Beacon Hill’s top Republicans cast doubt Tuesday on a Healey administration proposal to use surplus dollars to plug Massachusetts’ emergency shelter system’s $224 budget deficit this fiscal year, and help pay off a $915 million tab shelters are expected to run up next fiscal year.
Senate Minority Leader Bruce Tarr and House Minority Leader Brad Jones expressed hesitancy about using $700 million in surplus dollars leftover from the COVID-19 pandemic to address financial challenges in the shelter system, arguing the plan Gov. Maura Healey released Monday is only a temporary solution to a potentially long-term problem with no end in sight.
Tarr said he is “hesitant to see us use those funds” because they came from sources — robust tax revenues during the pandemic and large amounts of federal aid — that Massachusetts is not likely to see again.
“Once they’re gone, they won’t be available for any other contingency that might arise,” he told the Herald. “That being said, I think it’s certainly better to use those funds than to cannibalize the state budget, which has already committed funds for other important purposes that we can’t abandon.”
Jones said the plan from Healey feels like a “déjà vu” moment after the governor filed a spending bill in September that included $250 million for the shelter system. The bill was signed into law this month after a contentious back and forth between Democrats and Republicans.
“We all knew there was going to be more shoes to drop,” Jones told the Herald. “We all knew there’s going to be another filing. We all knew it was going to be hundreds of millions of dollars if there was no willingness to make any changes to the expected services that were going to be delivered to people that were arriving here in Massachusetts.”
Healey’s plan was detailed in a first-of-its-kind 10-page report on the state of the emergency shelter system the administration is required to file every two weeks with the Legislature’s two budget writing committees.
The Senate’s chief budget writer, Westport Democrat Sen. Michael Rodrigues, declined to comment on the report. House budget writer Rep. Aaron Michlewitz, a North End Democrat, did not respond to a request for comment.
A pair of economic policy onlookers were also at odds over Healey’s plan, offering mixed takes on whether shuttling $700 million to the emergency shelter system and housing production is a good move.
Massachusetts Taxpayers Foundation President Doug Howgate said drawing on money that has historically been used to balance the state budget, fund one-time capital investments and pilot programs, and fuel other spending bills “makes sense.”
But Howgate said the proposal does not get Massachusetts all the way through fiscal year 2025, when, according to the report, the state expects it will spend $915 million on the emergency shelter system and related services.
“We also need to be mindful of the fact that these are absolutely one-time resources. And as of right now, we don’t have any guarantee that this is a one time crisis,” he told the Herald. “This has to be accompanied by an ongoing conversation about how we manage this program and how we manage the rest of the budget sustainably going forward.”
Healey said she plans to file a supplemental spending bill “in the coming weeks” that would move the $700 million in surplus dollars from their current account to a fund dedicated to emergency shelters and housing.
The surplus money Healey is proposing to use is separate from the state’s rainy day account, which currently sits at about $8 billion.
Massachusetts Fiscal Alliance spokesman Paul Craney said the idea “is really an unsustainable path forward.” Massachusetts should not use one-time surplus dollars to pay for a program that is “exploding and there is no end or reforms in sight,” he said.
Thousands of homeless families, including Massachusetts residents and migrants fleeing unstable or dangerous conditions in their home countries, have entered the emergency shelter system, which was designed to provide temporary housing to families with children and pregnant people pursuant to a decades-old state law.
There were 7,529 families in the system as of Tuesday, state data showed, and a total of 3,516 entered emergency shelters as migrants, refugees, or asylum seekers as of Dec. 12, according to the Healey administration’s report to the Legislature.
Craney said the plan to use the surplus dollars is “actually one of the worst things you could do right now” as tax collections are coming in lower than expected this fiscal year.
“To sit there and take your reserves is actually really foolish. This is like the worst thing you can do,” he said.
Tarr also expressed concern with using one-time state dollars at a time when revenues are declining.
“If we use all the funds this year, it will be zeroed out. And again, this all comes in the context of declining state revenues. And all of that adds up to serious questions about sustainability of the path that we’re on,” he said.
In the report released Monday, Administration and Finance Secretary Matthew Gorzkowicz and Housing Secretary Ed Augustus said the emergency shelter system’s budget issues are a “two fiscal year problem, requiring a solution that spans FY24 and FY25.”
The crisis of family homelessness, the pair said, “requires a multi-faceted set of policies.”
“Thankfully, the state has the resources available in (surplus dollars) to put a plan in place that will address FY24 and much of FY25 without requiring offsetting budget cuts to other programs to meet the spending requirements of the family shelter crisis,” the secretaries said.
