: Funding for adult mental health services





The Governor recommends $90.2 million for
Child and Adolescent Mental
Health
. This is just below projected spending in FY 2018, and
includes
funding for the Massachusetts
Child Psychiatry Access Project
(MCPAP),
an innovative program that improves access to treatment for children
with behavioral health needs by making psychiatrists available to
provide consultation for primary care providers across Massachusetts.



For information on funding for all Mental Health programs going back to
FY 2001, please see MassBudget’s Budget Browser here.



Public Health


The Governor’s budget
proposal for Fiscal Year (FY)
2019
includes $622.9 million for the state’s public health
infrastructure. The Department of Public Health (DPH) oversees a
variety of prevention and treatment services, improves access to health
care, and ensures the safety of our food, water, and land. This total
is $6.7 million more than current FY 2018 budgeted totals. As detailed
below, the total includes some new public health initiatives not
administered by DPH, but that are closely aligned with existing public
health programs. Not included in this total is an additional $3.0
million
from casino revenue that will be dedicated to a new Public Health Trust
Fund. These funds will be used to support the prevention and treatment
of problems associated with compulsive gambling including substance
misuse and addiction.



Overall, the Governor’s budget proposal reflects the
Administration’s continued commitment to prevent and treat
substance misuse, and initiatives at DPH are central to that effort.
Combined, the funding for substance abuse and misuse services in DPH is
$152.9, a $6.4 million increase over FY 2018 budgeted totals (see
table).





table: Funding for substance misuse prevention and treatment





Funding for substance
misuse treatment and prevention
is scattered
throughout the state budget, and the Governor’s FY 2019
proposal allocates some new funding for substance misuse services for
school-aged children to the Department of Elementary and Secondary
Education (DESE). Funding for Recovery
High Schools,
for example, has
historically been within DPH. The Governor proposes moving that funding
over to DESE, but this analysis shifts it back to allow for more
accurate year-to-year comparisons. The Governor also proposes $5.0
million for a new fund to support substance use prevention, education
and screening within the schools. These programs would be coordinated
between both DPH and DESE.



There is little new investment in other areas crucial to protecting the
public health. Maternal
and child health
programs overall receive $69.7
million in the Governor’s budget proposal, $2.2 million more
than current FY 2018 budget totals. This total includes:



  • $11.9 million for the state
    supplement for the
    WIC
    (Women, Infants, and Children) Program
    , just
    above anticipated spending in FY 2018. WIC provides access to healthy
    food and nutrition counseling during pregnancy and in the early years
    of life.

  • $29.3 million for the Early
    Intervention Program
    , essentially level-funded with
    anticipated FY 2018
    spending. This funding supports community-based programs for infants
    and toddlers with developmental delays, or who are at risk for
    developmental delay.

  • However, the Governor does not
    recommend funding for the Postpartum
    Depression Pilot Program.
    This
    program received $50,000 in FY 2018 to support community health workers
    at a handful of health centers who work with women who have been
    identified with postpartum depression.



The Governor’s budget proposes funding the state’s
anti-smoking efforts in DPH through Smoking
Prevention and Cessation
at
$3.4 million. This is a 9.7 percent reduction to the FY 2018 funding
level. At one time, Massachusetts led the nation with its successful
public health campaign to reduce smoking. In FY 2001, for example, the
state budgeted more than the equivalent of $90 million (as adjusted for
inflation) to support anti-smoking efforts. This funding was cut
dramatically in the next year, and has dwindled away over the
subsequent decade and a half.



The department’s oral
health programs
receive $2.6 million, a
10.1 percent decrease compared to FY 2018 totals. A $297,000 reduction
to Dental
Health Services
brings funding for those services to $1.7
million, and the SEAL
sealant and fluoridation program receives
essentially level funding of $894,000.



Domestic Violence and Sexual Assault Prevention
receive
$34.1 million,
a 2.8 percent increase above anticipated FY 2018 spending, essentially
just above inflation. The Administration states that budget totals
include $500,000 for a new domestic violence and sexual assault
prevention and awareness campaign. Funding for the
Sexual Assault Nurse
Examiner
program is $4.8 million, essentially level with FY
2018
spending, and the Governor does not recommend continued funding for the
Healthy
Relationships
grant program, which received $50,000 in FY
2018.



The Governor’s budget proposal increases funding to address
gambling and other
compulsive behavior
by $250,000 to a total of $1.5
million.



There are several programs in the budget that together are designed to
provide community-based activities and supports for young people to
keep them engaged and ultimately reduce violence (see table). Together,
these programs are funded at $9.2 million, a 26.3 percent reduction
from expected FY 2018 spending for these programs. For example, the
Safe
and Successful Youth Initiative
provides young people with a
public health approach to reducing gun-related violence. This program
receives $7.3 million in the Governor’s budget, level with
the FY 2018 total. 





table: Funding for youth violence prevention and youth engagement programs





For information on funding
for all Public Health programs going back to
FY 2001, please see MassBudget’s Budget Browser
here.



State Employee Health Insurance


The Governor’s Fiscal Year (FY) 2019 budget proposal
includes
$1.59 billion to cover the costs of
health insurance for state
employees.
This total includes coverage for current
employees as well
as retirees (discussed more below).



Earlier in January, the Group Insurance Commission (GIC) proposed a
significant restructuring of the health insurance for state employees
and retirees by eliminating plans offered by Harvard Pilgrim Health
Care, Tufts Health Plan, and Fallon Community Health.  The GIC
would instead contract with UniCare, Neighborhood Health and Health New
England. This proposed change would affect about 200,000 of the 450,000
members of the GIC. At the time, the GIC stated that reducing the
number of plans offered in this way would save the state approximately
$20.8 million in the next year. However, there was significant concern
from GIC members that this change would be very disruptive, could
require some members to lose access to their providers, and that
members were given little notice and little opportunity to weigh in on
this decision. On February 1, the GIC voted to reverse this
decision. 



In order to more accurately reflect health insurance costs,
MassBudget’s totals for state employee health insurance
include adjustments that allow for better across-year comparisons (see
table). MassBudget removes from budget totals the amounts each year
that are simply pass-throughs of funding for municipal health
insurance. Municipalities have the option of taking advantage of the
state’s purchasing power by using the GIC to purchase their
employees’ health insurance. Municipalities reimburse the
state for the costs of this insurance, so there is no cost to the state
for adding these municipal employees to the GIC membership rolls.





table: State employee health insurance funding with municipal pass-through adjustment





State
Retiree Benefits



The state has adopted a schedule to move towards full funding of health
and other non-pension post-employment benefits
(“OPEB”) for retirees. The Commonwealth funds the
current and future costs of OPEB through a variety of transfers to the
State Retiree Benefits Trust. The Governor’s budget proposal
includes $441.2 million in an operating transfer directed to the State
Retiree Benefits Trust
. In order to fully fund the cost of
future
retirees’ benefits, in FY 2012 the state decided to dedicate
an increasing share of its annual Master Tobacco Settlement award to
the State Retiree Benefits Trust. The intent was to use 70 percent of
the award in FY 2019, which would be $175.9 million.



