Commonwealth of Massachusetts
The Governor's Budget Recommendation
When we began our first term as Governor and Lieutenant Governor in January of 1991, we decided to make balancing the budget without raising taxes one of the defining ideas of our administration. We did so for one simple reason: it is almost impossible to govern effectively if the fiscal house is out of order.
As we have successfully pursued this objective for the past five years, we have benefited from the combined wisdom of many people: small business people, service providers, consumers, state government employees, and individual taxpayers, to name just a few. We have also benefited from the collective knowledge of a Legislature that has shared our enthusiasm for fiscal prudence, and has often taken our initiatives and made them better.
The end result of this remarkable collaboration is astounding. The Commonwealth began Fiscal Year 1991 in the summer of 1990 with an opening fund deficit of $1.1 billion. We closed Fiscal Year 1991 in the summer of 1991 with a positive fund balance of $237 million. By Fiscal Year 1995, the beginning fund balance had risen to $589 million, a $1.7 billion swing over just four years. The closing balance for Fiscal Year 1995 was equally positive, totaling $726 million. The Stabilization Fund, which was empty when we took office, has a $425 million surplus five years later.
The Commonwealth has also made extraordinary progress using Generally Accepted Accounting Principles (GAAP), a more rigorous test of fiscal health than the accounting practices required by state law. At the close of Fiscal Year 1990, the Commonwealth fund balance was $1.9 billion in deficit, on a GAAP basis. By the end of Fiscal Year 1991, the GAAP deficit had been reduced to $761 million. In Fiscal Year 1995, for the first time since it started measuring its financial condition using GAAP in the mid 1980s, the Commonwealth of Massachusetts closed its books with a positive fund balance, totaling $287 million.
Along the way, we have worked with the Legislature to make an enormous amount of progress on a number of policy and programmatic fronts, including:
In addition, we have worked with the Legislature to cut taxes eleven times since 1991; the combined effect of these cuts have saved taxpayers over $700 million annually.
The Massachusetts economy has responded positively to this potent combination of fiscal prudence and tax reductions by creating 180,000 new jobs since 1991, reducing our unemployment rate from 9.5 percent in March of 1991 - one of the highest in the nation - to 5.1 percent in November of 1995, which is one of the lowest.
- Managed Care Medicaid;
- Workers Compensation Reform;
- Welfare Reform;
- MWRA Rate Relief;
- Facility Consolidation;
- Education Reform;
- Truth-in-Sentencing; and
- Bail Reform.
FISCAL YEAR 1997 OVERVIEW
With our fiscal house in order, we were able to ask people a very simple question: "If you could start from scratch, would you organize state government the way it is organized today, or would you change it?"
As we traveled across the Commonwealth over the course of the past six months, we asked people this question. No one said the current organization makes sense. Virtually everyone had a way to make it better, and almost no one defended the status quo: too much duplication; too few points of accountability; too much conflicting paperwork; and too many overlapping jurisdictions.
Just as important, very few people in state government, and only a handful of members of the Legislature, answered the first question affirmatively. Most believed, like their fellow citizens outside the public sector, that the current arrangement does not make a great deal of sense, does not maximize customer service, and can, at times, simply get in its own way.
Yet changing the current organization of state government will not be easy. The current structure did not happen overnight, and much of it is due to the influence of powerful interest and advocacy groups. Moving away from the status quo will require a concerted effort over several years to be fully realized, although many actions can be taken immediately. This budget document reflects a number of initiatives that can be pursued immediately, but assumes that additional consolidations and efficiencies can become operational only after other reforms occur first.
Fortunately, we begin debate around this shift in structure with the knowledge that the Legislature has supported a number of multi-year initiatives in the past, many of which were politically difficult. These include the shift toward managed care in Medicaid, education reform, and facility consolidation. This budget, and the legislative language that accompanies it, is a first step toward an operating structure for state government in Massachusetts that will properly position the Commonwealth for the turn of the century. It maximizes accountability; takes advantage of technology; prepares for federal changes around programs and funding; and eliminates administrative duplication.
