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Volume 1
- Budget Message
- Issues in Brief
- Budget Recommendations
- Local Aid to Cities and Towns
- Capital Budget and Debt
Volume 2
A Message from the Secretary of Administration and Finance
One of my primary responsibilities as the Secretary of Administration and Finance is to assist Governor Patrick in developing his annual budget recommendation for the Legislature. It is a significant undertaking that involves months of hard work by hundreds of people across state government.
Although the unprecedented fiscal challenges facing the Commonwealth since the recession have made the budget development process particularly challenging over the last few years, I have always enjoyed the process. Each year presents an opportunity to develop new and creative ways to responsibly maintain critical investments and to change the way government does business.
The most gratifying part of the budget development process for me is the opportunity it provides to meet with a broad range of people about every aspect of state government that is funded by the budget. I meet with many state officials responsible for managing state programs and services, and I meet with many stakeholders who depend on the state budget or who are impacted by it. I learn about the successes of the programs in which they have an interest, and I learn about the challenges they face. I learn about how government is helping people, and I learn about how government could be doing better.
Through this process, I am always struck by the important role government plays in people’s lives. I am struck by what government means to people – whether it’s helping their kids get a good education, helping their family get affordable health insurance, helping someone out of work get trained for a new job, helping a child who has been abused find a safe home, helping a homeless family find a place to live, helping make our neighborhoods safer, helping to support our businesses to invest, grow and create jobs or helping in the many, many other ways government helps people.
This year, I heard a consistent theme from the many state officials and stakeholders with whom I met. The last few years of austere budgets have taken their toll. State managers have been pressed to do more with less, and the people who benefit from state programs and services have seen the levels of state service consistently reduced. Not only were people pleading for budget funding in FY 2013 sufficient to avoid putting any additional strain on their programs, in most cases they were asking for increased funding levels to be restored. They know that the economy is growing again and that tax revenues are expected to increase next year, and they want the funding for their programs and services to grow too.
Unfortunately, the commonly-held expectation that the FY 2013 budget will provide sufficient funding to reverse the cuts to programs and services over the last few years is inconsistent with our fiscal reality. While tax revenues are expected to grow next year, they are only growing modestly. At the same time, we project continued growth in demand in our health care and other safety net programs. While we are taking a number of steps to contain growth in costs in these programs, the additional amounts needed to fund growth in costs in these programs and in certain legally-obligated fixed costs will exceed the growth in budgetary resources available to support the FY 2013 budget. As a result, total spending across the rest of state government will actually decrease in FY 2013.
So, the FY 2013 budget recommendation we file today reflects the fact that we have yet another very challenging year ahead of us. The many people with whom I’ve met throughout the budget development process will likely see that their expectations were not met. They will, however, hopefully recognize the following about the Governor’s budget recommendation.
First, they will see that the Governor has once again filed a fiscally responsible budget. The fiscal policies and practices we have put in place to manage through the state’s unprecedented fiscal challenges have set us apart from many other states. We have been recognized by all three rating agencies for our fiscal management through this fiscal crisis. In September, Standard and Poor’s upgraded the Commonwealth’s credit rating to AA+, resulting in all three of the state’s credit ratings being just one notch below the highest possible rating and giving the Commonwealth the highest credit ratings it has ever had. We have the third highest rainy day fund balance in the country, and we propose using only a modest and responsible level of rainy day fund resources in FY 2013. Once again, the Governor’s FY 2013 budget proposal is structurally balanced and sustainable.
Second, the people across the Commonwealth who depend on state government will see that Governor Patrick has once again done everything possible to preserve funding for critical investments. Chapter 70 funding for K-12 education is once again at the highest level in state history, and the budget continues to provide funding for targeted programs to address the achievement gap. Funding for programs to prevent youth violence and to support youth-at-risk is preserved and in some cases increased. Historic levels of investment in infrastructure will support job creation today and lay the foundation for economic growth in the future, and the budget makes critical investments in workforce development to help those in need of jobs develop the skills that our businesses need. The Governor’s FY 2013 budget proposal preserves affordable health care for all of those who need it by once again taking steps to contain growth in our health care costs.
People will also see that Governor Patrick’s FY 2013 budget proposal continues to drive changes in the way government does business. Building on his record of reforms, this budget proposal includes reforms to our community college system to better focus and coordinate the system to give students the skills our businesses need; reforms to the governance and management of our public housing authorities to ensure scarce resources are invested efficiently and effectively; reforms to our corrections system to reduce recidivism and reduce costs; further reforms to our public defender system to reduce costs while continuing to provide effective counsel to indigent criminal defendants; and many other reforms to make government more efficient, such as the way in which we manage and maintain state facilities.
The Governor is also changing the way in which we manage and allocate resources in state government by focusing on measuring performance and outcomes to inform decision-making. He is also driving innovation in government through the FY 2013 budget with initiatives like social innovation financing, the appointment of a Government Innovation Officer and Innovation Advisory Council, and the many ways in which we are relying on technology investments to improve government services while saving taxpayers money. This relentless drive to change the way government does business and to stretch every taxpayer dollar as far as possible is helping to preserve many critical programs and services.
Governor Patrick approaches the budget process with a keen understanding of not only his fiscal responsibility, but also with an understanding that the budget is a statement of our values. The Governor understands that the budget is not a compilation of numbers on a page – he knows that there are people behind those numbers, people who depend on the budget for their health and well-being and for a brighter future. Although the Governor’s FY 2013 budget proposal cannot meet everyone’s hopes and expectations, it reflects the thoughtfulness, effort and values that he has brought to each of the budgets he has proposed during his tenure. I thank the Governor for his leadership and engagement in developing this budget proposal.
I also want to thank Lieutenant Governor Murray and my colleagues on the Cabinet for their leadership and collaboration. They have all been personally engaged in the budget development process and have been critical contributors to ensuring we have a thoughtful and responsible budget proposal.
The Patrick-Murray Administration is fortunate to have strong fiscal partners in the Legislature. Unlike many other states, the Administration and the Legislature have worked collaboratively and responsibly to pass budgets that are balanced, on-time and fiscally responsible in the face of extraordinary fiscal challenges. I thank my colleagues, Chairman Stephen Brewer and Chairman Brian Dempsey, as well as their staffs, for their partnership in managing the Commonwealth’s budget through these difficult times.
Lastly, I want to express deep appreciation, thanks and gratitude to my incredible team in the Executive Office for Administration and Finance for their work on this budget recommendation. They are the hardest working and the most diligent, dedicated, energetic, thoughtful and creative group of people I know. It is an absolute privilege and pleasure to work with them and to be associated with them.
Sincerely,
Jay Gonzalez
Secretary of Administration and Finance
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