The Boston Globe
Monday, November 29, 1999
Human services spending swells
But real estate costs leave shelters crowded
By Michael Crowley
Globe Staff
After several years of meager funding increases for programs to help children, the
elderly, the sick, and the poor, human services has become one of the fastest-growing
areas of state spending.
After lagging behind for much of the '90s, aid for the state's most vulnerable
residents has nearly caught up with the overall growth of the state budget, according to
an analysis by the Massachusetts Taxpayers Foundation.
The increased spending seems to defy both political and economic trends. It comes
during an unprecedented economic boom that has slowly reduced poverty and created
thousands of jobs in Massachusetts. And it has happened under the stewardship of a
fiscally conservative governor, Paul Cellucci, and state House speaker, Thomas M.
Finneran.
At the same time, however, the state is spending millions to support thousands of
people forced off the welfare rolls since 1995. And while the economy has benefitted
millions of people, deep pockets of poverty remain in the state, and soaring real estate
costs have left homeless shelters overflowing at record rates.
Meanwhile, sustained budget surpluses have allowed political leaders to put money
in budget stockings where for years they left coal.
"We have been able to be aggressive in addressing a number of folks that are
awaiting services, and that's good news," said House Ways and Means Chairman Paul
Haley, a budget architect who is famously conservative with taxpayer dollars.
"I think the public does want to see us help those who have not been able to
take advantage of this economic surge."
"The question is," Haley warns, "can we sustain this during the
next economic downturn?"
The foundation's budget analysis shows that spending on programs like beds for the
homeless, affordable housing, and aid for the mentally ill has been growing over the past
three years at a rate of 5.2 percent.
That rate includes a 6.5 percent growth in the state Medicaid program for
low-income people and senior citizens, which was identified during the budget crisis of
the late-1980s as a fiscally dangerous "budget buster."
Human services programs grew more than twice as fast in the late 1980s, before a
crippling recession forced deep budget cuts. But the current growth is almost twice the
average rate of increase from fiscal year 1993 to fiscal year 1997, which was 2.8 percent
-- or less than half the growth of overall state spending during that period.
If a massive influx of billions of dollars pumped into public schools as part of
the 1993 Education Reform Act is subtracted, the rise of human-services as a budget
priority is even clearer. Minus local education dollars, state spending has grown by just
3.8 percent since fiscal year 1997, compared to the 5.2 percent growth in human-services
programs.
The $20.8 billion spending plan passed by the Legislature this month is a case
study in Beacon Hill's recent willingness to spend generously on aid for the needy.
In addition to high-profile spending, like $52 million to help seniors pay for
prescription drug costs, the budget boosts hundreds of smaller programs.
For example, the budget includes $900,000 for a Sexual Assault Nurse Examiner
program, which will put up to 75 specially trained nurses in emergency rooms to care for
victims of rape and sexual assault. Last year the program totaled just $200,000.
The budget provides an extra $6.5 million to address the vexing problem of working
families who are homeless -- often because they cannot save enough money for down payments
or security deposits -- but earn too much money to qualify for public shelter. The new
funding will expand shelters for homeless working families, and raises the amount of
income a family can earn and still be eligible for shelter by almost 50 percent, or up to
$18,000 for a family of three.
Following a winter last year in which 16 homeless people died on the streets of
Boston and Cambridge, the state's Department of Public Health will kick off a pilot
program intended to track and watch over homeless substance abusers.
The budget includes $2.2 million to create 150 shelter spaces for the homeless who
are mentally ill.
Next year, Massachusetts will become the first state in the nation to extend
Medicaid coverage for people diagnosed with HIV, but who do not have full-blown AIDS. And
a program that sends counselors into the homes of young mothers to guide them through
parenting will more than double, from $7.8 million to $16.1 million.
Some of the growth in human-services spending comes from the huge state Medicaid
program, which accounts for $4.3 billion of $9 billion in human-services spending in this
year's budget.
But other categories are growing quickly, according to the analysis. Spending on
mental retardation programs, for instance, has grown by almost 10 percent over the past
two years, to $855 million. And the budget for children's programs, run largely from the
Department of Social Services and the Department of Youth Services, has grown by more than
12 percent since 1998, to $629 million.
The rise in total human-services spending comes despite a dropoff of nearly $500
million spent per year in cash benefits since the state's 1995 welfare reform law cut the
welfare rolls by more than half.
While even budget hawks say the growth in such programs is affordable for now,
they warn that a soured economy could force cutbacks.
Haley says he has tried to encourage partnerships between the state and private
groups, to better insulate programs in the event of a recession.
"I think that's one lesson we've learned from the late-'80s is that we cannot
be the sole provider," Haley said. "We cannot build into our budget base a huge
programmatic expansion that can't be sustained when there's an economic slowdown."
Cam Huff, a foundation analyst, added that the future of such programs also
depends on the fate of two major tax cuts that appear headed for the statewide ballot next
year. One proposal, backed by Cellucci, would cut the state income tax by $1.4 billion.
Another, backed by an independent group, would rebate $550 million in toll and auto excise
tax costs to drivers.
"They would be an enormous shock to the system," Huff said. "If the
two initiative petitions pass, there's going to be a three-year or longer period in which
the state could not afford any increases at all."