More importantly, once fully implemented, this plan will save over $600 million in annual operating expenses. This makes it possible for the Commonwealth to continue to provide tax relief to its working men and women by reducing their income tax burden by $530 million, from a personal income tax rate of 5.95% today, to 5.7% in Calendar Year 1997, to 5.45% in Calendar Year 1998.
FORM FOLLOWS FUNCTION
As we met with constituents, and solicited advice from others around the Commonwealth, it became clear to us that a comprehensive review of state government would have to begin with an inventory of functions, tasks, and activities. This would tell us where the overlaps, duplications, and multiple points of accountability rested, and give us an opportunity to bundle together similar functions serving similar populations under single administrative entities.
For example, dozens of state agencies issue licenses. Many use similar processes; collect similar information; and use similar enforcement mechanisms. Yet each has its own information systems, its own administrative operations, and its own distribution systems. This is not only duplicative and inefficient, it is also very customer unfriendly. For example, boats and automobiles are licensed and registered at different locations using different registration fees and different rules for payment of sale tax, even though the only significant difference between the two is that one has wheels and the other floats.
Many Executive Office of Health and Human Services (EOHHS) agencies serve the same families and the same individuals, yet there is no capacity to generate an unduplicated count of service recipients, or a comprehensive snapshot of any particular individual's interaction with the current EOHHS Secretariat and its agencies at any given point in time, or over time. In addition, many current Executive Office of Communities and Development programs serve current EOHHS clients, but there is little capacity to determine the full extent of the intersection between the two.
This fragmentation of responsibility and authority has, over the years, eroded accountability. If five or six different administrative entities are each responsible for only a piece of a transaction, each can blame the other if it doesn't get done quickly, is done poorly, or is not done at all.
Much of this year's budget proposal is designed to end this kind of fragmentation: to establish singular points of accountability for similar functions; to place responsibility for performing those functions in one place; and to enable the managers and workers assigned to these activities to deliver the highest possible level of services. This will not only make state government more efficient, it should make it more accountable to the Legislature, to the taxpayer, and to the constituencies it serves.
In fact, once we inventoried functions and program responsibilities, and built an administrative structure to support them, we discovered that the Commonwealth has far more administrative structure than it needs. So much, in fact, that it makes executing transactions more complicated and more difficult. Eliminating this administrative underbrush will make the Commonwealth's government both smaller and better.
Specifically, we believe the Commonwealth's primary objectives can be more fully realized by utilizing a smaller Cabinet structure. This will make it possible to construct clearer lines of accountability, which will, in turn, encourage more customer-focused service delivery, and better program management.
This budget proposes the elimination of five cabinet secretariats:
A thorough review of the functions, goals and responsibilities of each of these entities did not justify continued existence. Rather than retaining a stand-alone housing and community development secretariat (EOCD), it makes more sense to place its resources with secretariats and agencies that could maximize them by leveraging other programs. For example, many of the recipients of EOCD's housing voucher program, which benefits low and moderate income individuals and families, are already receiving support and rehabilitation services from existing EOHHS agencies. Combining these funds with other programming at the proposed Executive Office of Family Services (EOFS) makes it possible for EOFS to maximize these resources. It also puts the burden of resource allocation and service coordination squarely on the EOFS Secretariat, instead of providing each Secretariat with an opportunity to blame the peculiarities of the other's operations for inappropriate decision-making.
- Communities and Development (EOCD);
- Consumer Affairs (EOCA);
- Economic Affairs (EOEA);
- Education (EOE); and,
- Labor (EOL).
EOCD works with local communities, but so does the current Division of Local Services (DLS) at the Department of Revenue. By combining EOCD's efforts with DLS, we can create a single entity, the Division of Municipal Services that can provide local governments with a single point of accountability for their relationships with the Commonwealth. By consolidating these activities within a division of the Department of Revenue, which is part of the Executive Office for Administration and Finance (EOAF), we can assure that the needs and concerns of local government are heard by the people who have the necessary tools to address them.
