Governor Patrick's and Lieutenant Governor Murray's fiscal year 2009 budget
continues moving Massachusetts forward on a path to change and shared
prosperity. The budget makes targeted investments that are critical to promoting
economic growth and opportunity and building a better future for the
Commonwealth. It also maintains fiscal responsibility, closing a projected
deficit through an emphasis on greater efficiency and reform and careful
approaches to generating additional revenues.
The Patrick-Murray Administration faced major challenges in building the
fiscal year 2009 state budget. The cost of simply continuing to provide state
government services based on current program design (without program expansions
or new initiatives) stood to exceed predicted tax revenues by well over a
billion dollars. This budget gap is the legacy of decades of neglect in making
investments needed to achieve the full promise of job creation in Massachusetts;
continuing reliance on one-time revenues instead of sustainable funding sources
to pay for public priorities; and the fact that there remains much work to be
done to reform state government and make it more efficient and
Confronting a large projected structural deficit but also continuing needs
for public investment, the Administration developed this budget based on a
series of careful choices aimed at addressing our state's highest priorities
while also maintaining fiscal responsibility.
The budget makes targeted investments in education, Local Aid, public safety
and job creation that are critical to promoting economic growth and opportunity.
Investing in the fundamentals of economic expansion will not only build a better
future for the people of Massachusetts but also help generate sustainable
revenues for the services that families and businesses need. Even with our
fiscal challenges, we cannot afford not to make these investments. The cost of
inaction would be a less successful and competitive economy and workforce and -
on that account - even greater fiscal challenges due to lagging revenues and
higher social costs.
These targeted investments are part of a balanced and fiscally responsible
budget. The budget curbs unnecessary or unwarranted expenditures through an
emphasis on efficiency, performance and reform. It generates additional revenues
through improved tax enforcement and greater corporate tax fairness. The budget
also protects cities and towns from an anticipated deficit in the State Lottery
Fund in fiscal year 2009, plugging this deficit with a portion of the initial
licensing fees from three destination resort casinos proposed by the
Administration. Though not included in the budget, under the Administration's
gaming proposal, additional licensing fees from these casinos would support
direct property tax relief for Massachusetts homeowners and local transportation
and infrastructure improvements.
Finally, the budget builds on last year's progress in making our state's
fiscal blueprint more transparent and user-friendly, containing new details
about revenues and transfers and enhancements to make information
The budget makes targeted investments in education, Local Aid, public safety
and job creation that are critical to promoting economic growth and opportunity
in Massachusetts and strengthening our fiscal climate in the long-run.
The Patrick-Murray Administration believes that offering each and every one
of our children access to a world-class education is essential to creating
broad-based opportunity throughout Massachusetts and strengthening our state's
The Governor's vision for the next phase of education reform entails building
a comprehensive, child-centered public education system starting with universal,
high-quality early education and continuing through adult skills training.
Investing in the education of our young people would not only enhance
opportunity and our state's competitiveness but also reduce social, fiscal and
economic costs associated with the lack of a comprehensive education. Indeed, on
average, high school dropouts have lower earnings and pay less in taxes, while
having higher incarceration rates and imposing higher fiscal costs on
government, than their counterparts with high school or college degrees.
The Administration has already begun to implement this next phase of
education reform in Massachusetts. Last year's budget contained the strongest
investment in education in the history of the Commonwealth, including doubled
funding to extend student learning time. The Administration has also proposed a historic investment
in public higher education, filing a ten-year, $2-billion bond bill to make long overdue capital
improvements at every one of the Commonwealth's state and community colleges and
University of Massachusetts campuses. Furthermore, it has convened education,
business, community and government leaders as part of the Commonwealth Readiness
Project to help develop a comprehensive, ten-year strategic plan to
continuously improve public education. In addition, the Administration recently
filed Article 87 legislation to create a Secretary of Education, to help
coordinate educational policy and build a seamless system of lifelong learning
from pre-kindergarten through skills training for adults.
The Administration's fiscal year 2009 budget contains $368 million in
increased education funding to continue moving Massachusetts forward into the
next phase of education reform. Guided by initial analysis from the Readiness
Project, the budget focuses on key priorities for improving the Commonwealth's
education system so that our students can compete with their peers across the
country and around the world.
- The budget fully funds Chapter 70 aid to cities and towns, increasing
state funding by $223 million to bring Chapter 70 aid to unprecedented levels.
Behind Medicaid, this is the second largest increase in the budget. With this
increase, all 328 school districts will receive more Chapter 70 funds than
they received in fiscal year 2008.
- The budget increases funding for the Universal Pre-Kindergarten Program by
$15 million, more than a 200 percent increase for the program. This will
support grants to an additional 890 child care facilities and schools,
benefiting about 14,300 children by promoting readiness for school and other
positive child development outcomes.
- The budget provides a second consecutive year of doubled funding for
Extended Learning Time Grants, increasing funding from $13 million to $26
million. This will provide extended learning time opportunities for over 8,900
- The budget increases funding for Kindergarten Expansion Grants by $8
million. This will allow an additional 440 classrooms to move from half- to
- The budget focuses on closing persistent achievement gaps, providing an
additional $2 million for extra tutoring opportunities for students with low
MCAS scores (a 15 percent increase) and an additional $4.5 million for the
Department of Elementary and Secondary Education to provide targeted
assistance to underperforming schools to help improve student achievement and
test scores (a 49 percent increase).
