budget_monitor_confpreview_fy16


[Updated for accuracy, June 4, 2015]





The House and Senate have now completed crafting and debating
their
state budget proposals for the year that begins July 1. The state
budget is the way we as a Commonwealth make decisions about funding for
a wide range of things including our local schools, roads and bridges,
subways and buses, environmental protection, maintenance of beaches and
parks, and supports for working families, like health care, child care
and job training programs.


This year’s budget proposals have a lot in common.
They
propose neither major budget cuts nor major increases. Both branches
approved the Governor’s proposal to enact an early retirement
plan that will reduce the state workforce by about 4,000 people. It
is unclear how much this will reduce the capacity of the state to
provide timely and efficient services that people rely on. Both budgets
modestly increase funding for local aid and education and direct new
funding towards reducing and treating substance abuse.



Making meaningful progress towards fixing our transportation systems,
making higher education more affordable, or addressing other major
issues facing working families would likely require reforming our state
tax system in a way that was not considered by either the House or
Senate. Currently our state’s highest income residents pay
substantially less of their income in state and local taxes than other
taxpayers. This costs the state approximately $2 billion a year and
makes it difficult for the state to address many of the big challenges
facing families across the state.



There are modest differences between the House and Senate budgets. The
House includes modestly more funding than the Senate for domestic
violence support services, for services for people with autism, and for
kindergarten expansion grants. The Senate includes modestly more for
early education and care, higher education and job training. The Senate
also funds additional auditors at the Department of Revenue, which will
generate resources to fund these investments by making it more
difficult for large corporations and other sophisticated taxpayers to
use tax evasion techniques to avoid paying taxes they owe.



During floor debate the Senate adopted an amendment that would increase
the state Earned Income Tax Credit (EITC) and expand the personal
exemption in lieu of a scheduled decrease in the income tax rate. This
would have the effect of directing tax reductions more towards lower
and middle income families and less towards our highest income
residents. The House did not include this proposal.



The Senate supports changing the structure of the
board of directors for the Massachusetts Department of Transportation
providing a larger role for the Secretary of Transportation. They also
authorize a Fiscal Management Control Board for the MBTA. The House
proposes suspending at the MBTA the state
law that regulates privatization (for more detail, click HERE).
The
Senate leaves that law in place.



This Monitor describes major differences between the House and Senate
final budgets that will need to be reconciled by the conference
committee now meeting. The Legislature’s final budget will
then be sent to the Governor, who has line item veto authority to
eliminate or reduce funding or specific policy provisions. Those vetoes
could be overridden by a two-thirds vote of both branches of the
Legislature.





Early Education & Care



Due to differences between the House and Senate, the conference
committee will have to reconcile over a dozen early education line
items. Overall the Senate appropriation of $568.3 million is $8.7
million more than the House with the Senate proposing more funding for
eleven programs and less funding for two.



The Senate approved a few amendments during floor debate including one
that establishes the Commonwealth Preschool Partnership Initiative.
This initiative would provide a total of $500,000 in grants to cities,
towns, school districts or collaboratives that are already providing
pre-k with funds to help them increase access for children ages 2.9 to
3.1 years old. The House proposal did not include this initiative.



Another major difference between the two proposals is the amount of
funding to reduce the Income Eligible Child Care Wait List. The
House
proposed $5 million while the Senate proposed $12 million. Although all
of these proposals provide some funding to increase the number of
subsidies available for kids in Massachusetts, they come short of
providing a subsidy to all of the families who need support. For more
information on the resources needed to provide early education to three
and four-year-olds in Massachusetts, see Building a
Foundation for
Success
.



The Senate proposed combining
TANF Child Care
and Supportive
Child Care

into one line item – Supportive
and TANF Child Care
. The House proposal
left them separate. In order to compare the two proposals, and based on
information from Senate Ways & Means, we allocate $100.5
million to Supportive Child Care and $121.6 million to TANF Child Care.
After that adjustment the Senate provides $250,000 more in each, a
difference of less than 1 percent. For more information on these two
line items, see the MassBudget Children’s
Budget
.



The table below illustrates all differences which will have to be
reconciled in Conference Committee.


image1



K-12 Education



For the most part, the Senate and House budgets for K-12 education are
very similar. However, several line items do vary across the final
House and Senate budgets and these differences will be reconciled in
conference. For full details, see the table below.



Of note, the Senate budget proposes funding Chapter 70 education aid
at
$4.51 billion, a 3 percent increase over last year. This Senate
proposal is $3.0 million above the House budget. This added funding
comes from providing additional support to districts that are
contributing more to their local schools than their target identified
in Chapter 70 reforms begun in 2007. This “effort
reduction” is increased to 50 percent in the Senate budget
compared to 45 percent in the House.



For more discussion of the House and Senate education proposals for FY
2016, see MassBudget’s Budget Monitors for the House
Ways and
Means
, House
Final
, and Senate
Ways and Means
budgets.



Other notable differences between the Senate and House proposals
include:



  • Kindergarten
    Expansion Grants
    are level-funded at $18.6 million in the
    House proposal, compared to
    only $1.0 million in the Senate.

  • The Special
    Education
    Circuit
    Breaker
    is funded at $271.7 million in the Senate
    proposal, which is
    $10.1 million above the House budget. The Senate’s proposal
    is likely sufficient to fully fund the Circuit Breaker formula, which
    reimburses school districts for the costs of educating severely
    disabled students.