The Executive Office of Consumer Affairs oversees a variety of regulatory and administrative functions, many of which can benefit from administrative consolidation and the introduction of statewide information technology tools. Its licensing functions, however, do not need to be separate from other licensing operations at the Department of Public Safety and the Registry of Motor Vehicles. By combining these three licensing operations in one new agency, the Department of Licensing and Regulation at EOAF, it becomes possible to consolidate technology databases, and to provide citizens with one-stop shopping for many licenses and simple permits.
The Executive Office of Economic Affairs serves a useful coordination purpose, but many of its administrative functions can be more appropriately handled elsewhere. The Department of Employment and Training, for example, uses a computer system that is virtually identical to the system operated by the Department of Revenue. Each collects much of the same information (for different purposes) from many of the same businesses and individuals. It doesn't make sense to continue to manage and pay for two enormous data systems, particularly if each is interfacing, for the most part, with the same clientele.
The Executive Office of Education has also served a useful role as a policy coordinator, but it represents one of at least five entities currently managing education and training policy and programming at the state level. We believe that a unified approach to education and training ultimately makes more sense. Here, we propose only two boards: one for public higher education; and one for K-12 education and training. This assures, for the first time, coordination and cooperation across publicly financed systems around standards, priorities and missions.
Finally, the Labor Secretariat contains a number of critical programs, but these can be done successfully in other administrative settings, and do not require a separate secretariat to be accomplished.
SEVEN POINTS OF ACCOUNTABILITY
Administration and Finance
Under this proposal, the Executive Office for Administration and Finance (EOAF) is responsible for two major functions:
Organizationally, this translates into three departments:
- Administrative responsibilities, including management support and oversight for state purchasing, human resources, and information technology functions, as well as basic licensing and permitting functions; and,
- Financial responsibilities, including the coordination and oversight of all revenue collection and spending activities for state government agencies, including operating, trust, capital, and federal funds.
This gives EOAF the capacity to act as one organization; to break down institutional turf; to bring similar functions together around a common administrative operation; and to take advantage of basic opportunities in information technology.
- Office of the Secretary (Fiscal Policy, Human Resources, Operational Services, Information Technologies, and Hearings and Dispute Resolution);
- Revenue; and,
- Licensing and Regulation.
For example, under the current structure an individual who purchases a boat and a trailer and then registers them would have to:
The Registry of Motor Vehicles would then prepare an excise tax bill for the trailer, and mail it out to the city or town in which the owner resides. The Department of Environmental Protection would also provide the municipality with an annual list of boat owners in its community. The municipality would then value the boat and prepare the excise tax bill.
- go to a Department of Revenue office to pay sales tax on the boat;
- go to a Department of Environmental Protection office to register and title the boat; and,
- go to a Registry of Motor Vehicles office to register and pay sales tax on the trailer.
Under the new structure, the individual would go to a Department of Licensing and Regulation (DLR) office to register and title the boat and the trailer, and pay the sales tax on both. The DLR would then prepare and send excise tax bills for the boat and the trailer to the individual, and notify the city or town of the transaction. This is a much simpler system to manage; requires fewer steps by the customer; and achieves a more timely transmission of relevant information.
It also relies on a more coordinated approach to information technology, something that rests at the core of much of this reorganization. This budget proposal assumes, for the first time, that the Commonwealth of Massachusetts is, in fact, a service delivery organization, and not merely an unconnected collection of programs and services. For years, state secretariats and agencies have celebrated their differences, instead of recognizing their many commonalities. The key to balancing these competing interests is shared, common information. Program managers can undertake their specialized missions, confident of overall service integration, if they work within a framework of shared information.
Today, this information sharing can and should be done electronically, and over time, it will radically alter the way state government delivers services. Between now and the year 2000, a forward-thinking, comprehensive approach to information technology can move the Commonwealth away from being a program-focused organization into becoming a citizen-focused organization. Business as usual, or with minor adjustments, will not sustain us. Private organizations are already discovering that information technology can dramatically enhance their relationships with their customers, and as the public becomes a more sophisticated consumer, our government's past inadequacy will become more and more apparent.
