Difference between revisions of "Massachusetts state budget"

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(Fiscal year 2013 state budget)
(Fiscal year 2012 state budget)
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* Tie the gas tax to inflation, ensuring gradual ­increases;<ref name=globe/> and
* Tie the gas tax to inflation, ensuring gradual ­increases;<ref name=globe/> and
* Get rid of three corporate tax breaks.<ref name=globe/>
* Get rid of three corporate tax breaks.<ref name=globe/>
==Fiscal year 2012 state budget==
::''See also: [[Archived Massachusetts state budgets]]''
'''Supplemental budget'''
On October 5, 2011, the [[Massachusetts House of Representatives|House of Representatives]] voted to approve a supplemental budget and on October 28, 2011, Governor Patrick signed the bill into law.<ref name=boosts>[http://www.boston.com/news/local/massachusetts/articles/2011/10/05/mass_house_considers_boosting_state_reserves/ The Boston Globe "Mass. House boosts state reserves" Oct. 5, 2011]</ref><Ref name=supp/>  The supplemental budget provided for a deposit of $350 million into the state's Rainy Day Fund, replenishing the reserve fund that had been tapped several times in recent years.  It was $50 million more than what Patrick had proposed depositing into the reserves.  Massachusetts is one of only four states in the country with a Rainy Day Fund in excess of $1 billion, with a balance of $1.4 billion as of 2011.<Ref name=boosts/><ref name=supp/>
The supplemental budget also provided for $169 million in spending, including giving cities and towns $65 million in promised local aid.<ref name=supp/>  Additional spending included:
* Nearly $20 million in aid for a series of natural disasters
* $39 million on the MassWorks Infrastructure Program
* $9 million for collective bargaining agreements
* $10 million to allowing substance abusers to be committed by the courts to a treatment program for up to 90 days
* $12 million in new assistance and $8 million in retained revenue to the trial court system
* $3 million for adult basic education programs
* $850,000 for adult immunization and vaccines.
'''FY2012 budget'''
Governor Patrick signed the FY2012 $30.6 billion state budget into law on July 11, 2012, after the state operated under a stopgap budget for ten days.<ref name=signs>[http://www.boston.com/news/local/massachusetts/articles/2011/07/11/mass_gov_patrick_set_to_sign_new_state_budget/ The Boston Globe "Mass. Gov. Patrick signs new state budget" July 11, 2011]</ref><ref>[http://money.cnn.com/2011/06/30/news/economy/state_budget/ CNNMoney.com "It's D-day for state budgets" June 30, 2011]</ref> The [[Massachusetts General Court|legislature]] reached a $30.6 billion budget agreement on June 30, 2012 and voted to approve that plan on July 1.<ref>[http://www.boston.com/Boston/metrodesk/2011/07/legislature-approves-billion-state-budget/sp2aGNitytVjBNB8YoH0ZI/index.html The Boston Globe "Legislature approves $30.6 billion state budget" July 1, 2011]</ref> 
The budget did not raise taxes and instead relied primarily on cuts to balance the state's $1.9 billion shortfall.  Cuts included:<ref name=accord>[http://www.boston.com/news/local/massachusetts/articles/2011/07/01/accord_reached_on_state_budget/ The Boston Globe "Accord reached on state budget" July 1, 2011]</reF> 
* A cut in direct benefits to poor people, which will reduce the clothing allowance given to children on welfare from $150 to $40<ref name=accord/><ref name=signs/>
* A $4 million cut in the Department of Developmental Services, cutting services to 1,000 people<ref name=accord/>