  • Charter
    School Reimbursements

    are funded at $84.5 million in the Senate budget, which is $7.6 million
    above the House.



In a floor amendment, the Senate proposed extending the deadline of the
Foundation Budget Review
Commission
from June 30th to November 1st.
This commission is evaluating and recommending updates to the
state’s model school budget (the foundation budget) and the
Chapter 70 funding system. Under this amendment, the commission would
issue a preliminary report in June, and a comprehensive report by
November.


image2



Higher Education



The House and Senate proposals for Higher Education are very similar,
with several minor differences detailed in the table below. These
discrepancies will be negotiated in a conference committee.



The largest difference within Higher Education is for the University of
Massachusetts
, which is funded at $18.9 million higher in
the Senate
budget. Additionally, the Senate budget contains language that would
allow UMass to retain tuition and fee revenue from in-state students
starting in FY 2017.



Some other notable differences include:



  • The
    Performance Management Set
    Aside
    , which funds competitive grants to campuses to
    implement The
    Vision Project
    , a Department of Higher Education strategic
    plan, is
    funded at $3.3 million in the House budget, but is not funded in the
    Senate budget.

  • High
    Demand Scholarships
    ,
    which funds students pursuing majors in high-growth fields such as STEM
    and health care, is not funded in the Senate budget, but is provided
    $1.0 million in the House budget. Additionally, the Massachusetts State
    Scholarship Program
    is funded at $95.6 million in the
    House, $2.0
    million greater than the Senate proposal.



The Senate added a negligible amount of funding to Higher Education
items during floor debate, meaning the final Senate budget is
essentially unchanged from the Senate Ways and Means proposal. For more
detail on Higher Education, please see MassBudget’s Budget
Monitors for the Senate
Ways and Means
, House
Final
, and
House Ways and
Means
budgets.


image3



Environment & Recreation



The state budget funds programs that keep our air, land and water
clean, maintain fish and wildlife habitats and staff parks, beaches,
pools and other recreation facilities. The Senate budget provides
$209.2 million in funding for Environment and Recreation programs. This
amount is $1.2 million more than the budget passed by the House and is
$11.8 million more than the state expects to spend in FY 2015. Even
with this increase, funding for state environment and recreation
programs is 29 percent lower in inflation adjusted dollar than it was
in 2001 after the state enacted a series of tax cuts.



Over the next several weeks a joint House-Senate Conference Committee
will meet to reconcile differences between the two budgets. For a full
listing of the differences in funding for Environment and Recreation
programs between the House and Senate budgets please see the table
below. Some highlights include:



  • The Senate budget provides
    small amounts to help the state prepare for and adapt to climate
    change. It provides $300,000 in funding for climate change adaption and
    preparedness and another $200,000 for a state climatologist. The House
    does not provide funding for either effort.

  • The House provided $1.2
    million in new funding to maintain beaches in Metropolitan Boston. The
    Senate did not provide funding for this new account.


image4



MassHealth (Medicaid) and Health
Reform



There are numerous funding differences between the Senate’s
proposal for MassHealth and health reform and the proposal from the
House (see table), but most of the differences are small. MassHealth is
the single largest program in the state budget; it helps pay for health
insurance to close to 1.7 million people in the Commonwealth
(approximately 1 in 4); and it also is one of the largest sources of
revenue for the budget, bringing in close to $8 billion each year (see
“Understanding the Actual Cost of MassHealth to the
State.”
) The program is funded jointly by the state
and
federal governments, with federal reimbursements covering close to half
of the state’s costs, and in certain instances significantly
more than half of costs.



The most significant difference among the line items is that House
proposes $2.50 billion for the Fee-for-Service
line item (4000-0700)
and the Senate proposes $2.47 billion.  The Senate’s
$29.0 million lesser amount incorporates several differences. The
Senate estimates $26.6 million in reduced costs due to newly-revised
caseload estimates, and also anticipates $3.0 million in savings from
what is known as “academic detailing.” Academic
detailing provides for academic or other health care professionals
without ties to the pharmaceutical industry to provide research-based
information to prescribers about the relative effectiveness of various
prescription medications. Academic detailing programs have been shown
to help reduce prescription drug costs. At the same time, the Senate
includes $6.0 million in additional funds targeted to
“disproportionate share hospitals” to help
reimburse these safety net health care providers for the costs
associated with providing health care to low income people. (The
Fee-for-Service line item also reflects an adjustment of $6.0 million
shifted from the Department of Mental Health into MassHealth totals to
support mental health services for people eligible for MassHealth.
MassBudget shifts this $6.0 million back to the mental health totals in
order to allow for more accurate comparisons – see Mental
Health section of this Budget Monitor.)



The Senate budget proposal also includes an additional $3.0 million in
funding for managed care
(4000-0500) in order to increase rates for
mental health and substance abuse providers. The House budget does not
include this rate increase.



MassHealth coverage for elders in the community and in nursing homes
does not vary significantly between the House and Senate proposals,
although the Senate includes $1.0 million less than the House for the
MassHealth share of increased nursing
home rates
, and does not provide
$2.8 million to fund incentive payments for facilities that established
cooperative employment arrangements between workers at the facilities
and their employers (4000-0640). These incentive payments were included
in the FY 2015 budget.



