On July 11, 2011, Governor Deval Patrick signed a balanced and responsible $30.6 billion fiscal year 2012 (FYI2) budget that implements reforms to make state government more efficient and transparent, and makes targeted investments in the Administration's key priorities to accelerate the Commonwealth’s economic recovery and lay a foundation for long-term growth and prosperity.
The FY12 budget eliminates the structural deficit and reduces state spending by $750 million, the largest year-to-year reduction in 20 years, while implementing cost-saving reforms and efficiencies. The budget also includes a modest draw of $185 million from the state’s stabilization fund. Even with the use of these reserve funds, the stabilization fund will have a balance of at least $585 million at the end of FY12, ranking the Commonwealth among the top ten states with the largest fund balances in the nation.
“This budget reflects tough decisions and sacrifice across state government along with a demonstrated commitment to doing business better," said Governor Patrick. "I am proud of the reform measures that will help us both improve services and save money, and look forward to supporting the programs, services and innovations that will help keep us on track to a brighter future.”
"With this balanced budget, Governor Patrick and I, along with our partners in the Legislature, continue to lead Massachusetts on the road to economic recovery,” said Lieutenant Governor Timothy Murray. “Despite the challenges we may face, our Administration remains committed to our core values, providing quality services, and protecting all residents of the Commonwealth.”
Since October 2008, Governor Patrick has successfully worked with the Legislature to close a cumulative budget gap of nearly $14 billion by eliminating over 6,000 state jobs, implementing cost-saving reforms that are changing the way government does business and making difficult cuts to programs across state government.
This balanced approach and continued proactive budget management have allowed the Commonwealth to maintain its stable bond rating. Earlier this year, citing the Patrick-Murray Administration's proactive budget management as a leading factor, Standard and Poor’s awarded Massachusetts a positive credit rating outlook, one of only three states to have such a rating. This rating has allowed the Administration to continue making critical investments in our schools, roads and bridges, and housing stock to build a stronger, lasting economic recovery.
Record of Reforms
The budget Governor Patrick signed today includes fundamental reforms to change the way government does business including:
- Municipal Relief: As part of the Patrick-Murray Administration’s commitment to helping cities and towns preserve critical local services, the FY12 budget includes reforms to help local governments control health care costs.
- Health Care Cost Containment: The budget adopts changes that will help us control growth in the state’s health care costs, while we implement systemic reforms to the way we pay for and deliver health care services that will make health care costs sustainable over the long term.
- Indigent Defense: The budget fundamentally reforms the way in which the state provides constitutionally-required legal services for indigent persons by moving toward a higher percentage of public defenders, resulting in more specialized service and cost-savings.
- Homelessness Reforms: The budget adopts reforms to family homeless programs, building on previous efforts to move toward a housing first system by providing emergency shelters to those families that truly need it, while increasing funding for housing to prevent homelessness.
- Better Government: The budget establishes a new Office of Commonwealth Performance, Accountability and Transparency, and supports re-negotiating state contracts to achieve additional savings on state purchases.
- Quasi-Public Reforms: The budget implements additional oversight measures of quasi-public agencies. Each state authority receiving over $500,000 in state funds will now be audited annually by an independent auditor. Agencies will establish a commission to review compensation in addition to preparing a financial annual report.
Investing in Shared Priorities
This budget makes targeted investments in Governor Patrick’s four key priorities for his second term: creating jobs, closing the achievement gap in our schools, controlling health care costs and addressing youth violence.
- Closing the Achievement Gap: Maintains funding for education programs that will help close the achievement gap and increases Chapter 70 school funding and special education aid for cities and towns.
- Controlling Health Care Costs: Adopts changes that will help us control growth in health care costs while we implement systemic reforms to the way we pay for and deliver health care services that will make health care costs sustainable over the long term.
- Addressing Youth Violence: Builds on the $10 million recently appropriated for the Governor’s Safe and Successful Youth Initiative to fund and support additional programs and services to help reduce youth violence.
- Jobs: Maintains investments in key growth areas including capital projects, life sciences, and workforce training.