* $800 million from MassHealth, the state's Medicaid program, that required the poor and the elderly to pay more for prescription drugs and other medical services<ref name=signs/>
* $70 million cut to higher education, which has prompted some public colleges and universities to raise tuition and fee rates.<ref name=signs/>
* The budget only funded services for adult day care for half the year<ref name=signs/>
The budget also included cuts to the judiciary branch, and Roderick L. Ireland, the chief justice of the Supreme Judicial Court, and Robert A. Mulligan, the chief justice for administration and management, said the cuts jeopardized the right of every person, guaranteed by the Massachusetts Constitution, to swift justice.  The justices also asked the governor to refrain from appointing additional trial judges and magistrates because there would be insufficient staff to support them.<Ref>[http://www.boston.com/Boston/metrodesk/2011/07/top-judges-warn-patrick-new-state-budget-will-lead-layoffs-courthouse-closings/WszLx0MYy5oaKAwNIWw8fK/index.html The Boston Globe "Top judges warn Patrick new state budget will lead to layoffs, courthouse closings" July 13, 2011]</ref>
The budget saved cities and towns at least $100 million annually in health insurance costs.<ref name=accord/>
The budget increased public school funding by $80 million, bringing funding to $3.99 billion, and offsetting $100 million in cuts from previous years.  It also included grants of $2.5 million for higher education that were awarded on merit and just not number of students enrolled.<Ref>[http://news.bostonherald.com/news/regional/view/20110906massachusetts_hands_out_college_grants/ The Boston Herald "Massachusetts hands out college grants" Sept. 6, 2011]</ref>
The governor's budget officials said that he hoped to achieve savings through stricter pension controls and limits on the rising cost of health care.<ref name=more>[http://www.boston.com/news/local/massachusetts/articles/2010/12/15/patrick_to_seek_15b_in_cuts_to_plug_states_budget_shortfall/ The Boston Globe "Patrick asks state to cut even more" Dec. 15, 2010]</ref> Lawmakers were expected to confront rising Medicare costs in FY2012.<ref name=looms>[http://www.boston.com/lifestyle/health/articles/2011/01/03/ballooning_medicaid_costs_strain_bay_state_budget/ The Boston Globe "Medicaid cost crisis looms for Bay State" Jan. 3, 2011]</ref>
===Unions and collective bargaining===
Personnel costs, including salaries and benefits, account for 75% of local Massachusetts budgets.  The House passed an amendment to the state budget bill on April 26, 2011, which divests policemen, firefighters, teachers and other municipal employees of their ability to collectively bargain for most health-care benefits.  It was expected to save cities and towns an estimated $100 million in FY2012 alone. Democrats, including the Speaker of the House, spearheaded passage of the bill. The bill created a 30-day negotiating window between city and town leaders and unions to work out disagreements. If no agreement was reached, municipalities were allowed to impose changes in co-payments, deductibles and other aspects of health care plans.<ref>[http://online.wsj.com/article/SB10001424052748704463804576291240909536676.html The Wall Street Journal "Union Busting, Massachusetts Style" April 29, 2011]</ref>
===Legislative proposed budgets===
With both the House and Senate budgets complete, a conference committee worked to reconcile them and send them to the governor.