However, instead of transferring $175.9 million, the
Governor’s budget proposes transferring an amount equivalent
to just 10 percent of the Tobacco Settlement award—$25.1
million—into the State Retiree Benefits Trust to fund OPEB.
Language in the budget states that this transfer would come from
unexpended debt payments reverted to the General Fund or, if those
reversions are insufficient, the Governor proposes making the transfer
from the Master Tobacco Settlement money deposited into the General
Fund. This total is $150.7 million less than the amount indicated for
FY 2019 in the statute.


There is also language in the budget stating that $4.4 million in
excess capital gains would be transferred from the Stabilization Fund
to the State Retiree Benefits Trust (and an additional $4.4 million to
support pensions) as long as the Stabilization Fund receives at least
$79.2 million in excess capital gains revenue.


For information on funding for State Employee Health Insurance
going
back to FY 2001, please see MassBudget’s Budget Browser

here.



HUMAN
SERVICES



Child Welfare


The Governor proposes $998.3 million in Fiscal Year (FY) 2019
for the
child welfare system, state services that aim to protect children at
risk of neglect or abuse. This is about 2.2 percent more than budgeted
for FY 2018. The increase will help the services keep pace with
inflation. The Department of Children and Families (DCF) —
which is responsible for child protection and custody — has a
mission to protect vulnerable children, both through strengthening a
child’s family environment and removing them from their home
environments, if necessary.



The Governor’s budget proposes a $14.2 million or 2.5 percent
increase for foster care
services
for FY 2019. Foster care services
include out-of-home placements, community-based services,
group
care
services,
and a campaign to recruit new foster parents.





table: Funding for foster care services





The Governor also proposes a 5.1 percent increase for administrative
costs at the DCF
, which includes the cost of bringing in
new employees,
regional office support services, and a program to help DCF clients
transition to employment (contracted with Roca, Inc.).





table: Funding for DCF administrative costs





This year, the Administration proposes level funding for case
management,
which includes social worker training and
salaries for
social workers. The Governor proposes a 1.3 percent, or $3.1 million,
increase over current spending levels. For social worker training, the
Administration proposes a $10,494 increase over what was budgeted in FY
2018, but this increase still leaves the FY 2019 budget almost $150,000
less than current spending levels.





table: Funding for case management





The Governor proposes a 2.8 percent increase over the FY 2018
budget
for family support services — services to help families stay
together. Within this category, the Governor proposes most of these
modest increases go to Family
Resource Centers,
which help children and
families in crisis access public resources, and to Family
Support and
Stabilization
, which try to help children stay in their homes
and help
families work on their own unique challenges.





table: Funding for family support services





The above analysis on child welfare services does not include
the
domestic violence line item, which was formerly housed under DCF but is
now part of the Department of Public Health budget. Please refer to the
Public Health section of this Budget
Monitor
for information on
domestic violence programs.



For information on funding for child welfare programs going back to FY
2001, please see MassBudget’s Budget Browser
here.



Disability Services


While the Governor is proposing a modest increase to
disability
services overall, he proposes larger boosts to services for people with
autism spectrum disorders. He also recommends modest increases to a
program for young adults with disabilities who have graduated from
special education and supports for adults to find and prepare for work.



Disability services include job training programs and community-based
supports to help people with physical and developmental disabilities as
well as their families. The 2.4 percent increase, from $1.95 billion to
$2.00 billion, is about adequate to keep pace with inflation.



The Governor proposes four notable increases in disability services for
Autism Omnibus Services,
the
Turning
22 Program
, transportation
services, and Community Day and Work Programs:



  • A 35.6 percent increase in
    funding for Autism
    Omnibus Services
    , which includes support for
    individuals with autism spectrum disorder, Smith-Magenis syndrome, or
    Prader-Willi syndrome. The Autism Omnibus law established these
    services when it was passed in 2014. The law includes several
    provisions: to require MassHealth coverage of necessary treatments for
    individuals younger than 21 who have autism spectrum disorders; to
    encourage special education teachers to deepen their knowledge about
    autism spectrum disorders; and to create tax-free savings accounts to
    help families cover disability-related services for those with autism
    spectrum disorder or other physical and developmental disabilities.

  • A modest 4.9 percent increase
    in funding for the Turning
    22 Program
    , from a combined $37.3 million to
    $39.1 million. This includes funding across three different departments
    — Massachusetts Commission for the Blind (MCB), Massachusetts
    Rehabilitation Commission (MRC), and Massachusetts Department of
    Developmental Services (DDS)— and pays for a portion of
    services offered during the transition year when the eligible young
    adults turn 22. The Governor recommends a notable increase to the
    Turning 22 program under DDS and essentially level funding for MCB and
    MRC (see below).


table: Proposed funding for the turning 22 program



  • A 7.3 percent increase for transportation
    services
    from home to community-based day programs or
    employment services.

  • For the Community
    Day and Work
    Programs,
    the Governor proposes a 3.7 percent increase.


Meanwhile, the Governor proposes essentially level funding to
most
other items in disability services.



For more information on funding for all disability services going back
to FY 2001, please see MassBudget’s Budget Browser here.



Elder Services


The Governor proposes increasing funding for elder services by
$13.5
million, from $286.1 million budgeted for Fiscal Year (FY) 2018 to a
proposed $299.5 million (4.7 percent) for FY 2019.



Councils on Aging
help elders access services such as
transportation,
food programs, health screenings, recreation, and education. The 16
percent increase Baker is proposing will support a $12 per elder
formula grant, an increase from $9.70 per elder.



The Administration also proposes a 9.3 percent increase for Elder
Protective Services,
to strengthen investigations into
emotional,
physical, sexual, or financial abuse of seniors.



The Governor also proposes a modest boost to elder home care services,
which enable seniors to age in place rather than live in nursing homes.
Most of the proposed 3.3 percent increase will go toward the Home Care
program
’s case management and administration.
The
Administration notes the boost will support more than 600 new clients
and ensure incoming clients will not have to be on a waitlist for
services.





table: Funding for elder services





For information on funding for all elder services going back
to FY
2001, please see MassBudget’s Budget Browser

here
.



Juvenile Justice


The Governor proposes a 1.5 percent, or $2.7 million, decrease
in
overall juvenile justice funding in for Fiscal Year (FY) 2019. The FY
2019 proposal is 0.2 percent, or $339,548 less than current estimated
spending for FY 2018. The Administration notes the decreases are
because Department of Youth Services (DYS) — the agency that
provides juvenile justice services — has seen recent savings.



