FY12 State Budget Discussion

1. FY12 State Budget Discussion Policy and Fiscal Committee November 1, 2010

2. FY2012 – Budget Option Comparison

3. FY2012 – Maintenance Budget *FY11 Admin account includes pending Reserve Draw of $111K for the FY11 CBA increases. **FYII Income Eligible account includes $5M PAC recently passed by the Legislature.

4. FY12 Maintenance Spending Plan 3000-1000 (Admin): $304,859 • Payroll Related: $288,606 • $226K to annualize FY11 Collective Bargaining ($167K), the value of FY11 step increases ($45K) and annualization of Licensor position ($14K). • $81,783K to fund FY12 Step increases ($41K) and FY12 CBA increases ($40K). • ($24K) decrease because amount found in other accounts to support payroll. • Lease Spaces: $37,249: • The leases for the Boston and Quincy offices expire in FY12 (Boston on August 13th and Quincy on December 31st) and must be renewed. Also, the Lawrence lease will increase by $4K in FY12. • Miscellaneous: ($22,700) • $27K for postage, paper, equipment leases and other admin expenses; and • ($50K): Market Rate analysis must be done biannually per CCDF regulations. It will be done in FY11, and is therefore not budgeted in FY12. 3000-2000 (Access Management): $150,000 • Annualized cost to maintain COTS Waitlist system. Child Care Accounts 3000-3050 (Supportive): $7,054,005 • Anticipated historical growth of 8.234% each year 3000-4050 (DTA Related): $8,885,936 • Anticipated FY11 expenditures plus 3% growth 3000-4060 (Income Eligible): $1,401,649 • Maintains existing levels of access (about 55,000 children statewide) in total caseload. Note that spending in the Supportive and DTA related accounts reflects legislative language that there cannot be a wait list.

5. FY2012 EEC Budget Request: Option #1 *FY11 Admin account includes pending Reserve Draw of $111K for the FY11 CBA increases. **FY11 Income Eligible account includes $5M PAC recently passed by the Legislature.

6. FY12 EEC Budget Recommendation: Option #1 Admin Build and Maintain Quality Infrastructure • Step 1: Support maintenance needs of admin account • Value: $304,859 • This figure is based on the cost of negotiated step increases, the value of collective bargaining agreement raises, the cost of lease increases in the Boston and Springfield offices, an increase in the cost of postage, and other minor costs. • There will be staff reductions in FY12 unless funds are restored to the admin account. • Step 2: Rebuild EEC Staffing Infrastructure • Value: $650,505 • Fill 11 positions essential to EEC infrastructure. • We continue to need additional staff to support communication and other roles. • This is the first stage in a multi-year effort to rebuild the EEC staff to levels appropriate to provide quality management and delivery of the EEC mission. • Total Value: $955,364

7. Two Year EEC Staffing Review

8. Support Positions in Fiscal, Policy, Quality Supports, and Communication

9. FY12 EEC Budget Recommendation: Option #1 Non-Admin • 3000-6000: Support QRIS Activities • Value: $4.0M • QRIS raises the standard of care and must therefore be supported with its own annual appropriation. • 3000-6000: Increase Funding for Professional Development • Value: $500K • The FY11 statewide implementation of a professional development network once implemented is expected to have a demand which exceeds current funding. • 3000-6075: Return Mental Health to FY10 Funding Level • Value: $250,000 (Increases appropriation to $1M) • Reduction in funding cut services and emphasis on supporting crisis assistance for children in need of services. More children with mental health issues are being served in child care.

10. FY2012 EEC Budget Request: Option #2 **FY11 Admin account includes pending Reserve Draw of $111K for the FY11 CBA increases. **FY11 Income Eligible account includes $5M PAC recently passed by the Legislature.

11. FY12 EEC Budget Recommendation: Option #2 Budget Option #2 – Reduced Request. In recognition of the economic environment, EEC would reduce its budget request by amending the following: • Admin: Staffing Request • Value: $379,114 • Instead of 11 positions, EEC would further its request to the following six essential positions: • Fiscal Monitors: 2 positions ($118,584) • Director of Community Partnership and Outreach: ($75,000) • Child Care Licensing Specialist: 2 positions ($100,530) • Chief Operations Officer: ($85,000) • Overall admin increase would be $683,973 ($304k for maintenance and $379K for 6 additional positions) • Not include the increase to Mental Health (thus keeping it at FY11 levels). • Remove the $500K Professional Development increase.

12. FY2012 Potential Impacts The Good, the Bad, and the Ugly • The Good: Potential increase in CCDF funding. The FFY2011 federal CCDF grant award may increase by $9M in discretionary and $15M in Matching funding. This increase, particularly in the discretionary award (since it does not need to be matched) could create an opportunity for additional funding from the Legislature in FY12. • The Bad: “Based on modeling done by A&F, it is clear that we will again have a gap between projected revenues and spending and therefore will not be able to afford maintenance levels of funding in FY12 and FY13.” This quote is from ANF and is the reality of the times we are navigating. FY12 spending caps will reflect this reality for most agencies. Governor Patrick and his administration have been extremely generous with the education budgets, but even this generosity is bound by the economic climate. • And the Ugly: Ballot Question 3 would reduce the Sales Tax rate in Massachusetts from 6.25% to 3%. This would eliminate $2.5B in annual state revenue. This, in addition to an already existing $2B structural deficit that needs to be remedied in FY2012, would have catastrophic impact on state government spending including EEC.

13. FY2012 – Summary of Budget Options *FY11 Admin account includes pending Reserve Draw of $111K for the FY11 CBA increases. **FYII Income Eligible account includes $5M PAC recently passed by the Legislature.