2025-03-10 00:00:00 - Joint Committee on Ways and Means
2025-03-10 00:00:00 - Joint Committee on Ways and Means
SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Yeah. Right. Exactly.
REP FERRANTE - Thank you, Anthony. Thank you. Thank you. And, to the members, thank you for being so efficient this morning. I know there's22 so many of us here. And24 I24 wanna thank you all for coming up and taking the ride to Gloucester both for the hearing and the important business that we're going to do today, but also, for coming up to my district and Senator Tarr's district, and getting a chance to see our hometown up close and personal. Today, we're here in Gloucester to host the first of what are gonna be a number of subject matter Ways and Means hearings to discuss the governor's budget. We choose, as a committee, to bring these committee hearings to various corners of the state and throughout the state in order that we can transparently show65 our constituents and the citizens how it is that we examine, review, and question, the budget, and how we proceed.
So in that, vein, I'd like to kick off this morning's hearing, by saying that, 1, I'm glad to have my colleagues here, and 2, to ask the public to participate as much as you possibly can to see what we do. In addition to the district hearings that we have, our hearings are also online at malegislature.gov. You can go there and you can watch each of the hearings either live or they're archived as well. With that, I wanna turn it to my Senate, for this hearing, Jake Oliveira, to give some opening remarks. And after that, I'll be turning to my legislative partner, Senator Bruce Tarr, to give some brief remarks. And, and then after that we will do committee introductions.
SEN OLIVEIRA - Thank you, Chair Ferrante. And it's an honor to be here on Cape Ann. We hear a lot about Cape Ann in the Senate side from the minority leader, so it's nice actually to see it firsthand. The business that we have today, as Chair Ferrante mentioned, deals with a lot of the economic drivers here in the Commonwealth of Massachusetts. When you look at housing, economic development, labor and workforce, division of insurance, the areas in which we're gonna be hearing from first, including a lot of the boards and commissions that run our economy here in Massachusetts. I think it's important for us to hear directly from these stakeholders as we begin to prepare our own budgets in both the House and the Senate. And to ensure that the public has an opportunity to show us in the various different189 regions of the Commonwealth. So on behalf of the Senate side, I wanna thank, my cochair for today for hosting this in her hometown, steps away from where she lives. It was an easier commute from all of us that come from across Massachusetts. It's an honor to be here today. Thank you, madam chair. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Senator Taar?
SEN TARR - Well, thank you, Madam Chair, and good morning. I first wanna begin by thanking you for arranging this hearing once again in Gloucester. It's important to have all of our colleagues here and have this part of the democratic process be brought227 to a community like Gloucester, which reflects so many of the issues that so many communities face all across the state. So thank you for that.235 And thank you to Senator Oliveira for coming to, also hold the gavel at this hearing. And thank you to all of our colleagues. We know that for many of you it's a long distance to get here. But it is so impressive to see the number of members of the committee that have shown up of each committee of Senate and House Ways and Means.
We are deeply grateful for you making the trip here today and coming to hear from the folks that have been invited to testify, but to do it in the context of this community. And to see, I've heard a lot of comments about our beautiful city hall and our beautiful city, and we appreciate that. And we would encourage you to come back, not only for the Ways and Means hearing, but whenever you have the opportunity. I also wanna thank, mayor Verga and his administration for hosting us here at City Hall. And I would just suggest that, it is important, as you suggested, madam chair, that we do have a transparent process. We do have an interactive process. And we do have a process that understands and is responsive to the priorities of the people in our communities. And having hearings like this in the field give us an opportunity contextually to understand what those things are. So we are gonna face, clearly a very challenging, fiscal year ahead. And putting together that budget is gonna require the very best from all of us. And we are at our very best when we are interacting frequently with the people we represent. So thank you very much. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you,321 senator. A couple of housekeeping notes before we start.325 If anybody needs to use the restroom, there are 2 restrooms right through the door on my right. If for some reason those are occupied, if you go down to the First Floor Level, there are additional, bathrooms as well. In terms of schedule, what I'd like to do is start with, the boards and commissions. At 01:00, I expect, secretary Jones at between 2 and 3, I expect secretary Augustus. And after Secretary Augustus, we'll have Secretary Al. So that should be359 how the day unfolds today. There'll be, somewhere around 11 quarter of 12 and 12:30, there'll be a lunch break until 1 when Secretary Jones comes.
And on the First Floor, I know375 many of you are impressed with the building. Just a couple comments about this building. If it reminds you in the exterior of Independence Hall in Philadelphia, it's the same architect that did Independence Hall that did Gloucester City Hall. At the time, Gloucester was 1 of the, wealthiest cities on the Eastern Seaboard because of its fishing industry. And in order to have the steeple in the tower that mariners could see coming into the Port Of Gloucester, Gloucester invested, I don't wanna say extravagantly, but extravagantly to have a showpiece that people would see as they were coming in from the water,414 not so much from the land. If you go down to the First Floor418 and if you look at the painting and the mural that's behind me, those are WPA paintings and Gloucester, the City Of Gloucester and Gloucester City Hall houses the largest collections of them. So if you have a chance when you're on the First Floor, it may seem commonplace because the paintings are so big. But they're actually, noted438 and, renowned paintings throughout441 the WPA period. So take a look at those as well. Just a comment about our microphones. If you are not using the microphone, have it stand up straight. If you put451 it down, there's going to be feedback. And just remember that these, unlike the microphones at the statehouse, these are voice activated. So if it's close to you and you start to whisper or talk, it will pick up your voice. So if you don't want your voice to be picked up, then just slide the microphone back a little bit so that it's not too close, to you. Okay.
FERRANTE - With that, in terms of member introductions, I'd like to start with introducing my assistant vice chair here, Kip Diggs. And what we're gonna do is we're gonna go along the right hand side first. And I want everybody to introduce themselves. And in addition to that, let everybody know, which towns you represent so people can have an appreciation for the full breadth of what this committee represents in terms of cities and towns. If I haven't said it yet already, I'm Ann Margret Ferrante, the vice chair of this committee. I represent Gloucester, Rockport, Essex, and Manchester. And Kip, I'm gonna turn it over to you.
REP DIGGS - Thank you very much, Madam Chair. I'm honored to be here. I'm representing Kip Diggs from the Second Barnstable District, which is Cotuit, Osterville, Centerville, Hyannis, Barnstable Village and West Yarmouth. So to see another Cape, it's awesome to be here. And seeing all this ocean, it's truly an honor. And we can relate to. we have a lot of Cape centric areas and issues, that we can help each other on. And I look forward to working with my, assistant, vice chair Ann Margaret and others in whatever we can do to help our district because that's what we're all about and helping Massachusetts. So thank you.
REP SMOLA - Thank you very much. I'm Todd Smola, first Hamden District. I'm the ranking member of the committee. I represent the towns of Brimfield, Holland, Palmer, Sturbridge, Wales, Warren. That's in Western Massachusetts primarily. Three separate counties, Hamden, Hampshire, and Worcester County. And, Mr. Mayor, thank you for having us here in your beautiful city today, and we appreciate it.
TARR - Good morning. I'm delighted to have a second chance at the microphone so quickly. State Senator Bruce Tarr, the minority leader of the Senate. I represent the First Essex And Middlesex District, which are 19 of the finest communities in Northeastern Massachusetts. I won't go through all of them because it would be time for the lunch break if I did that. But I represent from Manchester By The Sea to the New Hampshire border, and then West to North Andover and then Southwest to the town607 of North Reading. So happy to be here with all of you and happy to share, this experience of listening to what is in front of us and for the Commonwealth of Massachusetts in the coming year.
SEN DOONER - Kelly Dooner, state senator for the Third Bristol And Plymouth District and assistant minority leader. I will also spare you the long list of towns that I have, but just know it's from the Rhode Island border basically to the gateway to the Cape, and honored to be here. Thank you.
REP MCKENNA - Good morning, representative Jill McKenna, Southern Worcester County, towns of643 Webster, Douglas, Sutton, Oxford, and Uxbridge.645 So my district borders both647 Connecticut and Rhode Island.
REP SULLIVAN-ALMEIDA - Good morning. State representative Allison Sullivan-Almeida, and I come from the South Shore, which is Arlington, Whitman, East Bridgewater.
REP GARCIA - Good morning, everyone. Judith Garcia, and I proudly represent Chelsea and Everett.
REP ARRIAGA - State Representative, Shirley Arriaga. I represent the great city of Chicopee, Eighth Hampden District.
REP KASNER - Hello, representative Kristen Kasner. I represent the Second Essex District, which is Hamilton, Ipswich, Raleigh, Newbury, Georgetown, and Topsville Precinct 1. Thank you for having us.
REP TYLER - Good morning, everyone. Thank you so much for showing up. I am representative Chynah Tyler. I have the honor of representing parts of Boston, neighborhoods that you probably all visited and love, which include Roxbury, my hometown, just for namesake, Fenway and Mission Hill. Honored to be here. I'm a big fan of madam chairwoman and Gloucester. We have a lot of work in common. And this is my second time actually visiting Gloucester, so I'm happy to be back. Thank you.
REP PEASE - State representative Kelly Pease. I represent the Fourth Hamden District, which is Westfield and Southampton. So a little bit further west, but it's a pleasure to come out here and see this beautiful community.
REP KEARNEY - Good morning, everyone. Representative Patrick Kearney from Marshfield, Scituate, and Norwell.
REP CHAISSON - Good morning, Representative Michael Chaisson from the First Bristol, Foxborough, Mansfield, and Norton.
REP MARSI - Good morning. State representative John Marsi from the Sixth Worcester District, which is on the Connecticut line, towns of Dudley, Southbridge, Charlton, and Precinct 1 in Spencer, but I'm originally from Wilmington close to North Shore.
REP XIARHOS - Thank you, sir. Good morning, everybody. My name is Steven Xiahros. I represent the fighting Fifth Barnstable District on Cape Cod, which is Barnstable, Bourne and Sandwich. I was born and raised in the city of New Bedford, and this feels a lot like that. So thank you, madam, for having us. Beautiful. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. And now let's go to the left and start with senator Olivera.
OLIVEIRA - Thank you. Jake Oliveira. I'm the state senator for the Hamden, Hampshire, and Worcester District, which is 12 communities in the western part of the state in and around the Greater Springfield area.
SEN COMERFORD - Good morning, everyone. Thank you, chair Ferrante for hosting us and Senator Tarr, and thank you to Senator815 Oliveira815 for cochairing. My name is Jo817 Comerford. I represent the Hampshire Franklin Worcester District in the state senate. That's 25 cities and towns starting in about Northampton and climbing up the Connecticut River to the border of New Hampshire and Vermont. Very glad to be here.
SEN GOMEZ - Thank you. My name is Adam Gomez. Excuse me. My name is senator Adam Gomez. I represent the Hampton District, the city of Springfield, and also the city of Chicopee.
SEN PAYANO - Good morning, everyone. Senator Pavel Payano representing the First Essex District. I represent three incredible cities that sit on the Merrimack, Haverhill, Lawrence, and Methuen, and I'm also the chair of consumer protection, cochair of consumer protection and professional licensure.
SEN MORAN - Morning, everyone. John Moran from the Ninth Suffolk District, which is, parts of Boston, which include most of the South End, parts of Back Bay, Dorchester, and Lower Roxbury. I'm very happy to be here. Thank you.
REP HOWARD - Good morning. My name is Vanna Howard. I am a state representative representing the 17 Middlesex District. That's Lowell and Tewkesbury. And so great to be back, to Gloucester. This is my fifth times, back here. So thank you, madam chair, for hosting us again.
