~Executive Summary~

 

The following summary provides a brief overview of the Senate Committee on Ways and Means fiscal year 2009 budget recommendations. Throughout these recommendations are commitments to the health, safety, education and overall well-being of the Commonwealth’s residents.

 

 

~Financial Overview~

 

The Senate Committee on Ways and Means recommends a fiscal year 2009 operating budget of $28.04 billion.  These recommendations were reached in the face of a $1.3 billion budget gap and they represent a prudent and fiscally sound approach to closing that gap.  Our budget relies on the modest 3.8 percent growth in tax revenue agreed upon by the Senate, House of Representatives and Administration, amounting to $762 million in new revenue.  Of this new revenue, $148 million has been set aside for the increase to the annual MBTA, School Building Authority and state and municipal pension obligations.  Much of the remaining new revenue was used to cover increases in MassHealth, Commonwealth Care, the Group Insurance Commission and the cost of the Commonwealth’s debt service.

 

With the continuation of the downward trend in the economy, and in light of the budget gap the Commonwealth is facing, these FY09 recommendations utilize a small portion of the Stabilization Fund. The Commonwealth’s Stabilization Fund, which was created to act as a financial buffer in difficult fiscal times, ended FY07 with a balance of $2.3 billion - the largest balance in the history of the fund. Despite the relative health of this account, it is important that we minimize its use in anticipation of more difficult fiscal times, so the Senate draws only $201 million from this vital reserve.

 

The Committee’s budget includes $297 million in new revenue due to the adoption of tax reforms passed in the Senate version of the Corporate Tax Loopholes Bill.  “Check-the-box” prevents corporations from claiming one status for Massachusetts taxes and another for federal and other-state taxes. The Senate also adopts “combined reporting” to prevent multi-state businesses from moving their Massachusetts income to affiliates in lower-tax areas.

 

These reforms will bring the Commonwealth in line with its competitor states, making Massachusetts the last in the nation to adopt “check-the-box” and the 23^rd state to implement combined reporting.  In addition, the reforms clarify two tax issues related to the Earned Income Tax Credit and the Room Occupancy tax.

 

The Committee also counts $175 M in new revenue due to the adoption of a $1 per pack increase on the cigarette tax.  This new money will be used to help pay for the adoption of health information technology and the increased costs associated with health care reform.

 

The Committee’s recommendations also include $157 M in new revenue through various efficiencies and investments at the Department of Revenue.  The chart below details these initiatives.

 

 

 

~Local Aid~

 

The financial squeeze the state is experiencing is also being felt at the local level. With our communities struggling to provide basic services for their residents, it was critical for the Legislature to provide an assurance of what funding cities and towns could expect from the state.  To that end, the Legislature passed a resolution early in the budget process that guaranteed an additional 4.43 percent for local aid as compared to fiscal year 2008. The resolution fulfilled year three of the Chapter 70 education reform plan and increased funding to our public schools by $223 million, a 6 percent hike.  The Legislature also committed to providing $935 million in aid to municipalities from the lottery despite actual lottery revenue falling $124 million short of that mark.   

 

In addition, the recommendations provide $379 million for Additional Assistance and $28.3 million for Payment in Lieu of Taxes.     

 

 

~Education~

 

Education is the foundation for the future of our state, and it is imperative that we continue the Senate’s commitment to education from the earliest stages through to college.

 

Early Education and Care

 

Early education and care are the foundations from which our children thrive.  The Committee underscores this belief by increasing funding for universal pre-kindergarten grants by $5 million to ensure the highest quality early education possible. The recommendations also provide an additional $500,000 for childhood mental health services in order to provide early identification and treatment and to prevent pre-school expulsion. In addition, the Committee maintains its commitment to quality expenditures and head start grants.

 

The Committee also increases the funding for the supportive childcare line item by $11.8 million, ensuring early education and care for children with active Department of Social Services cases. In addition, childcare funding for low-income working families is increased by $34.5 million.  The Committee also increases early educator professional development grants by $550,000.

 

Continuing to focus on the safety and well-being of our children, the Committee’s recommendations increase the funding to the Children’s Trust Fund by $454,855 to support the prevention of child abuse and neglect.

