Governor Deval Patrick's Budget Recommendation - House 2 Fiscal Year 2013

Governor's Budget Recommendation FY 2013

Investing in Our Communities


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Governor Patrick    FY 2013 Budget Recommendation:
    Issues in Brief

    Deval L. Patrick, Governor
    Timothy P. Murray, Lt. Governor

 

The FY 2013 budget continues the Patrick-Murray Administration’s unprecedented support for cities and towns.  Major reforms achieved in FY 2012, particularly municipal health reform, will continue to advance and have even greater impact for municipalities in FY 2013.  The Administration’s approach to FY 2013 also includes additional tools to support municipalities in managing through this fiscal crisis and beyond.

Municipal Health Care Reform

Municipal health care reform, signed into law by Governor Patrick in July 2011, is already helping municipalities achieve significant savings.  More than 50 communities have taken steps to address their health care costs in one of several ways: reaching agreement through traditional bargaining, using the new reform’s decision-making process to make changes, adopting the new local option reform or scheduling local votes for the coming months. 

The nine communities that have completed the new reform process as of January 15, 2012, have collectively saved more than $30 M – putting this reform on track to far exceed the initial estimate of $100 M in savings for local governments statewide.  In the first year, more than $16 M of these savings are being realized by local governments, and more than $13 M by local employees through premium reductions and mitigation benefits. 

A dozen other communities have come to agreement through traditional bargaining since Governor Patrick changed the municipal healthcare conversation by proposing the new reform in January 2011, collectively saving another $30 M in the first year of those agreements based on current information.

Success story: Town of Arlington

In August 2011, just weeks after the Governor signed municipal health reform into law, the Town of Arlington and its Public Employee Committee used the new state negotiation process to agree to join the Group Insurance Commission (GIC).  Both the Town and its employees will see significant savings in 2012.

Pie chart of Arlington: $3.75 million Savings for Towns and Employees.  Three pie slices say: $1 million employee mitigation benefits (medium slice), $2 million town savings (large slice), $750,000 employee premium savings (smallest slice).

Local Aid

Aid to cities and towns, or local aid, represents approximately 16% of the Commonwealth’s annual budget.  In FY 2013, local aid programs account for $5.2 B, which reflects the Patrick-Murray Administration’s unprecedented commitment to a strong partnership between the state and its cities and towns:

  • The FY 2013 K-12 Chapter 70 funding is $4.136 B, the highest level of state K-12 education funding in history and a $145 M increase over FY 2012 to ensure that all districts are fully funded at foundation levels and that all districts will receive equal or greater funding than FY 2012;
  • The Chapter 90 Local Road Program will be funded at $200 M for the second year in a row, $45 M more than FY 2011 and $80 M more than the last year of the prior administration;
  • Unrestricted General Government Aid (UGGA) will be level-funded at $833.9 M.  For the second year in a row, an additional payment of $65 M will be made should sufficient surplus funds be available from FY 2012;
  • The budget invests $7 M for a second round of the Community Innovation Challenge Grant Program to provide financial support for one-time or transition costs related to innovative regionalization and other efficiency initiatives in local governments;
  • The budget invests $200,000 for the development of a program to enhance performance management, accountability and transparency for local governments.  This initiative will be overseen by municipal officials and administration officials with the support of the Collins Center for Public Management at UMass Boston;
  • Funding for the special education circuit breaker, which goes directly to municipalities, is maintained at $213 M, which was increased last year by $80 M;
  • Level funding of State Owned Land (PILOT), Regional School Transportation, Charter School Reimbursements and Library Aid;
  • Caseload-driven increases to Veterans’ Benefits and Tax Reimbursements to Veterans, the Blind and Widows; and
  • Veterans’ homeless shelter reimbursement increase of $872,000 over FY 2012 spending, as the Department of Veteran Service’s will now reimburse cities and towns for 100% of the costs they incur for the homeless shelter benefits they provide to veterans, instead of only reimbursing 75% of such costs. 

Additional Initiatives for Fiscal Year 2013

  • The GIC will offer two entry opportunities for municipalities to enter into the state health care system, making it easier for some municipalities to achieve health insurance savings sooner than they otherwise would.
  • The Administration will continue to support initiatives to enhance sharing and flow of business information between state government and municipalities, identify opportunities for state government to provide IT services directly to local government (such as providing services at the new Springfield Data Center),  and create optimized procurement for IT contracts that best serve municipalities. 
  • The new Municipal Procurement Program within the state Operational Services Division (OSD) will help municipalities save money by purchasing items through statewide contracts that leverage purchasing power and save money.  OSD is now working with local government stakeholders to develop procurement opportunities for school buses and heavy equipment vehicles.

Expanded Gaming Law Benefits for Local Governments

  • The new expanded gaming law includes benefits for local governments.  All tax revenue received from licensing fees for slots will be dedicated to local aid.  As soon as a casino is operational, 25% of its total tax revenue will go directly to local aid.  Successful applicants for a gaming license must demonstrate how they will protect the lottery from any adverse impacts.  The law also creates a Community Mitigation Fund to help cities and towns impacted by a new gaming development, an Education Fund to help pay for K-12 and higher education programs, and a Local Capital Projects Fund.  We cannot count on any revenue in FY 2013.  While possible licensing fee for slots would be received in FY 2013, the first $20 M of any licensing fee revenue received must be used to reimburse the state for start-up costs incurred to implement the gaming legislation.

Prepared by the Executive Office for Administration and Finance ·
www.mass.gov/budget/governor
For more information email: contactanf@massmail.state.ma.us (617) 727-2040



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