- The budget includes funding to create an Executive Office of Education
headed by a Secretary of Education - reflecting the Article
87 reorganization recently filed by the Administration.
The Administration will be proposing additional education reforms in
conjunction with the final report of the Readiness Project in the spring.
Local Aid and Property Tax Relief
The Patrick-Murray Administration recognizes that the quality of life and
cost of living in our individual communities fundamentally determines whether
businesses will locate and create jobs in Massachusetts and whether we can
retain the talented workforce needed to ensure our state's economic success.
In recent years, a combination of inadequate and unpredictable state
investments in our cities and towns and escalating municipal cost pressures -
particularly for health insurance for public employees - have driven steep
increases in property taxes and reductions in core services. This dynamic is a
threat to our state's short- and long-term economic vitality, discouraging
businesses and a talented workforce from planting roots in Massachusetts.
The Administration has made it a priority to reverse this dynamic. Despite
budget challenges in fiscal year 2008, it did not balance the budget on the
backs of municipalities but instead increased Local Aid. This included providing
then-record funding for Chapter 70 education aid. The Administration also filed
Partnership Act, aimed at relieving pressure on property taxes by letting
cities and towns join the state health insurance plan (a cost-savings proposal
which has become law) and raise revenue from other sources such as a modest
meals tax increase and the elimination of an out-of-date phone company tax
The Administration's fiscal year 2009 budget continues to prioritize targeted
investments in our local communities and property tax relief.
- Local Aid grows by 5.12 percent over last year's budget, including a $67
million off-budget increase for school construction through the Massachusetts
School Building Authority. As previously indicated, the budget also includes
$223 million to bring Chapter 70 education aid to unprecedented levels.
- In October of 2007, Governor Patrick filed legislation that called for the
development of up to three resort-style casinos in the Commonwealth, under a
regulatory framework that would encourage transparency in the gaming industry.
The proposal would create 20,000 permanent jobs throughout the state with good
wages and benefits and tens of thousands of additional construction jobs. It
would also generate hundreds of millions of dollars in new revenues for state
government through up-front casino licensing fees, payments from annual casino
operating revenues and additional income and sales tax revenues stemming from
new economic activity.
- If enacted, the Administration is proposing using a portion of the initial
casino licensing fees in fiscal year 2009 to protect Local Aid for our cities
and towns, provide direct property tax relief to Massachusetts homeowners and
support local transportation and infrastructure improvements. While up-front
casino licensing fees are projected to total at least $800 million, Governor
Patrick is proposing using only $300 million of these funds in fiscal year
2009 (to mitigate any delays in awarding all three casino licenses).
- The budget allocates $124 million of these
initial casino licensing fees to protect cities and towns from an
anticipated deficit in the State Lottery Fund. This will ensure that our
cities and towns receive $935 million in Lottery distributions (equal to
fiscal year 2008 Lottery funding), maintaining much-needed funding to help
pay for core public services such as police, fire and education. This
Lottery shortfall is expected to diminish in subsequent years.
- Though not included in the budget, under the gaming legislation, an
additional $176 million of these initial casino licensing fees would be
allocated in fiscal year 2009 to provide:
- $88 million in direct property tax relief for Massachusetts homeowners
through a new income tax credit program.
- $88 million for local transportation and infrastructure projects.
- The budget increases the state's reimbursements to cities and towns in
lieu of property taxes on state-owned land by $2 million,
continuing progress towards full funding of this program.
- The budget includes $15 million
for water and sewer rate relief for MWRA communities.
- The budget transfers the seven sheriffs
who are currently county officers to the state payroll, a reform which not
only promotes more efficient government but also provides immediate financial
relief for many cities and towns. Under this reform, municipal "maintenance of
effort" payments to support these sheriffs' offices will initially be frozen
at fiscal year 2008 levels and then eliminated in subsequent fiscal years.
The Patrick-Murray Administration views public safety as a cornerstone of
economic growth and opportunity. Safe streets and communities are an essential
part of a positive climate for raising a family, pursuing a career or growing a
business in Massachusetts. Similarly, we all have a moral and economic
obligation to give young people positive and productive alternatives to drugs
Taking office at a time of increased incidents of violent crime throughout
the Commonwealth, the Administration made public safety a top priority in 2007.
In April, it established the Governor's Anti-Crime Council, a panel of key
public safety, human services and community and government leaders convened to
develop comprehensive proposals for preventing and fighting crime and violence -
focusing in particular on the issues of gun and gang violence. The
Administration funded new officers on the beat and Shannon Grants, summer jobs
and volunteer programs to give at-risk young people alternatives to drugs and
gangs. It also filed a legislative package of anti-crime measures to shrink the
supply of illegal guns, mandate post-release supervision and re-entry support
for all inmates and share information among government agencies to assist
The Administration's fiscal year 2009 budget builds on this record of
vigilant crime prevention and law enforcement efforts to make our communities
even safer places in which to live and work.
