Finance Committee - Agenda - Jan 8, 2019

The next Finance Committee meeting is scheduled for Tuesday, Jan 8 at the Franklin Senior Center, 10 Daniel McCahill Street, Franklin, MA 02038.

This will be first of two meetings to review the Capital budget. You may recall that these capital budget hearings are usually held in November/December. The hearings are late this year as the State was late to certify the free cash total for Franklin.

Free cash is neither free nor cash. It is the accounting result of under spending what was authorized for the prior year's budget expenses, and receiving more revenue than had been forecast in the FY 2018 budget. 

Franklin has historically used the free cash amount to build the individual stabilization funds (general, recreation, fire truck, etc.) and to fund the capital needs for the Town departments.


Capital budget presentations are scheduled from

• Fire
• Police
• Public Works
• Sewer Enterprise
• Water Enterprise

On Tuesday, Jan 15, capital budget presentations are scheduled from

• Schools
• Facilities
• Technology
• Recreation

After hearing all the presentations, the Finance Committee will vote to recommend some or all of these (with or without modifications) to be brought to the Town Council for their review and vote.

The complete agenda documents for the Jan 8 and 15 meetings can be found on the Town of Franklin pages

Jan 8
https://www.franklinma.gov/sites/franklinma/files/agendas/2019-01-08_finance_committee_agenda.pdf

Jan 15
https://www.franklinma.gov/sites/franklinma/files/agendas/2019-01-15_finance_committee_agenda.pdf

Finance Committee - Agenda - Jan 8, 2019

Insights from the Audit Report 2017

The Audit Report for Fiscal Year 2017 does not have a "Management Letter" this time around. Hence, one can easily say the Town is in the best financial position from a control perspective than ever before.

The Audit Report is a good source of information, not just data.

How much stabilization money do we have?
At the end of 2017, the total was $6.7M a decrease of $1.3M primarily due to the use the purchase of the fire truck and the resurfacing of the turf fields. Both have stabilization accounts where we were saving for this expected purchase. (See the table at the top of page 10 of the printed doc, page 13 of the PDF for details).

How much did the FY 2017 budget change during the year?
You might be surprised to find that we added $3.9M to the budget but that was primarily due to the use of the "free cash" from the prior year. The expenditures for the fire truck and turf fields helped to contribute to this as money from "free cash" was added to what was saved in their respective stabilization accounts to provide the total for each purchase. (See General Fund Budgetary Highlights on page 10 of the printed doc, page 13 of the PDF for details).

How many stabilization funds do we have and what amount is in each?
Other than the agenda doc for each Finance Committee meeting which shows the current total during the fiscal year, this is one place to see that answer. The table also shows the change in funds along with the change in amounts over the years from 2008 to 2017. (See section G. Stabilization Funds on pages 11-12 of the printed doc, page 14-15 of the PDF for details).

How do we get "free cash"?
"Free cash" is neither free nor cash. It comes from two sources. (1) You receive more revenue than you budgeted for (2) you spend less than you budgeted for. You can see this effect in the table on See General Fund Statement of Revenues and Other Sources, Expenditures and Other Uses - Budget and Actual, for the year ended June 30, 2017. According to this, we should have $2.9M 'free cash' to use for FY 2018 which is less than we had available in FY 2017 (recall the $3.9M). (See page 19 of the printed doc, page 22 of the PDF for details).


You can find the audit report on the Town of Franklin webpage as part of the Town Council agenda for the January 24 meeting.
http://www.franklinma.gov/sites/franklinma/files/mai/files/2017_audit.pdf