The table below lists line items where the House and Senate proposals
have funding differences.


image5



Mental Health



The House and Senate budget differ little in their total funding for
mental health, but there are differences in their proposals in the
allocation of funding for adult mental health services. The Department
of Mental Health serves approximately 21,000 adults and children who
have severe and persistent mental illness, and the vast majority of
persons receiving mental health services receive those services in the
community, rather than in inpatient facilities. Both the House and
Senate budget proposals focus funding on community-based services, with
the Senate providing slightly more than the House.



The Senate budget includes $2.9 million more than the House for adult
mental health services in total, which is just a 1 percent difference.
However, the two budget proposals allocate funding slightly differently
among the various line items. The Senate includes $6.0 million more
than the House for emergency
services
(5047-0001) to cover emergency
services for mental health patients who have MassHealth insurance
coverage. The Senate includes $5.4 million less for adult mental health
and support services
(5046-0000) compared to the House,
but $4.2
million more for community-based
placements
(5046-0005). The Senate
total would support an additional 50 community placements for adults
currently in mental health continuing care facilities who are ready for
discharge into a community placement.



The Senate and House budget proposals for children’s and
adolescents’ mental health services
both include
$3.6 million
to fund the Massachusetts Child Psychiatry Access Project (MCPAP), but
the Senate proposal includes a new allocation of $500,000 to support
the MCPAP for Moms program. This innovative initiative provides mental
health screening for pregnant and postpartum women, in order to
identify postpartum depression or other mental health issues.



There is a $1.1 million difference in funding between the House and
Senate budget proposals for psychiatric
hospitals
, but both proposals
specify that the state will maintain the same number of inpatient beds
in FY 2016 as in FY 2015 (at least 671 beds). The Senate proposal
includes language to support up to 54 beds at Taunton State Hospital,
whereas the House budget language specifies 45 inpatient beds at
Taunton State Hospital.



The table below lists line items where the House and Senate proposals
have funding differences.


image6


(Note that totals for certain line items in both the House and
Senate
proposals have been adjusted to allow for better year-to-year
comparisons. These adjustments account for simple shifts of funding
from one line item to another.)





Public Health



The Senate budget proposal funds public health services at
approximately $6.2 million more than the House budget, with much of the
increased funding going to services to prevent and treat substance
abuse. Funding for the state’s public health programs is
essential for helping keep the Commonwealth healthy, as it supports a
wide variety of prevention and wellness programs, substance abuse
treatment initiatives, programs that help vulnerable populations get
access to health care, and essential environmental health and
regulatory programs that keep the air and water clean. Compared to the
House, the Senate also directs less funding in totals to the line items
supporting youth engagement programs, and recommends more funding for
substance abuse programs. There are also funding differences in many
other line items as well (see detailed table below.)



To support the provision of substance abuse treatment and services
within the budget, the Senate directs a total of $117.1 million, $5.0
million above the House proposal. There is a difference in the
allocation of funds, and MassBudget makes some adjustments to these
numbers in order to allow for more accurate comparisons (see table
below). The Senate proposes $10.0 million for the Substance Abuse
Services Fund
(4512-0210), established to increase the
number of people
receiving services from the bureau of substance abuse services in the
Dept. of Public Health. The House budget did not direct money to this
trust, but instead proposed more funding for the department’s
Bureau of Substance Abuse
Services
(4512-0200) and Substance Abuse
Step-Down Services
(4512-0201).



There are several substance abuse initiatives, including two new line
items. The Senate creates a new line item with $3.1 million to focus on
funding for Recovery
High Schools
(4512-0211), however only $1.5
million of that is new funding and the remainder is simply a shift from
the Bureau of Substance Abuse Services. (MassBudget adjusts the totals
to reflect that shift.) Recovery High Schools provide a safe and
therapeutic environment for youth working towards recovery from
substance abuse disorders, and this funding would allow for the
creation of two new programs.



The Senate also creates a new line item with $100,000 to cover the
costs of a municipal
Naloxone bulk purchase program
(4590-0930). This
program (detailed in Section 27) would allow for the state office of
pharmacy services to assist municipalities in the bulk purchasing of
naloxone (“Narcan”). Narcan is a drug that is often
lifesaving in its ability to reverse opioid overdose. This program
would also assist municipalities in providing training of first
responders in the use of the medication.


The Senate also provides $200,000 for
an initiative to
support the care of infants born with neonatal abstinence syndrome; the
House
proposes $100,000. The House puts this funding in the Bureau of
Substance Abuse
Services, while the Senate puts it in Family
Health Services
(4513-1000). The Senate also proposes
$500,000 more than
the House for comprehensive family planning, also funded in the Family
Health
Services line item.



On the other hand, funding for domestic violence programming is less in
the Senate than in the House – together the Senate funds the
domestic violence program
(4513-1130) and the
sexual assault nurse
examiner program
(4510-0810) at $1.1 million less than the
House.



There are two line items funding programs to promote positive youth
engagement for children and adolescents at risk of violence. The Safe
and Successful Youth Initiative program
(4000-0005) which
provides
programming for high risk youth most at risk of gun violence receives
$5.0 million in the Senate, and $6.0 million in the House. The
Youth-At-Risk grant
program
(4590-1507), which supports funding for
afterschool programming at community centers such as YMCAs and Boys and
Girls Clubs, receive $3.9 million in the Senate and $3.8 million in the
House.