REP BIELE - Good morning, everyone. My name is David Biele. I'm the state representative of the Fourth Suffolk District, which includes South Boston and the city of Boston. Appreciate the hospitality and look forward to a productive day.
REP HAWKINS - I'm Jim Hawkins, state rep second Bristol from Attleboro, and thank you again to Chair Ferrante. This is a treat to visit Gloucester, so thank you.
REP SABADOSA- Good morning. My name is Lindsay Sabadosa. I'm the state representative for the First Hampshire District. I represent the city of Northampton and eight more rural communities, Chesterfield, Covington, Goshen, Hatfield, Plainfield, Williamsburg, Westhampton, and Worthington. Almost got those in alphabetical order. But I'd also like to extend my thanks to Chair Ferrante for inviting us to, my favorite, seaside community in Massachusetts. Wonderful to be here today.
REP VAUGHN - Good morning, everyone. Marcus Vaughn, ninth Norfolk District representing the towns of Wrentham, Norfolk, Plainville, Millis, Medfield, and Walpole. Thank you, madam chair.
958 REP958 HOLMES958 -958 Good958 morning, everyone. I'm Russell Holmes. I960 represent portions of Boston, Mattapan,962 Dorchester, High Park, Roslindale, and JP.
REP RAMOS - Morning, everyone. State representative, Rolando Ramos from the city of Springfield, birthplace of basketball.
REP KEARNS - Good morning, everyone. My name is Sally Kearns. I'm a North Shore gal. I represent, a few towns down the line, Danvers, Peabody, Middleton, Topsfield, and Wenham. Always great to be in Gloucester. So thank you, madam chair and my colleagues.
REP HAMILTON - Good morning, everyone. State Representative Ryan Hamilton. I represent two cities up in the Merrimack Valley, Methuen and Haverhill.
REP SOUSA - Good morning, everyone. Priscila Sousa represent 6 Middlesex District, MetroWest. It's about 60% of Framingham. South Side, the best side. Don't tell Jack.
SPEAKER1 - Thank you, everyone. Next, I'd like to, thank and welcome mayor Greg Verger, the mayor of Gloucester, to come up and to give us some welcoming remarks.
GREG VERGA - CITY OF GLOUCESTER - Thank you, Rep Ferrante. And to all your colleagues, thank you for being here today. And as we've heard, pretty much every section of the state is represented here today, which is important. You guys are doing the important work, which I think you referred to last year as the sausage making, and it's great that the public is here to see it. So welcome to all of you to being here at Gloucester and most specifically, our historic city hall, and definitely check out the WPA murals. And we do have our full art inventory available on our city website if you don't get to see it all. But I just wanna thank you here. I know you have a challenge ahead. We've got a lot of uncertainty coming out of the federal government in terms of how much aid we might be seeing to state budget, which obviously is a fear that we have in the cities and towns. So, again, you've got a challenge ahead. And I think you're all up to the task. Thank you for being here, and thank you for putting in the work. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. Okay. Let's let's begin today's testimony, with
the board of library commissioners.
MAUREEN AMYOT - MLBC - Good morning, everyone. I'm Maureen Amyot, the new director at the Massachusetts Board of Library Commissioners. So this is my first time at a Ways and Means hearing and I'm so excited to be here, so thank you for having us. I didn't realize we were gonna get the honor of being first. So, so yay us. I wanna thank you for the opportunity to present testimony today about the importance of statewide library programs and services administered by the Massachusetts Board of Library Commissioners, or you'll hear me refer to us as MBLC. We thank you all for your ongoing commitment to libraries and library services in your individual districts and statewide.
The Massachusetts Board of Library Commissioners was the first state library agency in the nation. And is the agency of state government with the statutory authority and1190 responsibility to organize, develop, coordinate, and improve library services throughout the Commonwealth. Our doors are open every day to everyone. Massachusetts public libraries are busy. In fact, more than 28 million people visited the Commonwealth's libraries in person last year. That's not counting the millions who access our online resources like ebooks, classes, and research resources. At 28 million we're more popular than the Magic Kingdom at Disney World. Our commitment to serving all is not new, and we've been doing it since 1890.
The MBLC strives to provide every resident of the Commonwealth with full and equal access to library information resources regardless of their geographic location, social or economic status, age, level of physical ability, or intellectual ability, or cultural background. Many of the programs and services library patrons enjoy today can be traced back to the work of the first serving commissioners 130 years ago. We're efficient and effective. Under the direction of the MBLC, library services have been automated and streamlined. Cooperative purchasing agreements have been established, resources1280 have1280 been digitized, and many needs of local libraries and residents are met through statewide contracts, services, and grants that not only save time and money, but increase residents' access.
We're providing services in a climate of increasing stress. Attempts to ban books, programs, and other library services continue to increase in Massachusetts. Historically, there have been less than four challenges a year to materials in Massachusetts public libraries, with some years recording 0 challenges. FY '24, public libraries experienced 40 formal challenges. In FY '23, there were 22 formal challenges. This follows the national trend. And since nationwide, 44% of challenges included characters or people of color, and 39% included LGBTQ plus characters or people. This is a bigger issue than book challenges. Attempts to restrict access are acts of intolerance and exclusion intended to silence diverse voices and views.
We depend on federal funding to provide services, and our federal dollars pay for many of our statewide services. For example, they fund the statewide database program, which provides critical access to research databases that no community or school system could afford to purchase on its own. On average, 60% of database usage comes from schools where teachers use them as part of their course curriculum, giving students access to millions of articles from trusted sources on a variety of subjects, including science, health, biographies, history, literature, culture, arts, and more. Usage of our statewide research databases has increased 12% in just one year. Federal funds also support our statewide ebook program. Usage of that program has increased 19% in just the last year.
They also support literacy, early literacy, and increased accessibility for people with vision loss. And they fund some of the MBLC staff who use their expertise to provide support to librarians and statewide services every day. They fund services that are crucial to public libraries and are not funded in any other way, and take the burden off of local libraries. The commissioners and the Massachusetts library1444 community are emphasizing three budget lines in our FY 26 legislative agenda request. 7000-9101, our which is1456 our agency's administrative line, 7000-9501, which is state aid to public libraries, and 7000-9508, the Massachusetts Center for the Book. We're requesting an increase of $2 million for state aid to public libraries and smaller increases of1478 around 414,000 for our administrative line and 130,000 for the Center for the Book.
We're requesting cost of living increases for our other four budget lines. Our total requested increase for all seven lines is just over $4 million. We've created a website for our legislative agenda that is available at www.mblclegislativeagenda.com. It's a long one. But it includes information about library legislation regarding ebook pricing, freedom to read, and school libraries. We also included on the website a Massachusetts library funding organizational chart that displays how the MBLC supports libraries and library organizations in the Commonwealth with state and federal funds. So our three priority lines, first, the MBLC administrative line, 7000-9101, funds the staff that administers the state aid to public libraries and the Massachusetts Public Library construction programs. Provides advisory and technical support to library directors, trustees, and friends of libraries across the state, and works to raise awareness about the availability and value of libraries and library services.
Librarians across the Commonwealth are reckoning with fallout from an unprecedented period marked by increased service demands along with a record number of book, program, and intellectual freedom challenges. Today, libraries are often understaffed, and library workers are under stress from work environments that are increasingly confrontational and sometimes dangerous. Increased funding to the 7000-9101 Board of Library Commissioners strengthens the MBLC's support and services to our libraries and their patrons. State aid to public libraries, 7000-9501, is local aid for libraries that may be used only by the library in any way that supports the library. Local libraries use these funds to keep the doors open, purchase materials, improve technology, and more.
They're doing amazing and innovative programs only possible because of the state aid funds, including providing library1632 services to incarcerated patrons by teaching them how to1636 read books to their own children, partnering with the trial court to provide free equal1642 access to the court system for the public, and providing English classes and conversation circles for those new to our country. Teen programs are flourishing, providing teens with an opportunity to create human connections and overcome social isolation. Because libraries are viewed as a safe space, residents at risk come to the library for help when they're in crisis. Urban libraries are adding social workers to their staff using state aid funds. This line makes a huge impact on the libraries and their residents.
Also notable about state aid, it's an annual voluntary program administered by our agency that distributes this local aid to municipalities. 98% of the Commonwealth's cities and towns currently participate. The program encourages municipal support and improvement of robust public library services, bolsters resource sharing among libraries, and importantly, compensates for differences in municipal funding capacities. Libraries that are certified in our state aid program also have access to reciprocal borrowing of millions of items from other libraries. They have access to MBLC construction grants, federal library services and technology act grants, and our small libraries in networks program, which provides libraries that serve communities with populations under 10,000 with funding to support their membership in one of our nine automated library networks.
Increased funding to this line saves local communities money. And certified libraries give residents access to 53 million items from across the state. Line 9508, the Massachusetts Center for the Book, is the Commonwealth's affiliate of the Library of Congress Center for the Book, which promotes books and libraries, literacy and reading, and poetry and literature. The Massachusetts Center for the Book provides critical literacy programs1779 in gateway communities, and is a powerful ally for1783 libraries extending literacy and learning beyond traditional library audiences. Through programming and events, the Massachusetts Center for the Book impacts readers of all ages by concentrating on family literacy as well as teen and adult reader engagement.
Increased funding to the Massachusetts Center for the Book bridges the literacy gap and deepens literacy efforts in communities of need. Capital projects also help municipalities build and renovate libraries. The Massachusetts Public Library Construction Program has funded 237 construction grants and 113 planning and design grants to 264 municipalities across the Commonwealth since 1987. The funding for our construction program comes1841 from bonds, not from the budget. In addition to the many jobs these1847 projects bring to local communities during the construction phase, municipalities continue to see economic growth in the areas surrounding new or renovated and expanded library facilities long after the projects are completed. We're working with the Executive Office of Administration and Finance to continue increasing our annual cap for our construction program by $1 million per year from 26 million in FY1874 25 to 30 million in FY 29 as A&F has proposed.
This will allow us to complete our projects while mitigating escalation impact, which helps keep the program sustainable and projects attainable for municipalities. And lastly, I didn't wanna finish up my remarks without mentioning the Perkins and Worcester Talking Book libraries. Both of these organizations provide accessible library services to approximately 20,000 individuals in Massachusetts who are blind or print disabled and to organizations that provide services to this population. Both libraries enable people of all ages who are blind, vision impaired, or with a physical, perceptual, or reading disability that prevents them from using regular print materials to enjoy the pleasure of reading and pursuit of lifelong learning opportunities. The libraries provide free delivery of or online access to audio, large print, and braille materials, including books, magazines, and newspapers. Both libraries are network members of the Library of Congress National Library Service For The Blind and Print Disabled. So you can see that all of our budget lines, all seven of our budget lines touch every resident of1960 the Commonwealth. And we appreciate your support to help us continue1964 to do this work. Thank you.
FERRANTE - Thank you for your testimony today. A comment that I'd like to make is that it's interesting to me that my mom was a librarian, And it must have rubbed off on me1982 in some way because Drew Tarr,1984 who most of you know, his mom, my, he's my chief of staff. His mom was also a librarian, so it it seems to1992 run-in the office. But, and I would expect nothing less than the Board of Library Overseers to put out for us all kinds of tools so we could understand in-depth the funding of the library and the work that you do. With that, I wanna ask the members if anybody has a question. It was quite exhaust, your testimony was quite comprehensive. And I don't mean exhaustive in the negative, I mean it in the positive, that you covered a lot of the basis that we were hoping that you would. Is there any member that has a question, Senator Tarr?
