fy15 house ways and means budget briefing
TRANSCRIPT
HOUSE COMMITTEE ON WAYS & MEANS
FISCAL YEAR 2015
BUDGET BRIEFING
Chairman Brian S. Dempsey Wednesday
April 9, 2014
1
HWM FY 2015 Budget
The HWM FY 2015 budget includes $36.182B in direct appropriations, $1.75B (5%) higher than FY 2014 Estimated Spending, and $191M less than proposed in House 2
This budget proposal makes targeted investments in a number of key areas
$125M in local aid for Chapter 70 and UGGA, consistent with the local aid resolution reached with the Senate last month
$61M in new funds for community colleges, state universities and the University of Massachusetts system
$19.1M investment in programs for elders
$9.6M for increased childhood and adult mental health support services
$6.3M investment in substance abuse programs and services
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FY 2014
FY 2014 GAA $34.063B
FY 2014 Total Projected Spending $34.431B
Governor’s FY 2015 Proposal (House 2) $36.373B (5.3%)
HWM FY 2015 Budget Recommendation $36.182B (5.0%)
$34.063B $34.431B
$36.373B $36.182B
$33.5
$34.5
$35.5
$36.5
$37.5
FY14 GAA FY14ProjectedSpending
FY15 House 2 FY15 HWM
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$18.26 $18.54
$20.52 $21.12
$22.12 $23.20
$24.33
$15.0
$18.0
$21.0
$24.0
FY09 FY10 FY11 FY12 FY 13 FY14(estimated)
FY15(projection)
(In Billions)
4
Fiscal Year Tax Collections
FY 2015
Tax Revenues
FY 2015 Consensus Revenue $24.33B
Delay of FAS 109 $45.8M
Tax Settlements $240M
Statutory Transfers
Tax Dedicated to SBA ($782.4M)
Tax Dedicated to MBTA ($811.3M)
Tax Dedicated to Pensions* ($1.79B)
Workforce Training Fund Transfers to Trust ($22.2M)
Non-Tax Revenues
Federal Reimbursements $9.48B
Department Revenues $3.61B
Transfers (Lottery, Fringe Payments, Assessments) $1.84B
5
*Accelerating the timetable of fully funding our long-term pension liability by 4 years, from 2040 to 2036.
Increase the rate by 10% for FY 2015, FY 2016, and FY 2017, then back down to 7% until 2036
Closing the FY 2015 Budget Gap
The HWM budget closes an approximate $935M
budget gap by
$336M in sustainable, ongoing revenue sources
$260M in one-time revenues
Roughly half than the amount included in FY 2014 GAA
Includes a Stabilization Fund draw of $140M, the lowest
draw from the rainy day fund in four years
$339M in cuts from maintenance spending
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Projected FY 2015 Budget Gap
$0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000
Solutions
Budget Shortfall FY 2015 Budget Gap $780M
New
Investments
$155M
One-Time Solves
$260M
Ongoing Revenues
$336M Maintenance Cuts
$339M
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Budget Solves
One Timers
Transfer from Stabilization Fund $140M
Gaming Licenses $53.5M
Delay of FAS 109 $45.8M
Interest from Stab to General Fund $10.7M
Trust Fund Sweeps $10M
Ongoing Sources
Tax Settlement Alignment $240M
OPEB Transfer $75.9M
Slot Revenue $20M
Total One Timers $260M
Total Ongoing Sources $335.9M
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Use of One-Time Resources
$669M
$903M
$667M
$334M $295M
$0
$200
$400
$600
$800
$1,000
FY 12 FY 13 FY14 (Revised) FY15 H1 FY15 HWM
(In Millions)
9
FY 2014 Stabilization Fund Balances 10
$0 $0 $5 $9 $65 $85 $175
$619 $681 $921 $1,018 $1,306 $1,369
$1,461
$7,268
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
(In Millions)
Cost Drivers
$203M Chapter 257 Costs
$163M Annualized from FY 2014
$39.6M FY 2015 Portion
$163M Increase in Long-term Pension Liability
Accelerate funding of pension schedule, increasing the rate by 10% for FY 2015, FY 2016 and FY 2017
Fully fund pensions 4 years faster by 2036, instead of 2040
$141M Increase in Transfers to MassDOT and MBTA
$79.1M Increase in Debt Service
Ch 257 $202.6M
Debt Service $79.1M
FY 2015 Baseline Tax Growth $1.14B
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Remainder
for Budget
$554.3M
MassDOT
$141M
Pensions
$163M
Chapter 257
Chapter 257 of the Acts of 2008 places authority for determination of reimbursement rates for human and social
services with the Secretary of EOHHS
FY 2015 HWM budget includes $163M in Ch 257 annualization
The largest being $124M for Adult Long-term Residential services for DDS
Also contains a Ch 257 $15M reserve
Assumes that Community Based Flexible Supports rates for DMH will not be implemented in FY 2015
FY 2014 H1 funded 50% of the proposed 257 costs – FY 2014 GAA funded 80% of the 50%
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Chapter 257 Investments 13
$19.8M
$127.5M
$202.6M
$0
$50
$100
$150
$200
$250
$300
$350
$400
FY15 HWM
FY14 GAA
FY13 Post 9C
$350M investment over 3 fiscal years
Local Aid
UGGA $945.8M