The Senate passed its $30.5 billion state budget on May 26, 2011.  The Senate passed amendments adding $11 million in special education funding and $3 million for summer jobs for at-risk youth while rejecting proposed cuts in the state sales and income taxes. The plan dipped into the state's one-time savings accounts for $440 million to help close an estimated $1.9 billion spending gap without additional federal stimulus dollars.<ref>[http://www.boston.com/news/local/massachusetts/articles/2011/05/27/mass_senate_oks_305_billion_state_budget/ The Boston Globe Mass. Senate OKs $30.5 billion state budget" May 27, 2011]</ref>
The Massachusetts House approved a $30.4 billion budget for FY2012 on April 28, 2011, which was $94 million less than Patrick's proposal.<ref name=approves>[http://www.boston.com/news/local/massachusetts/articles/2011/04/28/mass_house_approves_304b_state_budget_proposal/ The Boston Globe "Mass. House approves $30.4B state budget proposal" April 28, 2011]</ref><Ref name=house>[http://www.boston.com/news/local/massachusetts/articles/2011/04/13/mass_house_to_release_2012_state_budget_proposal/?rss_id=Boston.com+--+Local+news The Boston Globe "Mass. House releases $30.4B 2012 state budget plan" April 13, 2011]</ref>  The House's budget used $103 million that otherwise would be transferred into the Rainy Day Fund, in addition to the $200 million they proposed withdrawing from the fund.<ref>[http://www.businessweek.com/ap/financialnews/D9MIUFB81.htm Businessweek "Mass. House releases $30.4B 2012 state budget plan" April 13, 2011]</ref>  It also cut $800 million from MassHealth, the state's Medicaid program.<ref name=approves/>
The House budget agreed with the governor's proposal to cut $65 million in local aid.<ref name=approves/>  The House plan included $337 million in revenue initiatives, such as postponing for one year a tax deduction for certain businesses.<Ref name=house/>
===Governor's proposed budget===
Overall, the governor's proposed budget relied on cuts and savings to close $1.3 billion of the budget gap, and also relied on $360 million in temporary revenues, such as using $200 million from the state stabilization fund, and anticipated $244 million from modest tax reforms and other revenue initiatives.<ref>[http://www.massbudget.org/documentsearch/findDocument?doc_id=775 Massachusetts Budget and Policy Center "Budget Monitor: The Governor’s Fiscal Year 2012 Budget" Feb. 3, 2011]</ref>
Patrick's spending plan for the fiscal year starting July 1 withdrew $200 million from the Rainy Day Fund, leaving $569 million in cash reserves.<ref name=unveils>[http://abcnews.go.com/Business/wireStory?id=12769230 ABC News "Gov. Patrick Unveils $30.5B Mass. Budget" Jan. 26, 2011]</ref>  The proposed budget also reduced the state work force by as many as 900 jobs.<ref name=unveils/>
Reductions in Patrick's proposed budget included a $23 million cut to emergency homeless shelters, a $16 million cut to the Department of Mental Health hospital and a $45 million reduction in spending by using salaried lawyers instead of private attorneys to represent the state's indigent criminal defendants.<ref name=unveils/>
To raise revenue, Patrick proposed a surcharge of $2.50 to $2.75 per year on the state's 3.1 million private auto insurance policies to generate funds for training police as well as the expansion of the state's $0.05 bottle deposit law to containers of water, flavored water, coffee-based drinks, juices and sports drinks to generate $20 million per year.<ref name=proposes>[http://www.masslive.com/hampfrank/republican/index.ssf?/base/news-30/1296807384255530.xml&coll=1 The Republican "Patrick proposes new tax, fees" Feb. 4, 2011]</ref>  However, House Speaker [[Robert DeLeo|Robert A. DeLeo]] said he opposed any new taxes or fees.<ref name=proposes/>
==Budget transparency==
==Budget transparency==

