CHARLES D. BAKER
KARYN E. POLITO
January 27, 2016
To the Honorable Senate and House of Representatives,
The Baker-Polito Administration is pleased to submit our attached budget recommendations for Fiscal Year 2017. This year’s proposal builds upon the successful efforts between the administration and the Legislature in Fiscal Year 2016 to bring state spending in line with revenue growth, reduce our reliance upon one-time budget solutions, avoid tax increases or Stabilization Fund withdrawals, provide over 400,000 low-income working families tax relief through an increase in the Earned Income Tax Credit, and invest in important priorities such as local aid, education, transportation, addressing substance misuse, and the Department of Children and Families.
Our FY17 House 2 budget proposal makes significant progress towards eliminating the long-term structural imbalance we identified last year by reducing the identified gap from $1.8 billion in FY16 to $635 million in FY17. We have reduced the use of one-time budget solutions by nearly $1 billion over the past two years, from $1.2 billion in FY15 to $253 million in FY17. And our budget assumes a sizeable deposit, ranging from $206 million to $282.5 million, into the state’s Stabilization Fund to ensure we are saving money in good economic times to protect us from future economic downturns.
Our proposal also keeps spending growth around 3.5% above the FY16 General Appropriations Act and continues progress in keeping MassHealth spending, which accounts for over one-third of the state budget, to 5% gross growth over the FY16 GAA.
Bringing the Commonwealth’s budget back towards structural balance allows us to continue investments in many important areas.
Keeping our promise to invest in our communities, we propose increasing unrestricted local aid by 4.3%, equal to 100% of the consensus revenue growth rate for state tax revenue. We will continue our successful Community Compact program, which has already provided technical assistance to over 100 communities for best practices in financial planning, economic development, regionalization and other areas.
We are increasing Chapter 70 education funding by $72.1 million, supporting $18.6 million for a redesigned quality kindergarten grant program to assist communities in achieving tuition-free, full-day kindergarten, adding over $20 million to a revised charter school reimbursement formula and boosting support for developing a next generation MCAS by $5.6 million.
Our House 2 proposal builds upon the investments we have made in reforming the Department of Children and Families, by supporting an increase in staffing that will result in 600 new employees at the agency since we took office.
We continue to address the Commonwealth’s substance misuse epidemic by adding 150 adult residential treatment beds and for programs to cover prevention, intervention, treatment and recovery services.
Finally, we are able to continue our commitments to expanded workforce training, early education, public safety, environmental, and transportation programs.
Since the beginning of our administration, we have appreciated the collaborative efforts with the Legislature to address the budget and other critical issues. Our strong working relationship and shared vision to improve the Commonwealth has delivered real results, and we look forward to our continued partnership in the year ahead.
Charles D. Baker
Karyn E. Polito