According to the Administration, these savings are driven in part by an
11.6 percent decline in the DYS monthly caseload between November 2014
and November 2017. They also noted that a decline in caseload allowed
the closure of a program and $2.0 million in savings to the department.
Most services within juvenile justice funding will see essentially
level funding.
Residential
Services for Committed Population

— which funds facilities and residential programs for
DYS-committed youth not living in the community — could see a
0.9 percent decrease from FY 2018 estimated spending. The proposed FY
2019 budget for this account is, however, 3.1 percent less than what
was budgeted for FY 2018.





table: Funding for juvenile justice





For information on funding for all juvenile justice programs
going back
to FY 2001, please see MassBudget’s Budget Browser here.



Transitional Assistance


Transitional assistance programs help low-income individuals
and
families meet their basic needs. In total, the Governor’s
Fiscal Year (FY) 2019 budget proposes funding transitional assistance
programs at $656.3 million, a $30.4 million increase (4.9 percent) from
current FY 2018 levels.



Transitional Aid for Families with Dependent Children
(TAFDC)
receives
a significant increase in funding in the FY 2019 proposal, $31.2
million (19.2 percent) more than current FY 2018 funding. The purpose
of TAFDC is to afford a baseline safety net of financial support for
low-income families with children. Program participants receive a cash
grant, and may also receive job training and assistance, education
support, and child care to help parents find and keep jobs. Yet in
recent years, the value of the cash grant has not kept up with
inflation.



In this proposal, there are several substantive recommendations for
TAFDC:



  • A portion of the proposed
    increase is to support a rise in caseloads, many of whom are families
    from Puerto Rico escaping the devastation from the 2017 hurricane.

  • The increase in proposed
    funding would also support families who are subject to work
    requirements. Since 1995, work-required families receive approximately
    2.75 percent less in grants than non-work required recipients. The
    Governor’s proposal would raise TAFDC benefits for
    work-required families to the level that non-work-required families
    receive.

  • The Governor also proposes an
    improved treatment of earnings for TAFDC recipients who are required to
    work. Currently, the first $200 of monthly earned income and 50 percent
    of the remaining earned income count against TAFDC eligibility. The
    proposal would not count 100 percent of a working recipient’s
    earned income for the first 6 months of employment (as long as total
    income does not exceed 200 percent of the federal poverty level) and
    then count 50 percent of earnings afterwards.

  • The proposal seeks to double
    the TAFDC assets cap from $2,500 to $5,000, which allows more families
    in poverty to be eligible for cash assistance and allow families to
    save money as they return back to work. However, assets limits still
    bar many families in poverty from getting assistance they need and many
    states have moved to eliminate their assets limits all together.



The proposal also keeps the annual back-to-school clothing allowance to
TAFDC recipients at $300 and the monthly rent allowance at $40.



The Governor proposes to reduce funding for the account that
supplements the federal Supplemental
Nutrition Assistance Program

(SNAP) by $300,000 (50.0 percent) below current FY 2018 levels. The
Governor also proposes a new account to provide for transportation
benefits for SNAP
recipients who are participating in the
SNAP work
program. This would be funded at $960,000.



The Department of Transitional Assistance (DTA) also funds some
important workforce development programs. For instance, the Governor
proposes funding the Employment
Services Program
, the primary education
and job-training program for TAFDC clients, at $14.2 million, a $22,000
decrease from current FY 2018 levels. Also, Pathways
to
Self-Sufficiency
, would receive $1.0 million, the same as
current FY
2018 levels. This funding supports employment services for TAFDC
clients who will no longer be exempt from the work requirement
resulting from the 2014 welfare reform law’s mandated
alignment of state disability standards with federal SSI disability
standards.



Emergency Aid to the Elderly, Disabled and Children,
a cash
assistance
program, receives $74.9 million, $3.0 million less than current funding.



Under the Governor’s proposal, the Caseworkers
Reserve

account, which funds salaries for caseworkers in DTA, receives a $2.0
million increase (2.9 percent) over current FY 2018 funding.



For information on funding for all transitional assistance programs
going back to FY 2001, please see MassBudget’s Budget Browser
here.



Other Human Services


The Governor’s Fiscal Year (FY) 2019 budget proposal
includes
$206.2 million for other human services, just under the FY 2018 current
budget total. This funding includes allocations for veterans’
services, food banks, and some cross-agency initiatives such as the
rate increases held in a reserve account for a variety of health and
human services providers that we include in this subcategory of this
Budget Monitor (see discussion below).



The Governor proposes $17.7 million for the
Emergency
Food Assistance
Program
which is level with FY 2018 current funding. This
funding
supplements federal funding to support the statewide network of food
banks that provide food to families struggling to make ends meet.



The Governor proposes a total of $147.8 million for veterans’
services
, $705,000 below FY 2018 budget totals, and $6.5
million below
anticipated spending in FY 2018. The biggest difference is due to a
one-time payment to Gold Star families in FY 2018.



The Governor’s budget includes $400,000 for the Low-Income
Citizenship Program
in the Office for Refugees and
Immigrants,
level-funded with current FY 2018 budget totals. This program helps
legal permanent residents become citizens.



Included in the total for “Other Human Services” is
$38.5 million for legally required Chapter
257 rate increases.
Chapter
257 standardizes rates paid to various types of human service providers
in order to make the system more efficient and fair. The amount
included in the Chapter 257 reserve account funds the planned rate
increases for providers across many human and social service programs.
For more information on the rate standardization and the timing of the
implementation across state agencies, see the state’s Chapter
257 update.
This reserve contains the amounts for the initial
increases, and over the course of the year those funds are then
distributed to the individual agencies to fund their
providers’ rate adjustments. In subsequent years, the rate
increases would be included in the totals of the agencies that received
the funds, and included in the budget totals in other sections of this
Budget Monitor.


For information on funding for all Other Human Services
programs going
back to FY 2001, please see MassBudget’s Budget Browser here.



INFRASTRUCTURE,
HOUSING
& ECONOMIC DEVELOPMENT



Transportation


The state supports an array of transportation systems,
including roads,
bridges, rail, buses, airports, and ferries that enable people and
goods to travel where they need to go. Much state funding for
transportation takes place through dedicated revenue sources and a
separate capital budget process. For a chart and description of the
structure of funding flows for transportation operations and debt
service, see MassBudget’s fact sheet, “
What
Does
Massachusetts Transportation Funding Support and What Are the Revenue
Sources?


The Governor’s proposal would level-fund support for
the Commonwealth’s 15
Regional Transit Authorities
(RTAs) at $80.4 million in
Fiscal Year (FY) 2019. The budget also proposes $367.7 million for the Massachusetts Transportation
Trust Fund
(MTTF) in FY 2019. This is a $64.3 million
more than the FY 2018 amount currently funded, though the current
year’s amount will likely increase with supplemental funding
for snow and ice cleanup later in the year. The Governor’s FY
2019 proposal already includes $83.0 million for a snow and ice
account. With supplemental funding, the amount for the MTTF was
$410.6 million in FY 2017, after adjusting for inflation –
$42.9 million more than the Governor’s current
proposal.  This fund contributes to highways, transit,
intercity rail, small airports, the Massachusetts Turnpike, and Motor
Vehicle Registry, while also receiving funds from tolls and federal
transportation sources, in addition to the state’s
Commonwealth Transportation Trust Fund.


