December 16, 2013
Secretary Glen Shor
Executive Office of Administration and Finance
The Honorable Stephen M. Brewer
Senate Committee on Ways and Means
The Honorable Brian S. Dempsey, Chairman
House Committee on Ways and Means
Dear Secretary Shor, Chairmen Brewer and Dempsey:
This letter is to inform you of Stabilization Fund transfers for FY2013 and FY2014:
Section 155 of Chapter 139 of the Acts of 2012, as amended, authorizes the disposal of the consolidated net surplus in the budgetary funds for fiscal year 2013 and further authorizes the transfer of any remaining amount of the consolidated net surplus to the Stabilization Fund.
Section 54 of Chapter 118 of the Acts of 2013 requires the Comptroller to use settlements and judgments in excess of $10 million, which previously were deposited in the Stabilization Fund, in an amount necessary to certify a fiscal year 2013 consolidated net surplus of $106.8 million. In accordance with this requirement, $46,265,431 of settlements and judgments revenue will be transferred to the General Fund.
After the disposal of the consolidated net surplus for fiscal year 2013, no funds remain. Therefore, no transfer to the Stabilization Fund was made at the end of FY13.
The attachment also shows the final Stabilization Fund balance as of June 30, 2013, including all prior transfers, earnings and deposits credited to the Stabilization Fund during fiscal year 2013.
Section 172(b) of Chapter 38 of the Acts of 2013 (the FY2014 General Appropriation Act) authorizes the transfer of interest and other investment income earned by the Commonwealth Stabilization Fund during FY2014 to the General Fund. A transfer totaling $1,372,196.75 will be processed, which includes interest earned by the Stabilization Fund in September through November 2013. This is in addition to a transfer of $858,267.27 that was made earlier in FY2013 on account of interest earned by the Stabilization Fund in July and August 2013.
On November 4, 2013, the Attorney General and the Department of Revenue jointly certified to the State Comptroller’s Office that for the period September 1, 2013 through October 31, 2013 individual judgments and settlements in excess of $10 million totaled $78,478,223. Pursuant to Section 2H of Chapter 29 of the Massachusetts General Laws, which requires that individual judgments and settlements in excess of $10 million be transferred to the Stabilization Fund, a transfer in the amount of $78,478,223 will be processed. This is in addition to a transfer of $69,618,000 that was made earlier in FY2014 on account of judgments and settlements in excess of $10 million that were certified for the months of July and August 2013.
If you have any questions regarding this, please contact Howard Merkowitz, Deputy Comptroller at (617) 973-2602.
Martin J. Benison
Attachment #1: Sec. 155 of Ch. 139 of the Acts of 2012, as amended
Attachment #2: Sec. 54 of Ch. 118 of the Acts of 2013
Attachment #3: Stabilization Fund Balance Spreadsheet
Amy Pitter, Commissioner, Department of Revenue
Judy Zeprun Kalman, Deputy Attorney General, Attorney General’s Office
Samuel Goldhar, Budget Director, House Ways and Means
Douglas Howgate, Budget Director, Senate Ways and Means
James MacDonald, First Deputy Treasurer, Treasurer’s Office
Kazim Ozyurt, Director, Office of Tax Policy Analysis, Department of Revenue
Howard Merkowitz, Deputy Comptroller, Office of the Comptroller
BJ Trivedi, FRAB Director, Office of the Comptroller
Julia Burns, GAB Director, Office of the Comptroller