Massachusetts state budget

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Massachusetts faced a $1.1 billion deficit for FY 2009, cutting the total budget from $28.2 billion to $27.5 billion.^[1] Gov. Deval Patrick announced in October 2009 lower revenues than anticipated for the first quarter of FY 2010 will produce a $600 million deficit. 2,000 state jobs may be cut in addition to the 1,400 already eliminated to balance the current year’s budget.^[2]

State Treasurer Timothy P. Cahill, who is also running for governor, criticized the budget figures and measures to date saying the FY 2010 deficit will be $1.4 billion unless stronger measures are taken. Cahill said, "Our budget is built on phantom figures and based on a hope and a prayer." Gov. Patrick’s Secretary of Administration and Finance, Jay Gonzalez, disputed State Treasurer Cahill’s figures, "I don’t know where the treasurer is getting his estimates."^[3]

The FY 2010 budget passed by the General Court of Massachusetts (the commonwealth's legislature) was signed by Gov. Patrick in June of 2009. Gov. Patrick announced on October 15, 2009 a 5-point plan to balance the budget in light of the most revenue figures to include:^[4]

• Executive Branch 9C Cuts: The Governor will review suggested reductions in government programs, so-called 9C cuts, submitted by Executive Branch agencies, and make hundreds of millions of dollars in mid-year cuts.
• State Personnel Impacts: The Governor's plan also calls for greater sacrifices from state employees, including:
  • the possibility of eliminating up to 2,000 positions as a result of programmatic reductions;
  • requiring all Executive Branch Managers to take up to nine furlough days, depending on their salary levels;
  • calling on union leaders to work with the Administration to identify ways union employees can share in this sacrifice to mitigate layoffs and continue to provide vital services.
• Consolidation of Agencies: The Governor has directed his Cabinet to provide to him by the time he files his FY11 budget proposal a plan for consolidating as many different agencies and functions as possible in order to achieve savings and provide services in a more efficient manner.
• Pooling State's Energy Purchases: The Governor has directed all state facilities managers to work with the Executive Office for Administration and Finance and Executive Office of Energy and Environmental Affairs on a plan for centralized energy purchasing, which would greatly reduce state energy costs.
• Expanded 9C Powers and Voluntary Cuts from Non-Executive Branch Agencies: The Governor will seek expanded 9C authority which will allow him to make mid-year reductions to accounts outside of the Executive Branch. He has also asked each constitutional officer to submit a plan to voluntarily reduce their own spending in the current fiscal year at levels consistent with what he is asking of Executive Branch agencies.

[edit] Budget Background

Historic General Appropriation Act (GAA) Budget Levels:^[5]

Massachusetts' 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 3 weeks after the Legislature convenes, which translates into the 4th Wednesday of January. This year, that date fell on Wednesday, January 28, 2009.^[6]

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.^[7]

[edit] Budget figures

The following table presents Massachusetts's spending history. The figures used are in millions of dollars:^[8]

• See Massachusetts state budget (2008-2009) for more details.

[edit] Accounting Principles

Mr. Joseph DeNucci has been the Auditor of the Commonwealth of Massachusetts since 1987. The Office of the Auditor of the Commonwealth publishes their audit reports online and is responsible for:^[9]

• 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.^[10] Massachusetts' CAFRs are published online by the Comptroller of the Commonwealth of Massachusetts Martin J. Benison has been Comptroller of the Commonwealth of Massachusetts since 1999.^[11]

Massachusetts currently has no statewide, official spending database online. However, the Massachusetts Budget and Policy Center, which "provides independent research and analysis of state budget and tax policies,"^[13] tracks actual spending in real and nominal terms using a "Budget Browser," available here.

[edit] Economic Stimulus Package

Massachusetts is expected to receive between $6 billion and $9 billion from the $787 billion economic stimulus package. ^[14] All told, the federal stimulus plan would create or save 75,000 jobs in Massachusetts, based on White House estimates.^[15] For more information on how the federal stimulus funds are being used in the state of Massachusetts, visit the state recovery website.

According to preliminary reports Massachusetts is expected to receive:

• $284.7 million towards transportation projects ^[16]
• $153.2 million for “shovel-ready” projects ^[16]
• $40.7 million to preserve police jobs and prevent other law enforcement cuts ^[17]
• $319 million for rail and bus network improvements ^[17]
• $345 million through the US Department of Housing and Urban Development ^[17]
• $1.6 billion over the next three years in federal Medicaid funding ^[17]
• $800 million in federal education assistance ^[18]

[edit] Budget transparency

Massachusetts currently has no statewide, official spending database online. However, the Massachusetts Budget and Policy Center, which "provides independent research and analysis of state budget and tax policies,"^[19] tracks actual spending in real and nominal terms using a "Budget Browser," available here.

Legislators in favor of transparency, headed by Massachusetts State Senator Cynthia Creem, have introduced a budget amendment that would require the Secretary of Administration and Finance to create a spending transparency website.^[20]

[edit] Legislation

None.

[edit] Government tools

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:

[edit] Economic Stimulus Transparency

• The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.^[21]

• Massachusetts will receive an estimated $3,579,139,180 ^[22]

• The economic recovery website to show how legislators and government officials in Massachusetts are spending Federal funds is available here.

[edit] Public employee salary information

The Boston Herald has this list of state payroll information: Massachusetts 2009 State Employee Payroll

[edit] See Also

Massachusetts taxpayer-funded lobbying

[edit] External links

[edit] Additional reading

• Governor's budget, Fiscal Year 2009
• Detailed Budget, FY 2009

[edit] References

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