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FY09 House 2 Budget Recommendation:
Issues in Brief
Deval L. Patrick, Governor
Timothy P. Murray, Lt. Governor
The volatility of the housing market has made the deeds excise revenues difficult to predict and to utilize as a stable funding source. Given that County funding through deeds excise accounts for approximately 1/3 of the total County Sheriffs' funding, this unstable source of revenue has created year end deficiencies on an annual basis. This funding uncertainty prevents the Sheriffs from budgeting properly and prevents the state from gaining an accurate view of the fiscal situation of the Sheriffs and the Houses of Corrections. Transferring the County Sheriffs to the state system will allow the Sheriffs to know their annual appropriation for a given fiscal year and allow them to plan accordingly while taking advantage of the economies of scale that the state can offer.
Governor Patrick has proposed to align the Massachusetts State and County Sheriffs under the state budgeting and finance laws. Massachusetts currently has 14 State and County Sheriffs that perform the same function, but operate under two different accounting systems. The 7 State Sheriffs operate under the State accounting system, including payroll, health care and retirement, while the 7 County Sheriffs continue to operate within the County accounting system. However, despite operating under the County accounting system, County Sheriffs use both State and County revenues to fund their operations. In H.2, Governor Patrick included a proposal to reform the funding and accounting system for these 7 Sheriffs, which will provide consistency, transparency and efficiency in budgeting.
The seven state sheriffs (Berkshire, Essex, Franklin, Hampden, Hampshire, Middlesex, and Worcester) function under the constitutional arm of the government and receive a direct state appropriation in the budget. Their employees are state employees, receive state health and retirement benefits, and their operations utilize the state accounting, human resources, and payroll systems.
The seven county sheriffs, (Barnstable, Bristol, Dukes, Nantucket, Norfolk, Plymouth, and Suffolk) are considered departments of the existing counties and receive their funding through 6 sources as allocated by the County Government Finance Review Board. The current funding sources include state general fund appropriations for operations and Shattuck Hospital expenses; a percentage of the County deeds excise revenue and a County Maintenance of Effort (MOE) contribution; and federal revenue received for housing federal inmates.
- Elimination of MOE helps Communities - Currently, each of the County Sheriffs receives Maintenance of Effort (MOE) paid by member communities in the County where it is located. This funding is to ensure the Sheriffs have enough money to operate the Houses of Correction. Each year, the MOE increases 2.5% and the County is responsible for this increase. With this transfer, the MOE for FY09 will be frozen at FY08 level and in FY10, the MOE will be eliminated. This will result in nearly $10M in funding being saved by the County's member Communities.
- Potential Cost Savings - Based on current estimates from GIC and PERAC (compared to county projections for health care and retirement costs), the cost of providing these benefits will drop by $6-9M once the transition is complete and operational. This estimate is based on FY09 projections from the counties, GIC and PERAC.
- Administrative Efficiency - This initiative eliminates the need for the County Government Finance Review Board, and involving EOPS, DOR, and the Auditor's office in the budget process. Removing this layer of bureaucracy makes the budget process more straightforward for the sheriffs, as well as ANF and the Legislature.
- Greater Fiscal Stability for Current County Sheriffs - Under the current scenario, the budget for the county sheriffs is volatile during each fiscal year. The county sheriffs are more susceptible to not reaching their funding goals because they are also dependent on local deeds revenue and county finances.
- One State Sheriff System - The County Sheriffs would no longer be under an entirely different budget cycle and funding mechanisms. Having 14 state sheriffs opens the door to further policy goals for all sheriffs, such as increasing economies of scale as one group, unifying public safety approach statewide, maximizing services for inmates statewide, standardize all inmate data, and having a more coherent funding approach.
- Increased Oversight - Under a uniform system ANF and the Legislature could track the expenses, revenue, and personnel with greater detail. Under this scenario, all sheriffs would process their accounting through MMARS and place their employees in the HR/CMS system. These two steps would provide a greater understanding of their fiscal picture, and more accountability to state finance rules and regulations.
Each Sheriff will have their own line item for the operation of their department and all employees will become state employees with state health insurance and pension benefits. Additionally, the County Corrections account (8910-0000) will be used to allocate the costs associated with health and retiree benefits to GIC and PERAC. All revenues previously collected by the County to fund the Sheriffs will now be deposited into the General Fund along with Federal revenue associated with housing Federal inmates.
|Seven County Sheriffs New State Line Items|
Summary of line items
|8910-8200 Barnstable Sheriff (OBS)||$22,394,289|
|8910-8300 Bristol Sheriff (BSD)||$35,205,797|
|8910-8400 Dukes Sheriff (SDD)||$2,245,218|
|8910-8500 Nantucket Sheriff (NSD)||$840,931|
|8910-8600 Norfolk Sheriff (SDN)||$27,412,555|
|8910-8700 Plymouth Sheriff (SDP)||$39,014,220|
|8910-8800 Suffolk Sheriff (SDS)||$89,291,236|
|8910-0000 County Corrections Reserve||$79,210,399|
Prepared by the Executive Office for Administration and Finance • Rooms 373 & 272 • State House
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