Revision as of 07:02, 23 April 2014

Massachusetts state budget

Flag of Massachusetts.png
Budget calendar:  Annual
Fiscal year:  2013
Date signed:  July 8, 2012
Financial figures
GF expenses:  $30.9 billion
All funds expenses:  $32.2 billion
Other state budgets
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Governor Deval Patrick signed the Massachusetts state budget into law on July 8, 2012, ten days after lawmakers sent it to him on June 28, 2012.[1] Accounting for both general fund and non-general fund monies, the FY2013 "all funds" budget totaled $32.2 billion.[2] FY2013 began on July 1, 2012, and with no budget signed into law, legislators passed a temporary spending measure to keep the state government operational.[3]

The state operates on an annual budget cycle and is currently in FY2014.[4] The state's fiscal year begins July 1.

As of 2012, Massachusetts had a total state debt of approximately $102,258,050,000, when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans and the state budget gap.[5] The 2012 total state debt was higher than the prior year's total of $97,940,986,000.[6]

As of 2012, Massachusetts's total state debt per capita was $15,522.96.[7]

Proposed fiscal year 2014 state budget

On January 25, 2013, Governor Patrick unveiled his $34.8 billion proposed FY2014 state budget.[8]

The proposal represented a 6.9% increase over FY13.[9] The proposal made no significant cuts and instead increased spending across state government.[8] To fund the spending, the governor proposed to raise taxes by $1.9 billion and to withdraw $400 million from the state’s reserve fund. Funding increases included:

  • $553 million for education, from early childhood programs through college, with elementary and secondary schools seeing at last $25 more per student;[8]
  • $269 million more for transportation;[8] and
  • $31 million in local aid for basic services.[8]

The governor wanted to increase the income tax and cut the sales tax.[10] The governor's tax changes would:

  • Increase the income tax from 5.25% to 6.25%;[8]
  • Cut the sales tax from 6.25% to 4.5%;[8]
  • Double the personal income tax exemption;[8]
  • Eliminate 44 income tax deductions — for T passes, college scholarships and dependents under 12, among other items;[8]
  • Tie the gas tax to inflation, ensuring gradual ­increases;[8] and
  • Get rid of three corporate tax breaks.[8]

Budget transparency

See also: Evaluation of Massachusetts state website

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."[11][12]

The state maintains the Massachusetts Transparency website.

Criteria for evaluating spending databases
State database Searchability Grants Contracts Line item expenditures Dept./agency budgets Public employee salary
Massachusetts Transparency Y
600px-Yes check.png
600px-Red x.png
600px-Red x.png
600px-Yes check.png
600px-Yes check.png
  • Vendor contracts are listed in the checkbook.[13]
  • Employee salaries are listed.[14]
  • All line item expenditures are not listed in the checkbook.

Multi-measure budget transparency profile

The Institute of Government and Public Affairs at the University of Illinois has created a multi-measure transparency profile for Massachusetts, which measures state transparency as of September 2011 using indicators from a range of organizations, including Sunshine Review. These indicators measure both website transparency and other recognized facets of governmental transparency. In addition, IGPA presents 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.[15]

In addition to the individual state profile, IGPA offers a 50-state comparison.[16]

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.[17] 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.[17]

Budget background

Massachusetts's fiscal year runs from July 1 to June 30 of the following year. According to the Massachusetts Constitution, the governor must propose a budget for the next fiscal year within three weeks after the legislature convenes, which translates into the fourth Wednesday of January.[18]

Step 1 : Governor’s Budget

  • The budget begins as a bill that the Governor submits in January (or February if at the start of a new term) to the House of Representatives.

Step 2 : House Ways & Means Budget

  • The House Ways and Means Committee reviews this budget and then develops its own recommendation.

Step 3 : House Budget

  • Once debated, amended and voted on by the full House, it becomes the House budget bill.

Step 4 : Senate Ways & Means Budget

  • At this point, the House passes its bill to the Senate. The Senate Ways & Means Committee reviews that bill and develops its own recommendation.

Step 5 : Senate Budget

  • Once debated, amended and voted on, it becomes the Senate's budget bill.

Step 6 : Conference Committee Budget

  • House and Senate leadership then assign members to a joint "conference committee" to negotiate the differences between the House and Senate bills. Once that work is completed, the conference committee returns its bill to the House for a vote. If the House makes any changes to the bill, it must return the bill to the conference committee to be renegotiated. Once approved by the House, the budget passes to the Senate, which then votes its approval.

Step 7 : Vetoes

  • From there, the Senate passes the bill to the Governor who has ten days to review and approve it, or make vetoes or reductions. The Governor may approve or veto the entire budget, or may veto or reduce certain line items or sections, but may not add anything.

Step 8 : Overrides

  • The House and Senate may vote to override the Governor's vetoes. Overrides require a two-thirds majority in each chamber.