$25.5M above FY 2014 GAA and House 2
Regional School Transportation $53.5M
$2M above FY 2014 GAA and House 2
PILOT $26.8M
Level with FY 2014 GAA
$500K above House 2
Libraries $23.2M
$920K above FY 2014 GAA
$425K above House 2
Chapter 70 $4.4B
$100M above FY 2014 GAA
Equal to House 2
Circuit Breaker $257.5M
$5M above FY 2014 GAA and House 2
Fully funds 75% reimbursement, assuming 4% growth in SPED costs
Charter Schools $80M
$5M above FY 2014 GAA and House 2
McKinney-Vento $7.4M
Level with FY 2014 GAA and House 2
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UGGA
$936.4
$899.0
$834.0
$899.0
$920.2 $920.2
$945.8
$800
$850
$900
$950
$1,000
FY10 FY11 FY12 FY13 FY14 FY15 H2 FY15Resolution
(In Millions)
15
Chapter 70
$3,869.8 $3,851.2
$3,990.8
$4,171.1
$4,301.2
$4,400.7 $4,400.7
$3,600
$3,800
$4,000
$4,200
$4,400
$4,600
FY10 FY11 FY12 FY13 FY14 FY15 H2 FY15Resolution
(In Millions)
16
House Committee on Ways and Means
FY 2015 Budget Proposal
Targeted Spending Areas 17
Education
In addition to the education local aid reimbursements, this budget includes a number of key investments in other areas of education
$7.5M for child care waitlist remediation, creating an additional 1250 child care slots
In FY14 $15M for waitlist remediation, creating ~3000 child care slots
$15.2M for Expanded Learning Time, a $1M increase over FY 2014
$61M in new funds for community colleges, state universities and the University of Massachusetts, plus an additional $7.1M for collective bargaining agreements
$91.6M for the Scholarship Reserve, a $1M increase of FY 2014
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UMass Funding History
$441.3M
$478.8M
$515.7M $518.8M
$400
$420
$440
$460
$480
$500
$520
$540
FY13 FY14 FY15 H2 FY15 HWM
(In Millions)
19
Higher Ed Campus Support 20
FY 2014
Base Appropriation $208.2M
CBAs $17.5M
Performance Funds $20M
Total $245.7M
FY 2015
Base Appropriation $245.6M
New CBAs $1.5M
Ratified CBAs $3.4M
Performance Funds $13.2M
Total $263.7M
FY 2014
Base Appropriation $204.7M
CBAs $9.8M
Performance Funding $15M
Total $229.5M
FY 2015
Base Appropriation $229.5M
CBAs $5.6M
Performance Funding $7.9M
Total $243M
Community Colleges State Universities
Investing in Science, Technology,
Engineering, and Math
STEM Pipeline $1.5M
Trust fund for STEM initiatives, distributed to STEM regional networks
AP Math and Science $2M
To increase student participation in AP math and science courses in underperforming school districts
STEM Starter Academy $4.8M
Programs in higher education to improve student performance in STEM subjects and connect students with STEM fields of employment
STEM Council Codification
Makes permanent the Science, Technology, Engineering and Math Council that currently exists under the Governor’s executive order
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Housing and Community Development
The HWM budget makes targeted investments that seek to prevent homelessness and reduce reliance on shelter
$60.5M for MRVP, $3M in new funds, plus an anticipated PAC of $12M, creating approximately 1200 new vouchers
In FY 2014 $15.5M in new funds was added and is expected to create 900 new vouchers
$26M for HomeBase, $1.6M in new resources to provide up to $6000 for families at the front door
Additional supports
$500K for RAFT, providing a total of $10.5M
$500K for a new Secure Jobs pilot
$230K for public/private housing partnerships
Provides $120.1M necessary to annualize 650 bed shelter expansion from FY 2014 supplemental budget
Provides funds for 3 hearing officers, with the goal of clearing the backlog of 203 EA appeals
22
Transportation
The HWM budget proposal funds transportation consistently with the Transportation Finance legislation and with House 2, increasing transfers to transportation by $141M over FY 2014
Closes the MBTA and MassDOT operating gaps ($425M)
Continues to dedicate increased gas tax and other revenues to Commonwealth Transportation Fund ($390M)
Devotes additional transportation resources to debt service
23
MassHealth 24
Provides $13.45B for MassHealth
Increases the DSTI transfer to $210M
Provides funding for 345K newly eligible members under ACA
Investment for Providers $112M
$96M for capitated plans including Medicaid managed care plans
$16M for acute hospitals due to inflationary increases
Savings Assumptions $373M
Assumes savings by not implementing higher DSH Rates, pushing ICB grant payments, and freezing rates for certain rehab and chronic disease hospitals, all of which were included in House 2
Additional savings from caseload adjustments
Health & Human Services 25
Department of Developmental Services $1.65B
Increases Family Respite Services to $54.9M, serving an additional 1,447 clients
