FY2014 Consolidated Net Surplus (11/10/2014)

Comptroller Fiscal Year Memo Letter Head

November 10, 2014

The Honorable Steven Grossman, Treasurer and Receiver–General
Commonwealth of Massachusetts
State House, Room 227
Boston, MA  02133

Dear Treasurer Grossman:

The purpose of this letter is to provide information on FY2014 year–end transfers and payments arising from the calculation of the Consolidated Net Surplus.

The Commonwealth’s reviewed financial statements – Statutory Basis, for fiscal year 2014, were filed with the Clerks of the Senate and the House Representatives on November 5, 2014.

Section 242(a) of Chapter 165 of the Acts of 2014 authorizes the disposal of the consolidated net surplus in the budgetary funds for fiscal year 2014 and further authorizes the transfer of any remaining amount of the consolidated net surplus to the Stabilization Fund. 

Section 25 of Chapter 237 of the Acts of 2014 requires the Comptroller to retain, in the General Fund, an amount of settlements and judgments in excess of $10 million, which would otherwise be transferred to the Stabilization Fund, but not more than is necessary to result in a consolidated net surplus of $57,500,000.00.  Previously in FY2014, I transferred $300,000,000.00 to the General Fund and in accordance with this requirement an additional $114,309,814.01 (which represents the remaining settlements and judgments revenue for FY2014) will be transferred to the General Fund.

As of June 30, 2014, the Commonwealth reported a Consolidated Net Surplus of $22,779,538.05 in the seven active budgeted funds included in the surplus calculation (the General Fund, the Children and Families Protection Fund, the Commonwealth Transportation Fund, the Massachusetts Tourism Fund, the Local Capital Projects Fund, the Manufacturing Fund and the Community College Fund), after complying with the provisions of Section 25 of Chapter 237 of the Acts of 2014.

Pursuant to Section 242(a) of Chapter 165 of the Acts of 2014 the balance of the Consolidated Net Surplus is to be distributed as shown below:

  • $11,389,769.02 payment from the General Fund to the Massachusetts Life Sciences Investment Fund at the Massachusetts Life Sciences Center;
  • $11,389,769.03 transfer from the General Fund to the Massachusetts Community Preservation Trust Fund.

After the disposal of the consolidated net surplus for fiscal year 2014, no funds remain.  Therefore, no transfer to the Stabilization Fund will be made.

The total FY2014 ending balance in the Stabilization Fund was $1.248 billion, a decrease approximately of $308 million from the FY2013 ending balance of $1.557 billion.  A detailed schedule of the final transfer calculations and all FY2014 year-end Stabilization Fund transfers is attached – see “Calculation of Transfers: Stabilization Fund, June 30, 2014”.

If you have any questions about these calculations, or the reviewed financial statements in general, it would be my pleasure to meet with you.

Respectfully,

Martin J. Benison
Comptroller

Cc:       
James MacDonald, Deputy Treasurer                
Julia Burns, Director of Accounting                
B J Trivedi, Director of Financial Reporting                
Howard Merkowitz, Deputy Comptroller

Enc.     
Attachment #1:  Section 242(a) of Chapter 165 of the Acts of 2014
Attachment #2:  Section 25 of Chapter 237 of the Acts of 2014            
Attachment #3:  Stabilization Fund Balance Spreadsheet
Attachment #4:  Calculation of Transfers: Stabilization Fund, June 2014

 

Attachment #1

Section 242(a) of Chapter 165 of the Acts of 2014

SECTION 242(a) – Notwithstanding any general or special law to the contrary, prior to transferring the consolidated net surplus in the budgetary funds to the Commonwealth Stabilization Fund under section 5C of chapter 29 of the General Laws, the comptroller shall dispose of the consolidated net surplus in the budgetary funds for fiscal year 2014 as follows: (i) transfer ½ of the surplus, not to exceed $25,000,000, to the Massachusetts Life Sciences Investment Fund established in section 6 of chapter 23I of the General Laws; (ii) transfer ½ of the surplus, not to exceed $25,000,000, to the Massachusetts Community Preservation Trust Fund established in section 9 of chapter 44B of the General Laws; provided, however, that if the consolidated net surplus in the budgetary funds exceeds $50,000,000, the comptroller shall transfer the remaining amount, not to exceed $7,500,000, to the Social Innovation Financing Trust Fund established in section 35VV of chapter 10 of the General Laws.
 

Attachment #2

Section 25 of Chapter 237 of the Acts of 2014

SECTION 25 – Notwithstanding any general or special law to the contrary, for fiscal year 2014, the comptroller shall retain in the General Fund all amounts that would otherwise be transferred under the last paragraph of section 2H of chapter 29 of the General Laws, but not more than necessary to result in a consolidated net surplus of $57,500,000.


 

Attachment #4

 

© Comptroller of the Commonwealth of Massachusetts.