Under this proposal, the Information Technologies Division will review and approve annual secretariat information technology plans before any funds, operating or capital, can be applied to these initiatives. To be approved, every plan will be required to incorporate strategies for pursuing interoperability and data sharing between departmental systems, and across secretariats over a defined period of time. In addition, the Division will pursue every opportunity to consolidate mainframe systems operations and to create shared database servers.
Perhaps no other secretariat in state government better exemplifies the need to create fewer points of accountability, more unity around program development, and a coordinated, comprehensive commitment to information technology than this one. Sixteen operating agencies serve hundreds of thousands of people and spend over $7 billion, but share no common client identification system; use multiple definitions to describe similar services; do not assign single case management responsibilities to families or individuals involved with more than one agency; have no common geographic boundaries; and have no capacity to collect management information on particular populations on a secretariat-wide basis.
While we have made significant strides in recent years to enhance the performance of many individual agencies within the existing Executive Office of Health and Human Services Secretariat, additional improvements must begin with a commitment to think about the proposed Executive Office of Family Services (EOFS) as a unified Secretariat, and not as an unorganized, uncoordinated, unconnected collection of disparate operating agencies. To continue the current way of doing business will, over time, severely restrict the Commonwealth's capacity to enhance the ways in which it serves disadvantaged populations.
We also propose to significantly reduce the number of operating agencies within the Secretariat, because many of these operations share common purposes, and the current structure actually discourages shared goals and objectives between similar agencies. Specifically we propose to consolidate the existing structure into five operating agencies: Public Health Services, Disability Services, Children's Services, Juvenile Justice, and Transitional Assistance. In addition, we propose incorporating the Office of Refugees and Immigrants into the new EOFS Secretariat, and re-naming it the Office of New Americans.
More importantly, all five agencies will have congruent regional boundaries, effective the first day of Fiscal Year 1997. A plan for consolidating regional and area office locations will be submitted to the Legislature by the end of Calendar Year 1996, with a July 1, 1997 effective date. The current structure does nothing to encourage agency workers and managers at the field level to communicate with one another in a systematic way. People have been talking about congruent area boundaries for the effective delivery of health and human services for at least a decade. It is time to implement this relatively simple, but critically important initiative.
To ensure a coordinated information technology strategy, all information technology projects will require the utilization of a common client identification number, as well as a secretariat-wide plan for interfacing with the vendor community. This will ensure that vendors that do business with more than one agency will not need to develop multiple information technology systems to satisfy agency information requests.
Finally, a number of programs currently managed by the Executive Office of Communities and Development (EOCD) will be transferred to EOFS. The Section 8 and Massachusetts Rental Voucher Program, as well as a number of special support housing programs, will be located in the Secretary's Office at EOFS. This will ensure maximum coordination with support service programs, and provide a single point of contact and accountability for these programs, many of which currently serve EOFS clients and consumers. The Executive Office of Family Services will also assume the weatherization and fuel assistance programs, which are currently managed by EOCD.
In the end, our efforts to review and replace all existing regulations by the end of Calendar Year 1996 may have a more profound impact on environmental affairs than our budget proposal. However, this submission, which recommends the consolidation of several agencies, remains an important component of our reorganization plan.
For example, it is well known that the Department of Environmental Management (DEM) and the Metropolitan District Commission (MDC) perform a number of similar functions. In some communities, like Weymouth, DEM parks (Webb State Park) and MDC parks (Abigail Adams Park) are right next to each other, but managed by separate agencies. We recommend consolidating DEM and the MDC parks into a single Department of Parks and Recreation, thereby maximizing our capacity to manage vehicles, personnel and other field-based operations.
We also recommend combining the Department of Fisheries, Wildlife and Environmental Law Enforcement with the Department of Food and Agriculture, creating a single Department of Natural Resources. This presents a number of opportunities to maximize technology, scientific inquiry, and land and water management.
Finally, we propose combining under the Department of Transportation within the new Executive Office of Public Property, the responsibility for roads currently being maintained by either the MDC or the Massachusetts Highway Department (MHD). There are numerous places across the Commonwealth in which MDC roads are maintained alongside MHD roads, with each agency using its own road crews and equipment. It is time to put this inefficiency to an end.