The Senate provides $28.4 million for the Early Intervention
program
(4513-1020), while the House proposes $27.6 million. This program
provides a variety of community-based therapies to infants and toddlers
who already are showing developmental delay or who are at risk of
developmental delay. In particular, the program has seen an increase in
referrals for children involved with the Dept. of Children and
Families, and children born with prenatal exposure to alcohol, opioids,
or other addictive drugs.



The table below lists line items where the House and Senate proposals
have funding differences.


image7a


image7b


(Note that totals for certain line items in both the House and
Senate
proposals have been adjusted to allow for better year-to-year
comparisons. These adjustments account for simple shifts of funding
from one line item to another.)





State Employee Health Insurance



The Senate budget proposal funds state employee health insurance at
$8.0 million less than the House, allocating slightly less for the cost
of state retiree benefits. The Commonwealth is one of the largest
employers in the Commonwealth and provides health insurance to
thousands of current and retired employees. The costs of this coverage
are shared, with the state paying for a portion of the coverage and
employees (or retirees) paying a portion. Although the
state’s Group Insurance Commission (that oversees the
administration of this health insurance) has historically been an
effective and aggressive negotiator with health insurance companies to
keep health insurance costs for the Commonwealth as low as possible,
like all employers, the Commonwealth has been confronting rising health
care costs over the years.


State
Retiree Benefits



The state has adopted a schedule to move towards full funding of health
and non-pension post-employment benefits (“OPEB”)
for retirees. In Fiscal Year 2012, the state decided to gradually
dedicate an increasing share of the Master Tobacco Settlement agreement
funds awarded to the state to the State Retiree Benefits Trust to fund
this liability. In FY 2015, the state did not make the transfer from
the Tobacco Settlement, and instead directed this portion of the
settlement funds back into the General Fund in order to help balance
the budget, and instead plans on making up the funding with unexpended
debt service appropriations. If that amount is insufficient, the
remainder would come from the Tobacco Settlement funds.



In FY 2016, the planned transfer amount would be approximately $109
million, but both the House and Senate budget proposals suspend this
transfer, and also reduce the amount to be directed to state retiree
benefits from $109 million to approximately $84.6 million. To make the
transfer, the Senate proposes using unexpended debt service
appropriations at the end of the year, with the balance to be made up
for by tax amnesty revenues in excess of $100 million. The House
proposed using unexpended debt service payment appropriations with the
remainder coming from a transfer from the General Fund. In all
instances these proposed transfers total $24.3 million less than the
amount stated in the statute. In addition, there is a direct
appropriation through an operating transfer of funds into the trust
fund. The House budget includes a transfer of $433.0 million, the
Senate proposed $425.0 million.



(In order to allow for more accurate year-to-year comparisons,
MassBudget adjusts the State Employee Health Insurance budget totals by
excluding amounts associated with municipal and retired teacher
participation in the Group Insurance Commission. This spending is
fully-funded by revenues from the municipalities, and therefore are not
included in our analysis of the state budget.)



The table below lists line items where the House and Senate proposals
have funding differences.


image8



Housing



The state budget funds affordable housing assistance and shelter for
low income homeless families and individuals. The final Senate budget
for Fiscal Year (FY) 2016 recommends spending $434.1 million on
affordable housing programs which is $4.1 million more than the House
FY 2016 budget and is slightly below the $434.5 million the state
expects to spend in FY 2015.



In their respective budgets, both the House and the Senate decrease
funding for shelter to low-income homeless families while increasing
funding for programs that help families move from shelter into housing
or prevent them from becoming homeless. The House and Senate budgets,
however, fund these efforts differently. A joint Conference Committee
will iron out these differences. For a full list of differences between
the House and Senate budgets please see the table below.



A large portion of the affordable housing budget funds programs that
assist eligible low-income families who are homeless. In FY 2015 the
state provided $191.8 million for Emergency
Assistance
(EA) which funds
both state-supported shelters and hotels and motels when the family
shelters are full. In their FY 2016 proposals, the House and Senate
budgets recommend spending about $154 million which is approximately
$37 million less than the amount the state expects to spend in FY 2015.
As noted in our Budget Monitor for the Senate Ways and Means Budget
HERE,
previous year’s budgets have reduced funding for EA at
the beginning of each fiscal year in anticipation that fewer homeless
families will need shelter. But over the course of each year the need
for shelter has exceeded the amount provided in the original budget and
the Legislature has approved supplemental funding.



While the House and Senate budgets provide similar funding for EA,
there is one notable difference in the language governing the
circumstances under which low-income homeless families are eligible to
receive shelter. (For a full description of eligibility criteria for EA
please see MassBudget’s Children’s Budget HERE.)
Recently the state tightened eligibility for EA which has forced some
homeless families with children to live in places not meant for human
habitation like a car, a public park, or a hospital emergency room
before they can access shelter. The Senate budget requires that the
Department of Housing and Community Development (DHCD) provide shelter
to these families so they do not have to sleep in such places before
they are permitted to live in shelter. This provision is not included
in the House budget.



