State plans additions to rainy day fund as FY15 comes to close

The final “supplemental” budget bill for fiscal 2015 being negotiated to officially close the books on the year by Oct. 31 includes contributions to start rebuilding the state’s stabilization fund before the next economic downturn.
 
The current “rainy day” fund balance of almost $1.2 billion is far short of the $2.3 billion total in the fund just before the start of the 2007 recession. Differing House and Senate supplemental budget bills for fiscal 2015 approved through mid-October included new contributions of between $50 million and $120 million.
 
The budget bills, still being negotiated, included funding to cover a deficiency in MassHealth, funding for unbudgeted state snow and ice costs, and funding for various treatment and prevention programs in response to the growing statewide opioid epidemic.
 
The House and Senate bills do not include the recommendation filed in July by Gov. Charlie Baker to provide $25 million to help cities and towns pay for the cost of last winter’s severe snowstorms.
 
The House and Senate bills both included provisions related to payment for municipal emergency ambulance services. Both bills would require direct payment to providers by insurance companies and ban the practice of paying the patient, which has led to fraud and abuse. The House bill clarifies that municipalities are authorized to set a fair rate for ambulance services. The MMA opposes Senate language that would effectively preempt local fee-setting authority and install a state rate-setting system.
 
The final revenue numbers for fiscal 2015 are better than were expected earlier in the year, when the state faced a $1 billion budget deficit that was eventually closed through a combination of spending and revenue measures. State tax collections brought in $24.7 billion last year, nearly $400 million more than expected under preliminary estimates. The Lottery reached $864 million in net profits, about $36 million above the original target for fiscal 2015.
 
Fiscal 2016 has started quietly, with state tax collections roughly on target for the first quarter of the year toward the full-year estimate of $25.6 billion. On Oct. 14, however, Administration and Finance Secretary Kristen Lepore revised downward by $145 million the state’s non-tax revenue projection for the year, including a $22 million reduction in projected revenue from the newly opened Plainridge Park Casino.
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