- The budget increases funding for new Municipal Police
Grants by $4 million, bringing funding for the program to $8 million. This
funding reflects the Administration's continuing commitment to putting
additional police officers on the beat to make our neighborhoods and
communities safer and more secure.
- The budget provides an additional $4 million for Shannon
Grants, bringing funding for the program to its highest level ever ($15
million). This is also the first time that funding for Shannon Grants has been
included in the base budget. This funding will enable the program to
distribute additional grants to communities to address gang-related crime
through outreach to at-risk youth, job skills workshops, reentry programs and
other crime prevention strategies.
- The budget includes a $5 million increase for Youth Violence
Prevention grants administered by the Department of Public Health in
consultation with the Executive Office of Public Safety and the Executive
Office of Labor and Workforce Development. This funding increase will support
services for as many as 7,660 additional young people. It also includes a $2.5
million increase for the summer jobs program under the Executive Office of
Labor and Workforce Development, which will make summer job grants available
to more than 20 communities in the state that suffer from high incidences of
- The budget provides a total of $4 million in increased funding for the Chief Medical
Examiner's Office ($2.3 million) and the State Police
Crime Lab ($1.7 million) to implement the recommendations of the Vance
Reports. This will help reduce a backlog in DNA testing at the Crime Lab and
improve operations at the Chief Medical Examiner's Office.
Job creation has been a central focus of the Patrick-Murray Administration's
governing agenda. The core elements of its job creation strategy are to
capitalize on our strengths in brainpower and cutting-edge research and
development, turning ideas from the laboratory into products made and new jobs
created in Massachusetts; to make the Commonwealth more business-friendly; and
to vigorously promote every region of our state as great places to do business.
The Administration has put this strategy into action by:
- streamlining state permitting to spur economic growth, cutting approval
time from two-to-three years to six months on development projects.
- strengthening the state's business development team to increase outreach
and customer service and spark investment in high-growth sectors, including
adding a permitting ombudsman.
- winning nationally and internationally competitive bids to attract
cutting-edge clean energy and life sciences companies, such as Evergreen Solar
- reversing restrictive stem cell research regulations put in place by the
previous Administration, to ensure that Massachusetts will be at the forefront
of stem cell research and life sciences.
- launching the Springfield
Partnership, a revitalization effort to improve the local business
environment and use state investments to leverage local economic development.
Through these and other efforts, Massachusetts added over 20,000 new jobs in
2007 - rising from 49th to 15th in the nation in job creation. This represents
significant progress towards Governor Patrick's goal of creating 100,000 new
jobs in the Commonwealth.
To help secure our state's economic future, the Administration has also
proposed a comprehensive plan to make Massachusetts the global leader in life
sciences. This ten-year,
$1 billion investment package would enhance our state's already nationally
recognized assets in medicine and science and fill gaps in federal funding to
support life science progress from the ideas stage through the production stage.
The plan would not only create numerous good-paying jobs in the Commonwealth but
also spur the development of cures and treatments for disease that will improve
the lives of people throughout the world.
The Administration's fiscal year 2009 budget makes targeted, high-yield
investments in these and other proven strategies to help spur further job
creation in the Commonwealth.
- The budget reserves the first $25 million of year-end
budget surpluses for investing in life sciences, funding grants to leverage
federal research dollars and assist life sciences businesses in taking the
next steps towards product viability and expansion. These grants, in
combination with proposed, targeted tax incentives for job creation and
capital investments, would help fuel the growth of the life sciences sector in
the Commonwealth. Similar to what was done previously, this funding would be
made available through the Bay State Competitiveness Investment Trust Fund
(which is capitalized with the first $100 million in year-end budget
- Under the Administration's plan, the Bay State Competitiveness
Investment Trust Fund would then allocate budget surplus funds it receives
to the Alternative and Clean Energy Fund ($20 million), the Affordable Housing
Trust Fund ($15 million), the Workforce Competitiveness Trust Fund ($15
million), low-income heating and energy assistance ($15 million), the Cultural
Facilities Fund ($7 million) and Regional Efficiency Assistance Grant Trust
Fund ($3 million).
- The budget provides $1.5 million
in new funding for the Office of Small Business and Entrepreneurship (OSBE),
which works with community development organizations to provide grants and
technical assistance for businesses with fewer than 20 employees to improve
productivity and increase profits.
- The budget maintains $4.0 million
in funding for the state's Expedited Permitting Office, including $3.5 million
for technical assistance grants to municipalities to support efforts to
expedite permitting and promote local and regional business development.
- The budget includes over $4 million
for a new, competitive Regional Tourism Grant program administered by the
Massachusetts Office of Travel and Tourism, to match local and regional
investments in promoting natural, cultural and historical attractions
throughout the state.
These targeted investments are part of a fiscally responsible budget. The
Patrick-Murray Administration did not resort to rigid, "one size fits all"
solutions to close a projected budget gap of well over a billion dollars.
Rather, it pursued a balanced approach to balancing the budget, putting taxpayer
dollars to their most efficient and effective uses and identifying careful
approaches to generating additional revenues.
First and foremost, the Administration attempted to close the projected
budget gap and pay for targeted investments through savings in state programs.
