MassBudget: Analyzing the Governor's Budget for FY 2016

The Governor's Budget starts the Franklin budget process at the state level. Why? Franklin depends heavily on state funding for its local budget. Being aware of what is happening on the state level is a key piece to understanding what Franklin can do with its local budget.

Each department has prepared their capital needs. These will be prioritized and dependent upon what is left of 'free cash' after the shortfall in the snow/ice budget is covered.

Each department has also prepared their operational budget needs which will begin to get reviewed at the Finance Committee before coming to the Town Council for hearings and then a vote to approve the budget in late May or early June. The budget needs to be in place to fund operations for the new fiscal year beginning July 1.

It is note worthy that one of the 'one time solutions' in the Governor's budget is the delay of a payment of $24 million to the state OPEB account. Franklin has an outstanding unfunded liability of about $89 million in our OPEB account. One of the priorities in our budget will be to increase some funding each year to help cover the requirements.

Stay tuned for frequent updates as the budget process develops over the next several weeks.

MassBudget    Information.    Participation.  Massachusetts Budget and Policy Center    Democracy. Analyzing the Governor's Budget for FY 2016 In releasing his state budget proposal (House 1) on Wednesday the Governor identified important priorities: "creating better communities, better schools, and better jobs for all of Massachusetts." House 1 does not, however, propose the types of significant investments in these areas that could make a meaningful difference in the lives of working people across the state. With the budget, the Governor filed a tax reform proposal that would significantly help lower-wage working people across the state: a doubling of the state earned income tax credit. This is a tax credit that increases the after tax wages of people with incomes under about $52,000 a year. The largest benefits go to low wage workers with children. It helps these families to make ends meet and be able to pay for basic necessities like food, clothing and rent. The Governor proposes paying for the increase in the earned income tax credit by eliminating the state's tax subsidies for movie producers. Our Budget Monitor describes the spending proposals in each major section of the budget. One of the most notable features overall is how heavily this budget proposal relies on temporary revenue and savings and on proposals that may prove to provide only temporary savings. As the chart below describes, the budget relies on over $600 million in temporary solutions that will help to balance the budget this year but will leave in place a longer term structural gap.     In addition, the budget counts on $178 million in savings from an early retirement program. This savings estimate assumes that most of the positions of people who retire would not be filled. It is not clear, for reasons we describe in the Monitor, that doing so would be possible, or in the best interests of the Commonwealth. Te read our full Budget Monitor, please click HERE.  The Massachusetts Budget and Policy Center (MassBudget) produces policy research, analysis, and data-driven recommendations focused on improving the lives of low- and middle-income children and adults, strengthening our state's economy, and enhancing the quality of life in Massachusetts. MASSACHUSETTS BUDGET AND POLICY CENTER 15 COURT SQUARE, SUITE 700 BOSTON, MA 02108

Massachusetts Budget and Policy Center | 15 Court Square | Suite 700 | Boston | MA | 02108