The budget proposes a transfer of $127.0 million in FY 2019 to
support
operation of the
Massachusetts Bay Transit Authority
(MBTA), the same
amount as in FY 2018. Last year’s budget reduced this budget
item by $60.0 million compared to the FY 2017 amount, and was
accompanied by creation of a $60.0 million supplemental capital funding
account for MBTA repair and modernization projects. To date, the MBTA
has spent $53.1 million of the $60.0 million authorized in FY 2018. The
administration expects to make another $60.0 million available for this
use in FY 2019. The MBTA’s stated goals include spending
enough toward achieving a state of good repair to eliminate its backlog
of repairs by Fiscal Year 2032, and to modernize and expand the system
for the region’s population and job growth. The agency could
alternately use this funding on the operational side, such as to
increase bus service, but the MBTA’s Fiscal Management and
Control Board reports that MBTA management believes $127 million will
be sufficient to balance the agency’s anticipated operating
budget. To bridge operating shortfalls in recent years, the agency
introduced various efficiencies, increased its advertising, sold off
land and other assets, privatized some functions, increased fares, and
cancelled late-night bus service, among other actions.


The transfer of budgeted funds away from operations is
partially
counterbalanced by an outside section of the Governor’s
budget proposal that would ease an earlier requirement that ongoing
employee costs be moved from the capital budget to the operating
budget. The MBTA has already shifted hundreds of employees off the
capital budget. The Governor’s budget would allow employees
who work on design and construction to continue being paid through the
capital budget. About $27 million of remaining annual salaries would no
longer need to be shifted. The MBTA notes that this is in accordance
with government accounting standards and federal reporting requirements.



A majority of the MBTA’s revenue comes from a dedicated
portion of the Massachusetts sales and use tax. The
Governor’s budget anticipates $1.03 billion in sales tax
transfers to the MBTA in FY 2019, a $25.0 million increase (2.5
percent) over the FY 2018 amount. Despite the relatively robust
economy, this growth remains below the “worst-case”
three-percent revenue growth projection when this revenue source was
dedicated to the MBTA. (To read more about sales tax funding for the
MBTA, read, “How
Slow Sales Tax Growth Causes Funding
Problems for the MBTA.
”)





table: Funding for transportation






Another outside section of the budget facilitates refunds of
motorists’ $25 court filing fee, if they are eventually found
not responsible for an infraction after a clerk magistrate’s
hearing.


For information on funding for all transportation funding
going back to FY 2001, please see MassBudget’s Budget Browser here.



Housing


Making sure that Massachusetts has an adequate supply of
affordable
housing for low- and moderate-income adults and children is an
important component to improving the health and quality of life of the
Commonwealth’s residents while also investing in our
state’s long-term economic success. The state budget funds
programs that provide shelter and affordable housing assistance to
families and individuals. The Governor’s Fiscal Year (FY)
2019 budget proposes $452.1 million for these programs. This amount,
while $11.4 million more than the current FY 2018 budget, is only
slightly more ($1.9 million) than the amount the state expects to spend
during the current fiscal year.



Homelessness Assistance



Currently, almost 60 percent of the state’s housing budget
funds shelter and assistance to families and individuals who are
homeless or at risk of losing their housing. The Governor recommends
providing $261.0 million for these programs in FY 2019. Of that, most
goes to providing shelter, through the
Emergency
Assistance (EA)
program,
to very low-income families who are homeless and
have
children. The Governor’s budget recommends providing EA with
$160.6 million. While this is $4.7 million more than the FY 2018
current budget, it is about $10 million less than the $170.6 million
the state expects to spend during this year. Because EA provides a
right to shelter for low-income homeless families who are eligible, the
state needs to provide sufficient funding to meet demand. Any
additional funding that EA will need in FY 2018 will either come from
the Caseload and Deficiency Reserve Account, created in the FY 2018
budget to provide supplemental funding to underfunded accounts, or from
a supplemental budget passed by the Legislature. Funding for EA has
fallen from its peak of almost $200 million in FY 2016, as the state
has moved families out of shelter, particularly hotels and motels, into
housing. The state’s Department of Housing and Community
Development (DHCD) may expect the number of families needing shelter to
fall even further in FY 2019 as they try to keep more of these families
housed. There is concern, however, that
the strict requirements governing which families qualify for EA
shelter, may prevent some families from receiving assistance even when
they are homeless. The Governor’s budget, like the FY 2018
current budget, requires that many families first prove they have slept
in a place such as a car or emergency room before they are eligible for
shelter.



The state budget also provides short-term housing assistance to
low-income families who are homeless or at risk of becoming homeless.
HomeBASE
helps families who are eligible for the EA program
to move
from shelter into housing or to provide assistance to keep them housed.
Residential Assistance
for Families in Transition
(RAFT)
helps
low-income families, some of whom may not be eligible for EA or
HomeBASE, to remain housed so that they do not become homeless. Because
the need for assistance is quite high and because it is not an
entitlement program, RAFT often runs out of funds before the end of the
fiscal year. The FY 2018 budget provides $15.0 million for RAFT which
is expected run out sometime in the spring. The Governor recommends
providing the same level of funding that both of these programs
received in the FY 2018 current budget.





table: Funding for homelessness assistance





A smaller portion of the state’s housing budget
provides
shelter and assistance to homeless individuals. The Governor recommends
a slight cut to the program that provides shelter for homeless
individuals
while he level funds the Home and Healthy for Good program,
which provides supportive housing for individuals who have been
chronically homeless. The program that provides shelter and services
for unaccompanied
youth
receives a significant increase in the
Governor’s FY 2019 budget proposal compared with the FY 2018
budget. 



Housing



While the Governor’s budget slightly reduces funding for
homelessness assistance programs, it recommends a small increase in
overall spending for housing programs. The Governor’s budget
recommends spending $191.1 million on housing which is $7.4 million
more than the state expects to spend in FY 2018.



The increases in the Governor’s proposed housing budget
includes $2.7 million for the Housing
Choice Initiative
which the
Governor announced at the end of 2017. This new program provides
incentives for cities and towns to increase their housing supply. The
$2.7 million proposed by the Governor is part of $10 million in total
funding from both the operating and capital budgets that is intended to
give municipalities the incentive to make
zoning and other changes that will add 135,000 new housing units
statewide by 2025. It is worth noting that this initiative provides
incentives to create housing but is not targeted specifically at
expanding affordable housing stock in the state.