It curbed unnecessary or unwarranted state expenditures through an emphasis on
efficiency, performance and reform. This spending restraint achieved $479
million in gross budget savings ($344 million in net budget savings).
- The budget includes over $300 million in gross savings (over $160 million
in net savings) in our state's Medicaid program (MassHealth) through value-
and cost-based purchasing of health care services, providing the right care in
the right setting, and efficient drug utilization. These savings are needed to
help pay for strong enrollment in the Commonwealth Care Health Insurance
Program - a cornerstone of our health care reform law. Examples of MassHealth
cost containment initiatives include:
- expanding chronic disease management strategies, to ensure that
MassHealth members receive appropriate care to avoid increased complications
- expanding MassHealth's pay-for-performance initiative to payments to
Medicaid managed care organizations, nursing facilities and physicians.
Through its Healthy Massachusetts Initiative, the Administration also
intends to coordinate MassHealth's pay-for-performance initiative with cost
and quality incentives in other state health insurance programs. This will
maximize the state's capacity to leverage cost and quality improvements in
our health care system.
- promoting the use of medically appropriate, less costly generic
prescription medications as alternatives to brand-name drugs.
- The budget offers comprehensive, affordable health insurance coverage to
state employees through the Group Insurance Commission, while including
reforms to improve the fairness and sustainability of health coverage for
state employees. The budget changes employee contributions from a system based
on date of hire to a more rational system based on salary levels and
This reform would reduce contributions for 6,000 state employees - and for
another 16,000 state employees, contribution levels would not change. For many
other state employees, contribution levels would increase modestly based on
salary and affordability. In the aggregate, these reforms would reduce system
costs by $51 million in fiscal year 2009, better positioning the Commonwealth
over time to continue to provide comprehensive health insurance to state
- The budget eliminates nearly $40 million of earmarks enacted through last
year's budget - removing earmarks that, however well-intentioned, were
inconsistent with the mission of the agency under which they were funded or
otherwise not affordable in a challenging budget year.
- The budget holds nearly 190 line-items to zero growth in spending for
fiscal year 2009. Base spending for these line items totaled almost $1.5
billion in fiscal year 2008.
The budget also includes other reforms aimed at making government at every
level more efficient, effective and accountable and laying the foundation for
- The budget converts the seven existing county sheriffs into state
sheriffs. While the seven state sheriffs are funded only through state
appropriations, the county sheriffs receive funding from seven different
mechanisms - including highly unstable deeds excise taxes - and are subject to
a more bureaucratic and fragmented funding process. Making them into state
sheriffs would provide greater fiscal stability and equity for these sheriffs
and, through more uniform accounting, improve understanding and oversight of
their finances. It would also achieve cost savings through providing health
benefits for these sheriffs' offices through the GIC.
would not only benefit current county sheriffs but also municipalities, which
must currently provide part of the sheriffs' revenues through increasing
annual "maintenance of effort" payments. Under this proposal, fiscal year 2009
"maintenance of effort" payments from municipalities would be frozen at fiscal
year 2008 levels - and then eliminated in fiscal year 2010. This would help
free up local resources for other important purposes.
- The budget simplifies and clarifies funding for transportation by
directing all transportation-related revenues to a new Transportation Fund,
funding all transportation-related expenses (including debt service on bonds
issued for transportation purposes) from this Fund. This reform would provide
the Commonwealth and the public with a more transparent and true accounting of
our transportation revenues and expenses and of the extent to which
transportation expenses need to be subsidized by non-transportation-related
General Fund receipts.
This change helps lay the groundwork for
subsequent, comprehensive transportation reform proposals being developed by
the Administration in consultation with transportation and finance experts,
legislators and other stakeholders, with the goal of more effectively and
efficiently managing and financing our transportation system. The budget
includes $1 million to help advance these policy development efforts and
initial implementation of comprehensive transportation reforms.
- The budget contains reforms to enhance the ability of the Department of
Conservation and Recreation (DCR) to focus on and succeed at its core mission
of protecting recreational assets, parks, beaches and forests, including:
- consolidating sixteen DCR funding accounts to allow the agency to
allocate resources more effectively and realize greater efficiencies.
- allowing a greater portion of revenues generated at parks and beaches to
remain at those facilities, creating opportunities for innovation,
entrepreneurship and an increased focus on public-private partnerships.
- proposing the long-term leasing of the Ponkapoag Golf Course -
offering the public an improved facility while enabling the DCR to narrow
its focus to its core responsibilities.
- The budget supports efforts to improve the efficiency of government's
business operations, including:
- realigning funding for the Information Technology Division (ITD) to
increase its administrative account by $1.2 million, to help ITD exercise
greater coordination and oversight of state information technology purchases
and leverage significant cost savings as well as ensure that its employees
are not funded through the capital budget.
- requiring agencies to submit an information technology plan as part of
their budgets for review by ITD.
- dedicating $3 million of budget surpluses deposited in the Bay State
Competitiveness Investment Trust Fund for grants to encourage and help
municipalities to implement regional approaches to delivering services, in
an effort to improve service delivery while containing or reducing costs.
- allowing state agencies to post procurement notices online instead of in
newspapers, saving hundreds of thousands of dollars and still providing
adequate notice of government procurement opportunities.