TARR - Thank you, Madam Chair, and thank you for your testimony. It was a comprehensive review and it reminded us all of the vital nature of libraries in our communities. What I wanted to do is, just take a moment and ask that before you leave, you take a look right out these windows and see a new library building springing up in an historic building, on a challenging site, in the middle of our downtown that is an essential resource for this community. And it is happening because of the work of the2059 Mass Board of Library Commissioners. And when we encountered difficulties relative to supply chain issues and2065 cost increases, you all were extremely flexible in working with the members of the legislature to find a way through that to be able to accommodate those increases so those projects could move forward.
So I would wanna take a moment to thank you for that. And you can see literally concrete evidence of the good work of the MBLC. Just look right outside, there's the Sawyer Free Library. And we are able to preserve the character of that building while modernizing it. And it is due to that collaboration and that innovation. I did have one quick question. You mentioned the increase in the utilization of library services, which comes as no surprise. I was hoping you might be able to give us a little bit of a sense of what the leading drivers are. What are the areas where most utilization is occurring or just maybe some of the more priority items where we see a lot of increase? Thank you
AMYOT - I would say based on our annual information statistic report that we collect from the libraries, it's circulation of materials. So the items that patrons are checking out, physical items and ebooks. And people, I wanna dispel the myth, people are still reading actual physical books, and you can get ebooks for free from your library. You don't have to buy them on Amazon or your favorite online vendor. So we're seeing a lot of that. But we also know, from the past, when economic times get difficult, people turn to their public libraries. They cut everything they can at home. So they cut their Internet and use the Internet at the library, or they go to the library and borrow a hotspot, have it for a couple weeks, return it, wait a few days, go back and take it again. The library becomes that essential public resource. And without the funding to support that because we know what's happening out in society. We know that it's coming, and we know that people are going again to be turning to their public libraries. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Senator Olivera.
OLIVEIRA - Thank you, madam chair, and thank you to the MBLC for your testimony and your budget advocacy. It plays a special place in my heart, aid to regional libraries, as it was my first speech that I gave on the Senate floor as a member of the Senate in support of our regional library systems and the work that they do. I think it's important to also say that libraries aren't just the centers that you go to to read materials or be part2236 of it, but they're such a big part of our communities. You heard every member list2240 their communities that they represent or the regions they represent. Many of us hold office hours in a lot of our communities, and they take place in libraries. And they are the place that we go to to work with veterans, whether we have a veterans event, or a community event, or a council event. They are the lifeblood of each one of our 351 cities and towns, and they are essential to our democracy.
My question has to do with something that you brought up at the beginning, the increase in book challenges that we see throughout, not just here in Massachusetts, but throughout the country right now. And Massachusetts is leading New England in the number of book challenges within our communities, not just in our public libraries, but also in our public school libraries. There's also a trend that's increasing among librarians right now, something called self censorship. Meaning that you might not even have a library challenge, but librarians are self censoring the materials that they're putting within their libraries. What can the MBLC do to add a layer of professional development for librarians across Massachusetts to ward against these threats to censoring material and also self censorship as well?
AMYOT - We actually have a series going up on the blog on our agency website as we speak. One of our consultants titles it fortifying your library, and we'll be talking about those exact issues of steps that libraries can take to shore up policies, and to be prepared, and to train staff of when someone comes in and aggressively wants to challenge materials, how do you handle that? What do you say? What do you do? Having been in that situation personally myself as a recently former library director, I know the stress, and I know what that feels like. So we want to equip people to deal with that as much, as we can. We're also working closely with the Massachusetts Library System, which is funded through our regional library line to coordinate continuing education for librarians around all of these topics. So, yeah, thank you for mentioning that.
SPEAKER1 - Representative Diggs?
DIGGS - I honestly don't have a question. I just wanted to say thank you because, honestly, we like Jake said, Senator Oliveira said, we have, office hours, and we're constantly in the libraries. And we see all the work that you2409 do , and people coming in and2411 using our libraries. And, you know, it's very important for us to be able to get our history. We can learn from our history so we don't make the same mistakes that we've made mistakes from before. We can get better. That's the only way we retool each other and retool ourselves, is by getting better and by being, you know, practicing makes perfect. So finding out what those things are and making ourselves better is is definitely a way. So, I just wanna thank you for what you do, and, keep up the awesome work. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. Thank you, rep Diggs. We're gonna go to we're gonna go to China, rep China Tyler, next. And then if there are, representatives that have a question, just raise your hand so I can get you on my list.
TYLER - Thank you so much, Madam Chair. I just wanted to, again, echo what Representative Diggs said and say thank you. I've had the pleasure of serving as a trustee of the Boston Public Library Board for the past five years and it takes a lot of work to be able to do what you guys do. And I understand that, you know, what you guys do is provide a crucial point of access to endless resources for folks that, you know, live in our communities, all our communities across the Commonwealth. And what I wanted to encourage you to continue to do, in that space, is continue to be innovative. I've seen some amazing programming come on board with closing the gap when it comes to early education and making sure that our kids can read, and or opening up our doors to folks who are formerly incarcerated because libraries are institutions, and they can feel kind of scary to a lot of folks who may not be used to walking through the doors. So I just wanted to encourage you to continue to be innovative and just making sure that it's a access point for all and to say thank you. Thank you.
SPEAKER1 - Thank you. Next, we have representative Moran.
MORAN - Thank you, madam vice chair. I just wanted to reemphasize what Senator Oliveira said about the importance of keeping our librarians safe. And I'd point out, we're not here to talk about legislation, but we have filed a bill, an act regarding free expression this year. And, the question, I guess, I have is, what which of these line items from a budget perspective ensure or help to ensure that our librarians are not harassed and they're kept safe?
AMYOT - That would be, I would say most of our lines, honestly. The agency line provides funding for our staff to be able to work with librarians to help them with all of those issues. Our state aid line allows them to bring in specialists to do staff training if they need that. And our regional, state aid to regional libraries provides funding for, as I mentioned earlier, for the Massachusetts library system to provide additional continuing education for librarians across the state. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. Next, we have representative Sabadosa.
SABADOSA - Thank you so much for your testimony here today. I was especially heartened to hear you include the Mass Center For The Book book amongst your priorities. And I was wondering if you could share a little bit, I believe I'm correct in saying that it is a satellite of the Library of Congress. Is that correct?
AMYOT - Yes.
SABADOSA - And I'm just wondering, if that entails any sort of federal funding for them, if there's anything we should be aware of and what those funding streams look like.
AMYOT - So the Mass Center For The Book was originally founded as a public private partnership. They're chartered through the Library of Congress but they don't receive funding. Every state has a charter with the Library of Congress for their Center For The Book, and it gives them access to programming and technical help, but there's no funding attached to that. So the funding that our Center For The Book receives is through the state budget and through a small amount of private fundraising. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. Next, we have representative Arriga.
ARRIAGA - I simply wanna echo everyone's sentiment. We are grateful to have the libraries in all our communities, towns, understanding that we are servicing all our constituents, the young and the old, with in hand books, information classes. I know my library, which I spent a lot of time there, we have classes to learn about computer literacy, even language. We host all kinds of meetings there. But one of the things that stands out to me, and I think all my colleagues here would agree, is having books. So some are reading books. There's a list of books for the kids and a lot of families, unfortunately, can't get their hands on the books. They can't afford them. But I know one of the things that my local library is doing, they have the books there. They can order the books, and they also have it in a virtual method, and even, like, a listening audio, for our kids.
And the importance of that it's crucial, so when our kids return back into the classroom in September, they're all on that page. They're not behind. And that is something that I think sometimes goes a little bit unnoticed. So I just wanted to take this moment and thank you for that because it really does make a big difference. And I've never seen kids so excited to go to the library and get their books, right? And they get the little card, and they know they can print their papers for school there. They share that information with their friends. My kid is one of them. She's going around advocating. So now our library is full of kids printing their papers and that's what we want. We want our communities to see our libraries as a community center for multiple resources. And you guys are doing a great job with that. And if there's anything particular, I know you mentioned few, that will make that big difference in continuing to explore and expand these programs, please let us know. Thank you so much.
AMYOT - Thank you. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER16 - Thank you. Senator Comerford?
COMERFORD - Thanks, Madam Chair. My mom was also a public librarian. Senator Oliveira saved me from going back. I just wanted to just add a word of thanks, especially, around the library construction help that you provide so doggedly and in such a steadfast, I think, collegial way with local communities. And, I want to go back to, now it's a couple of years ago, but when MBLC really stretched in a post pandemic setting to allow for cost overages in partnership with the administration and the legislature. It was an unprecedented show of solidarity for local communities and you saved 13 libraries. I believe the number is 13. And I just, I have personal experience with the library project in my district that has been hard to do. Hard. And you have been there with this town every step of the way. I feel like you're an agency that wants to get to yes. You want to say yes because these are radical places, these libraries, right? Can you imagine would think now if we thought, you know, oh, let's build these places where people can come together and get free stuff and talk about democracy and new ideas, and get access to information and opportunity, with really informed people to guide them. It would be a radical thought right now, but you make it real every day. So I'm very, very grateful. Thank you. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Representative Hawkins?
SPEAKER21 - Thank you. And I as well, my mother was a librarian.
SPEAKER28 - We're gonna
SPEAKER1 - have a club going.
I know. But thank thank
HAWKINS - I mostly wanna thank you. In Attleboro, we've certainly had issues with book bans and appreciate the support from the library association in dealing with that. And just a reminder, some of the, in Attleboro our public library also is like a bunch of social workers. They handle a lot of people that have issues as a source for information. But going forward recently, I think even increasingly value is to find reliable news that can be trusted, and you perform that service as well. So thank you for all you're doing. And my mother would be very proud of me to be here supporting you and your efforts. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Next, I'd like to, introduce 2 house members that just came in. 1 is, representative Rita Mendez from the Brockton area and also Steven Owens from the Watertown area. And, rep Owens, I know you have a quest a question or a comment.
REP MENDEZ - Thank you, Madam Chair, and I do apologize for being a few minutes late. I was listening on the way in. And as a representative from Watertown, I just wanted to say thank you for2984 uplifting the Perkins Talking Book Library in your line items every year and every year. It is a phenomenal operation they have going there. I'd like to invite any members of the committee who would love to see what they've got going on their premises. Serves, just, a huge number of people. And I'd really in the interest of time, just wanna say thank you for uplifting them every year.
SPEAKER1 - You. Is there any other member of the committee that wants to representative Holmes?
REP OWENS - Good day. My question is about what Rep Tyler was talking about, how we serve so many people. Is Boston still considered the library of last resort? I know you've said we are getting this across the state, but are we still the library for everyone in the state?
AMYOT - Yes. Except we gave it a nicer name. We call it now the library for the Commonwealth.
OWENS - Oh, okay. Alright. So library for the Commonwealth. So, we are that. And so I'm just just figuring out on the line items, is there a special amount that Boston gets for having that responsibility, and which line item is that?
AMYOT - That is in state aid to regional libraries. And, yes, line 7000-9401.
OWENS - And do you know what that amount we get for having that responsibility is?
UNIDENTIFIED SPEAKER - MBLC - Library system. Sorry. That line is split between the Massachusetts library system and the library for the Commonwealth. They've come to an agreement that the Massachusetts library system gets 75% of that line yearly, and the library for the Commonwealth gets 25%.