The Governor’s budget also recommends providing the
Massachusetts
Rental Voucher Program
(MRVP) with $5.2 million more than
the amount the state expects to spend in FY 2018. Documents
accompanying the Governor’s budget estimate that this
increase will allow DHCD to fund more than 200 new supportive housing
vouchers for low-income renters.



The Governor’s budget recommends providing $2.6 million to
implement the expansion
of Housing Courts
to serve the entire state.
This is an increase of $1.6 million above the current budget to help
pay for increased personnel to work at these courts. (Note: This amount
is not included in the total for housing funding, since MassBudget
includes it in the Courts and Legal Assistance subcategory of the Law
& Public Safety Category.)



In addition to these increases, the Governor’s budget
recommends $400,000 less for the Alternative
Housing Voucher Program
(AHVP) than the current FY 2018 budget. AHVP helps
individual adults
with disabilities secure affordable apartments. This program received
$5.0 million in FY 2018 but the state expects to spend only $4.3
million by the end of the current fiscal year.





table: Funding for affordable housing





For information on funding for housing programs going back to
FY 2001,
please see MassBudget’s Budget
Browser
here.



Economic
Development


Economic development programs aim to strengthen our
state’s
workforce, support community investments, and stimulate economic
activity. In total, the Governor’s Fiscal Year (FY) 2019
budget proposes to fund economic development programs at $140.1
million, a $2.6 million decrease (1.9 percent) from current FY 2018
levels.


Not included in the economic development totals are $1.8
million in
non-budgeted funding (money allocated outside the budget process) -
$1.2 million to the Tourism Trust Fund and $600,000 to the Mass.
Cultural Council. This funding comes from casino tax revenue.


The Governor recommends increases to several workforce
development
programs. For instance, Learn
to Earn
would receive $1.0 million, a
$750,000 increase over current funding levels. This program trains and
places unemployed and underemployed individuals in jobs in high-demand
fields through partnerships between public agencies, businesses,
community-based organizations, and career centers. The Workforce
Competitiveness Trust Fund
(WCTF) would receive $5.0
million, $3.3
million above current funding. WCTF is an employer grant program that
has similar workforce development goals as Learn to Earn. Also, the
proposal provides $1.5 million in new funding for Advanced
Manufacturing Workforce Development Grants
, which provides
training to
unemployed and underemployed individuals, including veterans.



The Governor also proposes funding decreases— about 6 percent— for
workforce development programs like YouthWorks,
a summer jobs program
for at-risk youth; and One-Stop
Career Centers
, which helps job
seekers, particularly those receiving unemployment insurance, improve
their skills and navigate the job search process. Most of the reduction
in YouthWorks reflects the removal of dedicated funding (or earmarks)
to specific organizations running youth employment programs. Also, the
Workforce Training Fund would
receive $500,000 less than current
funding – a 2 percent decrease.



The Massachusetts
Service Alliance,
which serves as the state
commission on service and volunteerism, would see a proposed $1.8
million decrease (58.6 percent) from current funding levels.



The Governor proposes $2.0 million—$1.3 million over current
funding—for Small
Business Technical Assistance Grants
, which
are competitive grants awarded to economic development organizations to
provide technical assistance or training programs to businesses with 20
or fewer employees. Also, the Governor recommends $1.2 million for the
Small Business
Development Center at UMass
—$212,000 less than
current FY 2018 funding.



The Governor proposes funding the Massachusetts
Office of Travel and
Tourism
(MOTT) at $4.2 million. This total reflects a $4.0
million
transfer from the Tourism
Trust Fund.
For the Regional
Tourism Council
Grants,
the Governor provides $6.0 million, which comes
entirely from
the Tourism Trust fund. The current statute transfers a total of $10.0
million in room occupancy tax revenue (from hotel room taxes) to the
Massachusetts Tourism Trust Fund and distributes 40 percent of this
funding ($4.0 million) to MOTT and 60 percent ($6.0 million) to the
Regional Tourism Councils. Overall, the proposal funds travel and
tourism $9.2 million less than current FY 2018 funding.  





table: Funding for tourism


Finally, the Governor recommends several new economic
development
programs, including:



  • $1.2 million for Cannabis
    and
    Hemp Oversight
    ;



  • $1.0 million for
    Manufacturing
    College;



  • $350,000 for Downtown
    Regional
    Grant Program;



  • $700,000 for Registered
    Apprenticeship Expansion;



  • and $200,000 for Business
    Export Grants.



For information on funding for all economic development programs going
back to FY 2001, please see MassBudget’s Budget Browser
here.



LAW
& PUBLIC SAFETY


The Law & Public Safety budget includes prosecutors;
law
enforcement; the Departments of Correction and Probation; sheriffs; the
courts; and legal defense for those unable to afford it themselves.
Overall the Governor’s Fiscal Year 2019 (FY 2019) Law
& Public Safety budget is $3.01 billion, which is 5.2 percent
over expected FY 2018 spending.



The Governor’s budget includes an increase of $68.5 million
to fund projected costs of collective bargaining agreements with the
state’s public safety unions. As of now we do not know the
exact allocation of these funds across the various public safety
subcategories, so readers should be aware that some of the
subcategories in the following table and in the text that follows will
end up with larger increases, once amounts and allocations of the
collective bargaining costs are final.





table: Funding for law and public safety





Prosecutors



The Governor proposes spending $7.6 million, or 4.5 percent, over FY
2018 spending on prosecutors—the Attorney General and
District Attorneys. The Governor proposes a $3.0 million reserve fund
to bring minimum salaries
for assistant district attorneys
up to
$46,000 in 2019. A
2014
Massachusetts Bar Association report
found that
Massachusetts assistant district attorneys were “grossly
underpaid, earning far less than their counterparts in comparative
jurisdictions across the country,” leading to a
“revolving door of prosecutors.” This reserve
account was first funded in FY 2016—also at $3.0 million. The
Suffolk and Hampden District Attorneys also receive large percentage
increases
in the Governor’s budget over FY 2018
spending (5.7
percent and 6.1 percent, respectively).



Law Enforcement



The Governor proposes spending $17.1 million, or 4.4 percent, over FY
2018 spending on law enforcement. This includes $5.1 million in
additional funding for the Chief
Medical Examiner
, which is facing an
increasing caseload due to the statewide opioid epidemic. Massachusetts
had the 8th-highest death rate from drug overdoses in the United States
in 2016.



Prisons, Probation, and Parole



The Governor proposes an increase of $42.5 million, or 2.9 percent,
over FY 2018 spending on prisons, probation, and parole. This includes
a $3.0 million (30.8 percent) increase for the Massachusetts Alcohol
and Substance Abuse Center
. The Massachusetts Alcohol and
Substance
Abuse Center, housed within the Plymouth County Correctional Facility,
has been the subject
of recent criticism
for its treatment of people
struggling with drug addiction. The governor also proposes large
increases to the Suffolk,
Essex, and Franklin sheriffs.