The Public Safety Secretariat should focus solely on criminal justice, law enforcement, and emergency response. Therefore, we recommend transferring the Department of Public Safety, which is primarily a licensing and inspection operation, along with the Registry of Motor Vehicles, to the new Department of Licensing and Regulation at the Executive Office for Administration and Finance. This makes it possible to combine these operations at EOAF with the licensing functions currently located at Consumer Affairs to create one front door, and one administrative operation, around licensing and simple permits. The Bureau of Special Investigations, which investigates welfare fraud, would be transferred to the proposed Executive Office of Family Services Secretary's Office, where it would be combined with other investigative operations to create a single investigations division.
We also recommend moving adult probation and parole to the newly created Department of Criminal Justice, which combines these operations with the state and county correctional systems. This gives one agency the capacity to be completely responsible for the custody of our prison populations. This will give the Department the ability to manage all levels of custody across our existing system, thereby enhancing our classification system and improving our decision-making process.
In addition, we propose to consolidate the State Police, the Chief Medical Examiner's Office, and criminal justice training into one Department of Law Enforcement. Here too, the opportunities to integrate strategic planning, policy development, and operations into a unified, coordinated, accountable agency are numerous.
These consolidations also make it easier to coordinate the information technology projects of criminal history systems and the court system. If we ever expect the law enforcement community to behave as a system, making the right decisions at the right time with the right information, we must make a concerted effort to develop an integrated information technology infrastructure. Creating a smaller universe of appropriately linked organizations is a first step toward a truly integrated law enforcement system.
The Public Property Secretariat will be responsible for the planning, development, repair, construction, and management of the Commonwealth's built assets, as well as its roads, bridges and other transportation infrastructure. This will be done by transferring the current Division of Capital Planning and Operations' design and construction functions to Public Property, along with the Bureau of State Office Buildings, thereby combining all of these activities under one secretariat. The Commonwealth could then optimize its utilization of equipment and management expertise; and make more coordinated decisions about capital planning and construction spending, particularly on projects that involve both infrastructure and vertical construction.
The Secretariat will also be responsible for the Massachusetts Bay Transportation Authority (MBTA), which we propose to split into two units. The first entity will represent the traditional transit authority, but will be subject to a series of privatization initiatives, including real estate management, payroll services, bus operations, fare collections, revenue counting, and auditing functions. These initiatives, which have been implemented by similar operations across the country, will enhance the cost-effectiveness of the MBTA, while ensuring a continuing decline in the size of the Commonwealth's operating subsidy.
In addition, we propose to create a Commuter Rail Corporation, which will be responsible for the management of the Commonwealth's growing commuter rail system. Currently, this is a "privatized" service, as the MBTA contracts with Amtrak to provide commuter rail service. Creating a separate corporate entity to deal with the growing web of commuter rail routes ensures the most cost-effective and focused approach to delivering this service.
We also recommend the implementation of a series of architectural design and construction procurement reforms that would align the Commonwealth's business practices more closely with those of the private sector. Many of these reforms have been supported by a number of independent organizations, including the Massachusetts Taxpayers Foundation, which recently released a report on these issues entitled, "A Taxpayer's Look at a Sacred Cow: Public Sector Design in Massachusetts Two Decades After the Ward Commission."
The Executive Office of Elder Affairs is the single point of accountability for elder services. Much of its programming, which is managed primarily through Home Care Corporations, is already community-based and privatized. It also works with local Councils on Aging to support a number of locally delivered programs and services. It will also continue to provide an invaluable role to the Commonwealth as an advocate on elder issues.
Education and Training
For years, Massachusetts has had a difficult time coordinating its publicly funded education and training programs. Policy objectives and scholastic programs have often operated in isolation, or at cross-purposes. Our proposal is designed to reduce this duplication and fragmentation by creating one board for K-12 education and training programs; another board for public higher education. Over time, this will facilitate more consistency between the K-12 system and the higher education system, and will enhance communications and resource allocation decisions between the educational and training communities.