OWENS - So 25% of?
UNIDENTIFIED SPEAKER - 7000-9401 line.
OWENS - Thank you. And is that something you're asking for an increase in? Wanna make sure I'm asking.
UNIDENTIFIED SPEAKER - That's one of our lines that we're asking for cost of living increase in.
OWENS - Alright. Thank you.
FERRANTE - Thank you. And and with that, it concludes, the quest the, the questioning for, this panel. I wanna thank you again. Clearly, through the questions and through your testimony, we know how important the library system is. I'm beginning to think that with the number of people who had moms as librarians, we might wanna start a new caucus of3136 libraries. Mother in laws count. I mean, I just you know, sisters, brothers, anybody in the immediate family. And I'd like to echo what Steve Owens said. My mom was a librarian until she was 57. When she was 57, she lost her sight, which would be the hardest thing for a librarian. But she has come to know the Talking Book and the Perkins Library, very well. And so I thank you, as Steven said, for lifting them up. And, also, I would add, I don't know if our assistant fisheries and wildlife director, Sofathir is still here, but we often say affectionately of the library that we grew up in Downtown Gloucester in immigrant families.
And during the school year, when other students had the opportunity to go on family vacations, we didn't. But the library had this great programming where we were able to go. We were able to talk about different places that one might visit. And through our imaginations and through the generosity of the children's library, we would act out what our vacations would be like. And so we never felt as though we missed a vacation. It was always, oh, Friday's here, and Monday's gonna be at the Sawyer Free Library, and off we were gonna go. So, again, thank you not only for providing the book, the researches, the data, and the services, but also that community support for those who may be without and may be in need. Thank you.
AMYOT - Thank you. SHOW NON-ESSENTIAL DIALOGUE
K. Next up, we're gonna have the cannabis control commission. And then after the cannabis control commission, I believe that, we'll be breaking for, lunch. So if we could have the cannabis control commission come up.
FERRANTE - Before we start, Sofathir, if you could just stand up and wave to I I wanted to introduce you. I didn't see you hiding back there, but I wanna thank our assistant director of Fish and Wildlife for coming and sitting in on our hearing today. There's a story in today's Globe, unfortunately, to the members that are on this commission saying that because of cuts to the NOAA, the National, Oceanic and Atmospheric Administration, our fishermen do not know if and when they will be able to open the fishing year for them today. So, when Secretary Howe comes later today, of economic development, you'll be hearing me asking her some questions about advocacy for our fishermen with the administration so that we can ensure that fishing families are able to have a living, an earned living, this year. So with that, I'm gonna stop there, but I am going to turn it over to the cannabis control commission.
BRUCE STEBBINS - CCC - Good morning. Thank you, chair, Representative Ferrante, Senator Comerford, Representative Diggs, Senator Oliveira, and members of the committee. Thank you for the opportunity to testify regarding the Cannabis Control Commission's budget request for FY 2026. We are grateful for the legislature's continued partnership in ensuring that the Commonwealth's adult and medical use cannabis industries are safe, equitable, and well regulated. I'm Bruce Stebbins. I'm the acting chair of the Cannabis Control Commission. For those who don't know me, I was appointed as a commissioner in 2021 and as acting chair in 2024. Before that, I served as an inaugural commissioner of the Massachusetts Gaming Commission, where I drafted regulations, helped operationalize the agency, and awarded Massachusetts three casino licenses. I've also served in economic development positions for both the city of Springfield and the Massachusetts Office of Business Development.
Joining me today is commissioner3421 Kimberly Roy, who serves as the commission treasurer, our executive director, Travis Ahern, who we had the pleasure of onboarding just last week, and our chief financial and accounting officer, Lisa Schlegel. Together, we aim to provide a comprehensive overview of the commission's financial requirements, our recent achievements, and the substantial economic impact of the cannabis industry on the Commonwealth. For fiscal year 2026, the commission is respectfully requesting $30.08 million, which includes 26.12 million for operational maintenance and 3.96 million for critical expansionary initiatives, including the development of a state run standards lab, expansion of our social equity program, investment in IT infrastructure, and increased staffing levels.
The vast bulk of our request is not expansionary. It is necessary funding needed to maintain our regulatory oversight, ensure patient and consumer safety, and support the continued growth of an industry that has already contributed over $8 billion in total business to consumer sales to the Commonwealth's economy. Despite the industry's growth, the commission's funding has not kept pace. Since FY 2023, the number of operational licenses has increased by 25%, while our funding has only increased by 3%. Though we prioritize our mission critical functions to protect public health and safety, without additional resources, delays in compliance inspections, licensing approvals, and equity program implementation will grow, threatening public health safety and industry stability.
We understand difficult choices must be made and we respect fiscal constraints that impact all agencies and initiatives. However, investing in the cannabis industry should not just be viewed as a cost, but as a strategic investment, one that is proven revenue generator that yields tenfold returns for3561 state and local communities. For every dollar allocated to regulatory oversight and industry expansion, Massachusetts reaps $18 in revenue returned to the Commonwealth as well as job creation. In FY 2024 alone, the industry generated 272 million in tax revenue, exceeding the tax revenue provided by the alcohol industry. These taxes have supported programs at our sister agencies, including the Bureau of Substance Abuse Services, the Executive Office of Economic Development, the Department of Higher Education, Executive Office of Public Safety and Security, the Department of Public Health, and the Department of Agricultural Resources.
The marijuana regulation fund has been pivotal in funding those state initiatives at these agencies, including public health programs, infrastructure development, recidivism programs, and the cannabis social equity trust fund. The equity trust fund, which is managed by our colleagues at the Executive Office Economic Development and financed by cannabis taxes, has distributed over $26 million in grants to historically disadvantaged businesses, providing crucial capital in this industry to ensure equitable industry participation and fostering economic opportunities. The local option tax on cannabis sales has provided municipalities with more than 185.4 million in revenue since 2018. That allows cities and towns to invest in community reinvestment initiatives, public safety improvements, and youth programs. However, it is more than just tax dollars.
The cannabis industry directly supports more than 17,000 employees and over 1,000 licensees, while stimulating many ancillary industries such3683 as construction, security, marketing, professional services, and waste management. The cannabis industry also continues to expand, driving economic benefits for the Commonwealth. Since the launch of adult use sales, cost per gram of flower has steadily declined, making legal cannabis more affordable for consumers. In November 2018, the average price per gram was approximately $14.35. By 2023, it had dropped to $7.11. And today, the average retail price is $4.41 per gram. This nearly 70% decrease, alongside rising monthly revenues indicates a growing number of products moving through the regulated marketplace. This price stabilization is normal and reflects a competitive and maturing marketplace.
Despite the numerous benefits, revenue, and economic impact the cannabis industry has in Massachusetts, critical advancements have been delayed because of budgets. In FY 2025, the legislature allocated the commission 19.8 million which was just 76% of the 25.9 million requested despite significant new regulatory and operational mandates required under Chapter 180 of the Acts of 2022. This ongoing underinvestment has led to operational shortfalls, including delays in compliance inspections, public education campaigns, equity programs, and critical upgrades in product testing. This jeopardizes consumer safety, public trust, and integrity of the regulated market. During a Joint Committee on Cannabis Policy hearing in the fall of 2024, multiple stakeholders expressed the urgent need for the commission to receive its full budget to address market challenges, such as testing inconsistencies and regulatory compliance issues. Focused on continuing the industry's success is our commission's new executive director. Travis started his role Monday, actually, and today is prepared to share with you where the commission hopes to evolve and grow in FY 2026.
TRAVIS AHERN - CCC - Thank you, acting chair. Good afternoon, Representative Ferrante, Senator Comerford, Representative Diggs, Senator Oliveira, and members of the committee. It's an honor to address you today as a new executive director of the Cannabis Control Commission. My background in municipal administration, fiscal oversight, and regulatory policy has prepared me well for this role. And I'm eager to bring my experience to bear in advancing the commission's work. Before stepping into this role, I served as the town administrator for the town of Holliston, where I managed financial operations, budget allocations, and policy implementation at the municipal level. In that role, I worked closely with state and local officials to ensure that public resources were managed effectively and transparently, while also fostering economic growth and community development, including the contributions of licensed cannabis businesses operating in our town. I understand firsthand how crucial it is for state agencies to collaborate with stakeholders to achieve common goals and I intend to continue that approach at the commission.
I recognize cannabis industry in Massachusetts is at a pivotal moment. The market continues to expand, and we are seeing increased activity from other states establishing their own cannabis industries. As executive director, my focus is on ensuring the success of the agency staff and our critical daily operations. However, without full funding in FY 2026, the commission's ability to effectively regulate the industry will be jeopardized. Though the commission has historically categorized much of its funding request as expansionary, the reality is that these funds are necessary to implement legislative requirements and maintain the safety of the industry. The commission's FY 2026 request includes the restoration of $4.8 million in deferred costs from previous fiscal years. These deferred costs include critical IT investments, such as our patient portal and licensing system upgrades that affect the entire industry, as well as unfunded staff positions, public education campaigns, and social equity program training and technical assistance programs.
With this budget allocation, the commission will be able to enhance regulatory oversight, public safety, and industry development through modernizing its licensing system and improving the state's medical marijuana platform that was inherited from the Department of Public Health. These upgrades will make processes more efficient, improve data transparency, and help regulators, patients, and businesses work more efficiently. The commission hopes to follow the lead of other states and begin development of a state run standards laboratory to significantly enhance regulatory oversight, allowing for confirmatory product testing, deeper investigations into public health concerns, establish a more robust secret shopper program, and additional post market testing capabilities, all without relying on external laboratories.
We believe that this initial investment will lead to future cost savings for the Commonwealth. A state run lab is critical to addressing inconsistencies in independent lab testing and ensuring consumers and patients in Massachusetts have full confidence that cannabis products available for purchase have met rigorous safety and potency standards. Other states have encountered significant issues with potency inflation and product contamination, and Massachusetts is not immune to these challenges. The need for a state run standards laboratory is further underscored by recent enforcement actions and investigations into product safety. Testing conducted between January and February of 2025 revealed inconsistency and potency results and yeast and mold contamination, prompting administrative action by the commission. This included full panel testing and individual confirmatory testing, which exceeded $5,000 for just a limited set of samples.
A state run lab would reduce these costs over time, ensuring the commission has the resources to protect public health without financial barriers. The standards laboratory would also determine the necessity for product recalls and serve as an industry wide reference point for lab testing standards and methods promoting uniformity, accuracy in labeling, enhancing product quality, and strengthening the public's trust in cannabis products. Additionally, the commission hopes to expand the social equity program and other resources to help individuals disproportionately impacted by cannabis prohibition. In FY 24, the commission had a budget of $400,000 for these programs. Over in FY 25, this has been cut to only $100,000, resulting in a delay in new coursework and technical training that would better prepare these individuals to enter the industry.
Our FY 2026 budget includes funding for this program to offer additional technical assistance courses and workforce training to ensure that more people have the opportunity to thrive in the cannabis industry. As a national leader in social equity, these programs and4111 ability to fund studies on exclusivity will be integral to ensuring continued progress toward an inclusive marketplace and serve as a model for other states to follow. In terms of personnel, the commission needs to hire additional staff as it matures. These positions include investigators, licensing specialists, and attorneys, namely operators and staff to handle the increased workload from Chapter 180. An increase in staffing will also reduce4136 caseloads for our staff and allow teams4138 the needed bandwidth to implement new regulations. Additional staff will speed up application processing, conduct compliance inspections, and strengthen operational support. Without an increase in funding for salaries, the commission will need to look at reducing staff, resulting in delays in licensing and inspections, slower responses on enforcement actions, and could result in significant challenges for the industry.