 

K-12 Education 

 

The education our children receive in primary and secondary school shapes their future success, which is why an early commitment was made to increase Chapter 70 education funding.

 

Along with the $223 million increase in Chapter 70 education funding, the recommendations maintain $33.8 million for Kindergarten Expansion Grants, and continue to provide $61.3 million for Regional School Transportation funding which reimburses districts for 87 percent of their costs.

 

In order to provide education to children of all abilities, the Committee increases special education reimbursements through the Circuit Breaker by $6 million, allowing districts to receive reimbursements for 75 percent of their costs, four times above their foundation budget for extraordinary special education costs. The Committee recommendations also increase Expanded Learning Time Grants by $4.5 million to allow for an additional 3,000 students to expand their school day or year in FY09.

 

Furthermore, to encourage low-income youth to work toward their high school diploma or GED and gain job skills, the recommendations provide an additional $500,000 for Youthbuild Grants, and an additional $250,000 for school-to-work connecting activities.

 

To ensure that everyone in the Commonwealth, regardless of age, has access to an education, the Committee has provided an additional $1 million for Adult Education.  The recommendations also increase funding for the After School and Out of School Programs by $3.45 million allowing the children of Massachusetts more options for structured activities when they are outside of the classroom.

 

Higher Education

 

For Massachusetts to be competitive in the national and global economy, it is essential that we maintain a top-notch public higher education system that will continue to draw both students and scholars.

 

To that end, the Committee recommendations provide an increase of $26.4 million for the University of Massachusetts, $8.1 million in additional funds for the nine Massachusetts State Colleges, and an $8.9 million increase for our 15 Community Colleges.

 

To assist residents in achieving the goal of higher education, the recommendations increase funding for the state scholarship programs by $3 million and Tufts Veterinary School by $200,000.  Funding is also maintained for the McNair program, the foster care financial aid program, and community college workforce training grants.  In addition, the Committee recommends a new initiative to provide $2 million in funding to public higher education institutions for a dual enrollment program for qualified high school students to take college courses.

 

~Libraries~

 

Libraries are an integral part of every community, providing opportunities for research, learning and access to the world for every citizen of the Commonwealth.  The Committee, in an effort to support these vital community centers, provides an additional $935,000 for Aid to Regional Libraries and $250,000 for Library Technology and Resource Sharing Networks.

 

The Committee also continues its commitment to the Municipal Library Matching Grant Program by providing $250,000 in matching dollars for private fundraising in support of local libraries.   

   

 

~Health and Human Services~

 

Health Care Reform

 

In just two years, the success of health care reform has been remarkable. With 340,000 residents obtaining insurance, Massachusetts has exceeded expectations with the first phase of health care reform. 

 

In order to build upon that success, the Committee recommends an increased investment of $869 million for Commonwealth Care. This funding will provide subsidized health insurance coverage to residents of Massachusetts with income less than 300 percent of the federal poverty level. The recommendations also include $453 million for the Health Safety Net Trust Fund, a 24 percent decrease from pre-reform expenditures in FY07, continuing the trend of decreased costs for providing free care.

 

In addition, the recommendations include $25 million for the Essential Community Provider Trust Fund to encourage innovation in systems of care within the community, provide incentives to physicians to adopt electronic medical records, and address financially distressed acute care hospitals and community health centers. Additionally, $160 million is included for supplemental payments to safety net hospitals, which are specified in Section 122 of the health care reform legislation.

 

The Committee recognizes the importance of cost control in the success of health care reform and has included the necessary funding to promote cost containment, transparency, and efficiency in the delivery of quality health care. These provisions are crucial to complement the second phase of health care reform. As a part of that recognition, these recommendations dedicate $25 million of increased tobacco revenue for the statewide adoption of electronic health records. The Committee also works to increase the workforce capacity of primary care providers and nurses through the establishment of a Massachusetts Center for Primary Care Recruitment and Placement and a new loan forgiveness program for health care professionals dedicated to serving in the Commonwealth.   These recommendations also include a $1.5 million initiative to expand enrollment and enhance primary care educational programs at our state medical school, and $1 million increase for the Nursing and Allied Workforce Development program to develop and support strategies that increase the number of public higher education faculty members that support careers in fields related to nursing and allied health.