As the House and Senate budgets recommend reducing funding for EA below
the FY 2015 budget, they increase funding for housing resources.
However, the two budgets differ in how they allocate additional
resources to provide supports to families who are homeless or at risk
of becoming homeless. Some differences include:



  • The Senate provides $85.4
    million for the Massachusetts
    Rental Voucher Program
    (MRVP) which is
    $2.5 million above the $82.9 million that the House provides. The House
    budget, however, also allows DHCD to transfer up to $8 million in
    unspent funds from FY 2015 into FY 2016. The Senate budget does not
    include this transfer, instead any unspent MRVP funds from FY 2015 will
    be transferred into the Affordable
    Housing Preservation and
    Stabilization Trust Fund
    (HPSTF) which DHCD can use to
    support MRVP or
    other affordable housing programs.

  • The House budget provides a
    $5.0 million deposit into HPSTF which the Senate budget does not.

  • The Senate budget provides
    $7.0 million for a new
    end family homelessness reserve
    housed at the
    Executive Office of Health and Human Services (EOHHS). This reserve,
    first proposed in the Governor’s budget with $20.0 million,
    would provide short-term, tailored assistance to families who are
    homeless or at risk of becoming homeless. The House budget does not
    provide funding for this reserve.

  • The House budget provides
    $31.3 million for HomeBASE
    which is $5.0 million more than the Senate
    proposal. 

  • The Senate budget provides
    $13.0 million for Residential
    Assistance for Families in Transition

    (RAFT) which is $1.0 million more than the House.


The House and Senate budgets also include a number of new
programs in
their respective budgets which will have to be reconciled in
conference.



  • The House budget provides $1.0
    million for the Urban
    Housing Agenda
    which provides planning grants to
    develop new affordable rental or homeownership housing in urban areas.
    This proposal, also included in the Governor’s budget, is not
    included in the Senate’s proposal.

  • The Senate provides $2.0
    million for a program to provide shelter and services to unaccompanied
    homeless youth
    who are up to 24 years old. The House does
    not include
    this provision.

  • The Senate proposes spending
    $500,000 for a housing
    authority self-sufficiency
    pilot program,
    outlined in Outside Section 93 of the Senate budget, which is modeled
    after the program that the Worcester Housing Authority is undertaking.
    (For a full description please see the Housing Section of the Senate
    Ways and Means Budget Monitor HERE.)
    The House budget does not include
    this new provision.





Child Welfare



While the majority of child welfare line items needing to be reconciled
in Conference Committee have small funding differences, one account
contains a larger variance – Regional Administration.
The
House eliminated this line item as it has for the last few years while
the Senate provided $6.0 million, level with FY 2015 current spending.
Regional Administration funds contracts with nonprofit “lead
agencies” that help coordinate services for the Department of
Children and Families (DCF). Proponents of lead agencies note the
important coordination function they fill between DCF social workers,
families and other professionals involved in a child’s case. Critics
claim that lead agencies duplicate work done in the past by social
workers and that funding should be spent on services.



The Senate proposes less funding for a few programs providing:



  • $250.4 million for Group
    Care
    ,
    $2.9 million less than the House

  • $24.3 million for Domestic
    Violence Support Services
    , $1.9 million less than the House



The Senate also does not provide funding for the Commission on the
Status of Grandparents Raising Grandchildren
. The House
provided
$80,000 for this commission which provides information and support for
grandparents, and advice to the state on the potential effects of
proposed legislation.



During floor debate the Senate adopted an amendment providing $2.0
million more for Social
Workers
for a total of $203.8 million, $2.0
million more than the House. The amendment also included language
calling for a monthly report to the legislature detailing current
average caseloads and how many more case workers would be needed to get
to a 15 to 1 ratio.


The
Senate provided $45.6
million ($900,000 more than the House) for Family Support and
Stabilization
.
These services are vital in helping families involved with DCF keep
their
children safely at home.



One House amendment not included in the Senate proposal would require
fingerprint checks for all persons older than 14 in a family applying
to become a foster, kinship, or adoptive family, and also for many of
the people contracting with DCF to work with these kids. Some of these
checks are already required by federal and state laws.



Funding for Family
Resource/Access Centers
is located in two line items
(4800-0200, 4000-0051). The Senate provides $9.9 million in total, $2.5
million more than the House. These centers currently make it easier for
children and families to access many public services including
Transitional Aid to Families with Dependent Children (TAFDC),
Supplemental Nutrition Assistance Program (SNAP), Women, Infants, and
Children’s Program (WIC), Fuel Assistance, and MassHealth.



There is a small difference in total funding for Services for Children
and Families
. Both the House and Senate provide around
$278 million.
Both proposals include a number of earmarks, some of which are
different and will need to be reconciled in conference.



The table below illustrates all differences which will have to be
reconciled in Conference Committee.


image9



Elder Services


The Senate provides $266.1 million for Elder Services, $3.7
million
above the final House proposal. Of note, Elder Home Care Purchased
Services
and Elder
Home Care Case Management and Administration

combined receive $142.2 million, $4.0 million more than the House.
These increases would likely eliminate waiting lists prompted by
mid-year cuts in FY 2015 and allow more seniors to age in place instead
of living in a nursing home.


The Senate also passed an amendment that could expand access
to home
care services which is not included in its proposed budget figures. The
funding for this expansion (up to $6.3 million) is largely contingent
upon additional revenue and/or a surplus in the Community First Trust
Fund
. If funded, this change would expand the eligibility
requirements
for home care services—including raising the income
eligibility ceiling—allowing more seniors access to these
vital services.


