BOSTON — Gov. Maura Healey’s budget team expects a $90 million funding gap associated with the migrant family shelter crisis, even after draining a large state reserve account full of COVID relief and state surplus funds, according to new plans.
Alongside her fiscal 2025 budget pitch, which maintains level-funding of $325 million for the state’s emergency shelter system, Healey filed a supplemental budget Wednesday to pour hundreds of millions of dollars more into the sprawling statewide effort to cover over-capacity shelter caseloads, school district costs, case management, and health and community services.
The $325 million figure reflects a caseload of 4,100 families, far below the current caseload that the governor capped at 7,500 families in November. The waitlist to access shelter hit 542 families last week.
Healey’s supplemental budget would move the remainder of a state Transitional Escrow Fund, which now has an uncommitted balance of $863 million, to an Emergency Housing and Community Trust Fund. In recent reports to the Legislature that have broadly pitched the same shelter funding solution, top Healey officials had said the escrow fund’s balance was $700 million.
Draining the escrow fund, which consists of federal COVID-19 relief money and other surplus dollars, allows the state to address the “extraordinary costs in FY24 and most of FY25 without requiring offsetting budget cuts to other programs,” the administration said in a budget brief. Up to $150 million would also be used for housing production and preservation.
Healey, asked why the administration is relying on one-time funding instead of boosting the budget line item to keep up with the ongoing shelter demand, said, “Because we gotta be smart.”
“It’s an evolving situation, revenues are evolving. We’re making certain reforms to the EA shelter system as well because that system has been in place for a while,” Healey said.
“You know, our job as long as we’re here is to make sure that we’re doing things in a smart way, and so we’re undertaking that analysis and effort right now,” the governor continued at a press conference Wednesday afternoon. “And you know, we’ll be prepared to turn where we need to go, and we’ll continue to stay in touch with the Legislature on this.”
Healey, asked whether shelter reforms could involve limiting the length of family stays, said, “I don’t want to overstate reforms right now and where we are in terms of analysis, but it is something that we’ve got to address.”
Administration and Finance Secretary Matt Gorzkowicz, asked whether there was a back-up plan should the Legislature not approve the funding pitch, told reporters that this proposal has been broached for some time. Conversations are ongoing with the Legislature, he said.
Senate Ways and Means Chair Michael Rodrigues gave a defensive response when asked earlier this month about Healey’s intent to use the Transitional Escrow Fund.
“We protect our reserve funds — whether it’s transitional escrow or the state fund — you know, we worked very hard,” Rodrigues had said. “We’ve been very responsible for building up this reserve fund, and we’re going to think long and hard about how we expend any of those reserve funds.”
The Transitional Escrow Fund’s new balance, a nearly 25% increase compared to recent estimates, reflects revised calculations and more detailed audits with Comptroller William McNamara’s office, according to Gorzkowicz and a spokesman for the Executive Office of Administration and Finance. The balance, which administration officials earlier this month pegged at roughly $700 million, has grown as officials sort out money allocated for the American Rescue Plan Act and the General Fund, they said.
Gorzkowicz said those accounting details should be outlined in an annual financial report released soon from McNamara.
Based on the current information provided by Healey’s office, House Minority Leader Brad Jones said he and his caucus members would not be comfortable spending the money from the escrow fund under Healey’s proposal. The flexible dollars could be used in an “endless number of ways,” and Jones said Healey has offered no reassurance that migrant funding won’t continue to climb.
“It’s really disappointing at this point that we’re not seeing any recommendations for modification to the right-to-shelter law and doing things even as a state to stem the attractiveness of Massachusetts,” Jones said. “It’s really getting expensive. It’s already past expensive, and it’s already past crowding out other things.”
House Speaker Ron Mariano and House Ways and Means Chair Aaron Michlewitz said they will review Healey’s plan “with the necessary due diligence in order to ensure that we continue to respond humanely to the crisis, while being mindful of the broader fiscal picture.”
“Since the beginning of the emergency shelter crisis, the House has worked hard to balance the goal of ensuring that no family in Massachusetts spends a night on the street, with the responsibility of allocating taxpayer money in a fiscally prudent manner,” Mariano and Michlewitz said in a joint statement. “That’s why the House provided robust emergency assistance funding, but specifically directed it towards school districts, workforce programs, and for an overflow site to shelter those on the waitlist.”
Even with the higher account balance, Healey’s plan leaves a $91 million emergency shelter funding gap, according to the budget brief.
Gorzkowicz, without providing specific examples, said officials are working on strategies to close the shortfall. The secretary indicated to reporters those strategies don’t include relying on the federal government to provide assistance, but Healey separately reiterated her demands to Congress Wednesday.
“We continue to seek funding from the federal government,” Healey said. “As I have said from the outset, this is a problem not of the state’s making. It is a problem that we are having to deal with.”
A spokesperson for Senate President Karen Spilka, asked about her response to the governor’s shelter pitch, provided a statement that instead talked about how senators planned to review the budget.
A spokesperson for Rodrigues also didn’t directly address the shelter and escrow funding proposal Wednesday.
“Chair Rodrigues views the Governor’s budget filing as the start of the conversation and a process that involves discussions with the Senate President and the Senate membership, and he looks forward to carefully reviewing the budget with the Senate Ways and Means team in the days to come,” said Rodrigues spokesperson Sean Fitzgerald.
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