Step 9 : Final Budget

  • The final budget is also known as the General Appropriations Act. The final budget consists of the Conference Committee version, minus any vetoes, plus any overrides.[19]

Budget figures

The following table presents Massachusetts's spending history. The figures used are in millions of dollars:[20]

Fiscal year Nominal government spending Real government spending Real change from prior year
2008 31,694.416[20] 34,213.722[20] 0.1%
2007 29,913.923[20] 34,194.834[20] 7.5%
2006 26,592.198[20] 31,811.763[20] 0.6%
2005 24,846.982[20] 31,610.590[20] 0.8%
2004 23,331.771[20] 31,350.891[20] -2.2%
2003 23,011.620[20] 32,046.556[20] -4.7%
2002 23,289.777[20] 33,617.370[20] 0.7%
2001 22,655.934[20] 33,396.954[20] n/a

Historic General Appropriation Act (GAA) Budget Levels:[21]

FY 2010 $27.0 billion
FY 2009 $28.2 billion
FY 2008 $26.8 billion
FY 2007 $25.7 billion

Accounting principles

See also: Massachusetts government accounting principles

Joseph DeNucci has been the Auditor of the Commonwealth of Massachusetts since 1987. The Office of the Auditor of the Commonwealth publishes its audit reports online and is responsible for:[22]

  • 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.

The Institute for Truth in Accounting (IFTA) rates Massachusetts “timely” in filing the state’s Comprehensive Annual Financial Report (CAFR) – the annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Massachusetts' CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[23] Massachusetts's CAFRs are published online by the Comptroller of the Commonwealth of Massachusetts.


As of 2013, Massachusetts has received over $7 billion in federal funding.[24]

Public employees

See also: Massachusetts public employee salaries
See also: Massachusetts public pensions

According to 2011 U.S. Census data, the state of Massachusetts employed a total of 114,104 people.[25] Of those employees, 81,246 were full-time employees receiving net pay of $415,142,357 per month and 32,858 were part-time employees paid $46,329,996 per month.[25] More than 46% of those employees, or 52,489 employees, were in education or higher education.[25]

See also

External links

Additional reading


  1. The Boston Globe "Patrick signs $32.5b state budget bill" July 8, 2012
  2. FY2013 Final Budget
  3. Boston.com "Mass. Gov. Patrick, aides study state budget plan" July 3, 2012
  4. National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting" April 2011
  5. State Budget Solutions "State Budget Solutions' third annual State Debt Report shows total state debt over $4 trillion" Aug. 28, 2012
  6. State Budget Solutions “Report reveals aggregate state debt exceeds $4 trillion” Oct. 24, 2011
  7. State Budget Solutions "State debt more than $37,000 per private worker, $13,000 per capita" Oct. 2, 2012
  8. 8.00 8.01 8.02 8.03 8.04 8.05 8.06 8.07 8.08 8.09 8.10 The Boston Globe "Patrick proposes $34.8b budget" Jan. 25, 2013
  9. Press Release by Gov. Patrick "Patrick-Murray Administration files Fiscal Year 2014 Budget" Jan. 23, 2013
  10. The Hartford Courant "States Taking Different Approaches On Taxes, With Malloy Offering Few Clues" Jan. 28, 2013
  11. Massachusetts Budget Browser
  12. Massachusetts Budget and Policy Center
  13. Checkbook
  14. Payroll
  15. Institute of Government and Public Affairs at the University of Illinois - Multi-measure Transparency Profile for Massachusetts
  16. IGPA 50-state Transparency Comparison
  17. 17.0 17.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
  18. The Official Web site of the Commonwealth of Massachusetts, retrieved October 26, 2009
  19. The Official Web site of the Commonwealth of Massachusetts, retrieved October 26, 2009
  20. 20.00 20.01 20.02 20.03 20.04 20.05 20.06 20.07 20.08 20.09 20.10 20.11 20.12 20.13 20.14 20.15 20.16 Massachusetts Budget and Policy Center, Online Budget Database, results derived when searching for "Select All Items" between the years 2001 and 2008
  21. Massachusetts Office of Administration and Finance, "Historical Budget Summary," accessed October 26, 2009
  22. Office of the Auditor of the Commonwealth, "Authority/Responsibility," accessed October 26, 2009
  23. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  24. Recovery, "Stimulus Spending by State"
  25. 25.0 25.1 25.2 Massachusetts Public Employment U.S. Census Data