- funding a study and creating a new legislative
commission to design a reformed maintenance model for state facilities,
focused principally on using existing funds more efficiently to maintain and
improve state building conditions.
- examining opportunities to consolidate administration of the
Commonwealth's workers' compensation program within the state's Human
Resources Division, reducing duplication of work and administrative costs.
Moving personnel costs currently paid in the capital budget to the operating
budget and equipment costs currently paid in the operating budget to the
capital budget - a no-cost realignment to reduce the fiscally imprudent
practice of paying for operating costs through the capital budget.
The budget includes a careful and fiscally responsible approach to generating
additional revenue to close the budget gap, pay for targeted investments in our
future and improve our structural budget climate.
- The budget includes over $150 million in additional revenues resulting
from initiatives to improve enforcement of our existing tax laws. Highlights
of these initiatives include:
- Enhanced enforcement of tobacco excise taxes by encrypting tobacco
stamps. Tobacco stamps are used to show payment of excise taxes, but the
current stamp technology is ineffective and easy to counterfeit. Encrypting
tobacco stamps would enable the Department of Revenue (DOR) to track
cigarette packs throughout distribution to ensure proper tax collection and
reduce contraband trafficking and other illegal tax evasion practices.
- Shifting the cigar
and pipe tobacco excise taxes from the retail level to the wholesale
level. Cigar and pipe tobacco excise taxes are currently taxed at the
retail level in Massachusetts. Collecting these tobacco excise taxes from
wholesalers instead of retailers would improve tax collections, enabling DOR
to focus its audit, enforcement and collection efforts on fewer, larger
- Requiring wholesalers
of cigarettes to prepay sales taxes. DOR must currently collect sales
taxes on cigarettes from a myriad of local retailers. Requiring wholesalers
of cigarettes to charge and collect a prepaid sales tax from cigarette
retailers would likewise improve tax collections by enabling the Department
to focus collections and enforcement activities on fewer, larger taxpayers.
- Improved wage enforcement. Misclassification of employees as independent
contractors has resulted in millions of dollars in lost tax revenues and
denied workers health insurance and workers' compensation benefits. The
Attorney General will work with the DOR and other state agencies to bring
new focus and visibility to the enforcement of employee classification laws,
to improve compliance and ensure appropriate payment of taxes.
- Increased revenue collections due to the hiring of 87 additional
auditors authorized in 2008.
The budget also revokes existing tax
exemptions for sales of aircraft and aircraft replacement parts and
pesticides, generating an additional $12 million in revenue. These tax
exemptions cost the state needed revenues without sufficient public policy
- As the Administration proposed last year, the budget calls for closing
certain unintended corporate tax loopholes that have distorted our tax system
and cost our state revenues needed for public investments in strengthening our
economic competitiveness. The two main reforms included in the budget are
"combined reporting" (taxing certain corporate income shifted to out-of-state
subsidiaries) and "check the box conformity" (requiring businesses filing as
corporations with the federal government and other states to use the same form
in Massachusetts). These changes will improve tax fairness, ensuring that
larger and out-of-state businesses pay taxes at the same rate as smaller and
Massachusetts-based businesses. They will also modernize our tax system to
match those of many of our economic competitors. Finally, these reforms will
generate $297 million in additional revenues in fiscal year 2009, helping to
pay for new investments in education, affordable housing and transportation
demanded by our businesses and our citizens.
In response to
thoughtful discussion about corporate tax policy over the past year, the
Administration is also proposing to reduce the corporate tax rate from 9.5
percent to 8.3 percent over three years, cutting the rate to 9.1 percent in
2010, 8.7 percent in 2011, and 8.3 percent in 2012. These substantial rate
reductions will help Massachusetts' businesses, especially smaller and
in-state businesses, compete in the global economy. Together with the
Administration's proposal to close corporate tax loopholes, these changes
reflect the recommendations of the Study
Commission on Corporate Taxation appointed by Governor Patrick, the
Speaker of the House of Representatives and the President of the Senate.
- As previously discussed, the budget dedicates a portion of up-front
licensing fee revenues from the Administration's proposal to create three
destination resort casinos in Massachusetts to protect cities and towns from
an anticipated $124 million deficit in the State Lottery Fund in fiscal year
2009. Though not included in the budget, under the gaming proposal, additional
license fees from these casinos would also provide $88 million for direct
property tax relief and $88 million for local transportation and
infrastructure projects in fiscal year 2009.
Measures like these enabled us to balance the budget and make targeted
investments in our future without having to use an excessive amount of reserves.
While the Administration was unable in one year to reverse an established
pattern of using one-time revenue sources, the budget proposes and implements a
formula for the responsible and measured use of reserves. This formula calls for
using reserves only to the extent needed to protect against lower-than-average
The resulting use of $369 million in reserves will prevent harmful cuts in
the event of slow revenue growth while also guarding against using reserves to
fund unsustainable program expansions. This limited use of reserves would
preserve $1.85 billion in the Stabilization Fund to protect the state in the
event of a serious fiscal downturn. This would still leave Massachusetts with
one of the largest Rainy Day funds in the nation. Moreover, if revenues do grow
at the five-year average, then this use of reserves would not be needed to
support contemplated spending.
