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fy07 governor's budget: INITIAL ANALYSIS

January 30, 2006

Overview

On Wednesday, January 25, 2005, Governor Romney presented a $25.2 billion state budget proposal for fiscal year 2007(FY07), a 5.3% increase. The primary areas of spending increases go to public education, local aid, environmental programs, and public health (note, however, that most increases do not begin to restore deep cuts made to many health, education and human services programs since FY03). The Governor also renewed his proposal to reduce the income tax rate from 5.3% to 5%.

The Governor's budget proposal serves as the starting point for the state's budget debate and is not binding on the Legislature. The full budget process usually concludes before the beginning of the new fiscal year which begins on July 1, after the House and Senate have debated and determined their own budget plans.

Below is a more detailed preliminary analysis of those areas critical to the four UWMB impact areas:

healthy child development

• Pursuant to law in FY05, the Legislature established the Department of Early Education and Care (EEC). Formerly, child care services for low-income families were provided by the Office of Child Care Services and the Department of Education. The new EEC is responsible for developing a comprehensive early education plan for all preschool children in the state, and will heretofore serve as the sole state agency to administer all early education and care services in the Commonwealth. Child care funding for low-income families is slightly increased to $313.22M, including $2.6M for increased rates for transportation as well as increased child care rates from last year and 2500 new vouchers added through the end of the current fiscal year.
• Many line items within the EEC budget are level funded from the FY06 level, including Community Partnerships for Children ($68.7M), Mass. Family Networks ($5.3M), and the Parent-Child Home program ($2 M).
• The state supplemental line item for the federal Head Start program is cut by almost 20% to $6.15M, which was its FY05 funding level (it was funded at $7.5M in FY06).
• The Governor's budget includes a new appropriation of $3M to provide parenting information and support. In addition, child care resource and referral services are slightly increased to $11M.
• There is also established a new "Parent-Child Care Partnership Program" to assist parents of children ages 0-5 in "nurturing their children's development and education and to strengthen parents' involvement in their children's schooling." Outside Section 82 directs the Board of EEC to create 60-minute mandatory parent orientation sessions for parents with children in state-subsidized child care programs.
• As it was last year, the Children's Trust Fund is now under the Office of Children, Youth and Family Service. The Governor proposes to significantly reduce the Healthy Families Home Visiting Program from $12.24M to $6.35M. This is an important priority for UWMB, as we had been instrumental in advocating for the creation and expansion of this program for first time parents under the age of 21.
• Within the Department of Education, the Governor's budget level funds full day kindergarten ($25M).
• Within the Department of Public Health, Healthy Start prenatal services are slightly cut to $15.97M, while the state's contribution to the WIC program is slightly increased to $13.2M. Slight increases are also included in early intervention ($31.46M), and Child and Adolescent Mental Health Services, up approximately $1M to $72.42M. These programs address the social - emotional domains of child development and coincide with UWMB's strategic direction in the Healthy Child Development impact area.
• The Children's Medical Security Program is decreased by $2.85M from the amount in the FY06 final budget and is proposed for $18.23M. This has been an important priority for UWMB as we had been instrumental in advocating for the creation of this program, which seeks to provide children with guaranteed access to healthcare.

youth

• With regard to UWMB's priority for funding out-of-school time, this budget does not reinstate or include a state funded line item specifically dedicated to afterschool or out-of-school time. Children ages birth through age 12 (age 16 for special needs) are eligible for subsidies/ vouchers from the low-income child care line item (now in the Early Education and Care Department). However, this source is distributed to priority families without regard to age except in determining overall eligibility. In addition, youth ages 13 to 18 fall outside this eligibility. In the past, some of the MCAS academic support funding was used for afterschool programming, but it is now strictly for tutoring youth to pass MCAS.
• The line item that provides matching grant funding for youth development programs through nonprofit organizations such as the Boys & Girls Clubs is level funded at $2M.
• The Governor's budget includes $25M for Extended Time Learning grants, to enable districts who applied for planning funding this past year to implement their plans to extend the school day.
• The final FY06 budget included $250,000 for the Latino After School Initiative, earmarked within the Division of Substance Abuse Services. The Governor's budget does not earmark funding for the Initiative.
• The Governor includes a new line item (funded at $1M) to provide grants to school districts for the development of a "parent-school partnership program."

sustainable employment

• Adult Basic Education is funded at $29.37M, more or less level funding from FY06 levels. In his budget proposal last year, the Governor proposed increasing the ABE line item to $35.81M, citing the need to reduce the long waitlist that has prevented many individuals from receiving this key employment assistance over the last several years.
• The Employment Service Program, which provides for education and training for welfare recipients, receives a $10M increase totaling $31.09M (plus $3M that could be available in retained revenue from federal food stamp reimbursements. With the Governor's proposed reforms to welfare, it is anticipated that this funding increase is designed to cover the expenses of an increased caseload of non-exempt recipients now required to participate in such work activities. The proposed reforms were recommended in the Governor's budget last year, but rejected by the legislature, and include the elimination of exemptions from the work requirement and time limit for parents with children between the ages of 1 and 2 and an elimination of housing search as a work activity for parents living in family shelter.
• The Governor's budget level funds the Workforce Training Programs line item at $21M. This provides for grants and technical assistance administered by the Department of Workforce Development. Other grants administered by Department of Workforce Development for industry-driven training, funded last year at $4M, have been discontinued.
• One Stop Career Centers receive a $2M increase, now funded at $6M.

affordable housing

• Governor Romney reduces funding for the Massachusetts Rental Voucher Program by $2M to $24.28M. The "extra" $2M provided by the legislature last year, was used to stabilize rents levels and allow vouchers to be reissued to new households waiting for housing. The Governor's budget recommends several major changes to the administration and eligibility requirements of this program. First, DHCD would no longer be required to reissue MRVP mobile vouchers when they turn over. Further, people would only be able to participate in the MRVP for a total of five years, or 36 consecutive months. A weekly work requirement would be added, ranging from 20-30 hours depending upon the age of the youngest household member. The proposal also eliminates the provision that tenants pay no more than 40% of their income toward rent.
• Residential Assistance to Families in Transition (RAFT), a homelessness prevention program, was reduced by $2M to $3M. Since the program began in 2004, RAFT has prevented more than 3,000 families from becoming homeless by stabilizing their housing situations. In FY05 and FY06, RAFT funds were exhausted before the end of the fiscal year.
• The Emergency Assistance account, which provides funding for the family shelter program, has been level funded at $73.5M. The Governor's proposal also limits eligibility to those families at or below 100% of the federal poverty line. (eligibility had been raised from 100% to 130% FPL during last year's budget cycle.)
• Housing Services and Counseling Services, including funding for nine Consumer Education Centers has received a slight increase and is funded at $1.5M.
• The Governor's budget establishes a new statewide Individual Development Account (IDA) program for households in state subsidized housing. Funds may be awarded to community-based organizations to establish local IDA programs. UWMB has recently secured a $500,000 federal grant to establish IDA programs. We had also entered into discussions with various government agencies and other foundations on growing these private-public partnerships.