 

 

MassHealth

 

Seeking to ensure that the low-income residents of the Commonwealth have the health coverage they need, the Committee continues to commit the necessary funds to provide quality, cost-effective health coverage to over 1.15 million residents through a 5.6 percent increase in MassHealth programs for FY09.  The increase in funding includes $20 million for the Community First Initiative, to help elderly and disabled MassHealth members receive community-based care and $5 million for a new Medical Home Demonstration Project, aimed at increasing access to primary care providers, and expanding their role as the “medical home” for patients. This initiative will result in better care management of chronic illnesses, fewer hospitalizations, and improved overall health. 

 

Through value and cost-based purchasing of health care services, providing the right care in the right setting, and efficient drug utilization, the Commonwealth will see over $300 million in gross savings in MassHealth. Some of the cost containment strategies within MassHealth include expanding chronic disease management, and expanding pay-for-performance incentive plans for Medicaid managed care organizations, nursing facilities, and physicians.

 

Human Services

 

The Committee recommends $25 million for coordinated care services for children suffering from severe emotional disturbances, and $23 million for the Purchase of Service rate reserve to provide salary increases for direct care providers.

 

Department of Youth Services

 

Working to ensure that our children are on the right path, the Committee increases funding for the department’s residential services by $2.2 million to provide rehabilitative services to youth and improve community safety by decreasing recidivism.  The recommendations also increase funding for non-residential services by $401,000 to maintain community-based programs for youth committed to the custody of the department, and continue $3.3 million in education funding for these youth.

 

The Committee also recommends establishing $200,000 in funding through the Department of Public Health to treat and prevent juvenile substance abuse among Department of Youth Services clients.  

 

 

Department of Transitional Assistance

 

With economic pressures mounting, more and more people are struggling to make ends meet.  To help these residents back on their feet, the recommendations increase Transitional Aid to Families with Dependant Children (TAFDC) grant payments by $28.3 million to provide cash assistance to the Commonwealth’s most vulnerable families.  The Committee also increases funding for the Emergency Assistance Family Shelter account by $2.4 million, and increases funding for the Department’s caseworkers by $2.2 million.

 

Recognizing that the elderly and disabled are some of the hardest hit during an economic downturn, the Committee also provides the Supplemental Security Income (SSI) cash assistance program with an additional $7 million.

 

Department of Social Services

 

In order to better protect our children from abuse and neglect, the Committee recommends increasing the funding of services for children and families by $18.5 million, and providing an additional $1.3 million for children in congregate care to maintain quality services for the Department’s most vulnerable clients.

 

Acknowledging the incredibly high demand for these services, the Committee also increases funding in the department’s social worker and case management line item by $10 million.

 

Office of the Child Advocate

 

The Committee recognizes the urgent need to address the child abuse crisis currently facing Massachusetts. Therefore, these recommendations include a new $300,000 line item that funds the Office of the Child Advocate.  The Child Advocate will be an independent voice for children and will report directly to the Governor.

 

Commission for the Blind

 

To assist blind residents of the Commonwealth, the recommendations include increasing funding for Turning 22 services by $579,000 to ensure that all new and existing Turning 22 consumers receive appropriate services in a timely manner. An additional $21,000 is also provided for Ferguson Industries for the Blind to continue valuable employment opportunities to legally blind residents.

 

 Department of Public Health

 

Emphasizing prevention and ensuring that every resident of the Commonwealth receives the care they need, these recommendations continue the Senate’s effort to provide health care for our most vulnerable citizens.

 

Early detection and treatment is not only cost effective, but is also more productive in increasing the overall health of residents.  Within that focus, the recommendations provide for an additional $2.8 million for universal immunizations to ensure that residents, particularly children, can have the benefit of this crucial preventative program. The recommendations also maintain funding for health promotion and disease prevention programs, providing residents access to prevention and treatment programs for illnesses such as: breast cancer, prostate cancer, multiple sclerosis, osteoporosis, diabetes, stroke, and renal disease.

