Press Statement  Auditor Bump Commends DHCD for Implementation of Report Recommendation

Boston — "An April 2015 report  issued by the Office of the State Auditor recommended that the Commonwealth improve information sharing with municipalities about how much excise tax the Department of Housing and Community Development is paying for the use of hotel and motel rooms as part of its Emergency Assistance program for homeless families.

I commend DHCD, which released its first report this month, for their quick implementation of this recommendation. This new reporting system not only brings greater transparency to this program, but also gives municipalities the valuable information they need to anticipate revenues and to build their annual budgets.  

The report released by the Office of the State Auditor’s Division of Local Mandates (DLM) studied the impacts of the state’s Emergency Assistance housing program and the adoption of the federal McKinney-Vento Act on local government budgets. It found that both programs generated at least $11.6 million annually in unreimbursed local costs. In addition to these costs, the report also identified that communities were potentially missing out on an estimated $1.7 million annually in uncollected hotel-motel excise taxes.

In the first quarter of Fiscal Year 2016, DHCD’s new contracting and invoicing procedures have required and verified that $484,107 in excise revenue was collected for cities and towns participating in the program. This amount is a baseline that helps both DHCD and cities and towns monitor the local financial impacts of its Emergency Assistance program. 

I thank DHCD for taking swift action in response to DLM’s recommendations and I look forward to continued collaboration with DHCD and other state agencies to protect cities and towns from unfunded mandates and other unintended financial burdens."

Background: In April 2015, the Office of the State Auditor’s Division of Local Mandates released a Municipal Impact Study of Massachusetts Hotel/Motel –Based Homeless Families Shelter Programs. The study followed a 2011 determination made by DLM that adoption of the federal McKinney-Vento Act, which requires cities and towns to provide school transportation for homeless children, represented an unfunded mandate.