Insights from the Audit Report 2017

MassBudget: Explaining the State Budget for FY 2018 Including Veto Overrides

MassBudget Information. Participation.  Massachusetts Budget and Policy Center Democracy. Explaining the State Budget for FY 2018 Including Veto Overrides In the Massachusetts Budget and Policy Center's latest Budget Monitor, "The State Budget for FY 2018 Including Veto Overrides," we see the Fiscal Year 2018 (FY 2018) budget season ending much the way it started: with our state facing difficult fiscal conditions and unable to make the kinds of long-term investments that could significantly improve the quality of life in Massachusetts and expand opportunity in all communities. At this point in the process -- after the Legislature enacted the budget, the Governor made a number of line item vetoes, and the Legislature overrode virtually all those vetoes and approved some supplemental funding -- we have a state budget that makes some modest investments, particularly in education, child welfare, and in addressing substance use disorders. The budget, however, continues to rely significantly on temporary fixes: counting 13 months of sales tax revenue in the 12 months of FY 2018; underfunding a number of accounts that will eventually need to be funded -- such as paying for snow and ice removal; and a number of similar strategies. Altogether the budget includes about $750 million in temporary revenue and underfunded accounts. This makes it highly likely that the state will continue to face serious fiscal challenges next year. A bright spot, however, is tax revenue growth so far this year has been stronger than projected. If that trend continues, it would reduce the need to rely on temporary fixes this year and would put the state in better fiscal condition next year. In the long term, however, there is a significant danger that the federal government will -- to pay for the costs of federal tax cuts -- impose deep cuts in Medicaid, education, and other services currently funded together by the state and federal governments. This Budget Monitor includes the final funding levels of FY 2017, the current FY 2018 budget, and significant policy changes in each area of the budget. Current 2018 budget levels are also compared to 2001 budget where relevant. For more comprehensive data on historic spending levels for each line item and category of the budget, see MassBudget's Budget Browser. For additional detail on programs in the state budget that affect children see our Children's Budget. Click here to read the full Budget Monitor, "The State Budget for FY 2018 Including Veto Overrides," or click below on individual sections: Child Welfare Disability Services Early Education Economic Development Elder Services Environment and Recreation Higher Education Housing Juvenile Justice K-12 Education Law and Public Safety Libraries Local Aid MassHealth and Health Reform Mental Health Other Human Services Pensions Public Health Revenue (tax and non-tax) State Employee Health Insurance Transitional Assistance Transportation Additional Line Item Overrides Summary Chart 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 Sent by nberger@massbudget.org in collaboration with Try it free today

screen grab of MassBudget webpage

MA Senate Overrides Budget Vetoes; Restores Funding for Education, Public Health, Other Statewide Services

The Senate today (Thursday) restored $24.9M to the Fiscal Year 2018 budget, overriding 26 of Governor Baker's line item vetoes, which totaled $320.6M. These veto overrides bolster valuable programs for children, families and vulnerable residents across the Commonwealth.

"These programs and services provide critical resources for people across the state – from housing support for young people and families, to mental health services for children to basic education and skills training for low income adults," said Senator Karen E. Spilka (D-Ashland), Chair of the Senate Committee on Ways and Means. "The Senate has carefully reviewed vetoes in the context of our difficult fiscal situation and ongoing efforts on health care cost containment. I am confident that the budget remains in balance and cautiously optimistic about revenue collections and potential savings moving forward."

"The Senate's analysis shows that these critical services are necessary and affordable and will go a long way toward supporting working families across the Commonwealth," said Senate President Stan Rosenberg (D-Amherst). "These investments will ensure that the right resources are in place to educate and promote the wellbeing of tomorrow's learners and leaders, while also taking care of our most needy."

The Senate restored funding for several programs that focus on high quality education for everyone, from children at birth to adults making midlife career transitions. Overrides include $200K for the Commonwealth Preschool Partnership Initiative and $850K for adult basic education.

The Senate reaffirmed its commitment to combating the opioid epidemic and advancing public health across the state, restoring $1.3M for early childhood mental health clinicians, $5M for MassHealth Senior Care and $800K to eliminate the waiting list for pediatric palliative care. In recognition of Suicide Prevention Awareness Month, the Senate restored $200K for Samaritans Inc. suicide prevention, intervention, education and outreach services.