 

Moreover, $7.6 million in additional funding is included for the state’s public health hospitals to ensure that residents have access to essential health services. Furthermore, the Committee’s recommendations include $6.5 million to provide for the continued expansion of substance abuse prevention and treatment services including $5 million dedicated to a pilot jail diversion treatment program for individuals with OxyContin and heroin addictions.

 

For the protection and development of our children, funding for early intervention programs is increased by $4.7 million to ensure that eligible children are able to access valuable developmental services. The recommendations increase funding for the pediatric palliative care program to a total of $1 million to better provide in-home support to the families of children with life limiting diseases.

 

The Committee reaffirms its commitment to addressing the causes of youth violence through prevention programs by increasing grants by $1 million for a total of $3 million.  The Committee’s recommendations also increase funding for domestic violence programs by $1.2 million to ensure access to invaluable services such as batterers’ intervention.

 

Department of Mental Health

 

In order to provide truly complete care, the Commonwealth must include mental health care as part of its services. In total, the Committee recommends an increase of $17.5 million for the Department of Mental Health. This increase will provide an additional $2.5 million for child and adolescent services, including the extremely successful Child Psychiatric Access Program, which the Committee expands by $250,000 in order to allow public schools to access the program.  The recommendations also provide for an increase of $8.8 million to state hospitals to address significant needs including psychiatric and in-patient services.

 

Department of Mental Retardation

 

Within the Department of Mental Retardation, the Committee recommends increasing funding by 4 percent for community residential services to adequately pay for Turning 22 services.  Additionally, services for new Turning 22 consumers are fully funded at $7.7 million ensure that all new and existing turning 22 consumers receive appropriate services in a timely manner.

 

As Massachusetts continues to transition to community-based services, the recommendations include an additional $4.7 million for state-operated beds to meet increased need.  The Committee has also increased funding for respite services by $1 million to encourage and support families that care for their loved ones in-home. Additionally, to ensure that consumers continue to receive quality residential services in the state facilities a $2.4 million increase is provided for our state facilities.

 

For children of the Commonwealth, the Committee provides an increase of $4 million for the Medicaid autism waiver to meet the substantial need for intensive home-based services for young children with severe autism.  The Committee also redirects funding from the residential rate initiative to address the growing waitlist for residential support services for school-aged children.

 

In addition, the Committee recommends that the name of the Department of Mental Retardation be changed to the Department of Developmental Disability Services.  People at all levels of government, advocates and citizens served by the department have long recognized the need to modernize and reduce the stigma that may be associated with the current name of the department.  Although time is provided to allow for the transition, the Committee acknowledges the importance of this issue and expects that this small, but meaningful, initiative will help to appropriately serve all those in need of developmental disability services.    

 

~Public Safety~

 

The safety of Massachusetts’ residents is paramount. Within these recommendations, the Committee continues the Senate’s commitment to the security of the Commonwealth, its communities, and its people.

 

In order to address the growing threat of gang violence, the Committee has included the Shannon Grant Program for the first time within the operating budget. The Shannon Grant Program, for which $13 million is recommended, includes workshops on job skill development and outreach programs for at-risk youth.

 

 

 

To continue to aid our cities and towns with public safety, the Committee maintains $21.3 million in funding for the Community Policing Grants and fully funds the Student Awareness of Fire Education (SAFE) program.  The recommendations also include a $20.5 million increase for the 14 Sheriffs’ Departments and a total increase of $4.8 million for the 11 District Attorneys’ Offices.

 

In an effort to retain Assistant District Attorneys with three or more years of experience, the Committee includes $500,000 that will be administered by the Massachusetts Districts Attorneys’ Association.

 

The recommendations provide a $1.4 million increase for the Department of Public Safety to increase the number of building and construction safety inspectors and hearings officers, which will reduce the backlog and long wait-periods for licenses, license renewals and complaints. This expansion is expected to generate $3.4 million in revenue.

 

Sex Offender Registry Board

 

In an effort ensure the classification of sex offenders before they are released from custody as well as address the cost associated with re-classifications and an increase in appeals, the recommendations include a $1 million increase in funding for the Sex Offender Registry Board.     

 

 

~Economic Development~

 

Smart, targeted investments in our economy and in our various economic sectors are the most effective tools the Commonwealth can use in its effort to improve the economy and quality of life of its residents. 

