“It’s very responsible,” Gorzkowicz said of the proposal. (Currently, the budget sits at $56 billion.) Moving the interest into the infrastructure fund would only resume once the rainy day fund begins growing again and if it exceeds 10 percent of the state’s operating budget. Matt Gorzkowicz, Healey’s budget chief, said the administration is proposing other guardrails, including temporarily suspending the interest transfer should the state have to draw down on the rainy day fund. But Healey officials say they don’t intend to touch the account’s underlying balance, and by using the interest going forward, the state could further whittle down the backlog of maintenance and capital work it has to tackle. Sweeping the interest from the account, as Healey is proposing, would mean less money tucked away for hard fiscal times. Sitting at a record $8 billion, the account’s balance has more than doubled over the last three years, significantly expanding the cushion the state could fall back on in times of economic disruption. The rainy day fund makes for an attractive option for extra cash. “The fewer things you have to rely on, the more confidence you can give to policy makers and bondholders,” he said. But as a funding mechanism, he said, its simplicity is its strength. “I couldn’t tell you 15 years from now whether this is still going to be a major source of resources. But it estimated it would generate $180 million this fiscal year, less than the $250 million Healey’s administration is projecting it could cull in interest each year.ĭoug Howgate, the foundation’s president, said “neither number is wrong,” but with interest rates climbing and the rainy day fund itself growing, so has the interest it can generate - at least for now. The Massachusetts Taxpayers Foundation, a business-backed watchdog group, also recommended using the interest on the state’s savings account - known on Beacon Hill as the rainy day fund - as a potential source. Policy makers are already hitting self-imposed limits on how much they can borrow each year to spend on capital projects, meaning the state likely needs to cobble together money from other sources. That leaves a gap of about $800 million left to find, the Massachusetts Taxpayers Foundation estimated in a report last month. With nearly $17 billion in federal funding the state could pursue in the coming years, the state’s share could total at least $2.7 billion, though state officials have already identified ways they could cover a large chunk of that through borrowing. We have proven that we can win if we play and compete.”įederal programs usually require the state to contribute a share of funding - typically about 20 percent - when applying for grant money. “This is about money coming in, putting people to work with great jobs and great opportunities that run the gamut,” Healey said at a State House news conference. Healey’s proposal, which needs legislative approval, would also make permanent the new account, which state officials want to use thereafter to help fund other capital and maintenance projects. Combined with $50 million the state could use in revenue from the state’s so-called millionaires tax, the newly proposed kitty would reach $800 million by 2026.
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