September 20, 2013
Secretary Glen Shor
Executive Office of Administration and Finance
The Honorable Stephen M. Brewer, Chairman
Senate Committee on Ways and Means
The Honorable Brian S. Dempsey, Chairman
House Committee on Ways and Means
Dear Secretary Shor, Chairman Brewer and Chairman Dempsey:
This letter is to inform you of Stabilization Fund transfers for FY2013 and FY2014.
Fiscal Year 2013
Section 160 of Chapter 139 of the Acts of 2012 (the FY2013 General Appropriation Act) authorizes the transfer of interest and other investment income earned by the Commonwealth Stabilization Fund during FY2013 to the General Fund. Total interest earned in FY2013 was $7,126,580.23. Transfers totaling $6,778,212.61 to the General Fund were made previously in fiscal year 2013. Therefore, we will process the final FY2013 interest transfer totaling $348,367.62.
At the close of FY2013, the Stabilization Fund had a smaller unrealized gain in the value of its assets than was recognized at the end of FY2012, resulting in a net adjustment of negative $1,804,194.55 to the FY2013 Stabilization Fund balance. When this adjustment is netted against total FY2013 interest income of $7,126,580.23, the FY2013 net interest and other investment income that will be transferred from the Stabilization Fund to the General Fund is $5,322,385.68. Because interest income of $7,126,580.23 is transferred separately from the Stabilization Fund to the General Fund, $1,804,194.55 will be transferred back to the General Fund from the Stabilization Fund to align the transfers with the net investment income earned by the Stabilization Fund during FY2013.
Final FY2013 transfers, if any, to the Stabilization Fund will be made in conjunction with issuance of the Commonwealth’s FY2013 Statutory Basis Financial Report, due by October 31, 2013.
Fiscal Year 2014
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 $858,267.27 will be processed, which includes interest earned by the Stabilization Fund in July and August 2013.
On September 3, 2013, the Attorney General and the Department of Revenue jointly certified to the State Comptroller’s Office that for the period July 1, 2013 through August 31, 2013 individual judgments and settlements in excess of $10 million totaled $69,618,000. 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 $69,618,000 will be processed.
If you have any questions regarding this letter, please feel free to contact me at (617) 973-2315 or Howard Merkowitz, Deputy Comptroller, at (617) 973-2602.
Martin J. Benison
Emme Schultz, Budget Director
Amy Pitter, Commissioner of Revenue
James MacDonald, First Deputy Treasurer
Howard Merkowitz, Deputy Comptroller
Kazim Ozyurt, Director, Office of Tax Policy Analysis, Department of Revenue
BJ Trivedi, FRAB Director, Office of the Comptroller
Julia Burns, GAB Director, Office of the Comptroller
Enc.: Attachment: Stabilization Fund Balance Spreadsheet