 |
If our state government
were to continue to grow unchecked from FY03 to FY04, the Commonwealth’s spending
would balloon from $22.4 billion to $24.4 billion. At that unsustainable
growth rate of 8.6%, unsupported by projected revenue, our deficit is $3.2
billion. Since some spending is contingent on federal revenue, on a net basis
the gap to close is $2.8 billion.
This budget constrains spending
to $22.86 billion, a growth rate of just .5% after adjusting for certain spending
moving on and off budget from FY03. A table illustrates this below:
FY03
Spending vs. FY04 House 1: (millions)
| |
FY03 Projected
Spending |
FY04
House 1 |
%
Change |
| Base
Spending |
22,452 |
22,553 |
0.45% |
| On/off
budget adjustments, net |
282 |
305 |
|
| |
22,734 |
22,858 |
0.55% |
While the budget as a whole is nearly flat, some areas, like
Medicaid and debt service, are driven by factors beyond management control. As a result, other program funding must drop in order to maintain fiscal balance.
|
|
FY03 Projected
Spending |
FY04
House 1 |
Variance |
%
Change |
| Medicaid |
5,968 |
6,502 |
534 |
8.9% |
| K-12
Education |
4,085 |
4,110 |
25 |
0.6% |
| Debt
Service |
1,518 |
1,593 |
75 |
4.9% |
| Subtotal,
all of the above |
11,571 |
12,205 |
634 |
5.5% |
| Subtotal,
all other |
11,164 |
10,653 |
(511) |
-4.6% |
| Total |
22,734 |
22,858 |
124 |
0.5% |
The $2.8 billion in solutions breaks out
across three major categories:
|
FY04
$2.8B Solutions by type: |
|
|
| Program/Eligibility
reductions |
272 |
10% |
| Local
Aid |
350 |
12% |
| Reform
and Restructuring |
2,173 |
78% |
| |
2,795 |
100% |
A detailed breakout of each of these categories
follows:
|
Reform and Restructuring |
|
2,173
|
|
Health and Human Services |
425 |
|
Health Care Reforms |
176 |
|
|
Premiums and co-pays (19) |
|
|
|
Drug Utilization and Case Management (87) |
|
|
|
Tightening Eligibility Procedures (27) |
|
|
|
Adjusting Rates (22) |
|
|
|
Long term care reform (21) |
|
|
|
Administrative Consolidations and Restructuring |
90 |
|
|
Maximizing federal revenue |
159 |
|
|
Higher Education |
|
150 |
|
Administrative Consolidations and Restructuring |
100 |
|
|
Restructuring tuition, fees and financial aid |
50 |
|
|
Judiciary |
|
84 |
|
Administrative Consolidations and Restructuring |
43 |
|
|
Revenue incentives for Probation/Public Defenders |
41 |
|
|
Asset Management |
|
371 |
|
Mass. Turnpike debt restructuring and refinancing |
191 |
|
|
Transfer of surplus land to pension fund |
180 |
|
|
Tax Loopholes and Administrative Changes |
|
166 |
|
Loophole closing |
128 |
|
|
Changing interest rate from 4 to 2% above market |
28 |
|
|
Changing valuation of used vehicles for sales tax |
10 |
|
|
Management Reforms |
|
368 |
|
Changing state employee health premiums to 25% |
80 |
|
|
Eliminating refund for mandatory Medicare Part B |
25 |
|
|
Workforce and other reforms |
263 |
|
|
Revenue Restructuring |
|
610 |
|
Transfers and other changes |
246 |
|
|
Registry of Deeds fee restructuring |
230 |
|
|
Casino mitigation |
75 |
|
|
Fee Rationalization |
59 |
|
| |
|
Local Aid
(Actual cut from FY03 spending is $232M) |
|
350 |
| |
|
Program/Eligibility Reductions |
|
272 |
|
Suspend Prescription Advantage, pending federal action |
98 |
|
|
Reductions from Governor's FY03 emergency actions |
174 |
|
|
|
Grand Total, all FY04 deficit solutions |
|
2,795
|
|
|
