Resources & Glossary

State Budget Resources

MassBudget's website: www.massbudget.org. This website includes all of the Budget Briefs and Budget Monitors that MassBudget writes on every step of the budget process. To get a listing of all Budget Monitors listed by fiscal year, please click on Budget Monitor located under “MassBudget Reports by Topic.”

Governor's Budget website: This website provides information, including descriptions of spending accounts and links to agencies that oversee spending for each account. It also provides a breakdown of spending within each account.

Massachusetts State Legislature's Homepage: This website contains a section on the budget recommendations for the upcoming fiscal year as well as the text of previous fiscal year budgets. The House budget website provides the text of the original House Ways and Means budget, texts of amendments and the final House Budget. The Senate’s budget website provides the Senate Ways and Means budget, text of amendments and the final Senate Budget. The website also has the final Conference Committee budget.

General Appropriations Acts for Previous Fiscal Years: Use these links to find text and earmarks in specific line-items:

Information on the American Recovery and Reinvestments Act (Federal Stimulus Bill) for Massachusetts: The American Recovery and Reinvestment Act was signed into law on February 17, 2009. Massachusetts’ ARRA website explains how federal stimulus money is being spent in Massachusetts and outlines the government’s future plans for economic recovery.

Federal Information on the American Recovery and Reinvestment Act: Provides information on federal implementation of ARRA.

Massachusetts Department of State Revenue: Information on state revenue.

Local Aid Information (Cherry Sheets): This site provides information on local aide and lists the amount of aide each community in Massachusetts receives from the state.

Overview of the State Budget Process

Every year the Governor proposes a new budget for the next fiscal year. This is followed by budgets proposed, debated, and then voted on by the House and Senate. The state budget is not final until signed into law by the Governor. Unlike the federal budget which can run a deficit, Massachusetts must keep its budget in balance. Revenues that Massachusetts collects to pay for programs in the budget include money raised through taxes such as the income tax, sales tax and corporate taxes; fees and fines levied by state agencies; and federal revenues that are targeted for specific programs, such as Medicaid (for health care) and Title I for public schools.

The budget process begins in the fall when state agencies submit their budget requests to the Governor’s Executive Office of Administration and Finance (A&F). Usually in January, the Governor drafts his or her spending plan and submits it to the Legislature. The House Ways and Means Committee usually proposes its budget recommendations in April, which are then debated and amended by the full House of Representatives. The Senate Ways and Means Committee drafts its budget, which is usually debated and amended during late May by the full Senate. In early June, the House and Senate each appoint three members who become the conference committee and have to reconcile the differences between the two budgets. The final document is passed by the House and Senate and is sent to the Governor. Often in June the Governor signs the budget, usually accompanied by a “veto message” in which he/she strikes certain parts of the budget. The Legislature then has the opportunity to override individual vetoes by a two-thirds vote in each branch. The final budget, called the General Appropriations Act (GAA), goes into effect on July 1, the beginning of the state’s fiscal year.

Budget Glossary

Fiscal Year: Period that the Massachusetts state budget covers: July 1 through June 30. The fiscal year is always named for the second year. For instance, Fiscal Year 2009 lasts from July 1, 2008 to June 30, 2009.

Deficiency Budget: See “Supplemental Budget.”

Budget Deficit: A budget deficit occurs when the state spends more money than it takes in.

American Recovery and Reinvestment Act (ARRA): The $787 billion federal recovery act, signed by President Obama in February 2009 in response to the economic crisis, makes targeted investments in federal, state and local governments, as well as non-governmental organizations and individuals, through direct appropriations, competitive grants, and tax adjustments. ARRA provides funding for infrastructure investments; state and local budgetary relief for education, health care, public safety and other programs; support for counter-cyclical programs such as unemployment insurance, food stamps and workforce training; tax benefits; investments in green energy; and other areas.

Consensus Tax Revenue: Prior to the beginning of the budget process in January of each year, the governor and Legislature usually agree on how much tax revenue they believe that the state will raise in the upcoming fiscal year. The Governor’s, House and Senate budgets then use this revenue estimate to build their respective budget proposals.

General Appropriations Act (GAA): The GAA is the fiscal year budget as passed by the Legislature and signed into law by the Governor.

General Fund: Most of the revenue raised by the state is deposited into the General Fund and is used to pay for programs funded in the state budget.

Line Item: Unit by which the Legislature appropriates money. Line items consist of an account number, language that outlines how the money may be spent, a dollar amount, and the fund designation.

9C Cut: Refers to Section 9C of Chapter 29 of the Massachusetts General Laws. Section 9C requires the Governor to act when projected revenue is less than authorized spending. These actions ensure that the budget is brought into balance by either making immediate cuts in spending accounts or recommending increases in revenue. Any tax revenue increases must be approved by the Legislature.

Outside Section: Outside sections, beginning with Section 3 of the GAA, contain specific provisions of law which govern particular appropriations contained in the budget, make other special laws that usually apply for only one fiscal year, or amend the General Laws to implement permanent changes included in the budget.

Pre-Budget Transfers: There are certain taxes and fees that are automatically directed to fund specific items in the budget (for example, a portion of the sales tax is automatically directed to fund the MBTA). These pre-budget transfers, like line item appropriations, are a way the state spends money.

Reserve Accounts: Line items that start with 1599- are called reserve accounts. These line items are often one-time holding accounts, and the funding may be incorporated into other line items in subsequent years. Reserve accounts are frequently used to fund personnel costs associated with collective bargaining agreements.

Retained Revenue: Retained revenue accounts specify how much of the revenues (usually fees, charges or reimbursements) that a department or program raises may be kept to help pay services offered by that department or program. Any revenues raised above that amount must be returned to the General Fund.

Supplemental Budget: A supplemental budget for the current fiscal year can be proposed and passed by the Legislature to provide additional funding to programs with a funding shortfall (also known as a Deficiency Budget) or as needed to accomplish a new or expanded purpose.

Stabilization Fund: Also known as the “rainy day” fund, any end-of-year surplus is deposited into this fund. The state can use this money to fund programs if there is a budget deficit.

Veto: Action taken by the Governor, authorized by the Constitution, to disapprove a legislative bill. For state budgets, the Governor may disapprove individual line items, or portions of line items, and outside sections. Vetoes can be overridden by a two-thirds vote of both the House and the Senate.

For more budget glossary terms, please visit the Governor's budget web site.