Governor Deval Patrick's Budget Recommendation - House 2 Fiscal Year 2015

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FY 2014 Update

FY 2014 Update

In July 2013, the Governor signed into law the FY 2014 General Appropriations Act (GAA) – Chapter 38 of the Acts of 2013. The FY 2014 budget authorized spending of $34.064 B (or $35.694 B when including the $1.630 B annual pension contribution), a 0.5% increase (or 5.3% with the pension contribution) from FY 2013 actual expenditures of $33.894 B.

FY 2013 Year-End Supplemental Funding for FY 2014

Similar to most fiscal years, total FY 2014 spending was increased upon the adoption of “year-end” FY 2013 supplemental budget legislation, which (along with previous authorizations) authorized $166.7 M in FY 2013 budgetary appropriations (known as Prior Appropriations Continued or PACs) to continue to be expended into FY 2014. The year-end FY 2013 supplemental bill (Chapter 118 of the Acts of 2013) also provided additional supplemental appropriations for FY 2014 in the amount of $220.3 M. Of the $220.3 M in supplementary appropriations, $174 M adjusted the transfer schedule to an off-budget trust fund, the Medical Assistance Trust Fund, to align federal payment authorization with the fiscal year.  This change was the result of a timing challenge rather than an increased obligation. In sum, these changes bring total FY 2014 spending up to $34.450 B.

FY 2014 Original One-Time Resources

When the Governor signed the FY 2014 budget into law, the Executive Office for Administration and Finance (A&F) projected a total of $696 M in non-recurring or “one-time” resources needed to maintain a balanced budget this year.

The largest one-time resource was $350 M of Stabilization Fund (also known as rainy day fund) resources. Other one-time resources include $46 M in delaying the FAS 109 tax deduction and $59 M in utilizing non-budgetary resources, largely in health care related trust funds and from shifting costs to quasi-public authorities for programs in line with their missions.

FY 2014 January Revenue Revision

On January 14, 2014, based on available data on tax revenue collections and economic trends, the Secretary for Administration and Finance revised the tax revenue forecast for FY 2014 to $23.200 B. This represents an increase of $403 M from the $22.797 B tax revenue estimate assumed in the FY 2014 General Appropriations Act (GAA). The revised tax revenue estimate for FY 2014 is within the range of estimates provided by economists and other experts at the consensus revenue hearing in December 2013, and accounts for $281 M in above benchmark year-to-date tax revenue collections, revised economic projections for the remainder of the year and tax law changes including the recent income tax rate reduction. 

As a result of A&F’s ongoing fiscal management, A&F updated its projected one-time resources needed to balance the FY 2014 budget to a total of $667 M. A&F estimates that $31 M of FY 2013 PACs carried into FY 2014 are used to support ongoing costs.

Revised FY 2014 Estimated Spending

The table outlines the changes to FY 2014 spending since the Governor signed the GAA into law, including PACs, supplemental funding and net A&F contingencies (combination of surpluses and deficiencies recognized in A&F’s budget assumptions). All FY 2014 estimated spending amounts used in this document and the Governor’s FY 2015 budget recommendations reflect these assumptions.

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