The Patrick-Murray Administration is deeply committed to making the operation
of state government more transparent - and information about state government
more accessible - to the people of Massachusetts. Opening up state government
empowers the public to participate in shaping our collective priorities and to
hold government accountable for delivering on those priorities.
As recognized recently by the McCormack Graduate School of Policy Studies and
the Massachusetts Budget and Policy Center, "Massachusetts made dramatic
progress towards a more transparent budget process over the past year." Last
year's budget contained a number of changes to improve the transparency and
accessibility of state financial information:
- A budget tracking tool on the Governor's website provided line-item
appropriation numbers for the fiscal year 2007 budget and each fiscal year
2008 budget proposal as it was released, allowing for easy comparisons.
- Historical spending levels for the past four fiscal years were provided on
the Governor's website for each line-item in the budget.
- Historical government employment levels over the same period, along with
fiscal year 2008 projections, were included for each state department and
- A departmental information link on the Governor's budget site provided
department and agency mission statements, goals, organization charts, and
- A budget navigation guide on the Governor's website provided a brief
introduction to reading and interpreting the state budget.
- Downloadable budget files were made available on the Governor's site,
including a downloadable line-item appropriation spreadsheet updated with each
new budget proposal.
In submitting its fiscal year 2009 budget, the Administration is taking
further steps to make it easier to find and understand key information about
state finances, including:
- providing additional information about revenues, including an on-line
drill-down by government unit, summaries by fund for revenues and expenditures
and descriptions of the various revenue sources.
- detailing the various transfers between state funds, including revenues
from fringe benefits, the Stabilization Fund and tobacco settlements as well
as transfers to cover the costs of major health care programs - including the
Commonwealth Care Health Insurance Program, the Essential Community Provider
Trust Fund, the Health Safety Net Trust Fund (formerly the Uncompensated Care
Pool), the Medical Assistance Trust Fund and retiree health insurance
- providing more information in the printed budget, including additional
agency detail such as mission statements, website links and employment levels.
- posting formatted Word and .pdf versions of the entire budget for download
and printing from the budget website.
- including the tax expenditure budget with printed and online versions of
the operating budget, elevating the prominence of policy decisions not to
collect tax revenues and thereby effectively invest state tax dollars for
particular policy purposes.
- providing additional context for the decisions that were made in
developing the budget, including substantial information on our state's
economy, the forces behind this year's projected budget gap and the solutions
used to address the shortfall.
- compiling related budget documentation on the budget website, including a
budget glossary, a budget calendar and supplemental budget and capital bond
bills as they are filed and enacted.
- making the full budget website ADA-accessible.
The Patrick-Murray Administration's fiscal year 2009 budget is an important
and fiscally responsible step forward on the path to change and shared
prosperity for Massachusetts. Still, achieving the full promise of a better,
stronger Commonwealth will clearly take much more work.
Our state's many policy challenges have developed over decades, and they
cannot be solved overnight. Likewise, while the choices embodied in this budget
would improve our fiscal climate in subsequent years, it will take continued
effort to build a truly sustainable fiscal framework that can help accomplish
the progress and change our state needs. Along these lines, health-related
budget costs are a source of particular concern, as they already comprise 45
percent of state spending and are growing at unsustainable rates. Further
collaboration between the Administration, Legislature and other stakeholders to
identify sensible and effective ways to rein in these costs is critical to
ensuring the success of our state's historic health care reform legislation and
preserving sufficient resources to invest in other pressing public
The Administration looks forward to working with the Legislature to enact a
fiscally responsible fiscal year 2009 budget that continues to move our state
forward on the path towards change and shared prosperity - and move our state's
finances towards long-term sustainability.
Program and Policy Highlights
- $15 million increase for the Universal Pre-Kindergarten Program, an over
200 percent increase.
- Fully funds Chapter
70 education aid to cities and towns, increasing state aid by $223
million. Also provides $5.5 million for the Foundation Reserve.
- $13 million increase for Extended Learning Time Grants, doubling funding
for the program.
- $8 million increase for Kindergarten Expansion Grants.
- $4.5 million increase for Targeted Assistance to Schools and Districts, a
49 percent increase.
- $2 million increase for Student Supports to Close Achievement Gap/MCAS
low-scoring student support program.
- $1.5 million for a new Executive Office
of Education headed by a Secretary of Education, including a systemic
accountability and assistance office. This is consistent with the Article 87
Reorganization recently filed by the Administration.
- $1.5 million increase in funding for METCO.
- $2 million to reinstate the dual enrollment program administered by the
Department of Higher Education, to give up to 2,500 high school students
access to college classes.
- Outside of the budget, the Massachusetts Educational Finance Authority
(MEFA) will provide $1 million this year and $350,000 for each of the next
three years to develop and launch a "one stop shopping" website to help
Massachusetts students plan for, research, and be prepared for college and
- Local Aid grows by 5.12 percent over last year's budget, including a $67
million off-budget increase for school construction through the School
- Holds cities and towns harmless from anticipated $124 million deficit in
the State Lottery Fund - allocating initial gaming license fees upon enactment
to ensure that municipalities receive $935 million in Lottery distributions.