 

In order to attract new business and grow the economy, the Commonwealth must have a qualified workforce ready to step into new jobs. To aid in facilitating that workforce, the recommendations provide for $27.4 million in workforce training grants for programs aimed at stimulating growth in key workforce sectors as well as providing vital training and career path development for those already in these fields. The Committee also includes $5.5 million in funding for One-Stop Career Centers to assist residents trying to get back into the workforce as well as to provide employers with a pool of qualified candidates.

 

While attracting new industry is important, the Commonwealth must also maintain and support our traditional industries. The recommendations include initiatives to support these industries such as providing $1.1 million in funding for the Massachusetts Manufacturing Extension Partnership to focus on revitalizing and sustaining Massachusetts’ manufacturing sector.

 

 Tourism has consistently been one of the largest industries in the state. With the weakened dollar, it is an opportune moment to focus on international tourism efforts. It is also critical that we take the opportunity to focus on families who will be vacationing closer to home this year. In that regard, the Committee provides over $19 million for the Massachusetts Office of Travel and Tourism to fund both specific programs and broader agency initiatives. Furthermore, the Committee recommends $9 million for the Regional Tourist Councils to continue their more localized efforts.

 

In order to help communities move important projects forward and produce jobs, the recommendations allocate $4 million for streamline permitting grants to municipalities to help cut through much of the bureaucratic red tape and more quickly get businesses up and running to help local and regional economies.

 

Additionally, the Committee provides $8 million in funding for the summer jobs for at-risk youth program.  This funding will help keep youth engaged in their communities in productive ways during the summer months, and instill the important values of hard work and cooperation. 

 

 

~Elder Affairs~

 

The continued support of senior citizens is a top priority of the Senate.  One of the ways this commitment is continued is supporting programs that assist the elderly wishing to remain in their homes. As such, over $1 million in additional funding is provided for home care programming, which assists elders with personal and supportive services allowing them to remain in the community. Moreover, the Committee recommends continuing the open enrollment period of the Commonwealth’s Prescription Advantage program, allowing more elders to take part in this low-cost pharmaceutical program.

 

The recommendations also include more than $1 million in funding over the previous fiscal year for the Elder Protective Services Program to assist in the investigation of reports of elder abuse, and for providing needed protective services to abused elders.  Furthermore, the Committee recognizes the unique struggles associated with homeless elders and recommends an additional $100,000 in funding for the Residential Placement for Homeless Elders program.

 

In addition, the Committee recommends allowing more seniors to be eligible for tax deferral on their property taxes and, as such, increases the income threshold to provide this much needed financial relief.   

 

~Veterans~

 

As our veterans made the commitment to protect our state and nation, it is our duty to provide them with the benefits and services they have earned. 

 

Though the Commonwealth can never fully repay veterans for their sacrifice, the Committee recommends several measures which seek to provide them with some token of gratitude for their service. These initiatives include full funding of the Welcome Home Bill and Life Insurance Premiums for the National Guard.  The recommendations also call for an expansion of the law that allows cities and towns to defer the payment of taxes for members and dependents of the Massachusetts National Guard or Reserves while the member is on active service outside the Commonwealth and for 180 days following that term of service. This expansion would allow our communities to extend that exemption to automobile excise taxes and thereby ease the tax burden on our service members.

 

The Committee also recommends extending for three years the initiative that provides for adjustments to be made in the salaries of state employees serving in the Armed Forces. 

 

In an effort to increase purchasing power and reduce cost, the Committee also recommends the partnering of both Holyoke and Chelsea Soldiers’ Homes with the State Office of Pharmacy Services.

 

~Housing~

 

The availability of affordable housing is key to the well-being of our residents as well as to maintaining and attracting a qualified workforce.

 

With the economic decline making it difficult for some families to keep a roof over their heads, the Committee’s recommendations include $138.4 million or 8.1 percent increase for housing programs.

 

As part of this increase, an additional $5.8 million is provided for Local Housing Subsidies, the state aided public housing program that provides housing to low-income families and individuals. The funding also includes an additional $3.1 million to the Massachusetts Rental Voucher Program, a state-funded rental assistance program for low-income families and individuals, and an additional $500,000 each for the Alternative Voucher Program to provide rental assistance for non-elderly persons with disabilities and the Rental Subsidy Program for eligible clients of the Department of Mental Health.