Other overrides include:

• $1.9M for the Massachusetts Cultural Council
• $675K for Unaccompanied Homeless Youth Services
• $250K to expand the Housing Court to serve all residents across the state

Live reporting: Finance Committee - 09/26/17

A collection via Storify of the Twitter posts during the Finance Committee meeting on Tuesday, Sep 26, 2017.

Be sure to scroll within the Storify widget to view all the posts.

Next meeting may be part of budget cycle series in 2018, or if something comes up between now and tax rate hearing at end of Nov, there may be another meeting.

"The funding restorations are sustainable"

From the Milford Daily News, articles of interest for Franklin:

"Undeterred by tax collections that are trailing benchmarks two months into the fiscal year, the Legislature is half way toward restoring $275 million in spending that Gov. Charlie Baker vetoed from the annual budget. 

Without debate, the House on Wednesday voted to put back funding for the Tufts School of Veterinary Medicine, a big data fund, and rental assistance among dozens of other priorities. 

House Democrats needed just a few hours to speed through votes overriding a majority of the $320 million that Baker excised in July, when he signed a fiscal 2018 budget that he said had a $39.4 billion bottom line. The spending will be restored if Senate Democrats also agree to the overrides. 

House Republicans who voted to uphold Baker’s vetoes lacked the numbers to stop the overrides and did not seek to persuade Democrats with floor speeches."

Continue reading the article online (subscription may be required) 
http://www.milforddailynews.com/news/20170913/house-overrides-275-million-in-vetoes-by-baker

"The funding restorations are sustainable"

Bilello will not be running for re-election to Franklin School Committee

To repeat my comment from Facebook:  

"Vanessa, thank you! I have great respect for your choice, I wish you all the best!"

You can read her full posting on Facebook:

Franklin's FY 2018 budget by major budget category

Benefits	$10,956,398
Culture & Recreation	$1,399,397
Debt Service	$6,609,708
DPW - Hwy	$4,669,497
Education	$62,586,202
General Government	$9,899,231
Human Services	$691,948
Liability Insurance	$525,000.0
Public Safety	$11,201,434
Sewer	$5,074,368.0
Solid Waste Disposal	$1,949,673.0
Water	$4,748,897.0
Total	$120,311,753

The FY 2018 budget document can be found here

https://drive.google.com/open?id=0B0wjbnXDBhczeFo1Ni1nMmhTcDg

FY 2018 budget resolution can be found here

https://drive.google.com/open?id=0B0wjbnXDBhczVzRZVHlNRUFJWmM

In the News: FY 2018 first month revenues; possible sale tax cut for ballot question

Two articles related to the State budget. One on the revenues generated in the first month of the new fiscal year (FY 2018) and the second on a possible ballot question put forward by retailers to reduce the sales tax in MA. From the Milford Daily News, articles of interest for Franklin:

"The Massachusetts Lottery surpassed the $1 billion mark in net profits for the first time in its history, raking in $1.035 billion in fiscal 2017 despite declining sales, officials announced Monday. 

Estimated sales of $5.093 billion for the fiscal year that ended June 30 dropped below the $5.233 billion in sales the previous year, which marked an all-time high, Lottery executive director Michael Sweeney said Monday at a Lottery Commission meeting. 

The Lottery reported a record high of $915 million in Keno sales, attributing it in part to a continued expansion of agents offering the game. Meanwhile, Powerball sales fell by $47.2 million from fiscal 2016 and instant ticket sales dropped 2.7 percent to $3.5 billion."

Continue reading the article online (subscription may be required)
http://www.milforddailynews.com/news/20170801/sales-and-payouts-down-profits-up-at-state-lottery

"Massachusetts voters in November 2018 may have a major tax cut on their ballot to go along with a proposed surtax on high income households. 

Retail industry officials are poised to file initiative petitions that would reduce the 6.25 percent sales tax rate to either 5 percent or 4.5 percent, the News Service has learned. 