Beyond these initiatives, the commission is committed to upholding five key priorities to sustain the Commonwealth's leadership in cannabis regulation. Number 1, enhancing regulatory efficiency, 2, expanding public education and outreach, 3, bolstering compliance and enforcement, 4, advancing social equity initiatives, and 5, safeguarding fiscal sustainability. As the commission seeks additional budget resources, we must also continue to ensure that we are making efficient use of taxpayer dollars. Our goal is to maximize revenue generation4190 while maintaining regulatory integrity4192 and protecting consumers. With continued investment in regulation4196 enforcement and equity, we can ensure product safety, protect public health, and support the economic success of Massachusetts businesses and communities. I am committed to ensuring that the commission operates with integrity, accountability, and a forward thinking approach that meets the evolving needs of the industry and the public. I would now like to turn it over to the commission's CFAO, Lisa Schlegel.
LISA SCHLEGEL - CCC - Thank you, executive director. Good afternoon, Representative Ferrante, Senator Comerford, Representative Diggs, Senator Oliveira, and members of the committee. As chief financial officer, I'm here to outline the financial landscape of the cannabis industry in Massachusetts and how it impacts the commission's ability to regulate effectively. The cannabis industry has grown into a major economic force in4242 the commonwealth generating substantial tax revenue at both the state and local4246 levels. Cannabis is the commonwealth's number 1 cash crop generating more revenue than any other agricultural commodity including cranberries. In the 2024 calendar year, cannabis generated over $1.64 billion in gross sales, setting a new annual record for the commonwealth. Additionally, the 10.75% excise tax on retail cannabis sales generated 174 million in revenue to the marijuana regulation fund. And the 6.25% Massachusetts sales tax generated $98.7 million for FY 24.
Municipalities who imposed a local option tax of up to 3% received over $47 million in local tax revenue in FY 24. Simply put, cannabis is no longer an emerging market. It's a critical pillar of the Commonwealth's economy' We have seen an increase in the FY 25 collection of fees, resulting in a 10% increase of our revenue reported a year ago. The introduction on new license types will continue to increase revenue. Rather than focusing on a goal of being self funded, the commission has not raised fees since inception in an effort to support an industry that's been the commission has not raised fees since inception in an effort to support an industry already facing incredible economic challenges due to federal prohibition.
As part of fulfilling our first in the nation's statutory equity mandate, the commission provides application and license fee waivers to social equity and economic empowerment participants. Year after year, the commission regularly generates more annual non tax revenue than it spend, generating needed public funds and remaining a solid investment taxpayers can be proud of. However, as the industry matures, so do the demands placed on the commission. Requiring adequate funding to support industry oversight, public safety initiatives, and equitable access to the market. Despite our statutory mandate to educate the public on health and safety issues, the commission has not received funding for public awareness since September 23.
As the commission begins to roll out social consumption licenses, we hope to launch a campaign aiming to prevent underage consumption, address the risks of high potency products, raise awareness of cannabis in peer driving, and educate constituents about responsible on-site social consumption prior to the opening of such establishments and activities. We can only do this with the reinstatement of public awareness funding. In discussions with regulators from states that have already implemented social consumption establishment, a common challenge they have identified was the lack of an early public education. Many expressed that having the resources to launch similar campaigns before establishments open would have significantly improved public safety within their states. The commission continues to pay industry costs such as medical patient registration cards, licensee badges, and fee waivers for equity businesses out of its operating budget.
As costs have risen so have these expenses to over $1 million in FY 24, placing additional strain on the commission's resources and diverting funds from agency initiatives. The FY 26 budget request includes initial outlays for digital registrations and electronic badging, as well as the state run standards lab. These initiatives will achieve systematic efficiencies and cost savings in future budget years. Additionally, the commission's outdated IT infrastructure for both the medical patient portal and the licensing platforms required $1.8 million investment to modernize its systems. $1.2 million of this represents one time implementation or upgrade costs.
Currently, the commission relies on separate systems for licensing, patient registration and allocations, investigations and enforcement, which also facilitate the collection4493 of approximately $20 million in non tax revenue. Upgrading these platforms will streamline staff operations, enhance security and compliance monitoring, and improve the experience for patients and licensees ultimately reducing administrative burdens and increasing constituent access. Overall, the revenue generated by the cannabis industry underscores its importance to the commonwealth's economy. But sustaining this success requires strategic investment. I would4524 now like to turn it over to Commissioner Roy to discuss the commission's work and successes over FY 24 and4530 FY 25 thus far.
KIMBERLY ROY - CCC - Thank you, Lisa. Thank you so much chairs Ferrante and Comerford, Vice Chair Diggs, and Senator Oliveira. And thank you to all the members today, for my time. Very grateful. Thank you. As mentioned, I am commissioner Kimberly Roy. I sit in the public health seat of the commission and currently serve as the commission's treasurer. During my time as commissioner, Massachusetts has remained committed to public health and safety while remaining a forefront of policy. Despite increasing competition from surrounding states, Massachusetts remains a national leader in cannabis regulation and4574 economic impact. It is our responsibility to continue to set that standard. In4580 fiscal year 2024, the commission made multiple contributions to federal cannabis policy discussions. The commission provided data to the Food and Drug Administration on medical cannabis use, product composition, and patient purchasing trends. The commission also submitted formal comments to the Drug Enforcement Administration, supporting the reschedule of marijuana to a schedule 3 controlled substance.
The commission has engaged with cannabis regulators nationwide to stay on the cutting edge of policy in issues facing the industry, including hosting delegates from Hawaii to share best practices for adult use cannabis regulation. To sustain the status as a national leader, the commission requires adequate funding to expand and enhance the industry. Despite budget constraints, the commission achieved several key milestones in 2024, including three of the highest grossing sales months on record occurring in 2024 with revenue exceeding 140 million in each of those three months. Despite significant staffing needs, the commission approved 119 new licenses, including 48 marijuana retailers, seven cultivators, 14 product manufacturers, two delivery couriers, six delivery operators, and 38 medical treatment centers.
Despite having an insufficient and outdated patient portal, the commission reached an all time registration of over 90,000 medical marijuana patients and 6,317 caregivers. Despite having a significant decrease in social equity funding, the commission accepted 2294692 new participants into the social equity program, providing free technical assistance to individuals disproportionately impacted by marijuana prohibition. Despite not having funding to fulfill our statutory mandate to educate the public on health and safety issues, the commission developed and launched multiple campaigns, including the faces of equity campaign to highlight industry diversity and new consumer awareness programs to inform the public about cannabis safety, potency, and illicit market risks.
The commission worked diligently to implement key regulatory reforms under Chapter 180, including host community agreement oversight, model bylaws, community impact fee forms, and 20 guidance documents. By conducting over 900 inspections, the commission has also taken steps to increase compliance and enforcement measures with the goal of ensuring product safety and consumer protection. During the past year, the commission issued new testing guidance and protocols, including updated compliance and safety standards that align with national best practices. The commission also published new training curricula for cannabis businesses, employees, allowing them to receive advanced license specific training. The commission's nationally recognized research team presented research at four scientific meetings. Our constituent services team and other departments respond to over 100, per day in inquiries from patients, stakeholders, licensees, municipal officials, and members of the public.
Commissioners have conducted listening sessions across the Commonwealth, including on Martha's Vineyard, to hear directly from patients, licensees, and the public on pressing issues facing the industry. These achievements reflect4801 our commitment to delivering on our legislative4803 mandates even under constrained resources. With the right investment, the commission can deliver impactful results that benefit the industry and the public. In fact, with the exception of 2022, when the commission advocated for key reforms that were adopted as part of Chapter 180, our agency has promulgated updated regulations every year to help keep pace with the pace of change in the evolving industry locally and nationally.4828 With additional investments in resources, the commission4832 can further promote and protect public health and safety, improve industry oversight, streamline licensing, and enhance compliance enforcement.
The Cannabis Control Commission remains committed to maintaining the highest regulatory standards. But without proper resources and future investments, it will be challenging. And as a result, ensuring compliance, safety, and equitable industry growth may hang in the balance. Respectfully, even a one time appropriation to provide the commission with the ability to stand up a standards laboratory for confirmatory testing and implement a modernized patient friendly patient portal would be a significant step to assist us in promoting, preserving, and protecting public health. Thus far in 2025, the commission has issued advisories and stricter testing requirements, demonstrating commitment to worker safety, consumer safety, and swift public communication. Revised our adult and medical use regulations to better support social equity delivery businesses, testing transportation, and small business expansion and patient access.
Conducted listening sessions and public comment periods for licensees on topics such as outdoor cultivation, laboratory testing, the medical use of marijuana program, and accounts receivables. Published a draft framework for three types of social consumption establishments focusing on receiving input from municipalities, local tourism boards, local health departments, law enforcement, elected officials, and the public. We met with community members and patients at senior centers and health fairs across the state and presented at John Hopkins Bloomberg School of Health with regulators from other states on social equity in the cannabis industry. Progress in the4941 industry and at the commission continues to advance as new license types, technology, testing protocols, and products develop, the commission is actively addressing challenges to strengthen the industry. However, continued progress requires the necessary resources.
With 30.08 million in funding, the commission can continue to ensure public safety through robust compliance and enforcement, expands equity program to promote fair and inclusive market, invest in public education and research initiatives, and sustain industry growth while maintaining consumer confidence. The commission remains committed to its mission of ensuring public health and safety, regulatory compliance, and economic equity within the cannabis industry.4989 We appreciate the legislature's consideration of our request and look forward to working with you and our partners across government to strengthen the Commonwealth's4999 cannabis industry and uphold the high standards that Massachusetts residents expect. On behalf of the entire Cannabis Control Commission, thank you for your time and consideration. We are happy to answer any questions you may have. Thank you. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. I'm gonna hold, my question, and I am gonna turn to my left and ask senator Olivera if he has question.
OLIVEIRA - Thank you, and thank you, Acting Chair Stebbins, and congratulations on the new role, Travis, and to the other commissioners and members. Thank you for giving us an overview of the cannabis industry and the directions and trends that they're going in. My question has to do with some of the social equity licenses that currently exist. And thank you for highlighting the fact that the support for social equity has gone down budgetarily and needs to be bolstered up a bit in order to help that industry. My question with increased competition, area states all around us, with the exception of one, now having recreational use of marijuana and greater competition. Many of our social equity licenses that we have given out in the Commonwealth, a lot of the people who have done that have put their entire life savings into their business and growing their business. And given the trends of increased competition, given the trends of the value of cannabis products going down, how can we further help our social equity licensees in order to stave off against any type of industry competition that might adversely affect something that they put their life savings into?
STEBBINS - Thank you, senator. Great question. First, you know, I will just share with you a little bit of experience, I think, to your question about neighboring competition from states that have since legalized since Massachusetts legalized. Anecdotally, the licensees that I've talked to, I went out to the Berkshires, I visited a lot in the5131 Berkshires, especially as New York and Vermont were coming online. I think what we have all done is, we gave Massachusetts kind of a5139 head start. These licensees have valued, 1, not only producing a good product, but I think they've also valued getting to know their customers. The few that I talked to, one in North Adams, one in Pittsfield, they've all talked about still seeing out of state license5158 plates still come to us.
