Thursday, July 7, 2011
House and Senate Pass Balanced FY12 Budget, Canton's Representative and Senator Weigh In

Budget Promotes Cautious Spending and Increased Efficiency
Representative William C. Galvin (D-Canton) and Senator Brian A. Joyce (D-Milton) are pleased to announce the passage of 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. 
“This was a very difficult budget cycle, but despite the circumstances we were able to increase local aid and deliver a responsible budget on time without raising taxes,” stated Representative Galvin. 
“While the federal government continues to accrue debt, this state budget is balanced and fiscally prudent. Given limited resources and a challenging economy, we made targeted economic investments and by necessity, some very difficult cuts,” said Senator Joyce.
The budget increases Chapter 70 funding by $140 million and SPED Circuit Breaker funding by $80 million over their FY11 appropriations.  The plan also preserves services for some of the neediest residents of the Commonwealth by focusing limited resources for the Department of Mental Health, early intervention services and public safety initiatives.
Selected highlights of the budget agreement include:

  • Funding for the Massachusetts Hospital School and $100,000 for the Norfolk County Dispatch Center;
  • $213 million for special education circuit breaker funding, an increase of $80 million over FY11;
  • Full funding for the state’s inpatient mental health beds, club houses and mental health community services;
  • Full funding for the Early Intervention program that addresses developmental delays in children ages 0-3;
  • Increased funding for the State’s Veteran Outreach Centers and Veterans homeless shelters by 10% at $1.91 million and $2.29 million, respectively;
  • Regional School Transportation was funded at $43.52 million, an increase of $3 million from FY11, allowing school districts to receive a reimbursement rate of 61%.

The budget also includes new policy initiatives, including a plan to reform municipal health insurance that provides savings for cities and towns while ensuring that employees and retirees have a strong voice without a veto. The conference report allows municipalities to alter co-payments, deductibles and other plan design features so long as such features are no greater in dollar amount that those offered by the Group Insurance Commission (GIC)  plan with the largest subscriber enrollment. The GIC provides health insurance to state workers and legislators.
The municipal employee health reform plan does not alter collective bargaining rights associated with premium splits. Furthermore, as a local option proposal, cities and towns will not be required to implement plan design changes for employees. Rather, municipalities will have the option to implement or abstain from plan design changes.
Additional policy initiatives include:

  • A requirement that 25% of indigent defense be provided by public defenders by the end of FY11.  The substantial increase in the number of public defenders will help control costs, while maintaining the quality of the existing indigent defense system;
  • The establishment of a new Office of Commonwealth Performance, Accountability and Transparency that will evaluate programs, coordinate grant activity and allow greater transparency.  The office will also have a specific focus on projecting caseloads for a number of state programs;
  • Includes three new initiatives that will provide state agencies with resources necessary 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 investments will generate revenue and protect government resources;
  • The Conference Committee Report also includes a provision that would return up to $65 million in FY11 Budgetary Reversions for use as onetime, non-recurring local aid payments to close the gap left by painful but necessary cuts;

House and Senate negotiators assigned to resolving differences between the branches’ versions of the budget were faced with the most difficult budget since the economy collapsed in 2008.  Moving forward without the aid of $1.5 billion in federal stimulus funds that has provided relief in past years, legislators relied on funding reductions, ongoing revenue initiatives and one-time revenues to find a balanced approach of cuts and revenues. This balanced approach preserved services for the neediest citizens and targeted programs aimed to provide financial assistance to education initiatives, municipalities and families.
The Conference Report ends the year with a stabilization fund balance that exceeds $800 million, an amount greater than the stabilization fund balance entering FY11.  The budget plan also marks the smallest year to year spending increase in the past decade, creating a spending plan based on transparency, accountability, and performance.
Once enacted, the bill will travel to the Governor’s desk for his consideration.