- Though not included in budget, casino license fees would also provide $88
million for direct property tax relief and $88 million for local
transportation and infrastructure projects in fiscal year 2009 under
- $2 million increase in reimbursements to cities and towns in lieu of
property taxes on state-owned land.
- $15 million for water and sewer rate relief for MWRA communities.
- Converts current county sheriffs to state sheriffs, not only promoting
more efficient government but also providing financial relief to
- $4 million increase for the Municipal Police Grant Program, doubling
fiscal year 2008 funding for the program.
- $4 million increase for Shannon Grants, the highest ever funding for the
program and first time that it is funded in the base budget.
- $5 million increase for Youth Violence Prevention Grants administered by
the Department of Public Health in consultation with the Executive Office of
Public Safety and the Executive Office of Labor and Workforce Development.
- $2.5 million increase for the summer jobs program administered by the
Executive Office of Labor and Workforce Development.
- $4 million in increased funding for the Chief Medical Examiner's Office
($2.3 million) and the State Police Crime Lab ($1.7 million) to implement the
recommendations of the Vance Reports.
- $1.5 million increase for the State Parole Board to increase residential
beds, open a district office and hire eight parole officers.
- $477,000 increase for the Criminal History Systems Board.
- Fully funds global positioning system established at the end of fiscal
year 2007 to track domestic violence abusers and those convicted of sexual
offenses against children.
- $25 million reserved for investments in life sciences through budget
surplus amounts deposited in Bay State Competitiveness Investment Trust Fund
- Bay State Competitiveness Investment Trust Fund would then allocate
budget surplus funds it receives to the Alternative and Clean Energy Fund
($20 million), the Affordable Housing Trust Fund ($15 million), the
Workforce Competitiveness Trust Fund ($15 million), low-income heating and
energy assistance ($15 million), the Cultural Facilities Fund ($7 million),
and Regional Efficiency Assistance Grant Trust Fund ($3 million). If the Bay
State Fund had less than $75 million after life sciences investments, the
funding would be allocated proportionally among these purposes.
- $1.5 million increase for the Office of Small Business and
Entrepreneurship, which provides technical assistance and grants to support
businesses with less than 20 employees.
- $4 million for the state's Expedited Permitting Office, including $3.5
million for technical assistance grants to municipalities to support efforts
to expedite permitting and promote local and regional business development.
- $8.25 million in start-up investments for the first phase of implementing
the recommendations of Commission to End Homelessness, which will support
pilot initiatives to reform the homeless services delivery system in the
Commonwealth to a "housing first" model. MassHousing is seeking federal
approval to augment this investment by providing an additional $1.75 million
in each of the next four fiscal years to support this initiative.
- $13 million increase in the state's operating subsidy to local housing
authorities (LHA's), allowing LHA's to make long-neglected investments in
facilities maintenance and improve the energy efficiency of housing units.
- $5 million for a program at the Division of Banks to oversee the mortgage
lending industry and provide foreclosure counseling and prevention services to
communities most at-risk of foreclosures and predatory lending.
- Over $4 million for a new, competitive Regional Tourism Grant program
administered by the Massachusetts Office of Travel and Tourism, to match local
and regional investments in promoting natural, cultural and historical
attractions throughout the state.
- 5.6 percent overall funding increase for MassHealth, as compared to the
fiscal year 2008 General Appropriations Act.
- Over $300 million in gross MassHealth savings (over $160 million in net
savings) through value- and cost-based purchasing of health care services,
providing the right care in the right setting, and efficient drug utilization
- including expanding chronic disease management and expanding
pay-for-performance to payments to Medicaid managed care organizations,
nursing facilities and physicians.
- $869 million for Commonwealth Care, an 84 percent increase over the fiscal
year 2008 General Appropriations Act due to greater-than-expected success in
enrolling previously uninsured individuals in the program.
- $453 million for the Health Safety Net Trust Fund.
- $46 million to implement the first year of the Community First Initiative,
to help elderly and disabled MassHealth members receive care in their
communities instead of in institutional settings.
- $25 million for coordinated care services for children suffering from
severe emotional disturbances (based on Rosie D case).
- $23 million for the Purchase of Service Performance Initiative to provide
salary increases for direct care providers and take initial steps towards
implementing reform of purchase of service reimbursement mechanisms.
- $1.89 million for the Health Care Quality and Cost Council, a $500,000
increase over fiscal year 2008 spending.
- $5.7 million increase for the Department of Public Health to meet
increasing demand for Early Intervention Services.
- $1 million for Executive Office of Health and Human Services to address
health disparities within the Commonwealth.
- Recognizes the establishment of the Office of the Child Advocate by
Executive Order 494, to investigate allegations of child abuse and neglect and
supply independent oversight of agencies providing services to children.
- $1.7 million increase in spending for substance abuse services, a 2.23
- Maintains $12 million for smoking prevention programs, reflecting
continuation of a significant funding increase received in fiscal year 2008.
- Continues to implement two new vaccines (Rotavirus Vaccine and
Meningococcal Conjugate Vaccine) under the Universal Immunization Program.