In addition to the amendment outlined above, the table below
illustrates all funding differences that must be reconciled in
conference committee.


image10



Disability Services



The Senate proposes funding disability services at $1.83 billion, $12.4
million below the House. Although this net difference is small, many of
the line item appropriations vary between the House and Senate
proposals (see table below).



There are significant differences between the House and Senate
proposals in workforce development and group programs for people with
disabilities:



  • The Senate proposes funding Community
    Day and Work Programs for the Developmentally Disabled
    at
    $173.5 million, $9.7 million below the House. These programs offer a
    wide variety of group and individual supports, helping people with
    developmental disabilities find work and build skills.

  • The Senate proposes funding Community
    Based Employment
    at $5.0 million, $2.0 million above the
    House. This program provides funding to move individuals with
    disabilities from sheltered work to integrated work settings.

  • The Senate proposes funding Community
    Transportation Services for the Developmentally Disabled

    at
    $19.0 million, $3.0 million below the House. These services allow
    individuals with disabilities to maintain employment and take part in
    community activities.



In addition, the Senate proposes funding Autism Omnibus Services
at
$6.3 million, and the House proposes funding Autism Services at
$12.4
million. Both line-items provide services to individuals with autism
spectrum disorders. Some of this funding supports programs which in the
past have been funded in Respite Family Supports and Department of
Developmental Disabilities Administration (DSS Administration). In
order to make apples-to-apples comparisons, we do not include the
additional dollars coming from Respite Family Support and DDS
Administration. In total, the House proposal is about $5.6 million
higher than the Senate proposal.


image11



Juvenile Justice


Four Juvenile Justice programs will need to be reconciled by
the
conference committee. Most of the differences between the Senate and
House proposals are quite small. Residential Services for Committed
Population has the largest difference with the House providing $120.2
million, $3.2 million more than the Senate. The Senate made one change
during debate adding $500,000 for Residential Services for Detained
Population.



The table below illustrates all differences which will have to be
reconciled in Conference Committee.


image12



Transitional Assistance



The House and Senate provided different funding levels for both
Transitional Aid to Families with Dependent Children (TAFDC) and
Emergency Aid to the Elderly, Disabled, and Children (EAEDC). Client
projections for FY 2016 will partly determine funding levels for these
two programs. However, the Senate made one change within TAFDC which
will have to be reconciled in conference. The Senate increased a
clothing allowance from $150 to $200. This clothing allowance is a
one-time payment made in September helping poor families pay for
back-to-school clothing. The House kept the clothing allowance at $150.



There are a few programs though with funding differences which will
need to be reconciled in conference. The Senate provided $12.1 million
for the Employment
Services Program
, $848,000 more than the House. This
program provides TAFDC recipients with education, occupational skills
and the employment support services needed to acquire and retain jobs.
For an in depth analysis on funding for education and job training
programs, see
Declines in Work Supports for Low-Income Parents
.



The Senate also proposes $5.0 million for Pathways to Self Sufficiency,
a new program offering job training to help TAFDC recipients get and
keep jobs. The House provided no funding for this program which was
initially funded at $11.0 million in a FY 2015 supplemental budget bill
in July which accompanied a welfare bill changing the disability
standard.



The Senate also included two outside sections not in the House
proposal. In Section 91, the Senate proposes the Job Support Services
Plan
which would provide job support services to TAFDC
recipients who
will no longer be exempt from work requirements due to the change in
the disability standard. The program would utilize specialists in each
community service area to help find jobs, training or education.
Section 92 would develop a
Family Well- Being
pilot program in at least
two DTA offices to support participants who are still exempt from work
requirements. The program would help assess barriers to employment and
lay out a plan for helping them qualify for other services. The Senate
provides $1.0 million specifically for transportation and child care
services for participants of this program.



The table below illustrates all differences which will have to be
reconciled in Conference Committee.


image13



Economic Development



In Massachusetts, we support workforce and business development
programs in order to boost the skills of working people and stimulate
economic growth. The Senate proposes funding economic development at
$137.9 million. While slightly above the House proposal (3 percent),
the Senate proposal would still be 52 percent below FY 2001 levels,
adjusted for inflation.


image14


The Senate proposal is higher than the House proposal in
several
workforce development programs:



  • The Senate proposes funding YouthWorks
    at $11.7 million, $2.2 million over the House proposal. This
    program provides summer and some year round jobs about 5,000 low-income
    and at-risk youth living in targeted communities.

  • The Senate proposes adding
    $2.2 million to the Workforce
    Competitiveness Trust Fund
    , which helps
    workers build skills necessary to get jobs in high demand industries
    such as health care, construction and education. The Baker
    Administration eliminated funding for this program during mid-year
    cuts.

  • The Senate proposes funding One-Stop
    Career Centers
    at $5.1 million, $1.1 million over the House
    proposal. These centers helps job seekers, particularly those receiving
    unemployment insurance, improve their skills and navigate the job
    search process.

  • The Senate proposes funding Advanced
    Manufacturing Workforce Development Grants
    at $1.5 million.
    The House did not propose funding into this grant program, which
    provides training in precision manufacturing for unemployed and
    underemployed workers.



The Senate also proposes not to fund several new programs proposed by
the Governor and House, such as Working Cities Technical Assistance
Grants, Urban Agenda Economic Development Grants and Mass Port
Authority Tourism.



