OFFICE OF THE GOVERNOR
COMMONWEALTH OF MASSACHUSETTS
STATE HOUSE ▪ BOSTON, MA 02133
CHARLES D. BAKER
KARYN E. POLITO
January 25, 2017
To the Honorable Senate and House of Representatives,
The Baker-Polito administration proudly submits our third budget recommendation since taking office. The Fiscal Year 2018 (FY18) House 1 budget proposal keeps the Commonwealth on a path of fiscal responsibility, essentially achieves our stated goal of bringing the state budget into structural balance, addresses long-term obligations, and funds important priorities.
House 1 responsibly budgets for a $98 million deposit to the Stabilization Fund, accounts for a scheduled income tax rate reduction, provides a tax credit for businesses with 100 or fewer employees who hire veterans, and invests in important priorities such as addressing substance misuse, the Department of Children and Families (DCF), local aid, education, workforce skills and job training, and homelessness.
For FY18, we are pleased to make continued progress on our long-term goal of structural balance, reducing the use of one-time, non-recurring budget solutions from $1.2 billion in Fiscal Year 2015 to under $100 million in FY18, or more than 90%. Coupled with our new, more practical approach to building our Stabilization Fund, we have significantly improved the Commonwealth’s fiscal outlook.
Spending increases by 4.3%, or 2.7% net of MassHealth revenue, over the Fiscal Year 2017 projected spending. We propose a comprehensive approach targeting affordability, flexibility, program integrity, and employer contributions to manage the spending and enrollment growth of MassHealth, which is now nearly 40% of the state’s annual budget.
House 1 continues to support several important administration priorities. Spending at DCF has increased by $114 million to support the hiring of almost 600 new employees. House 1 continues this support with a $26.9 million increase in FY18. Since taking office, we have also increased spending to address substance misuse by 50%, from $120 million to $180 million annually.
Once again keeping our promise to our communities, we propose an increase of 3.9% in unrestricted local aid, equal to 100% of the consensus revenue growth rate for state tax revenue. We propose nearly $7 million for the Community Compact program created in 2015, which has partnered with approximately 250 municipalities to develop best practices such as financial and regionalization planning.
Chapter 70 education funding increases by $91.4 million, including a minimum aid increase of $20 per pupil in each district and effort reduction at under-aided schools. This funding also begins to address the rising cost of health care and retiree benefits in school districts.
We propose spending nearly $200 million on workforce skills and job training in FY18, including a new “Learn to Earn” program that will train and place unemployed and underemployed individuals in occupations in high demand fields.
We continue to address homelessness prevention services by supporting $500 million in funding individuals and families who seek suitable accommodations and permanent housing. Since the start of our administration, we have reduced overall emergency assistance caseload by 22%, and families housed in hotels and motels by over 90%.
Our administration has worked closely with the Legislature to achieve many accomplishments over the past two years, and we look forward to a continued collaboration as we address the critical needs of the Commonwealth.
|Charles D. Baker||Karyn E. Polito|