- $4.2 million increase for the Department of Social Services to increase
the number of social workers and clinical managers in an effort to decrease
- An additional $250,000 for the Department of Veterans' Services to fund
veterans' homeless shelters throughout the state.
- $750,000 increase for the Massachusetts Office of Refugees and Immigrants
for the Citizenship for New Americans Program, helping legal immigrants to
become U.S. citizens. The Department of Transitional Assistance and the
Massachusetts Office for Refugees and Immigrants (MORI) are working together
to help eligible EAEDC recipients attain U.S. citizenship.
- $2.6 million increase for the Women Infants and Children Program
(containing both state and federal funds), to provide nutritional assistance
to an additional 3,000 clients per month.
- $6.3 million increase for the Department of Conservation and Recreation
(DCR) for basic park, forest and beach operations and maintenance and to hire
additional park rangers, including $2.3 million in retained revenue generated
at these facilities. The Administration's investment increases the operating
budget for DCR to over $100 million dollars, the highest recommended
appropriation since the creation of the agency in 2004.
- Consolidates sixteen DCR funding accounts to allow the agency to allocate
resources more effectively and realize greater efficiencies.
- Proposes long-term leasing of the Ponkapoag Golf Course - offering the
public an improved facility while enabling DCR to focus on its core mission.
- $250,000 to restore the Natural Heritage and Endangered Species Program
(NHESP) as a budgetary line item, providing more funding stability for this
important program. NHESP is responsible for the collection and analysis of
baseline scientific data regarding endangered species, which provide leading
indicators for global climate change and are fundamental criteria for state
- $640,000 increase for the Regional Greenhouse Gas Initiative and Mercury
Management Act programs at the Department of Environmental Protection.
- $5 million increase for new staff, security and technology at the Registry
of Motor Vehicles, to ensure proper implementation of core programs (such as
Melanie's Law) and reduce wait times and improve customer service at branches
and call centers.
- Simplifies and clarifies funding for transportation by directing all
transportation-related revenues to a new Transportation Fund, funding all
transportation-related expenses (including debt service on bonds issued for
transportation purposes) from this Fund.
- $1 million to help advance policy development and initial implementation
of comprehensive transportation reforms.
- Allocates $15 million from budget surpluses to recapitalize the Workforce
Competitiveness Trust Fund (WCTF). Funding would enable the WCTF (which was
originally funded in 2006) to award additional grants for collaborative
employment and training programs proposed by labor organizations, industry
groups and regional entities. The $15 million would be made available through
the Bay State Competitiveness Investment Trust Fund, which is funded with the
first $100 million in year-end budget surpluses.
- $900,000 for the Massachusetts Service Alliance as the state's
contribution to the federal Americorps program, allowing it to leverage about
$10 million in annual federal funding for Americorps.
- $21 million for Workforce Training Fund investments.
- $5.5 million for one-stop career centers.
- $1.6 million for the Massachusetts Manufacturing Extension Partnership.
- Fully consolidates the Board of Conciliation, the Labor Relations
Commission and the Joint Labor-Management Commission into the new Division of
Labor Relations - reflecting the Administration's reorganization and allowing
for more flexible use of resources to address backlogs that existed at the
- $180,000 to support enhanced efforts by the Division of Occupational
Safety (DOS) to ensure that Massachusetts' workers are protected under the
state's employment and training laws and regulations.
Other Branches of Government
- Total of $814.5 million for the Supreme Judicial Court, Trial Court,
Appeals Court, Public Counsel Services, Commission on Judicial Conduct, Board
of Bar Examiners and Mental Health Legal Advisors Committee.
- Trial Court's 148 line items were consolidated into thirteen, consistent
with the Monan Report's recommendations for court reform, and encouraging more
effective performance management.
- Requires the Trial Court to better report fee collections.
- Gives the Chief Justice for Administration and Management full
transferability between line items.
- $2.4 million increase for the Massachusetts Legal Assistance Corporation
to provide civil legal aid to assist indigent citizens with housing, domestic
violence and health care issues.
- Fully funds the Committee for Public Counsel Services' District Court,
Juvenile Court and children and family law public defender expansion, as
recommended by the 2004 Rogers Report.
- $6.8 million in additional elections and voter registration funding for
the Secretary of the Commonwealth, fully funding 2008 state primary and
general election costs.
- $3 million for the State Lottery Commission under the State Treasurer for
expanding Lottery games (Keno, Daily Race Game) in order to generate
- $719,000 in additional funding for the Attorney General for expanded
advocacy on behalf of electricity and gas consumers (funded by an increased
assessment on suppliers).
- Maintains last year's significant increase for the State Auditor's
Medicaid Audit Unit, to identify fraud and abuse in our state's Medicaid
- Total of $101.3 million for District Attorneys (including the District
- Continues full funding for all District Attorneys' offices to participate
in the District Attorneys' Association's Discovery document management system
and for city and town police departments to participate in its DAMION
electronic case management system.
- Fully funds the Massachusetts Commission Against Discrimination's new
Worcester and New Bedford offices and expands the Commission's training
program to proactively avoid discrimination in the workplace and housing.
- Allows the state Ethics Commission to permit the filing of Statements of
Financial Interest through all web browsers.