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Opaque Massachusetts budget process hides state’s real priorities

January 13, 2017 Leave a comment

In a preview this week of the Fiscal 2018 state budget, the Massachusetts Budget and Policy Center points out a key shortcoming in the budget process.

That process is not transparent, the nonpartisan think tank argues, because it doesn’t provide a needed context for the proposals and decisions that the governor and Legislature make.

As the Budget and Policy Center notes, that needed context lies in the release of a public “maintenance budget” that discloses the projected costs of continuing “current services” from one fiscal year to the next. Without that “maintenance budget” context, it is difficult, if not impossible, for the public to really know whether proposed funding levels are meeting real needs or falling short of them.

The problem can be clearly seen in the current-year funding of group homes operated by the Department of Developmental Services.

Last January, Governor Baker proposed a $3.7 million — or 1.7 percent — increase in the DDS state-operated group home line item. But while that sounds like more funding for those facilities, it was in actuality a cut when adjusted for inflation.  The inflation rate was 1.8 percent, according to the Policy Center’s numbers.

Moreover, the funding increase proposed by the governor for the state-operated group homes was reportedly about $500,000 less than what DDS wanted in order to maintain current services in the residences. That $500,000 figure, however, wasn’t readily available to the public. The figure was casually mentioned by DDS Commissioner Elin Howe during a conference call on the budget last year with advocates for the developmentally disabled.

At the same time, Howe didn’t intend to do anything about that actual shortfall in funding for the state-operated group homes.  As we noted last May, while Howe admitted the funding proposed by the governor for the group homes was inadequate, she also said DDS did not intend to seek an amendment in the House budget to increase that funding. Howe’s response to us was, “we’re just going to have to manage it.”

This is exactly why the maintenance budget disclosure is needed as part of the process. It would give the public a better insight into what the governor and Legislature actually intend with their budget proposals and deliberations.

It appears to us that the DDS mindset is that it is not worthwhile to push even for maintenance-level funding for the state-operated group homes and potentially other state-run programs. That’s because the Department’s ultimate priority or aim, as we see it, is to privatize these services.

Interestingly, the Budget and Policy Center also pointed out that certain other budgetary accounts were underfunded in the current fiscal year, including a human services account that helps fund corporate provider-run or privatized group homes in the DDS system. That account was underfunded by $14.7 million. However, the administration apparently plans to fully fund those accounts next year, the Center noted.

Partly as a result of the unfunded accounts and the use of a host of one-time revenues and temporary solutions to balance the current-year budget, the Policy Center is projecting a $616 million budget shortfall in Fiscal 2018.

The Policy Center’s preview suggested that one of the major reasons for the Legislature’s underfunding of the privatized group home and other accounts was the lack of a publicly available maintenance budget document. The Policy Center points out that 19 other states publish a maintenance budget document, but Massachusetts is not among them.

The Policy Center is also calling for the public release of a baseline tax revenue growth estimate. This sounds like a suggestion that the administration adjust its usual revenue projections to take into account any tax cuts or tax increases that have been enacted.  As the Policy Center noted,

The initial tax revenue growth estimates for FY 2017 were unusually optimistic, but there was no easy way to see that because of the way the estimates were presented.

We concur with the Budget and Policy Center’s recommendations, particularly on the need for disclosure of a maintenance budget. The more information the public has with which to assess the budgetary process, the better off we are, and this appears to be a key piece of missing information.

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We thought there was a state budget deficit

December 1, 2014 1 comment

Given that the Patrick administration is projecting a $329 million state budget deficit in the current fiscal year and is seeking to cut millions of dollars in local aid and other accounts, why are they also proposing more than $42 million in additional funding in the current year for corporate providers that contract with the Department of Developmental Services?

While the administration has made more than $200 million in emergency “9C” cuts  and has proposed additional cuts, it has filed a supplemental budget appropriation to add $42.5 million to the DDS Adult Long-term Residential (corporate provider) line item.  The supplemental funding for the providers, by the way, is listed in the same bill filed by the administration that proposes mid-year cuts in local aid and other accounts.

It’s not as though DDS itself is being spared the funding cuts.  As part of the 9C reductions, two DDS line items are being cut: the Community Day and Work line item by $3 million, and Respite Family Supports by $2.5 million.

But the DDS providers are getting multiple funding increases.  As of July 1, the administration and Legislature had agreed to raise the provider line item by $159 million from the previous fiscal year, pushing it over the $1 billion mark.  The reason for that nearly 20 percent increase in funding in one year was to fully fund higher payment rates to the providers that were agreed to in legislation enacted in 2008 and known as “Chapter 257.”

But even that $159 million increase this year wasn’t apparently enough.  The $42.5 million supplemental appropriation now being sought by the administration is supposedly to make up for a continuing shortfall in fully implementing the Chapter 257 rate increases for the providers.

But why make up that Chapter 257 shortfall now while we’re facing a state budget deficit? Chapter 257 has apparently not been fully funded since it was enacted in 2008, so why is it so important to commit $42 million to it now?

Meanwhile, in light of the planned $42 million increase to the providers, the decision to cut at least one of the two DDS programs –Respite Family Supports by $2.5 million — is especially puzzling.   Respite care involves short-­term, out­-of­-home supports for individuals with developmental disabilities who live at home.  It allows  parents  and  other primary  caregivers  to  handle  personal matters, emergencies, or simply take a break.  In fact, DDS listed its commitment to supporting families who care at home for developmentally disabled individuals as the third of its top five strategic goals for fiscal 2012 through 2014.

The DDS strategic plan goes on to promise that:

The Family Support account will provide the resources needed to provide vital respite care, in-home skills development, social programs and support groups for parents and siblings.

The administration and Legislature had, in fact, approved a $2.5 million — or roughly 5 percent — increase in the Respite Family Supports account as of the start of the fiscal year on July 1.  So taking that increase away now amounts to an effective cut in inflation-adjusted terms in this “vital” program.  The fact that the money is being rescinded in the middle of the year effectively doubles the impact of that cut to $5 million on an annualized basis.

The DDS Community Day line item had been increased by $11.8 million from the previous fiscal year, apparently in part to help fund the transfers of people from sheltered workshops to day programs.  In addition, the Legislature had approved two reserve funds totaling $3 million to help fund that same transfer from sheltered workshops to day and employment programs.

The mid-year cut in the Community Day account of that same $3 million amount may make some sense given that language was approved in the current-year budget preventing the planned closures of sheltered workshops.  If the workshops are going to stay open past this coming June, DDS won’t need the funding they were originally projecting to transfer people to day programs.

But while the Community Day account cut might make some sense, the cut to the Respite Family account seems to make much less sense.  And when considered in light of the extra millions going to the providers, the Respite Family cut seems downright cruel.

In fact, we might take this occasion to ask what happened to the additional $80 to $110 million in Medicaid funding from the federal government that was going to be used to “increase community services and decrease institutional settings in Massachusetts?”  As the Massachusetts Association of Developmental Disabilities Providers stated, “the activities of DDS comprise a significant part of the base for this (additional Medicaid) award…”

If we have received up to $110 million in additional Medicaid funding this year, why not use that to help solve the budget deficit, and at least prevent cuts to critical programs such as Respite Family care?  Moreover, we hope the House and Senate Ways and Means Committees will see fit to put the administration’s proposed $42 million increase in state funding to the DDS providers on hold, at least while we’re dealing with the current budget shortfall.