Includes language to ensure that those who wish to retain employment in sheltered workshops may do so
Creates a $1M Community Based Employment Services Pilot Program
Funds $126M in annualized Ch 257 costs
Department of Public Health $562M
Includes $1M for a feasibility study for the State Lab
Due to the Childhood Vaccine Bill, funding of $53.8M in the Universal Immunization line item is moved off budget
Elder Affairs $269.6M
Increases funding within the Department by $17M
Purchases an extra hour of homemaker services per month per elder
Eliminates waitlist for Elder Enhanced Home Care Services
Increases Supportive Senior Housing Program sites from 31 to 41
Fully restores Service Incentive Grant Program to FY 09 level
Fully funds Naturally Occurring Retirement Communities
Human Service Salary Reserve History 26
$10M
$20M
$11.5M
$10.7M
$0
$10
$20
$30
$40
$50
$60
FY14 Supp
FY14 GAA
FY13 GAA
FY12 Supp
$52.2M investment over 3 fiscal years
Judiciary 27
Trial Court $609.4M
Invests over $5M for new hires and backfilling
Invests $2.7M in Specialty Courts
Funds 8 new specialty courts: 5 drug, 2 mental health and 1 veterans’ court
District Attorneys $107.4M
Receives a 4% increase over FY 2014 GAA
In FY 2014, the DAs were level funded
$500K ADA Retention Fund
Committee for Public Council Service $167.8M
Maintain staffing ratio of 25:75
Requires board approval for increases in management compensation
Public Safety & Security 28
State Police $285.7M
Includes $600K to begin recruitment for a new class of troopers
Municipal Police Training $4.3M
Sheriffs’ Departments $556.6M
Equal funding to House 2, except for Berkshire and Worcester, who were cut in House 2
Department of Corrections $579.7M
$5M for the MA Alcohol and Substance Abuse Center
Includes an outside section requiring DOC to re-procure its food service provider
Substance Abuse
Mental & Behavioral Health
Department of Children & Families
Information Technology
Government Efficiencies & Oversight
HWM Initiatives 29
HWM Initiatives: Substance Abuse
To address the recent surge in overdoses and drug related deaths across the Commonwealth, the HWM budget proposal seeks to build upon the work we have done to combat substance abuse in the last few years
Since FY 2011, the Legislature has made a strong commitment to treating those impacted by substance abuse, continually expanding funding and services
The FY 2015 HWM budget recommendation for the Bureau of Substance Abuse represents a $15.7M (19.4%) increase over FY 2011
The recommendations in this budget attempt to both prevent abuse and treat those who require services
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HWM Initiatives: Substance Abuse
$81M $81.3M $83.7M
$90.5M
$93.4M
$96.7M
$70
$75
$80
$85
$90
$95
$100
FY11 FY12 FY13 FY14 FY15 H2 FY15 HWM
Bureau of Substance Abuse Investments (In Millions)
31
HWM Initiatives: Substance Abuse
Prevention
Restrict Certain Prescription Opioids
Allows the Commissioner, consistent with federal law, to limit the distribution of certain prescription opioids that have no abuse deterrent properties
Prescription Monitoring Program (PMP)
Established by Chapter 244 of the Acts 2012, The PMP tracks prescription drug products with recognized potential for abuse by establishing a provider database to monitor the frequency of the prescriptions
With only 40% of providers currently participating, the system has identified approximately 280 people who were flagged as “doctor shopping”
The $3.7M investment ensures mandatory utilization of the system with all prescribers, including midlevel prescribers
Increase the Maximum Penalty for Heroin Trafficking
To deter heroin distribution, increase the maximum incarceration for heroin trafficking from 20 to 30 years
DA Heroin Pilot Program
$500K investment for education and drug diversion programs
32
HWM Initiatives: Substance Abuse
Treatment Nasal Narcan Bystander and First Responder Expansion $815K
Allows 10 additional municipalities with a demonstrated need and high incidence of overdoses to have First Responders carrying Narcan
Creates 7 new Bystander sites, which distribute Narcan kits free of cost upon completion of training
Section 35 expansion $5.5M
$4.2M to maintain 280 beds under Section 35, previously funded through trust fund
$1.3M for 64 additional beds to reduce the number of people diverted to correctional facilities due to lack of beds
Sober Homes $500K
Establishes a voluntary accreditation program for alcohol and drug free housing to be utilized by state agencies and the trial courts when making referrals
Specialty Courts $2.7M
For 8 specialty courts, including 5 new drugs courts
Includes certification and training for specialty court staff
