Massachusetts state budget
|Massachusetts state budget|
|State Credit Rating:||AA+ (as of May 2012)|
|Current Governor:||Deval Patrick|
|GF expenses:||$25.509 billion (estimated for FY 2013)|
|All funds expenses:||$60.298 billion (estimated for FY 2013)|
|Spending % Change:||1.73%|
|% from Federal Funding:||28.81%|
|Per Capita State Debt:||$19,493|
|Other state budgets|
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- 1 Budget process
- 2 Expenditures
- 3 Revenues
- 4 State budgets by year
- 5 Historical spending
- 6 State debt
- 7 Federal aid to state budget
- 8 Budget transparency
- 9 Accounting principles
- 10 Contact information
- 11 See also
- 12 External links
- 13 References
- A summary of the budget drafting process
- Trends in expenditures and revenues
- Current and past fiscal year budget developments
- Financial transparency measures
Between fiscal year 2009 and fiscal year 2013, Massachusetts's total expenditures increased by approximately $11.656 billion, from $48.642 billion in 2009 to $60.298 billion in 2013. This represents a 23.96 percent increase, outpacing the cumulative rate of inflation during the same period (9.06 percent, calculated using the Consumer Price Indices for January 2009 and January 2013).
- Budget instruction guidelines are sent to state agencies in July of the year preceding the start of the new fiscal year.
- State agencies submit their budget requests in September.
- Agency hearings are held in August and September.
- The governor submits his or her proposed budget to the state legislature on the fourth Wednesday in January.
- The legislature typically adopts a budget in June. A simple majority is required to pass a budget. The fiscal year begins July 1.
In Massachusetts, the governor may exercise line item veto, item veto of appropriations, or item veto of selected words authority.
The governor is legally required to submit a balanced budget proposal. Likewise, the legislature is legally required to pass a balanced budget.
Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:
- General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."
- Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."
- Federal funds: "Funds received directly from the federal government."
- Bonds: "Expenditures from the sale of bonds, generally for capital projects."
The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context). Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.
|Total state expenditures, FY 2013 ($ in millions)|
|State||General fund||Federal funds||Other funds||Bonds||Total||Per capita expenditures|
| Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.|
Source: National Association of State Budget Officers
Expenditures by function
State expenditures in Massachusetts can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.
|Expenditures by function, FY 2012 (as percents)|
|State||Elementary and secondary ed.||Higher ed.||Public assistance||Medicaid||Corrections||Transportation||Other|
|Source: National Association of State Budget Officers|
From 2008 to 2012, elementary and secondary education spending fell by 3.20 percentage points, or 23 percent, as a share of the budget. During the same period, Medicaid spending rose by two percentage points, or 10.7 percent, as a share of the budget. The table below details changes in expenditures from 2008 to 2012. Figures are rendered as percents, indicating the share of the total budget spent per category.
|Expenditures from 2008 to 2012 (as percents)|
|Year||Elementary and secondary ed.||Higher ed.||Public assistance||Medicaid||Corrections||Transportation||Other|
|Change in %||-3.20%||-0.40%||-0.60%||2.00%||-0.70%||0.60%||2.40%|
|Source: National Association of State Budget Officers|
The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.
|Revenue sources in the general fund, FY 2013 ($ in millions)|
|State||Sales tax||Personal income tax||Corporate income tax||Gaming tax||Other taxes and fees||Total||Per capita revenue**|
| Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.|
Source: National Association of State Budget Officers
The table below details the change in revenue sources in the general fund from 2009 to 2013. Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.
|Revenue sources in the general fund, Massachusetts ($ in millions)|
|Year||Sales tax||Personal income tax||Corporate income tax||Gaming tax||Other taxes and fees||Total||Per capita revenue**|
|Change in %||33.47%||21.23%||17.62%||0.00%||225.45%||48.80%||46.59%|
| Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.|
Source: National Association of State Budget Officers
State budgets by year
See budget bill: Chapter 38, Acts of 2013
Fiscal year 2014
|Massachusetts state budget -- 2014|
|Massachusetts State Legislature|
|Text:||Chapter 38, Acts of 2013|
|Introduced:||January 24, 2013|
|State House:||April 24, 2013|
|Vote (lower house):||127-29|
|State Senate:||May 23, 2013|
|Vote (upper house):||36-3|
|Conference:||July 1, 2013|
|Conference Vote (upper house):||36-3|
|Conference Vote (lower house):||124-29|
|Signed:||July 12, 2013|
|Vetoed:||July 12, 2013 (items vetoed; items passed over veto on July 30, 2013)|
On July 12, 2013, Governor Deval Patrick signed the fiscal year 2014 budget into law. The budget as enacted boasted significant funding increases for education and related programs, including an additional $130 million for Chapter 70 school aid and an additional $15 million for early education programs. The budget also included $97 million for public universities and colleges, which, according to Patrick, would result in "no tuition and fee increases in the coming year." In order to balance the budget, Patrick authorized a $350 million withdrawal from the state's Stabilization Fund.
Patrick vetoed approximately $240 million in transportation funding and $177 million in aid to local governments. Patrick argued that he could not support these items until the state legislature completed work on a separate transportation finance bill.
Fiscal year 2013
- See also: Massachusetts state budget (2012-2013)
Fiscal year 2012
- See also: Massachusetts state budget (2011-2012)
Fiscal year 2011
- See also: Massachusetts state budget (2010-2011)
Fiscal year 2010
- See also: Massachusetts state budget (2009-2010)
State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).
|Historical state budget spending in Massachusetts ($ in millions)|
|Fiscal year||General Fund||Other funds||Federal funds||Bonds||Budget totals|
|Total||% of Budget||Total||% of Budget||Total||% of Budget||Total||% of Budget|
|General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.|
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.