Obviously, we require them again.5162 Please consume your product here and not transfer it over state lines. But they have felt comfortable in terms of being first to the market. I think they were able to capture their customers and hold on to their customers. When it comes to what else we can do for our social equity applicants, a couple of things. And I think all of you in this room need to be congratulated for the changes you made in Chapter 180, not only municipal equity strategies as a requirement, but the creation of the social equity trust fund. I think the most recent round, which was, I think, a total allotment of about 25 million was really the first grant round that could see the full potential of5212 a fully funded round.
I know some folks are still working through5216 getting their money, but, in terms of talking to5220 social equity applicants, they do look at5222 that as a lifeline. I visited a social equity participant on Friday. They're taking their money. They wanna expand their operations. They wanna use that money to help build an elevator in an old mill building. Additionally, I think we're in the first phases of rolling out social consumption. That license type is gonna be exclusive and this was in the original regs. It'll be exclusive to our social equity applicants, our economic empowerment applicants, as well as our micro business and our craft marijuana cooperative growers. Those last two license types were really identified by folks who had been a resident of the Commonwealth for at least over a year. But we are getting out now and talking to social equity applicants, talking about the three potential licenses that'll be available, and I'll quickly run through those.
The first is a supplemental social consumption license. You already have a cultivation facility, you already have a retail facility, you already have a product manufacturing facility. You wanna make space available for people to come and safely consume products. Our, hospitality license is the second type. This is where we're looking for a little bit of ingenuity in the marketplace. We know there are people that wanna do yoga and incorporate cannabis5308 products into yoga. Or they might just wanna have a smoking area attached to their bed and breakfast. And our third type, which we consider kind of the lowest barrier to entry, is being able to host events with the licensed marijuana establishments in Massachusetts. So as I see it, I think that's kind of the next opportunity for the market with respect to our social equity participants.
Again, we have over 1,100 social equity program participants. A lot of those entered the program looking at that cannabis business ownership track. But we also offer other tracks, like, I wanna be in a management position, or I want a entry level position, or I have a plumbing business and I wanna see how I can support the industry without actually touching the plant. So support for our SEP programs, these new license types that we wanna roll out, and, again, we're also looking at our existing licenses, our delivery licenses to see if we should extend the exclusivity for that. I think those are tremendous opportunities to expand the marketplace. But I also think, you know, the great work that the legislature did helping us create that trust fund, I think we will, we have yet to see the real strong ramifications and impact of that program, but I'm optimistic.
OLIVEIRA - Thank you, madam chair. I will just say thank you, Acting Chair Stebbins for that. You were the only thing that's standing between lunch and us, so your testimony certainly gave me the munchies. Thank you.
STEBBINS - Good. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Nice 1. Rep Smola?
SMOLA - Thank you very much. Thank you for your testimony here today. And I appreciate all the good work that you do, especially on an evolving industry. So I heard a lot of things about growth, expansion, licensure, talk about opportunities for the future. But I guess I'm more concerned with data and what we've seen so far, particularly with youth and what we're looking at in numbers in terms of exposure, increase in use of marijuana, how it's getting out to the, perhaps, the places we don't really want it to get out to. I didn't hear much about that this morning, and I'd like you to give us a little bit of a background in terms of what we have seen in Massachusetts since we have legalized this industry.
And, you know, I appreciate the hard job that you have on this evolving industry, and, obviously, it's something new. But I hope that at least, some of my colleagues are concerned with the fact that because there's more access, because there's more exposure, and all you have to do is drive down Main Street in any community in Massachusetts from 7AM till midnight, we all smell more marijuana that's being used while people are driving in motor vehicles. A lot of folks are youth. This is a serious issue of concern. So outside of regulating the industry, looking at licensure, looking at all these positive aspects of expansion, are there other things that we should be looking at in terms of exposure particularly to youth and also the use of cannabis products behind the wheels of the car and other things? I'd like to get your thoughts on kind of in general about all that.
ROY - Thank you, Rep Smola. It's a great question and, actually, one near and dear to my heart. And I wanna thank the legislature because for your infinite wisdom of having us have legislative mandates that require us to look at trends, social trends and usage. And our research team, nationally recognized research team, every other year produces that report. In regards to driving, I'm really proud to say that, when I started as a commissioner about three years ago, it was brought to my attention, at the time, that there was no cannabis impairment taught in any of our driving schools across the Commonwealth. There was alcohol impairment curriculum, as there should be, but there was no cannabis impairment.
So I took that as a personal mission for myself and created a working group with the Registrar of Motor Vehicles, UMass Amherst. We had some researchers there, AAA Northeast, EOPSS. And we put together, AAA, had a curriculum already built that was based on empirical data peer reviewed by Brown University for accuracy. We took an iteration of that, and we filmed it in Massachusetts, conducive with Massachusetts laws and regulations. And it's called shifting gears, the blunt truth about marijuana and driving. And Massachusetts was the first state in the nation to mandate cannabis impairment curriculum to all the young people in Massachusetts. So since then, 50,000 young people, each year in the driving schools of Massachusetts receive information that's not stigmatization but empirical data.
If you feel different, you drive different. And to be aware, and we you to be safe, and we want you to make safe decisions at the end of the day, and ride share or and from an adult that, you know. But, since then, other state states have followed suit. Connecticut, I believe Rhode Island. So we're a model. We're a national model for keeping our young people safe when it comes to cannabis impairment behind the wheel. We have strict age gates in Massachusetts, 21 and older, unless you're a pediatric patient and you have certification, write offs from two physicians. IDs are checked at the door and, again, checked at the point of sale. So I can say this, look all of you in the eye and say that, we have very strict age gates at all of our dispensaries across the Commonwealth of Massachusetts.
Having said that, there is an illicit market, right? And I've heard instances in Worcester where, young people brought in candy bar, to one of the high schools in Worcester. I would say that's about two years ago, and it was a Willy Wonka bar. And we don't5674 offer Willy Wonka bars like that because anything that's marketed to young people, whether it's5680 celebrities or athletes, they can't intentionally be marketed to young people, neon colors or cartoons. And we have a product catalog. So if you're ever interested in what products are available in the market, you can go to our product catalog on the website. But, you know, we always say, if you're gonna consume, please consume safely and responsibly. And what does responsibly mean? If you have young people, teenagers, pets, you need to lock up your products because there is that gray area where what happens in a closed door setting at home, is tricky, you know, to make sure that everybody is locking up5721 their products safely. So that is an issue.
Now, do we have the exact numbers? I don't know what those are. I know we're in the process of looking at trends again, and the report now, I think, is over a year old. We can get that to you, the trends report. But, you know, we wanna educate our young people, right? Because brains develop up until you're 24 years of age, and we don't want young people to affect their development of their brains. So but, you know, young people do need it for medicinal purpose, so I don't wanna sound like I'm stigmatizing. But we do, we have more about MJ, which, talks about safe practices. We are proud to be one of the cosponsors of the driver's ed. So we are doing things. We don't have a budget, though, for consumer and patient education. We're mandated to do so. And we, respectfully, we do ask for that each year and it has not been funded. So we're doing stuff with 0.00 and it's tricky. And driver's ed I did with no budget, people donated, their resources. So we wanna educate but just don't have the funding to educate. So I'm sorry I don't have specific stats. I can get that to you, but that kind of gives you a high level assessment. Thank you.
SMOLA - I appreciate that. Just as a really quick follow-up, I know there's a lot of people that have questions, but that data, I think, is gonna matter most of all in terms of as we look at additional appropriation for whatever category you're seeking it. And so I think, you know, getting that to us is going to be of great value to the committee because, you know, we make those investments based upon the intel and the information that we're getting back. And, again, it's a new industry, and I know you're all working hard. And I don't want to sound like I'm trying to come down on you specifically because I know you're doing everything you possibly can under the circumstances. But as the evolution of this industry moves forward, it's an ever changing platform. As competition in other states come online, as their standards change or they bring them online to begin with, it's important that the Commonwealth make sure that we are on top of all this stuff and that we react accordingly. And so that's gonna be based on good data that's provided to the committee and the legislature overall. So anything that you can provide us with respect to usage and being able to draw that correlation between, usage and the time that's been around, I think, is gonna be very helpful. So thank you for your testimony.
ROY - We can get that sent out to the committee, very soon. And a trend that we do see with young people, mostly college age and young adults, is there's a shift from alcohol use to cannabis use, and we have seen those numbers shift.
SPEAKER2 - Thank you.
SPEAKER1 - Thank you. I wanna pause here for a second. There are about 1, 2, 3, 4, 5, 6, or members that have questions. However, we're approaching the 01:00 hour, and I know this is a marathon, session for a lot of us. A lot of you were, here at 10AM. So what I wanna say is that lunch is ready downstairs. If there's anybody who wants to go down, now, to to grab lunch or anybody in the in the next half half hour that wants to, go down after question. We'll take a a quick break. But what I wanna do is try to keep us on target and have, the secretary of labor begin her testimony between 01:50, 01:20, 1 25. So if if you'd like to go down now, lunch is, ready to be served. If you wanna wait because you're interested in the questions, by all means, wait and listen to the questions. And then let's all figure on being back up here around 01:20. Thank you. Okay. Next up is senator Gomez.
SEN GOMEZ - Thank you, Madam Chair. I will try to be quick. I do have quite a few questions. So please committee and individuals, bear with me. Obviously, I'm very humbled to be appointed as chair again to cannabis policy. So a lot of these questions are things that you guys are requesting for. So, 1, Travis, welcome to the team. Nice to see both commissioners here again. And salutations to the commissions that aren't here. I know that if they could, they would. And I know you guys work extremely hard, especially when it comes to the industry. Can you explain how much revenue is generated from employee badge fees and where that revenue from badging fees goes?
SCHLEGEL - Employee badge fees. I don't know if we, I don't have the exact amount of employee badge fees because there's some employ employees that have badge fees as well as agent badge fees. All revenue that comes into the commission goes to the marijuana regulation fund. We hold on to no revenue. Everything that comes in is automatically transferred to the marijuana regulation fund. But we can get you the breakdown of employees.
GOMEZ - I would love that. Thank you. And if the state was to approve the $187,000 to the budget increase for badging, will employers still need to absorb the cost of employee badges?
SCHLEGEL - 187,000?
GOMEZ - I believe 187,000 is the request.
SCHLEGEL - That's for all badge fees.
GOMEZ - Increase for all badge fees?
SCHLEGEL - All badge fees, including patient registration fees, we're looking to digitize instead of, right now, they're all paper issued registration fees for patients, and employee badges, and licensee badges. They're plastic or paper, and we're looking to change off of that and go to a digital or electronic badging system. So there's some implementation cost in that as well.
GOMEZ - So the question was, just specifically, would it eliminate employers having to pay for the badges entirely or they would have to, because I know right now there's a badge fee. Transitioning from that, is the $187,000 just to transition into a digitized more efficient manner, or does that eliminate badge fees is the question that I'm asking? And the commission or anybody can take that question.
SPEAKER33 - Mhmm. You're saying we bad to decide, but you're talking about commission employees.
SPEAKER17 - Not a not a problem, man.
STEBBINS - Just to add on the question of badging, right now, it is the licensee who carries that cost for their employee. I will tell you we have heard a lot from the industry about badging. Senator, if you were to6129 work for the same business that might have6131 three or four up to 9 licenses, you'd have to,6135 they'd be paying for a badge for every licensee that you worked for.6139 I have a strong interest in changing our regulations around badging. I think we're ready to modernize that process, implementing a digital badging process. But if you work for one employer, you should have one badge. We also do allow that if somebody is maintaining a good track record that that badge renewal could be extended out to three years.