Courts



The Governor proposes an increase of $11.4 million, or 2.2 percent,
over FY 2018 spending on courts. This includes a $1.6 million expansion
of the state’s Housing
Courts
. The Governor proposes a $6.6
million (10.0 percent) increase in funding for Trial Court
justices’ salaries
, as mandated by state
statute. The
Governor’s budget also includes a $1.1 million increase (3.9
percent) for the Probate
and Family Courts
, which the Governor says is
“to help alleviate pressure on overburdened courts due to
recent spikes in cases related to substance misuse and
children’s needs” in Western Massachusetts.



Additionally, the Governor’s budget includes an Outside
Section authorizing the trial court to transfer funds within its
divisions, as long as no more than 5 percent of transferred funds come
from the probation and community corrections appropriations.



Legal Assistance



Massachusetts funds legal assistance for those who cannot afford it
themselves. Among all the Law & Public Safety subcategories,
the smallest increase over FY 2018 spending in the Governor’s
budget goes to legal assistance: just $3.4 million, or 1.3
percent—less than inflation.



The Committee for Public
Counsel Services (CPCS)
provides legal defense
for those who cannot afford it in “criminal,
delinquency,
youthful offender, child welfare, mental health, sexually dangerous
person, and sex offender registry cases.”
The
Governor
proposes an increase in CPCS funding of just $3.2 million, or 1.4
percent—insufficient to keep up with inflation.



The remaining legal assistance funding is distributed across three line
items, each of which is seeing just a 1.0 percent increase in the
Governor’s budget—again, lower than the rate of
inflation:



  • Massachusetts
    Legal Assistance
    Corporation (MLAC)
    is a nonprofit that funds civil legal
    defense to
    low-income Massachusetts residents in cases involving, among other
    things, child welfare, domestic violence, housing, employment,
    immigration, health care, and government benefits. MLAC received $18.0
    million in FY 2018, but the legal aid programs it funds have to turn
    away about two-thirds of eligible residents who seek legal assistance
    45,000
    low-income people each year.

  • Prisoners
    Legal Services
    is a
    nonprofit that provides civil legal defense to, and advocates on behalf
    of, people incarcerated in Massachusetts prisons and jails, with
    particular focus on health care, assaults by correctional staff,
    conditions of confinement, and segregation (which includes solitary
    confinement). Currently there are over 3,000
    prisoners for every PLS
    attorney.

  • Mental Health
    Legal Advisors
    Committee
    is a branch of the Massachusetts Supreme
    Judicial Court that
    provides advocacy and legal representation to low-income people with
    mental health concerns.


table: Funding for legal assistance





For information on funding for all Law and Public Safety
programs going
back to FY 2001, please see MassBudget’s Budget Browser here.



LOCAL
AID


Unrestricted Local Aid



The Governor’s Fiscal Year (FY) 2019 budget proposes to
increase Unrestricted General Government Aid (UGGA) by $37.2 million
over current FY 2018 levels to $1.10 billion, an increase of 3.5
percent. This is less than last year’s $39.9 million increase.



General local aid helps cities and towns fund vital local services such
as police and fire protection, parks, and public works. For more
information on general local aid, please see
Demystifying
General Local
Aid in Massachusetts.



The Commonwealth’s capacity to fund general local aid has
been hindered by a series of significant state-level tax cuts during
the 1990’s and 2000’s combined with the Great Recession. While over the
past several years, general local aid funding has increased in step
with or slightly above inflation, it still remains 39.8 percent below
FY 2001 levels, when adjusted for inflation.





bar graph: General local aid






Other Local Aid



The Commonwealth provides other sources of local aid to cities and
towns for more specific purposes. The largest form of local aid is for
K-12 education, which is discussed separately in the K-12 Education
section. Aid for libraries is also discussed in its own section in this
Budget Monitor.



The Governor’s budget proposal would provide $10.2 million
for the Municipal
Regionalization and Efficiencies Incentive Reserve
– $1.25 million below the amount initially
enacted in the
current FY 2018 amount. Identical to last year, as part of this
proposal, the Governor’s budget would provide $3.4 million
for a competitive public
safety grants
program for populous communities
with low per-capita police funding. It would allocate $2.8 million for
continuing a District
Local Technical Assistance Fund
administered by
the Division of Local Services within the Department of Revenue. The
proposal would provide $2.0 million to fund a competitive grants
program for regionalizing
services or planning,
and $2.0 million for
the Community Compact
incentive program to support best local practices.



Some cities and towns receive other forms of non-education local aid
from smaller programs that provide aid only to a subset of qualifying
cities and towns. For example, the Governor’s budget would
provide $26.8 million for local
payments in lieu of taxes
to
communities with state-owned land that is not subject to local property
taxes. This is the same amount as this item has been since FY 2014. The
Governor’s budget reflects lower horse racing revenue with
the same amount of racing revenue shared with cities and towns
($721,000) as in FY 2018.



For information on funding for Local Aid programs going back to FY
2001, please see MassBudget’s Budget Browser here.



OTHER



Libraries


The state budget supports local libraries, the Boston Public
Library,
which serves as the primary research and reference service for the
Commonwealth, and other library programs in Massachusetts. The
Governor’s Fiscal Year (FY) 2019 budget proposes spending
$25.6 million on public libraries, which is $170,000 above the current
FY 2018 budget. Most of the major programs funded through the library
budget, including state aid to municipal libraries and to the regional
library program, receive an increase of 1 percent which does not keep
pace with increased costs due to inflation. Below is a summary of the
Governor’s funding proposals for libraries in FY 2019
compared with the FY 2018 current budget.





table: funding for libraries





For information on funding for all libraries line items going
back to
FY 2001, please see MassBudget’s Budget Browser
here.



REVENUE


The Governor’s Fiscal Year (FY) 2019 budget contains new
sources of revenue from casinos and marijuana, as well as a new
temporary source of federally-induced corporate income tax, a proposed
extension of the room-occupancy tax to short-term rentals, and the
second year of a temporary health care assessment for employers. The
budget also presumes a previously scheduled reduction in the personal
income tax rate from 5.10 percent to 5.05 percent. The major
tax-related policy proposal included in the Governor’s budget
is an increase in the state match to the federal Earned Income Tax
Credit (EITC) that would provide additional funds to low-income working
families when they file their 2019 taxes in 2020.



Tax Revenue


The starting point for every state budget is the Consensus
Revenue
Estimate (CRE). The FY 2019 CRE figure agreed to by the Administration,
the House, and the Senate is $27.594 billion, an amount $933 million or
3.5 percent above the current FY 2018 benchmark estimate of $26.661
billion, which is a $157 million increase over the prior estimate. In
light of about $220 million in other tax law changes (such as a
triggered reduction in the personal income tax rate), however, this
means that to achieve the level of actual tax revenue growth ($933
million), the baseline revenue growth in FY 2019 would have to increase
by $1.153 billion, or 4.3 percent, over the FY 2018 benchmark estimate.