“Massachusetts small businesses that employ thousands of workers are significantly disadvantaged when competing with stores in tax-free New Hampshire and big online retailers,” Jon Hurst, president of the Retailers Association of Massachusetts, said in a statement. “Reducing the state sales tax will help small business remain competitive, while also putting money back in the pockets of those who need it most including seniors on fixed incomes and working class families.”

Continue reading the article online (subscription may be required)
http://www.milforddailynews.com/news/20170801/retailers-will-file-sales-tax-cut-ballot-question

For reference

Governor Baker signs the FY 2018 budget
http://www.mass.gov/governor/press-office/press-releases/fy2018/governor-baker-signs-fiscal-year-2018-budget.html

Franklin Town Council 2nd budget hearing for FY 2018 
http://www.franklinmatters.org/2016/05/franklin-ma-town-council-budget-hearing.html

Franklin Town Council approves FY 2018 budget
http://www.franklinmatters.org/2017/05/live-reporting-town-council-budget.html

new turf field surfaces were the result of several years of saving
for the eventual replacement to avoid the one time cost  

MassBudget: Explaining the FY 2018 budget

MassBudget Information. Participation.  Massachusetts Budget and Policy Center Democracy. Analyzing the Fiscal Year 2018 Budget At this point in the process, the Fiscal Year 2018 (FY 2018) state budget looks a lot like the FY 2017 budget. As MassBudget's new Budget Monitor, "Analyzing the Fiscal Year 2018 Budget" explains, the proposed total bottom line is lower than that of the FY 2017 budget, after adjusting for inflation, and we see essentially status-quo funding levels in each major category. Over the coming weeks and into the fall the Legislature will decide on whether to override the Governor's vetoes and whether to accept changes he has proposed or advance new proposals in response to his suggested changes. One major area of the budget remains in limbo: MassHealth, the Commonwealth's Medicaid program that comprises about a quarter of state spending. (While MassHealth is about 40 percent of the total budget, much of the cost of the program is paid by the federal government.) At the beginning of the budget process, the Governor identified a major challenge facing the MassHealth program: cost shifting from private sector employers onto the state MassHealth program as a result of more private sector employees not receiving health care from their employers. To address this cost shifting and help to stabilize the finances of the state MassHealth program, the Governor proposed an assessment on employers that don't meet certain thresholds for providing health insurance for their employees. That assessment would have raised $300 million in revenue in the first year and $600 million or more in future years. The budget enacted by the Legislature included a modified version of the employer assessment recommended by the Governor, but not new changes to MassHealth or the commercial health insurance market he proposed. When signing the budget, the Governor used his authority to send back sections with proposed amendments to ask the Legislature to hold hearings on and adopt his proposed changes to MassHealth along with the employer assessment. The budget uses a conservative revenue estimate for FY 2018, $749 million below the original estimate. It relies, however, on significant amounts of temporary revenue and savings to achieve balance.  This Budget Monitor describes the funding levels and major initiatives in each area of the budget.  It also provides comparisons to earlier versions this year, FY 2017 funding levels, and historic funding levels back to 2001 where relevant. For more comprehensive data on historic spending levels for each line item and category of the budget, see MassBudget's Budget Browser. For additional detail on programs in the state budget that affect children see our Children's Budget.  Click here to read the full Budget Monitor, "Analyzing the State Budget for FY 2018," or click below on individual sections: Child Welfare Disability Services Early Education Economic Development Elder Services Environment & Recreation Higher Education Housing Juvenile Justice K-12 Education Law & Public Safety Libraries Local Aid MassHealth & Health Reform Mental Health Other Human Services Pensions Public Health Revenue (tax and non-tax) State Employee Health Insurance Transitional Assistance Transportation Additional Line Item Vetoes Summary Chart #   #   # 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

Early Education funding down 23% since 2001 (MassBudget graphic) Massachusetts Budget and Policy Center, 15 Court Square, Suite 700, Boston, MA 02108 Sent by nberger@massbudget.org in collaboration with Try it free today