Another challenge that we have with badging, and, again, a reason I wanna address this in regs, is that, if any of us were working in a marijuana establishment and were laid off tomorrow, we'd have to go through a whole badging process again with a new employer. I'd like to find a way to make that transition smoother. We know people need to support their families. We don't want them to leave the industry. We want a way to allow them to easily slide into a position with another cannabis licensee. And we also wanna make sure that, and we heard this from our outdoor cultivators, that they don't need people for an entire year. They need people specifically around cultivation. I would love to see our badging system be able to allow people to move employees between licensees for a period of time. So your employees could help me out when I'm ready to cultivate and vice versa. So there are definitely some changes to badging that we need to make. One badge per employee per licensee, one badge per agent per employer, as well as looking at, you know, how can we, somebody who loses their job not have to go all the way back through the registration process again. So there's a lot of work that we're focused on doing around badging in the coming year, and, obviously, moving to digital badges would be a tremendous help.
GOMEZ - Thank you for that answer. When going through the Commonwealth and going to different parts of different parts of the business, I did recognize that I had to take one badge off to put another badge on to different parts of the facility. And, obviously, the overhead cost that some of these employers have to take on versus, we know how volatile the industry, if you understand it and know it, obviously, I've been a part of it for a little while now. That's the reason of my question with badging. I have some more further questions into social equity, the social equity fund. And it's, how many social equity cohorts have been run so far in the state?
STEBBINS - We have had four cohorts and about 1,100 people go6301 through our social equity program.
GOMEZ - Do current and past programs participants have access to all of the training and resources from the past social equity program cohorts? If so, can you explain how the resource center and modules will be different or expanded from past classes? And, obviously, the question is because you guys are asking for a total of 855 more and increase when it comes to the social equity program.
STEBBINS - Great question. They are entitled to, everybody is entitled to access the curriculum. I would say the curriculum changes. I think just last year, we've added, and I will confirm these numbers for you, about 15 or 20 new educational segments for the industry. A lot of it is generated by what our SCE program participants say they're looking for. But as we find new resources, we make those available.
GOMEZ - I'm gonna ask a couple questions on testing. The commission is asking for an increase of 378,000 for testing. 88,000 maintenance increase to restore the I and E testing analytics and 200,000 for for standing testings lab for I and E, and a 90,000 to also increase testing and analytics. Can you explain what type of new testing, if any, the CCC will be conducting with this additional increase in testing dollars? And, also, are there plans to update the current testing system and regulations to create standardized testing across the testing program?
ROY - The short answer is yes, yes, yes, and yes. But thank you so much for that question, Senator Gomez. Sitting in the public health seat, I've been very focused on testing. If I can be quite honest, we probably should have requested even a higher appropriation or a onetime appropriation for a standards lab. I've been advocating this for a number of years now. The system we have, quite frankly, is inherently conflicted. And what I mean by that is, we have 12 independent testing laboratories. We do random inspections, scheduled inspections on these laboratories. We write up notices of deficiencies, and then we expect them to be the independent voice for us for confirmatory testing. The commission is in the process of, as we are, regulations mandate us to do so, excuse me, a a tip line, because we are getting whistleblower complaints. We are getting tips. We do follow-up on them.
And, recently, Senator Gomez, you may have6476 seen that we issued a patient and consumer advisory about potentially contaminated products. Let me first step back and say Massachusetts has the most stringent testing protocols in the nation. We have very prescriptive action limits for total yeast and mold. We have 10,000 colony forming units, for those,6494 where other states like Connecticut have a 100,000 colony forming units. We need to take a holistic review of our entire testing, protocol. We have a lot of sub-regulatory guidance documents that perhaps need to be put in a regulation.6506 We need to look at our action limits. As just one example, maybe we need to be strain specific around aspergillus and Pseudomonas as other states are. But the bottom line is we want honesty and integrity, and we want a healthy industry.
And currently, we do our best with what we have, but it is not enough. I testified in front of the agriculture committee about intoxicating hemp and folks were buying it off the shelves. We don't regulate hemp as you know, but independent, labs looked at them and said there were things in there they couldn't identify. Remember I called them Frankenoids or Frankenstein like compounds. So the state, to safeguard health and consumer health, we need to be able to independently verify on our own. The commission needs to be6558 able to say this potency is accurate. We need to say that they6564 are passing total yeast and mold, or heavy metals, or whatever it is, microtoxins. We need to be able to confirm that. We have no ability. We had a RFP out with one independent testing lab. It's cost prohibitive to run a few panels. We can't do that.
So, yes, we need to do a deep dive on our testing regulations. We need to have a more robust secret shopper program, but we're unable to do that without a testing lab. Secret shopper sounds easy, right? Buy the weed, test the weed. Well, who buys the weed? Who pays for the weed? It's evidence. How does it get transported as evidence? Where is the evidence room? It has to be stored in a particular temperature and room. Who tests the6609 weed and who destroys of it. It's really complicated. And so we're doing the best we can with what we have, but we can't guarantee without being able to independently confirm. So, we will look at our limits. We will look at strain specific. We will look at a more robust secret shopper program, and all of these things.
Youth prevention, that's another thing in secret shopper, right? We talked about youth, Rep Smola mentioned youth prevention. Well, that's right on our regulations, but it's really hard to do without the resources. So, thank you for this question. It's so important. Testing is what sets us apart from the illicit market. And we don't want folks to go to the illicit market and buy fentanyl laced cannabis. We don't want that. But we wanna make sure a cancer patient knows that they have the right potency, and there is no mold in their products. And so I may sound a little emotional, but it's really near and dear to my heart. So thank you so much for that question.
GOMEZ - Thank you6665 for articulating such6667 an answer. Really appreciate it. You alluded to hemp and there has been discussions to regulate hemp at a higher level. Particularly, we know that hemp is looked at as an agriculture versus, and you had gotten to the position of how hemp, there was certain things when it was tested, that was available before on certain shelves as having some psychoactive whatever chemicals or whatever scientifically made to make it kind of intoxicating, right? Has the commission discussed what the cost of regulating the industry would be if hemp was to be legislated to come under the Cannabis Control Commission's purview, I think?
ROY - May I just, thank you for that question. And I did testify in front of the agriculture committee, and thank you so much for the invitation. I actually referred to it as gas station weed. I don't know if you remember that. It was a public health crisis because there's no age gate, the products aren't properly tested. Folks walking in at gas stations and package stores buying products off the shelf. And what happened was this was a loophole in The United States Farm Bill. As we know, 0.3 and higher is cannabis and under is hemp. And we are so grateful to our partners at MDAR, who we partner with all the time. But it kind of fell under a DPH, MDAR, a little bit of Cannabis Control Commission, ABCC. And we're so grateful to the governor and the Department of Public Health and all of folks on the committee that made it possible that memo was issued and the products were removed from the shelf.
And the marijuana regulation fund does go to support part of MDAR. So we'd have to look at MDAR's budget. But the bottom line is, and this is the science you alluded to, Senator Gomez, where they're extracting hemp and making it psychoactive, reconstituting it. But we wanna make sure that if there are products like that, you know, maybe they're sold in our dispensaries, right, because they are psychoactive. So I think we need a holistic review of that. And I don't know what MDAR's current budget is but I know we're subject matter experts in cannabis. And whatever this body deems fit, we would respectfully try to execute. So I I'll pass it on to Chair Stebbins.
STEBBINS - Senator, not much to add other than we haven't assessed, or formulated, or proposed any budget if we were to undertake any type of that activity. But I will tell you that, my conversations with the ABCC, my conversations with the commissioner of public health, as well as with Commissioner Randall at MDAR, we're all focused on it. As Commissioner Roy said, we tried to figure out who had the authority to address the problem when some of this gas station weed started showing up in the marketplace. And, you know, I appreciate what DPH and ABCC did to request that it all be pulled from the shelves.
GOMEZ - Thank you. I have one last question. I forget who testified on the conversation behind accounts receivable. I think it was Travis. I'm not saying Travis has to answer this question, but what percentage of your operating budget goes towards monitoring businesses that are delinquent in payments towards the other businesses, if any? How much would it cost to establish a system to monitor these businesses similar to6891 what the alcohol board does? Would the commission need to dedicate additional manpower towards monitoring this issue?
STEBBINS - It's a great question. It's an industry question and it's a national question. Right now, according to some of the latest figures we have, that outstanding accounts receivable is about a $3 billion problem for the industry. The industry has approached us. They have asked us to look at the ABCC model. We have6923 spoken with Executive Director Sacrimone at the ABCC. He has given us the history of how they rolled out such a program that involved both work from the legislature as well as work from the ABCC. But, essentially, what was stood up was a platform paid for by the industry to track, I think to your point, track who had outstanding debts. I will tell you sitting here today, we are having internal conversations about what a platform could look like, would the industry want to opt in. But we do know that, you know, folks run up a bill one place, and then they run off and find somebody else to do business with. And it's impacting the whole supply chain from independent testing laboratories all the way down to our retail establishments.
So right now, if you are renewing your license, you know, we wanna make sure that you're still compliant with the secretary of state's office and the Department of Revenue. This is a new piece to it and one that we think, you know, could shake the foundations of the industry. So we are looking at what the ABCC did, looking at our own regulations to see how we can continue to hold licensees accountable. You know, there are, I'll express this as one commissioner. I might wanna institute some safeguards that you can't pursue a change of ownership or pursue a new license if you have outstanding accounts receivable. So we're just entering this conversation, entering the work in partnership with the ABCC to look at their model, but it's something that we're definitely focused on. And I would like to see us address this year through regulations.
SPEAKER1 - Thank you. Next, we have, representative McKenna.
MCKENNA - Thank you very much, Madam Chair. We've heard a number of times mentioning other states as competitors and measuring our own industry against other states. I'm wondering if we view other states and can view them as collaborators. And if you can expand on whether there's any relationship and or collaboration with peer agencies to find best practices to measure our standards versus theirs and see what's being done well or what needs improvement and if there's any sort of statewide agency of cannabis overseers per se.
STEBBINS - I'm happy to answer that question and I know Commissioner Roy would like to chime in as well. Actually, Massachusetts was the first state to kind of pull all their colleagues together. And that first meeting has evolved into7096 an organization that we call7098 CANNRA, which are the regulators across the United States. I will tell you from my7104 personal experience, since joining the commission, I've regularly reached out to other jurisdictions. We meet annually. We've not only had commissioners attend but staff attend to meet their peers as well. But a quick example of just7120 drafting our social consumption regulatory framework, we talked to California, Colorado, Nevada, Illinois, New Jersey, Michigan, and New York State.7130 So, there is definitely collab. This is all new for a lot of us. This is a newer industry, and we look to, there aren't many more mature markets out there than us, and we know there are some new markets that have come behind us. But I would say the collaboration is there. And CANNRA , I think we kind of feel some ownership to that organization starting has been a valuable place for not only commissioners again, but for the team to go and attend their meetings and talk amongst each other.
ROY - Thank you, Rep McKenna. When I go around the Commonwealth and talk, I say to folks, imagine having a product that you can't ship across state lines, you can't fly it in the air, you can't ship it over federal waters. There are no bankruptcy protections. There is limited or no access to banking. There's a provision in the IRS code called 280E where you cannot deduct ordinary business expenses, which makes your product taxed at an 80 to 90% tax rate. And in spite of that, Massachusetts cannabis, both adult medical use is an $8 billion industry despite all of those significant headwinds. And so what do we do to compete? And we are looking at, we're taking a holistic review out of all the license types. We've already done delivery, we've already done micro business. We're gonna do testing labs. And we're gonna keep going to make these, without compromising public health and safety, how do we make these more lucrative? How do we, I don't wanna use the word deregulate because I don't think my colleague loves that. So we're gonna modernize our regulations without jeopardizing those pillars.