At the K-12 level, the primary focus will be on standards and performance. School systems that fail to educate their students will not be tolerated. In addition, we propose to give the new board the ability to pursue more flexible mechanisms for certifying teachers to ensure that schools and students have a wider range of potential teachers to choose from. We also propose to give every child's parents a chance to choose which public school his or her child will attend, by creating a statewide open enrollment policy for K-12 students. In addition, we plan to offer low-income students tuition reimbursement certificates if they wish to attend a private school, provided that the private school is willing to become a Charter School.
We also recommend consolidating about 25 categorical programs into one block grant, to be distributed to communities by the Board of Education and Training. We propose that 75% of the block grant must be spent by school districts on programs such as early childhood education, after-school programs, or talented and gifted programs.
Finally, to give local officials more flexibility, we propose to eliminate the current mandates concerning school governance (elected school committees, etc.), replacing them with language that allows each city and town to develop its own school governance structure, with the approval of the Board of Education and Training.
We also propose to consolidate most training programs under the Board of Education and Training, consistent with our belief that training is, in fact, another point on the continuum of life-long learning. This will give us far more capacity to manage the relationship between training and education, and also position the Commonwealth to maximize its use of federal funds when the federal government follows through with its intent to block grant much of its training money.
In public higher education, we propose to give a significant amount of management authority to the Board of Higher Education, thereby making it possible for the Board to begin to manage public higher education as a system, instead of as a series of unconnected, uncoordinated campuses. This current lack of coordination has created program overlap and duplication, inappropriate allocation of resources, and little program accountability to the Commonwealth at the campus level. We believe this kind of coordinated effort is critical for the public higher education system to succeed.
CLEANING OUT THE COBWEBS
For years, a quiet debate has gone on concerning the appropriate role of county government. In some areas of the Commonwealth, regional collaboration makes sense, and cities and towns that wish to engage in this kind of activity should do so. However, there is little justification for a separate arm of government sandwiched between the Commonwealth and its cities and towns, particularly when so much of what county government does is already financed by state and city government.
Our proposal, which would be phased in over several years, consolidates many county functions with similar state functions, but gives cities and towns that are interested in retaining certain regional services the capacity to do so.
Specifically, county corrections would be combined with state corrections operations, although the sheriffs would retain their current standing as elected officials. The Commonwealth would absorb the county court system, which, for all intents and purposes, it already pays for.
Registries of Deeds, primarily because of their small size, have never been able to take advantage of the technology that is currently available to support their operations. As a consolidated operation in the Secretary of State's office, planned in conjunction with the Information Technologies Division, the economies of scale and the information technology opportunities are enormous.
Finally, to ignore the ongoing financial and operational difficulties facing county government is to risk both fiscal and programmatic disaster several years from now. If people think our plan is too complex or too aggressive, we would be more than willing to work on a consensus approach that can prevent a very significant problem from crashing down on the Commonwealth several years from now.
We acknowledge the complexity of this proposal. This is due, in many ways, to the enormously tangled administrative and programmatic web that county government represents. The outcome, over time, will be less complexity, more uniformity, and less reliance on a political infrastructure that has little relevance in the Massachusetts of the 1990s.
In 1993, the National Commission on State and Local Public Service called for an end to civil service, arguing, among other things, that it is so rule-bound and complicated that "merit is often the last value served." Most public sector managers, and many other public sector employees, would agree wholeheartedly with this characterization. The inflexible, process-oriented core of civil service makes it difficult to hire talented individuals, and makes it almost impossible to fire incompetent personnel.
Test-taking may have had value at some point in time, but the civil service process of the 1990s often makes it harder to hire appropriately qualified individuals. Many exams do not test the skills and abilities required for today's most important positions, and the procedure can turn relatively routine hiring activities into boondoggles.
More importantly, the vast majority of civil service employees are already covered by collective bargaining agreements, which establish terms and conditions of employment. All civil service offers most employees is another set of rules and regulations, some of which include lifetime tenure, which can be manipulated by poorly performing employees to protect their job status.