33
HWM Initiatives: Mental & Behavioral
Health Adult Community Mental Health Services
Increases funding by $7.5M, moving clients off the waitlist
Funding level also maintains services for approximately 249 clients, cut by House 2
Child and Adolescent Mental Health Services
Maintains funding for 200 clients, cut by House 2
Rental Subsidy Program for DMH
$1M increase above FY 2014 GAA and House 2
Maintains the 626 beds in DMH, including 45 beds at Taunton State Hospital
Other Increases
$8M for rate increases to Mass. Behavioral Health Partnership (MBHP) and $207M for Children’s Behavioral Health Initiative (CBHI)
Health Policy Commission
$2M to integrate behavioral health into certification for patient centered medical homes
DPH Emergency Room Reports
Requires a hospital with an emergency room to report certain information, in compliance with HIPAA, on patients who seek emergency treatment for mental health or substance abuse health problems to DPH
34
HWM Initiatives: Department of
Children & Families
Reduces social worker caseload ratios
Further caps the number of children for which one caseworker may be responsible at 28, not more than 10 of which may be in out-of-home placement
$12.6M Investment to Hire 245 FTEs
$2.8M invested in FY 2014 supp to hire 100 FTEs
$9.8M investment proposed in FY 2015 to annualize FY 2014 new hires and employ 145 additional FTEs
Background Checks $200K
Codifies and strengthens DCF background checks by requiring state and national fingerprint-based background checks and Sex Offender Registry checks for all current and future foster parents
Licensing
Within the first 3 years of employment, requires DCF social workers to obtain a certified social worker license, and increases training requirements
35
HWM Initiatives: Department of
Children & Families 36
Management Review
Directs the Office of the Child Advocate, with input from the AG and the IG, to conduct an emergency management audit of DCF to improve its administration
Disqualifications
Prohibits individuals from becoming foster parents if they or other individuals residing within the household have been convicted of child abuse or violent crimes
Medical Screening
Requires DCF to hire licensed medical professionals at each of the department’s regional offices to ensure initial medical screenings of all children entering the department’s care occur within 72 hours
Improved Information Technology
Requires upgrades to DCF communications and information technology and recordkeeping practices, including the ability of case workers to upload photos of clients on an annual basis
HWM Initiatives: Information
Technology Reform
Establishes the Massachusetts Office of Information Technology (MOIT) within the Executive Office for Administration and Finance administered by a Chief Information Officer for the Commonwealth
The CIO shall supervise all IT services of state agencies and set a minimum threshold where any proposed IT expenditure by an agency within an executive office needs to be reviewed and approved by MOIT
All contracts for IT shall require the approval of the CIO
Initiate procurements of IT resources for state agencies and enter into any agreement or contract for the procurement on behalf of a state agency or other governmental entity of the commonwealth, if so authorized
The Massachusetts Health Connector Authority will be considered a state agency for the purposes of MOIT oversight
Creating a centralized approach to Information Technology within the Commonwealth
37
HWM Initiatives: Information
Technology Reform
Consolidation of Information Technology
Agency IT budgets are consolidated under their respective
executive offices
The Secretary of each Executive Office shall, in consultation with
and approval by the CIO, appoint a Director of Information
Technology of the executive office who shall manage all IT
operations within the executive office and supervise all IT
personnel
Each director shall be responsible for evaluating the present and
future IT needs of agencies within their respective executive
offices
38
HWM Initiatives: Government
Efficiencies & Oversight
Hinton Drug Lab: Forensic Advisory Board appointments
Adopts a recommendation by the Hinton Drug Lab Task Force to expand membership of the board by adding forensic scientists and members of the bar with criminal and forensic experience
MA Gaming Commission: Employee Accountability and Internal Control System
Requires the commission to establish a system that closely aligns with the human resources division’s rules and policies on state employee expenses
The system shall include specific policies related to travel expenses and meal reimbursement
39