Finally, the Senate proposes funding a new program, North Shore
InnoVentures, at $100,000 which supports the development of early stage
biotech and clean tech businesses.


image15



Local Aid



The House and Senate propose equal funding of $979.8 million for
Unrestricted General Government Aid
(UGGA). UGGA is the
state’s main non-school local aid program, which helps
support vital local services across the Commonwealth.



The Commonwealth’s ability to support general local aid has
been hindered by significant state-level tax cuts during the 1990’s and
2000’s combined with the recent recession. While over the past few
years, funding for general local aid has increased with or slightly
above inflation, under the House and Senate proposals, it still remains
43 percent below FY 2001 levels, adjusted for inflation.



The one local aid program with a major difference between the House and
Senate proposals is the Municipal
Regionalization and Efficiencies
Incentive Reserve
, which supports initiatives that improve
the delivery
of local services. The Senate proposes $4.7 million more than the House
for this program.


image16



Transportation



In large measure, the Senate’s FY 2016 budget agrees closely
with that of the House on matters related to Transportation. Among the
most notable aspects of the Senate FY 2016 budget are the changes it
makes relative to the Massachusetts Bay Transit Authority (MBTA). The
Senate, like the House, proposes changes to the rules governing the
structure of the board of directors for the Massachusetts Department of
Transportation, which oversees the MBTA (for details, see the
Transportation section of MassBudget’s SWM
Budget Monitor
).
Unlike the House, the Senate does not adopt a set of provisions -
included in the budgets of both the House and the Governor – that would
place a 5-year moratorium on “Pacheco Law”
regulations for the MBTA. The Pacheco Law requires public agencies to
prove cost-savings (which may not be achieved through lower wages)
before outsourcing publicly funded projects to private contractors (for
a detailed discussion of these regulations see MassBudget’s
Pacheco
Law factsheet
). This substantial difference will need to be
reconciled during conference.


During floor debate the Senate added a proposal to create a
Fiscal Management Control Board for the MBTA that
would sit within the Department of Transportation and report to the
Secretary of Transportation.1This
five-person board would be empowered to
“initiate and assure the implementation of appropriate
measures to secure fiscal, operational and management stability of the
MBTA.” A similar plan was proposed in the House during floor
debate, but was not adopted as part of the final House budget. This
difference between the House and Senate budgets will need to be
reconciled in conference.


For additional discussion and details regarding the Senate
proposals on
Transportation, see the Transportation section of
MassBudget’s
SWM Budget Monitor.





Law & Public Safety


Overall, funding levels provided by the Senate and the House
for Law
& Public Safety programs are very close – out of a
total budgetary outlay for these programs of $2.63 billion, the two
budgets differ by only $17.5 million, or less than 1 percent. This
similarity in total funding levels, however, masks the substantial
differences that exist at the line item level – more than one
hundred specific Law & Public Safety accounts are funded at
different levels in the Senate vs. the House budget. These differences
will need to be resolved in conference.


In the area of Courts & Legal Assistance, the Senate
provides a
net of $13.7 million more than the House for the trial courts
(including both increases and some reductions), both for the Office of
the Chief Justice for Administration and for individual court accounts.
The Senate also provides a net of $3.4 million more than the House for
legal assistance, including the Committee for Public Counsel Services
(CPCS, $2.6 million more), CPCS attorneys’ salaries ($1.9
million more), the Massachusetts Legal Assistance Corporation ($100,000
more), and Indigent Persons’ Fees and Court Costs ($1.3
million less).


In the area of Law Enforcement, the Senate provides a net of
$1.8
million more than the House, including an additional $2 million for the
Shannon Grant Gang Prevention program ($8.0 million total) and $1.0
million less for the Department of State Police Operations ($267.8
million total).


In the area of Prisons, Probation & Parole, the Senate
provides
a net of $7.0 million less than the House. While many
Sheriffs’ Departments primary accounts receive slightly more
under the Senate than the House budget, most retained revenue accounts
for federal reimbursements are lower under the Senate proposal.


For Prosecutors, the Senate provides a net of $2.0 million less than
the House, though this total takes into account the $3 million the
House proposes for a reserve account for District Attorneys’
salaries, which the Senate chooses not to fund. In general, the Senate
provides more funding than the House for individual DAs’
offices, but less for special investigative units and other special
programs.


In the area of Other Law & Public Safety programs,
notable
differences between the Senate and House include the following:



  • $2 million provided by the
    Senate to fund an Illegal Tobacco Task Force

  • $3.8 million (or 19 percent)
    more from the Senate than the House for the Department of Fire Services
    Administration

  • $969,000 (or 23 percent) more
    from the Senate than the House for the Department of Public Safety, but
    $363,000 (or 12 percent) less than the House for the Executive Office
    of Public Safety and Security

  • $750,000 provided by the
    Senate for evidence-based programming grants, “to pilot or
    expand new or current innovative and evidence-based approaches for
    improving recidivism outcomes.





Revenue



During floor debate, the Senate adopted an amendment making changes to
several elements of the state’s personal income tax system.
The House budget contained no such provisions. The Senate tax package
represents the most significant difference, revenue wise, between the
House and Senate FY 2016 budgets. This difference will need to be
worked out in conference. Specifically, the Senate’s proposal
would do three things:2



  • Freeze the state’s
    personal income tax at the current 5.15 percent. Under current law, the
    rate very likely will be reduced in stages to 5.0 percent over the next
    several years (read more about these automatic rate reductions
    here
    ).

