What are the major objects of budgeted expenditures?

Roughly speaking, half of the Commonwealth’s budgeted spending goes through agencies that primarily serve the needs of the less advantaged — through the subsidized health plans, public assistance, and other social services, including housing and subisidized day care.

 One quarter is contributed to independent agencies — mostly to cities and towns, through direct local aid and via school building assistance, but also to the MBTA, other regional transit agencies and the higher education system, that is, UMass and the state and community colleges.

 All other statewide functions — parks, economic development, roads, other infrastructure, law enforcement — account for 17% of state spending.

 Cost in the general government categories, highlighted green, are mostly allocable to the other functions.  Employee pensions and health care are not accounted for within the individual agencies.  Even the general government category itself includes, as its largest line items, various funds allocable to other functions.  For example, certain Big Dig costs and human service worker compensation reserves are budgeted within the Executive Office of Administration and Finance for control purposes.

2007 Spending from Budgeted Funds plus Sales Tax Allocations  $ Millions  %
Medicaid/Mass Health        7,550 25%
Public Assistance — Aid to Needy Families, etc.        1,258 4%
Health and Human Services, Early Education, Housing        3,999 13%
Transfers from General Fund, largest is for Universal Health Care        1,626 5%
Direct Local Aid        5,033 16%
School Building Authority (sales tax allocation, not budgeted)           557 2%
Education (largely consists of grants to cities and towns)           377 1%
MBTA Subsidy (sales tax allocation, not budgeted)           734 2%
Other Regional Transit Subsidies             52 0%
Higher Education (state subsidy, does not include tuitions and fees received)        1,116 4%
Energy and Environmental Affairs           236 1%
Transportation and Public Works (operational)           232 1%
Debt Service (major infrastructure funding)        2,084 7%
Labor, Economic Development           257 1%
Justice — State Police, the Courts, Corrections        2,228 7%
General Government (officers, etc.; also various reserves for other  functions)        1,070 3%
Group Insurance Commission — state employee health benefits        1,022 3%
Pension — state contributions to state employee pensions        1,335 4%
TOTAL      30,767 100%

 Sources:   2007 Statutory Basis Financial ReportAdministration and Finance Budget Tracking Tool.

 Click here to see a pie chart for state spending from the Comptroller;  this 2006 chart offers less detail than the 2007 table above.

 Keeping State Budgeted Spending in Context:

 To keep a full perspective on the state’s financial operations, it is worth noting that in 2007, in addition to the state spending above, the state spent considerable funds through non-appropriated accounts and independent agencies — roughly an additional $10 billion.

 Some of that $10 billion flowed through non-budgeted funds of the Commonwealth.  Roughly $2.0 billion was spent from federal grants that do not require state appropriation action.  As a note, the gross revenues of the lottery were $4.6 billion before payouts and expenses; however, the net distributions from the lottery fund are already accounted in the chart.    The Universal Health Care funds are also largely accounted for above as transfers, but there were an $0.3 billion in assessments in the uncompensated care pool.  The varous capital projects funds are indirectly included above through debt service, which is primarily paid through the general fund.

 Additionally, independent agencies within the scope of the state’s Comprehensive Annual Financial Report spent approximately$6.2 billion in 2007.   The state’s higher education system expended another roughly $2.7 billion from non-appropriated revenues (see the 2007 Statutory Basis Financial Report at page 318); the major transportation agencies — the T and the Turnpike –together with other smaller component units  spent an additional roughly $2 billion; the Unemployment Compensation fund spent$1.5 billion (but this amount was funded by dedicated employer taxes). 

 Related, but seperately reported agencies accounted for an additional roughly $1 billion in spending:  Massport which spent roughly $0.5 billion, MassHousing  which had revenues of $0.4 billion.  Additionally, the Health and Education Facilities Authority typically does over one billion per year in financings for non-profits.  The Technology Development Corporation makes much smaller investments in companies.

 Altogether, state and local government in Massachusetts accounts for over $50 billion of annual spending — $40 billion summarized above plus spending by municipalities of over $12 billion.  (Cities and towns spent roughly 12 billion in 2006, net of local aid; the  MWRA  spent $0.5 billion in 2007 heavily derived from assessments on cities and towns.)

Published by Will Brownsberger

Will Brownsberger is State Senator from the Second Suffolk and Middlesex District.