 

The recommendations also increase funding for the Rental Assistance for Families in Transition (RAFT) program by $500,000, which provides one-time, limited financial assistance to enable families to retain housing, obtain new housing or otherwise avoid homelessness. The SoftSecond Loan Program, which assists low and moderate income families with the purchase of their first home, is also increased by $500,000.  Moreover, the Housing Consumer Education Centers are increased by $250,000.

 

Homelessness Commission

 

The Committee recommends funding an $8.25 million reserve to support the implementation of the recommendations of the special commission to end homelessness in the Commonwealth.  This funding is provided in addition to $1.75 million from the Massachusetts Housing Finance Agency and is an essential step to eradicating homelessness in Massachusetts.

 

 

~Energy & the Environment~

 

With soaring energy costs, an emphasis on renewable energy and a continued desire to preserve and protect our parks and open spaces, the Committee’s recommendations provide $230 million in total funding for the Executive Office of Energy and Environmental Affairs.

 

Under the Department of Conservation and Recreation, funding for our state parks is increased by 3.4 percent, and funding is continued for urban parks and beaches and pools.

 

To ensure the continued protection of our natural resources, the Committee increases funding for the Department of Environmental Protection by 2.6 percent, and includes funding to support the Regional Greenhouse Gas Initiative, enforce the Mercury Management Act programs and minimize climate change impacts

 

The recommendations also provide a 6.4 percent increase in funding to ensure the programs within the Department of Fish and Game will receive the proper management and protection of the Commonwealth’s marine fisheries, wildlife management land, riverway protection, upkeep of boating and fishing access and hunting and fishing licenses.

 

Knowing that thousands of residents across Massachusetts are struggling with the increased price of food and are looking to food assistance programs, the Committee provides $12 million in funding for the Massachusetts Emergency Food Assistance Program administered through the Department of Agricultural Resources.

 

In a continued effort to ensure that utility consumers are provided with the most reliable service at the lowest possible cost and to protect the public safety from transportation and gas pipeline related accidents, these recommendations provide for a $3 million increase for the Department of Public Utilities.

 

As energy costs rise, there is a growing effort to focus on the development of greener energy resources. These recommendations provide for an increase of $687,000 for the Division of Energy Resources to aid in this development and the implementation of energy strategies to achieve cost-effective efficiencies throughout Massachusetts.

 

~Judiciary~

 

The Legislature has taken steps over the past several years to improve the overall quality of the courts, striving to ensure fairness and efficiency in the delivery of justice.  The Senate Ways and Means budget recommendations provide funding to ensure the ability of the third branch of government to carry out its important work.

 

The Committee increases funding for the Trial Court by $18.4 million over last year’s budget and provides the Chief Justice for Administration and Management with increased flexibility in spending to ensure the fair funding of individual courts and to maximize efficiency throughout the Trial Court.  The Committee recommendations increase funding for the Supreme Judicial Court by $700,000 to enable much needed upgrades of the SJC and Appeals Court computer system. 

 

The Committee provides full funding of $181.9 million to the Committee for Public Counsel Services to fulfill its mandate of providing legal representation to indigent persons in criminal and in certain other cases.  The recommendations also provide for a $1.4 million increase to the Massachusetts Legal Assistance Corporation for civil legal assistance to persons in need throughout the Commonwealth.  This funding is especially important as the need for legal representation has increased substantially in light of the foreclosure crisis and other factors.

 

~Bay State Competitiveness Investment Fund~

 

Massachusetts has always been a center for innovation, culture, and cutting-edge research. In order to maintain and widen our competitive edge, it is critical to continue to make investments in these areas. To achieve that goal, the Committee’s recommendations pledge $50 million of any surplus in state funds for the purpose of investing in the Commonwealth. Out of those funds, $25 million would be allocated for the Massachusetts Life Sciences Investment Fund to support the Senate’s Commitment to the Life Sciences package we passed in March, and $7 million would be directed to the Massachusetts Cultural Facilities Fund to provide capital support to the cities and towns for important cultural programs that enrich the lives of all our citizens.