While our budget document appears to propose only $16.74 billion in Fiscal Year 1997 spending, this is due primarily to accounting changes associated with block grants at the federal level. Using Fiscal Year 1996 accounting conventions, we are proposing $17.36 billion in spending for Fiscal Year 1997, a $425 million, or 2.5% increase over anticipated Fiscal Year 1996 spending. Our tax revenue estimate is conservative. We expect tax revenues to grow by less than 4% next year, due, in part, to the implementation of the so-called "single sales factor" methodology for manufacturing and defense firms. Overall, we anticipate modest non-tax revenue growth, and we have incorporated the first phase of the Weld/Cellucci Administration's $530 million cut in the personal income tax. This income tax rate reduction, from 5.95% today to 5.70% in Calendar Year 1997, is worth $133 million in Fiscal Year 1997.
For budgeting purposes, we assume that the federal government will implement block grants for Medicaid and public welfare. While the numbers associated with this assumption are certainly fluid, it is quite likely that our estimates will, in fact, represent a worst case scenario. It is highly unlikely that federal support will decline from currently projected levels as the budget debate goes forward, and quite possible that federal support will actually increase.
We calculate finishing Fiscal Year 1997 with a $23 million surplus, based on these assumptions, and presume rolling $100 million in federal Medicaid funds forward into Fiscal Year 1998 to support any contingency obligations.
Most of the state spending increases proposed in this budget represent bipartisan, multi-year commitments, such as the fourth year of education reform and the third year of the so-called "lottery cap phase-out," under which the Commonwealth allocates a larger percentage of state lottery profits to cities and towns over a five-year period. Other increases are predetermined by funding schedules, such as School Building Assistance, debt service and pension payments; and caseload driven accounts, such as Transitional Aid to Families with Dependent Children (TAFDC), Emergency Aid to the Elderly, Disabled, and Children (EAEDC), Supplemental Security Income (SSI), and Medicaid. By themselves, these nine programs account for a $500 million increase in Fiscal Year 1997 spending over anticipated Fiscal Year 1996 spending.
In addition, we believe we should keep all of our commitments. First, we are proposing a $15 million increase in Fiscal Year 1997 to support social workers, foster care services, and adoption services at the Department of Children's Services. We are also requesting a $20 million increase for the courts and District Attorneys, and $15 million for the Department of Criminal Justice, consistent with our support for law enforcement and criminal justice. To support our welfare reform efforts, we are asking for an additional $50 million in child care funding, divided among low income, working families; and TAFDC families who are working or are in education or training programs. Other adjustments, such as anticipated collective bargaining agreements, domestic violence programs, AIDS funding, regional school transportation, and wage increases for direct care workers in vendor programs, add another $125 million.
The reorganization proposals put forth in this document reduce Fiscal Year 1997 budgeted spending by over $300 million, making many of these initiatives possible. Over two fiscal years, other downsizing initiatives, such as our proposal to manage the Commonwealth's participation in the federal Supplemental Security Income program (SSI), and the savings on contract assistance associated with MBTA privatization initiatives, will generate an additional $350 million in savings, more than enough to support the second phase of the income tax cut.
This tax cut is modest, is phased in over time, and represents a significant opportunity to give something back to the hardworking people of this Commonwealth.
A SINGULAR OPPORTUNITY
Many management texts talk about structure following strategy. In state government, structure is strategy. The Commonwealth doesn't have 101 operating agencies and 11 cabinet secretariats by accident. Over time, people have solved problems by creating new structures to deal with them, instead of fixing the operating issues affecting the ones that already existed. This makes the process by which the Executive Branch currently develops policy and executes transactions quite colorful to observe, but it hardly represents a forward-thinking approach to holding managers and workers accountable for their actions and responsible for getting things done.
It also contradicts fundamental rules about managing large, complex organizations in an information technology age.
This Administration is quite proud of the bipartisanship that has accompanied many of the most significant accomplishments of the past five years. Here is an opportunity to work together to leave a legacy that can prepare state government for the turn of the century. The strategic and operational objectives of this initiative are fairly straightforward. If the Legislature has a better way to achieve similar goals associated with any of these proposals, we welcome the opportunity to discuss these issues as we work together with them to achieve these goals.
Working together, we have already made an enormous difference. We look forward to this unique opportunity to further our progress.
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