- Budget Development
- Financial Statements
- Appropriation Recommendations
- Operating Transfers
- Local Aid - Section 3
- Outside Sections
- Tax Expenditure Budget
- Capital Budget
- Federal Stimulus
Capital Transfers Policy
In 2008, the Legislature authorized the borrowing of $50 million per year to fund the acquisition of equipment on the capital budget instead of the operating budget. This effort was the first component of Governor Patrick’s no-cost mechanism for taking employees and other budgetary expenses off the capital budget with the goal of significantly scaling back the fiscally imprudent practice of funding these expenses with debt.
Each year, the operating budget includes purchases for the following types of equipment:
- Computers, computer cables and two-way radios;
- Cars, trucks and all terrain vehicles;
- Lawnmowers, snow blowers, power tools and other equipment;
- Construction supplies such as lumber and hardware;
Using the $50M bond authorization, the Executive Office for Administration and Finance (A&F) will direct agencies to purchase durable goods with a life span of five years or more through the annual capital budget. The money budgeted for these durable goods in the annual operating budget will then be used to transfer existing employees paid from bond funds to the operating budget. If a line-item funded the acquisition of durable equipment, Outside Section 26 of the Governor’s budget would allow A&F to transfer that amount to another line-item to fund the cost of personnel that would have otherwise been funded from the capital budget. With line item transferability, the Governor can ensure that the initiative is cost neutral to the operating budget while reducing the costly practice of funding employees through bond proceeds.
For a number of years personnel and other goods (paper, utilities, etc.) have been charged to capital accounts – resulting in millions of additional dollars in interest payments while reducing the amount of money available for statewide construction projects. The practice of shifting operating costs to the capital budget was born years ago during tough economic times like those we are currently experiencing. This proposal is a no cost and responsible wat to start to bring some capital project personnel back onto the operating budget.
Section 26 of the Governor's Fiscal Year 2011 budget completes the reforms started in 2008. The Administration is committed to monitoring transfers to ensure their appropriateness, while also looking for fiscally responsible ways to bring proper costs back onto the operating budget. The total amount of such transfers cannot exceed $50 million, and ANF will be required to give the Senate and House Committee on Ways and Means a schedule of all such transfers.
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