Other assumptions and new policies also affect the amount of
available
tax revenue for the budget:




  • Marijuana
    sales
    – With the legalization of recreational
    marijuana, the budget anticipates $63 million in marijuana sales taxes
    and excise taxes, $40 million of which is directed to the Marijuana
    Regulation Fund, $3.7 million of which is directed to the Massachusetts
    School Building Authority, and $19.3 million is transferred to the
    state’s General Fund.



  • Casino opening
    – The budget proposal anticipates $60.0 million in new casino
    revenue, including $43.8 million to support budget spending and $16.2
    million allocated outside the budget process. The funds allocated in
    the budget include: $12.0 million for a Gaming Local Aid Fund, $9.0
    million for a Transportation Infrastructure and Development Fund, $8.4
    million for an Education Fund, $6.0 million for the Stabilization Fund,
    $5.7 million for a Gaming Economic Development Fund, and $2.7 million
    for a Local Capital Projects Fund. Of the funds directed to
    non-budgeted sources, the largest share is $6.0 million directed to a
    Long-Term Liability reduction fund for debt reduction. Apart from these
    casino revenues, the state is also expecting $54.4 million in
    anticipated Plainridge slots revenue, approximately $10 million less
    than FY 2018 to account for the possible impact of the opening of
    Springfield casino on Plainridge. 



  • Corporate
    dividend repatriation
    – As a result of the new
    federal tax law, the Governor’s budget anticipates $65.0
    million in new, one-time revenue from the accumulated profits of the
    foreign subsidiaries of U.S.-based corporations. While these
    subsidiaries’ foreign profits were subject to U.S. taxation
    when they were “repatriated” in the form of
    dividend payments back to the U.S. parent, over $2 trillion is
    currently held (for tax purposes) abroad. The new federal law deems
    these profits to have been repatriated and applies a discounted federal
    tax rate – thus creating a one-time increase in revenue.
    Under existing state law, a small share of these repatriated profits
    attributed to Massachusetts will be subject to taxation.



  • Short-term
    rentals
    – Similar to last year, the Governor
    proposes to extend the state’s five percent room occupancy
    tax — which is paid currently by hotels and motels
    — to include short-term housing rentals, including those
    rented on online platforms such as Airbnb. This proposal would apply
    only to rooms rented 150 or more nights per year and is estimated to
    generate $13 million in additional state revenue. Localities would also
    be empowered to charge their own tax of up to six percent (6.5 percent
    for Boston.) The budget proposal would also allow companies like Airbnb
    to enter voluntary agreements to collect these taxes on behalf of the
    state. Airbnb’s website lists 39 other states, as well as the
    District of Columbia and Puerto Rico, where laws enable the company to
    collect and remit taxes on behalf of the host. For more information on
    Airbnb and Massachusetts state taxes, see MassBudget’s July
    2016 fact sheet, “Airbnb
    and Taxes: What Other States are Doing and How Much Revenue Might Be
    Raised in Massachusetts.



  • Earned income
    tax credit (EITC
    ) – While it will not impact
    this year’s budget, the Governor proposes to expand the
    state’s Earned Income Tax Credit (EITC) by increasing the
    state match of the federal EITC from 23 percent to 30 percent. This is
    a refundable tax credit for low-income workers to increase the
    after-tax rewards from work. It is available only to tax filers with
    earned income and provides benefits primarily to workers with children.
    The new federal tax law erodes the value of the EITC over time by using
    a slower adjustment for inflation. A body of research has shown that
    — in addition to encouraging people to work and helping
    families to make ends meet — the EITC improves health
    outcomes for mothers and children, and boosts children’s
    academic performance and lifelong income earnings. By increasing
    Massachusetts’ state match rate to 30 percent, the
    Commonwealth would be on par with New York’s match, though
    below other states such as Vermont, New Jersey, and California. The
    proposed increase would begin January 1, 2019, meaning the higher
    credits would be paid after low-income workers file their taxes in
    2020. The annual cost for the increase will be about $65 million per
    year when fully implemented. The last time the Governor’s
    budget proposed increasing the EITC, it proposed cuts to the
    state’s Film Tax Credit to pay for the change.  The
    Governor’s FY 2019 budget does not appear to propose a
    funding source for the cost of this initiative when the state begins
    paying for it in FY 2020.



table


Non-Tax Revenue


The Governor’s Fiscal Year (FY) 2019 budget proposal
relies
on a variety of non-tax revenues—federal revenues, which are
mostly reimbursements from the federal government for state spending on
Medicaid (MassHealth and related costs); departmental revenues, which
are fees, assessments, fines, tuition, and similar receipts; and what
are known as “transfer” revenues, which include
lottery receipts, revenues from the newly-licensed gambling facilities,
and funds that the state draws from an assortment of non-budgeted
trusts.



There are several non-tax revenue issues of note in the
Governor’s budget proposal. The first is not new, but is a
significant revenue source scheduled to end after FY 2019: the $259.9
million in revenue from an assessment on employers to offset increased
MassHealth costs. This assessment was put into place in response to a
growing number of private sector employees not getting
employer-sponsored insurance and instead enrolling in MassHealth.


Temporary Budget-Balancing
Strategies


The Governor’s budget is balanced partially with
temporary
savings and revenue:



  • Assessment
    for employees on MassHealth
    –As mentioned above,
    the budget includes an employer assessment to defray state MassHealth
    costs due to employees using health insurance coverage under
    MassHealth. This assessment will expire after this year.



  • Underfunding
    state retiree health benefits by $150.7 million

    – State law dictates that by FY 2019 the state should be
    transferring 70 percent of the Tobacco Settlement to the State Retiree
    Benefits Trust, or $175.9 million. Instead of this amount, the
    Governor’s budget includes $25.1 million for these
    “other post-employment benefits”
    (“OPEB”) for state retirees paid from debt
    reversions or, if those reversions are not available, using the Tobacco
    Settlement funds (see the “State
    Employee Health
    Insurance
    ” section of this Budget
    Monitor.) 



  • Sale of
    state-owned property
    – The Governor’s
    budget includes $29.5 million in transfers to the General Fund from the
    sale of state-owned property, the Sullivan Courthouse in East
    Cambridge. There had been delays with this sale, but the Administration
    expects the sale will close in FY 2019. This is a non-recurring revenue
    source because the property will not be available to sell again in
    future years. 


table


The Governor’s budget appears to break from budget
writers’ recent practices of obtaining temporary
“savings” from underfunding accounts relative to
their anticipated costs and then providing substantial supplemental
funding in subsequent legislation later in the year. The
Governor’s proposal fully funds anticipated snow and ice
removal for winter storms, as well as fully funding typically
underfunded accounts for sheriffs and public counsel. Unlike in the
past several years the Governor’s budget does not anticipate
drawing money out of the Commonwealth Care Trust Fund to help balance
the budget. In fact, there is an appropriation this year into that
fund. (See the “MassHealth
and Health Reform

section of this Budget
Monitor
.)



