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Senate and House Pass Balanced Budget for FY12

July 1, 2011

While other states are shutting down and laying off thousands of employees, the Massachusetts Legislature today passed a $30.59 billion spending plan for fiscal year 2012 aimed at increasing government efficiency, cutting costs and shielding essential services. The budget reduces the state’s FY12 Stabilization Fund draw by $15 million and closes a $1.9 billion budget gap with funding reductions, ongoing revenue initiatives and one-time revenues.

“I am happy the legislature was able to deliver a bipartisan, balanced, on-time budget that protects our most vulnerable citizens and delivers much needed education and local aid,” said Senator Karen Spilka (D-Ashland). “The budget gives our partners at the municipal level more tools to meet the fiscal challenges we all face as our economy recovers.”

The budget increases Chapter 70 funding by $140 million and the SPED Circuit Breaker funding by $80 million over their FY11 appropriations. $65 million in local aid will also be made available from unexpended fiscal year 2011 funds to offset the previously expected cuts.

The spending plan also includes no new taxes while preserving services for some of the neediest and most vulnerable residents of the Commonwealth, including the elderly, the disabled, and those with mental health issues.

Included in the budget was Spilka’s “Gift of Life” Act, which creates an individual income tax deduction for citizens of Massachusetts who donate an organ, while living, to another human being. This deduction, of up to $10,000, is to cover expenses incurred from his or her organ donation which have not already been reimbursed. These include travel expenses, lodging expenses, and lost wages by the donor.

“I am so happy that my act was included in the final budget proposal,” said Spilka. “It is vital to ensure that living donors do not incur financial loss for their altruistic organ donation. This legislation will also raise awareness for living organ donations, and help those in need of a transplant to receive an organ in a shorter period of time, ultimately saving lives and the state money every year.”

Selected highlights of the budget agreement include:

  • $213 million for special education circuit breaker funding, an increase of $80 million over FY11;
  • $43.52 million increase in funding Regional School Transportation, an increase of $3 million from FY11
  • $26 million for PILOT program, which reimburses cities and towns in lieu of taxes on state-owned land, an increase of $2 million over FY11;
  • $6 million in funding for Regional Tourism councils – including fund for the new MetroWest Tourism and Visitors Bureau, created by the 2010 Economic Development Reorganization Bill;
  • $850,000 for Regional Economic Development Organizations, created by the 2010 Economic Development Reorganization Bill;
  • $500,000 for science, technology, engineering and math (STEM) education grants
  • $9 million for the creation of a Regionalization and Efficiency Inventive Grant Program
  • 10% increase for funding for State’s Veteran Outreach Centers and Veterans homeless shelters – including $15,000 for the Vietnam Moving Wall Exhibit in MetroWest;
  • $2 million in funding for a new State Police Class to ensure stronger public safety

Policy Initiatives include:

  • A municipal health care proposal that provides strong incentives for municipalities and employees to come to a mutually agreed upon solution to health care benefits with language that ensures the integrity of the negotiation process while protecting retirees, specifying that any cost-saving proposal from a municipality must also include a plan to mitigate or cap the impact of changes on subscribers, specifically retirees, low-wage workers, and heavy users of health care;
  • Establishment of a new Office of Commonwealth Performance, Accountability and Transparency that will evaluate programs, coordinate grant activity and allow greater transparency
  • Three new initiatives that will provide state agencies with the necessary resources to aggressively pursue and recoup unnecessary expenditure of funds and instances of fraud or overpayment – a new auditing and program integrity grant program for state agencies; a line item to support MassHealth auditing and recoveries; and a new unit within the Operational Services Division to conduct vendor audits

The Conference Report ends the year with stabilization fund balance that exceeds $800 million, an amount greater than the stabilization fund balance entering FY11. The spending plan also marks the smallest year to year spending increase in the past decade. This plan, based on transparency, accountability and performance preserves services for the neediest citizens and targets programs investing in educational initiatives, municipalities and families.

The bill has been sent to the Governor’s desk where he has ten days to either sign the budget legislation or send it back to the Legislature.

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