  • Increase the state’s
    personal exemption amounts by $400 (to $4,800), $600 (to $7,400), and
    $800 (to $9,600) for single, head of household, and married joint
    filers, respectively. The personal exemption is automatically deducted
    from each filer’s income before taxes are applied, thereby
    reducing taxes owed (learn more about the structure of the
    Massachusetts personal income tax – including the personal
    exemption – here).

  • Increase the
    Commonwealth’s Earned Income Tax Credit (EITC). Currently,
    the Massachusetts state EITC is equal to 15 percent of the amount a
    filer receives through the federal EITC program (read more about the
    Massachusetts EITC here).
    The Senate’s proposal would raise
    this percentage in three steps to 22.5 percent, by 2018.



In its first year of implementation, the Senate’s package
would be essentially revenue neutral. On average, during this first
year, the bottom 60 percent of Massachusetts households would see
modest tax decreases of $10 to $40 – some EITC recipient households
would see more substantial cuts of about $150 to $200. Only the very
highest income households (those in the top 1 percent, with incomes
averaging over $2.5 million annually) would see substantial tax
increases, approaching a thousand dollars, on average.



A second substantial difference between the Senate and House budgets is
their respective funding for the Department of Revenue (DOR). The
Senate FY 2016 budget proposes funding DOR’s tax activities
at $130.2 million, an amount $9.4 million above the House, $8.1 million
above the FY 2015 GAA and $14.5 million above the FY 2015 current
budget. (In FY 2015, as revenues fell short of the amount projected,
Governors Patrick and Baker made a combined $6.4 million in emergency
cuts to DOR’s Office of Tax Administration (OTA)).



The OTA, which makes sure that taxpayers are paying taxes they legally
owe to the state, is funded through two primary accounts. The
Administrative Account (1201-0100) pays the salaries of auditors and
collectors, as well as support staff and lawyers. The Additional
Auditors Retained Revenue account (1201-0130), created in FY 2004,
allows the DOR to retain a certain portion of the unpaid revenue it
collects to help pay auditors’ salaries. The combined $9.4
million difference in these accounts between the Senate and House will
have to be reconciled in conference.


image17


In documents accompanying its FY 2016 budget proposal, the
Senate Ways
and Means Committee noted that of its $8.1 million increase above the
FY 2015 GAA, $4.0 million of it would allow the OTA to hire 40
additional auditors allowing the state to collect an estimated $20
million in additional revenue in FY 2016. Many audits, particularly of
multinational and multistate corporations that owe taxes to the
Commonwealth, can be highly complex and time-consuming. By allowing the
OTA to hire additional auditors, the Senate budget proposal would
increase the OTA’s ability to collect taxes legally owed to
the Commonwealth. It is also likely that by increasing the
OTA’s capacity to conduct complex tax audits, taxpayers,
including large corporations, will be more likely to comply with the
Commonwealth’s tax laws rather than engage in complex evasion
schemes to avoid paying taxes they legally owe to the state.



Beyond the Senate’s tax package and higher funding levels for
DOR, the Senate also approved a provision imposing a 170 percent excise
tax on “fruit-flavored or other
nontobacco-flavored” cigars and smoking tobacco.3 Up
to $4 million of the revenue raised from taxing these products will be
directed to smoking prevention and cessation programs. The House does
not include such a provision in its budget.



Other notable tax-related differences between the House and Senate
budgets include Senate proposals to enhance the Department of
Revenue’s auditing and collecting capacities; enhance tobacco
law enforcement and tax collections; and close a loophole in the
states’ combined reporting law. Details on these proposals
and other tax-related elements of the Senate’s FY 2016 budget
can be found in the revenue section of MassBudget’s
Senate
Ways and Means Budget Monitor
.


image18


Non-Tax
Revenue



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


There are no significant differences between the House and
Senate
budget proposals for non-tax revenue. One minor difference is in
treatment of the state’s Stabilization (“Rainy
Day”) Fund. Current law requires that if the Commonwealth
collects capital gains tax revenue in excess of $1.09 billion, that
excess would be transferred to replenish the Rainy Day Fund. The House
budget proposal suspends the requirement to transfer excess capital
gains tax revenue into the Rainy Day Fund, and instead retains all
capital gains tax revenue in the General Fund. The Senate, on the other
hand, proposes retaining in the General Fund the first $300 million in
excess capital gains tax revenues received above the $1.09 billion
threshold, and then transferring any excess capital gains tax revenues
above that into the Rainy Day Fund. Although these are different
approaches to whether excess capital gains tax revenues should be used
to replenish the Rainy Day Fund, the state’s Dept. of Revenue
does not anticipate more than $300 million in excess capital gains
revenues this year, so in effect the two budget proposals are not
dramatically different on this score.



Other Savings or Reductions in Spending



The state has adopted a schedule to move towards full funding of health
and other post-employment benefits (“OPEB”) for
retirees (see State Employee Health Insurance section of this Budget
Monitor for description.) However, by funding this liability at less
than the amount established by statute, both the House and Senate
“save” $24.3 million. The House and Senate have
proposed different strategies to fund this liability.



Budget by Program Area


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