MassBudget: A first take on the Governor's budget FY 2018
Massachusetts Budget and Policy Center
A First Take on the Governor's Budget
The most significant new initiative in the Governor's budget is a common-sense proposal to address the problem of costs for private sector employee health care being shifted from employers onto state government. Fixing that problem should create a more sustainably balanced budget and reduce the pressure for budget cuts that could harm people and communities across the Commonwealth.
The budget also includes some targeted new investments, such as to reform Bridgewater State Hospital and to increase funding for the Department of Children and Families. It does not, however, propose substantial new investments to make higher education more affordable, or expand access to early education, or fix our transportation systems.
MassBudget will publish a detailed examination of this budget early next week. Based on our first look, these are a few of the more significant elements proposed by the Governor's budget:
Creates a $2000 per employee assessment on employers of 11 or more (full-time equivalent) employees who fail to provide health insurance for their employees. Massachusetts' health reform law had included a similar assessment (at a lower amount) previously. That assessment was repealed and subsequently we have seen an increase in the costs incurred by MassHealth to pay for health care for employees not receiving health care coverage from their employer. The proposed assessment could encourage employers to provide coverage and provide revenue to offset state costs when employers don't provide coverage.
Leaves early education funding essentially flat - increasing by 0.1 percent to $568.0 million, a funding level unlikely to decrease a waitlist of over 23,000 kids across Massachusetts.
Increases Unrestricted General Local Aid to cities and towns by $39.9 million, a 3.9 percent increase over FY 2017 levels, but still 40.5 percent below its FY 2001 level, adjusting for inflation.
Makes short-term online rentals - like those available through websites such as Airbnb and VRBO - that are rented 150 days or more during the previous calendar year, subject to the same room occupancy tax applied to regular hotel and motel rooms. The proposal is similar to but narrower than one put forward last year by the Senate (see MassBudget's factsheet on this earlier proposal). The Administration estimates this proposal would generate some $12 million in FY 2018.
Increases Chapter 70 Education Aid for local schools by $91.4 million (2.0 percent), roughly in line with the projected rate of inflation. This is less of an increase than has been provided in the state budget in the past couple of years.
Reduces state aid for MBTA operations by $60.0 million below FY 2017 levels, while making this sum available to the transit agency's capital budget. In other words, this is a transfer from funds available to pay for regular spending such as for electricity, salaries, and supplies; but provides additional funds avail for one-time expenditures, such as for contracting repairs or purchasing new buses or signal systems.
Significantly increases funding by $16.7 million (222.6 percent) for the Turning 22 program under the Department of Developmental Services. This program pays for a share of services provided to eligible young adults with disabilities during their transition year from services that they are no longer eligible for upon turning 22.
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.
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