According to a January 2014 report by the nonprofit organization State Budget Solutions, Massachusetts had a state debt of over $129 billion. Its state debt per capita was $19,493. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.
|Total state debt in Massachusetts|
|Total state debt||$129,550,263,000||10|
|Per capita debt||$19,493||12|
|State and other fund expenditures||$40,946,000,000||36|
A 2012 report from the Pew Center on the States noted that the commonwealth's pension system was funded at 71 percent at the close of fiscal year 2010, below the 80 precent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."
The funding ratio for the state's pension system decreased from 77.00 percent in fiscal year 2007 to 66.72 percent in fiscal year 2012, a decrease of 10.28 percentage points, or 13.4 percent. Likewise, unfunded liabilities increased from over $11.7 billion in fiscal year 2007 to more than $21 billion in fiscal year 2012.
States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit rating indicates lower risk for an investor, which in turn lowers costs for taxpayers.
The table below lists the Standard and Poor's credit rating for Massachusetts from 2001 to 2012 (grades from surrounding states are provided for additional context).
|S&P credit ratings from 2001 to 2012|
|Massachusetts||Connecticut||Maine||New Hampshire||Rhode Island|
Federal aid to state budget
- See also: Federal aid to budgets in the 50 states
The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.
State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.
|Federal aid to state budgets in 2012|
|State||Federal aid as % of general revenue||Total federal aid||National rank|
As of 2013, Massachusetts had received over $7 billion in federal stimulus funding.
|Line item expenditures|
|Public employee salaries|
|Last evaluated in 2012.|
The state maintains an official transparency website called Informed Massachusetts. The table to the right is helpful in evaluating the level of transparency provided by the site.
The Massachusetts Budget and Policy Center, which "provides independent research and analysis of state budget and tax policies," tracks actual spending in real and nominal terms using a "Budget Browser."
Multi-measure budget transparency profile
The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for Massachusetts, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.
IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. Massachusetts tied for 20th in the nation with 12 other states, earning five out of eight possible points.
|Massachusetts - IGPA score for budget process, contents and disclosure|
|Budget transparency indicator||Yes or no?|
|"Generally Accepted Accounting Principles" budget|
|Binding revenue forecast|
|Legislative revenue forecast|
|Constitution or statutory tax/spend limitations|
In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.
U.S. PIRG "Following the Money" report
- See also: Following the Money 2014 Report
The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending. According to the report, Massachusetts received a grade of A- and a numerical score of 90.5, indicating that Massachusetts was "leading" in terms of transparency regarding state spending.
The Office of the Auditor of the Commonwealth publishes its audit reports online and is responsible for:
- Determining whether the Commonwealth's resources are properly safeguarded;
- Determining whether such resources are properly and prudently used;
- Evaluating internal controls to help insure integrity in financial management systems;
- Determines whether computer systems and technology environment meet control objectives regarding security, integrity, and availability;
- Evaluating management's economy and efficiency in it use of resources;
- Determining and evaluating a program's results, benefits, or accomplishments; and
- Ensuring that all audit results are fully disclosed to the public and the auditees.
Massachusetts Executive Office for Administration and Finance
State House, Room 373
Boston, Massachusetts 02133
- Massachusetts government sector lobbying
- Massachusetts public pensions
- Governor of Massachusetts
- Massachusetts State Senate
- Massachusetts House of Representatives
- Massachusetts State Legislature
- State Budget Solutions, Massachusetts
- Budget Browser from the Massachusetts Budget and Policy Center
- Model transparency legislation from the American Legislative Exchange Council is available here
- Pioneer Institute for Public Policy Research
- Citizens for Limited Taxation
- Massachusetts Executive Office for Administration and Finance
- Fiscal Year 2009 Budget Summary
- Massachusetts General Court
- Official Website of the Commonwealth of Massachusetts
- Office of the Comptroller
- U.S. PIRG, "Report: Transparent & Accountable Budgets," April 8, 2014
- The New York Times, "Battles loom in many states over what to do with budget surpluses," February 3, 2014
- Center on Budget and Policy Priorities, "Policy Basics: The ABCs of State Budgets," February 7, 2013
- Gov. Deval L. Patrick, "2010 State of the Commonwealth Address," January 21, 2010
- Refers to General Fund spending. Typically in state budgets the General Fund is spending that is most directly controlled by state legislators.
- This figure is derived by calculating the percent difference between the prior two years' spending levels according to the National Association of State Budget Officers.
- Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
- InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
- National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
- National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
- National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
- United States Census Bureau, "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
- National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
- National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
- National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
- National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
- United States Census Bureau, "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
- WAMC - Northeast Public Radio, "Mass. Governor Signs FY2014 Budget, Vetoes Transportation Funding," July 12, 2013
- State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
- Washington Examiner, "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
- State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
- Pew Center on the States, "Widening Gap Update: Massachusetts," June 18, 2012
- Commonwealth of Massachusetts, "Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2012," accessed November 13, 2013
- Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
- United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
- Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
- MassBudget, "Budget Browser," accessed April 23, 2014
- Institute of Government and Public Affairs at University of Illinois, "Home page," accessed February 21, 2014
- Institute of Government and Public Affairs at University of Illinois, "Budget Transparency Profiles - All 50 States," September 2011
- U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
- Office of the Auditor of the Commonwealth, "Authority/Responsibility," accessed October 26, 2009