Unlike past years, the Governor proposes to fully fund the statutorily
required $88.5 million deposit of capital gains taxes to the
state’s Stabilization Fund (“Rainy Day
Fund”). In addition, the budget deposits $6.0 million in
gaming revenues and $3.7 million from sale of abandoned property into
the Stabilization Fund. These funds will be available to the state when
the current long economic recovery period comes to an end and new funds
are needed for needs such as unemployment benefits and filling other
shortfalls from reduced revenue.


Department of Revenue
Administration


Among its other activities, the Department of Revenue (DOR),
through
its Office of Tax Administration, makes sure that taxpayers are paying
taxes they legally owe to the state. These activities are funded
through two primary accounts including the DOR administrative account
(1201-0100) and the Additional Auditors Retained Revenue account
(1201-0130). DOR hires auditors and collectors who identify taxes
legally owed to the state that have not yet been paid, and works with
taxpayers to collect these unpaid taxes.



For these DOR tax activities, the Governor proposes a combined $106.7
million, which is 0.2 percent more than current FY 2018 funding levels,
but remains 41.0 percent below the 2001 level, when adjusting for
inflation. The DOR’s lower funding levels in recent years
partly reflect large numbers of employees who have taken part in the
Commonwealth’s early retirement program. Large staff
reductions can have implications for DOR’s ability to
identify and collect all the taxes owed to the Commonwealth, such as
those that lead to large tax settlements. If vacated positions are not
filled in future years (which will require reversing some or all of the
recent cuts), there is a danger that the cuts not only could reduce
permanently the Commonwealth’s ability to collect unpaid
taxes that are legally owed to the state, but also that such cuts could
engender greater levels of tax evasion. If sophisticated, well-financed
taxpayers come to view DOR’s audit and collection capacities
as permanently degraded, some of these taxpayers could see this as an
opportunity to reduce their tax payments through increased levels of
tax evasion or other forms of non-compliance.


You can see historical funding levels for administration of
the DOR at
MassBudget Budget
Browser
here.



TOTAL
BUDGET BY CATEGORY
& SUBCATEGORY


To allow for more accurate
year-to-year comparisons and to better include all appropriated
spending, MassBudget makes certain adjustments to the budget data as
presented by the Administration and Legislature.



FY 2019 Governor
column shows funding in the structure of
the FY 2018
budget in order to allow for more accurate across-year comparisons. For
example, if the FY 2019 budget proposal consolidates several line
items, using information provided by the Administration, MassBudget
“un-consolidates” the total and re-distributes the
amounts back into their prior year’s line items in order to
allow for more accurate across-year comparisons of totals.



FY 2018 Current
column shows the budgeted General
Appropriation Act as
enacted in July 2017, and as amended by supplemental budget legislation.



For other explanatory information, see details below the chart.





table: Budget by category and subcategory






  • MassBudget’s totals
    include the
    “pre-budget transfers”
    of funds.
    Statutes require that the Legislature transfer portions of revenue
    prior to the appropriation process to support certain functions.
    Although these transfers function no differently from appropriations,
    the Governor and Legislature do not reflect these expenditures in their
    budget totals; instead, they are shown as amounts deducted or
    transferred from revenue prior to the budgeting process. To better
    reflect total state funding, MassBudget includes these pre-budget
    transfers in appropriation totals. In the Governor’s budget
    in FY 2019, these transfers add $4.68 billion to the total. These
    transfers are: tax revenues dedicated to the MBTA and school building
    assistance, cigarette excises dedicated to the Commonwealth Care Trust
    Fund, the state contribution to the pension system, a transfer to the
    State Retiree Benefits Trust, and transfers to the Workforce Training
    Trust.



  • MassBudget’s totals
    include annual appropriations into non-budgeted
    (“off-budget”) trusts
    . The transfer of
    funds from
    the General Fund or another budgeted fund into a non-budgeted trust is
    a form of appropriation, and should be treated as any other
    appropriation. Prior to FY 2011, the budget authorized these transfers
    in Outside Section budget language. Starting in FY 2011, a new section
    of the budget, Section 2E, systematically accounted for the transfer of
    funds into off-budgeted trusts. MassBudget’s totals include
    these operating transfers in all budget years.



  • When spending that is now
    included in the budget was previously “off-budget,”
    MassBudget’s totals include the prior years’
    “off-budget” spending totals in order to reflect
    more accurate year-to-year
    comparisons.
    For example, funding directed
    to health care providers as partial reimbursement for uncompensated
    care was previously funded by a transfer of federal revenue directly
    into the off-budget Uncompensated Care Trust Fund. This spending was
    brought on-budget in FY 2009, and incorporated into the
    state’s budgeted health care appropriations.
    MassBudget’s health care budget totals include the off-budget
    spending for these services in order to reflect a more accurate
    across-year comparison.



  • MassBudget reduces State
    Employee Health Insurance
    totals to exclude spending on
    health
    insurance for municipal employees and retired teachers for which the
    state is fully-reimbursed by participating municipal governments.



  • MassBudget reduces funding for
    the community colleges, state universities, and University of
    Massachusetts campuses by the amount of tuition that these campuses
    remit to the state treasury each year. These adjusted totals more
    accurately reflect the “net” appropriations
    available to the campuses to support operations, and allow for more
    consistent comparisons across the years, since the policies about
    tuition remission
    have varied from year to year and from
    campus to
    campus. For example, until FY 2003, all of the University of
    Massachusetts (UMass) campuses were required to remit to the state
    treasury all tuition from all students. From FY 2004 – FY
    2011, UMass Amherst (only) remitted only in-state tuition, and retained
    tuition from out-of-state students. Starting in FY 2012, the remaining
    UMass campuses were also allowed to retain tuition from out-of-state
    students. Starting in FY 2017, all of the UMass campuses retained all
    tuition revenue, remitting none. The MassBudget adjustments make it
    possible to make meaningful comparisons of appropriations to these
    campuses even with these policy changes.



  • MassBudget’s totals
    include funding paid for out of anticipated
    reversions.
    Reversions are
    appropriated funds that remain unspent by the end of the year that are
    then returned to the General Fund. For example, a portion of funding
    for health care for retired state employees has in some years come from
    anticipated reversions of funds.



  • MassBudget’s totals
    reflect legislatively-approved
    “prior appropriation
    continued”
    (PAC) amounts. In most instances,
    MassBudget
    shifts the PAC amount from the year in which the funding was first
    appropriated into the year in which the Administration expects to spend
    the totals.



  • Because MassBudget totals
    reflect budgeted appropriations and not actual spending, there can be
    apparent fluctuations in the MassHealth and Health Reform totals that
    are simply due to the timing of payments to certain off-budget trusts.
    These budget variations may not reflect real differences in spending.




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