We just had a medical hearing, and many folks brought up the topic of devertical integration. We have this vertical integration that that limits access. You have MTC deserts where we've had a number of MTCs closed, and now you have big swaths of land of towns that they have no access. So we have to look at how do we increase access to medical cannabis. That's one way. We're looking at all of these license types. We do collaborate with our counterparts, as Chair Stebbins said with CANNRA. But it's tricky. The social equity fund is helping folks with access to capital. But what else7266 can we do? But those are, some things are like they're, because the federal illegality, it's very tricky, but we are trying to do the best we can and take a holistic deep dive into all of these license types.
MCKENNA - Thank you. And to tie two things together, you mentioned the public safety and also working with CANNRA on the social consumption. I'm wondering if you can briefly paint a picture of what social consumption looks like because I think a lot of us hear that and we picture a hookah bar or a cigar bar and people going in and consuming a large quantity, and then how does that translate to public safety when they leave the establishment, where there's no clear measure of inebriation or intoxication, and how that translates to driving a motor vehicle after leaving an establishment? Where is that overlap with public safety and what social consumption is going to look like?
STEBBINS - Great question, and happy to do a deeper dive into this question with you. I will tell you how we have approached building out this framework. One of the first groups that we wanted to engage was the public safety community. So it started with Secretary Reedy, it has extended to the Massachusetts Municipal Police Training Commission. We're actually meeting next week with the major city chiefs organization. But what was interesting to me is, we heard from both the industry and public safety, we need training for these folks. We currently require anybody who touches the plant to go through four hours of training. We currently require anybody who's delivering cannabis to go through training. We're gonna create a training program that is specific to people that are gonna work in a social consumption establishment.
I have personally sat through one, not only our RVT training, which I will tell you needs some updating, but I've also sat through a drug recognition expert training. I've also sat through tips, safe serve training in a restaurant. There's a lot of similarities. I will tell you, additionally. So we wanna engage with public safety officials to help guide us in laying out what those training requirements are gonna be. Regs that were already on the books for social consumption requires that every licensee has some type of transportation program. Are you safely gonna be able to get a consumer home if you feel they've been impaired? What are the things you can do on-site for somebody who might have an adverse reaction,7412 whether it's CBD, water? There are ways to kind of cool down a person who may be having an adverse reaction.
We know the technology is not there. Similar to you can measure somebody's blood alcohol level, we know that technology doesn't exist. But just the fact that those public safety groups, and it's an important conversation as we move forward to communities that want to adopt social consumption, the public safety folks are at the table. Again, the visit I had on Friday of behavioral, the police chief was there to answer his questions, answer the department's questions. But we are building in considerable safeguards and happy to have a conversation with you in more detail if that works.
MCKENNA - Thank you. And one final very brief question was, you mentioned new licenses and new license types, and I know that one license type that existed was the micro business. It wasn't very utilized. And while it appeared to be a easy way into the industry, it actually kind of pigeonholed people and didn't allow for growth and expansion. And I see that as a potential for collaboration with the social equity piece to give more people opportunity. Has that micro business license been reviewed, been tweaked to allow it to be more functional and utilized, or what's the status of that?
STEBBINS - It has. It's a great question. It's one of the accomplishments that we had in our last regulatory round. We said that if you're a micro business, you can now own additional licenses. You'll be treated similar to how we treat those other license types in terms of the fees. But Commissioner Roy and I worked on that, we were coming across folks, a micro business license allows you to grow up to 5,000 square feet. Well, Well, if I'm doing great,7522 you're basically telling me I have to give that license up, give up my revenue stream to go pursue another license. So we've removed that. And the fact that,7532 when we get to social consumption, that that is also an eligible license7536 type for micro business. We think there are opportunities for more people to see that as a valuable step forward.
SPEAKER1 - Thank you. Next, representative Sullivan Olmeda.
SULLIVAN-ALMEIDA - Thank you, Madam Chair. And I will try to be brief. I7553 know everyone's that's still sitting here is probably hungry. So I just had7557 a really quick question around the oversight around policy and procedures. And it's my understanding that the dispensaries can't be handing out free marijuana or incentives, loyalty programming, things like in that nature. What oversight does the commission have? And I know I've heard, you know,7579 from the testimony that there's been concerns around funding and kind of everything evaluating as we go. But, as far as oversight when there's issues around either promoting loyalty programming and or gifting, I guess, you could say?
ROY - That's a great question. We did get a lot of questions on this. I'm gonna give you kind of a nuanced answer, so I'm gonna apologize upfront. So we did have our enforcement council provide a recommendation to the executive director and the commission about advertising. Now on medical, the MTCs can off offer that, right? We wanna give discounts to our veterans. We wanna give discounts to our seniors in loyalty programs, and that's available. But we have kind of MTC deserts right now, and not everybody's a medical patient for a number of reasons, right? But, we have in the regulations, that you can offer, you can't mass market, okay? And advertising on cannabis is real tricky because you can't, you have federal agencies that won't let you market in certain ways on social media, right? Because you use certain words, like, Instagram, and it's not gonna get through.
So, we have, in our regulations and in the bulletin, that you can't just send it to everybody on this, committee as an email. But everybody on this committee can opt in to Kim Roy's cannabis. And if you opt in, then we can tell you, yes, we have, this vape is the deal of the day, if you opt in. Obviously, you have to prove you're 21 or older if you opt in. So you can. If you go into a dispensary, you can ask, is there anything on special today? So if you voluntarily opt in or inquire, you can avail your, you know, the dispensary can avail those loyalty things or those discounts to you, but it can't mass market. It can't be just, like, to the masses. So I know it's a little nuanced, but that's currently, unless we address advertising and our regs, that's currently where it sits right now.
SULLIVAN-ALMEIDA - Okay. So does the commission have those conversations with different dispensaries that might be flagged by, constituents or just general public? I know that in my district specifically, I heard from several constituents regarding a billboard that had to do with the loyalty programming, and I got several calls.
ROY - Yeah. That would prompt an investigation.
SULLIVAN-ALMEIDA - Okay. And so is there transparency to the public? If a complaint was filed by the public, I guess the concern is around the response from the commission to the public because then they come to us, we go to you guys, and it's always, like, kind of like this, you know, merry-go-round. So are you guys looking at kind of, your policy and procedures around having that transparency with the public but also respecting maybe the privacy and barriers in businesses as well.
ROY - Yeah. And, yes, we are. We're gonna have an update at our next meeting. We're gonna have a commission tip line. Right now, we have 20 different avenues, if you will, for people to report complaints, whether it's, we always joke we're in complaint inbox a, the commissioners, but it goes to constituent services, it goes to the receptionist at the front. It's triaged all over the place. It can't be that way. It has to be one place where one email address, one phone number we can share with the public. We're in the process. In our, we're in March now. At our April meeting, we're7778 gonna have an update on that, so we are getting real close. The commission is looking to, we talked about hiring an intake officer, a person solely dedicated to when a mom calls or one of your constituents calls that it's fielded appropriately, and it's triaged appropriately, and that the the public, has, you know, a dedicated email line and a dedicated phone number, that they can call. And we want you to know that we take every complaint seriously. And if it has merit, we do follow-up. But it can be confusing, right? Where do I go? And so maybe we do need to be more transparent on what the rules are advertising. I know the memo is buried somewhere in our website, but maybe we need to broadcast that again to refresh people. But we hopefully, over the next couple months, we'll be able to announce this tip line.
SULLIVAN-ALMEIDA - Well, I think you guys might have addressed it because the7831 billboard message has changed.
ROY - Oh, good. Okay.
SULLIVAN-ALMEIDA - I know that from hearing7835 from constituents, it was the response back. So I think if you do have this kind of centralized area of complaints or concerns, that they will get a response back, you know, either response in general or just a swifter response. So I do appreciate that. And I'll let my constituents know that you guys are working on that. So thank you.
7854 ROY7854 -7854 Thank7854 you. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, representative. I'm gonna ask the panel. I know there were 2 more representatives that had question. Representative Souza and representative Holmes. I'm gonna ask you if you can answer those questions off to the side. To the members, I know there's 30 of us here, and that's a lot to answer questions. So as chair, looking at the clock and managing the clock, we have 3 secretaries coming up plus 2 more boards and commissions. At the rate we're going, we will not finish by 05:00, and I'm not sure if it's the will of this committee to have a second hearing. I'm thinking that it's probably not. So as chair, I'm gonna use my discretion and say, from now on, 1 question for the members, 1 follow-up. That's gonna be the new rule. Otherwise, we're gonna have to have a second hearing date. If you do have a question, you know, the the secretaries are here. You7906 can ask some of those follow-up questions afterwards. I'm sure those staff their staffs will take them, but these are only 2 commissions. And the secretaries are gonna come up with a lot more information and much larger requests. So in the interest of managing the clock, 1 question, 1 follow-up. With that, we're gonna take a 5 minute recess so that if anybody needs to use the restrooms or, do anything in that process. I know we started, even though we started at 11, most of you are here until 10, and I wanna give you that opportunity to take a bathroom break. Madam secretary, thank you for your patience today.
SPEAKER11 - Absolutely.
SPEAKER1 - I'm gonna, turn the microphone over to you and have you give you a presentation.
SPEAKER2 - Wonderful. Thank you.
LAUREN JONES - EOLWD - Good afternoon, Senator Oliveira, Vice Chair Ferrante, and members of the Joint Committee on Ways and Means. Good afternoon. I appreciate the opportunity to be in the wonderful city of Gloucester. And, ironically,7966 I'll be in Senator Oliveira's district tomorrow. But I appreciate the opportunity to testify before you on Governor Healey and Lieutenant Governor Driscoll's labor and workforce development budget recommendations for fiscal year 2026. Today, I am joined by Alicia Ordway, undersecretary of workforce development, and Josh Cutler, under secretary of labor. Together, alongside the rest of my senior staff who are also here today, department leaders and agency staff, we are committed to serving Massachusetts residents, including job seekers, workers, employers, and workforce partners statewide.
The mission of the Executive Office of Labor and Workforce Development, or I'll refer to in my testimony as LWD, is to enhance the quality, resiliency, and stability of the Commonwealth's workforce. LWD cultivates a skilled workforce across industries, provides economic stability for workers affected by job loss, injury, or illness, and uphold standards for safe working conditions within the workplace. Governor Healey's H1 FY 26 budget proposes $112.9 million in state funding for our executive office and departments. These resources are complemented by federal funds, most notably for our departments of unemployment assistance, career services, labor standards, and the division of apprentice standards. Additionally, the department of industrial accidents and the department of family and medical leave leverage administrative costs through their respective trust funds. That said, the 112.9 million represents critical dollars to serve workers, job seekers, individuals, and families in Massachusetts, especially dedicated to meet labor and workforce demands.
Additionally, with workforce development at the intersection of education for adult learners and economic development for high growth industries, I have the privilege of chairing the workforce skills cabinet and the opportunity to collaborate often with my colleagues across the governor's cabinet to support workforce initiatives in the governor's proposed budget. First, I'll speak to the administration's workforce agenda. A year ago I joined Governor Healey, in March of 2024, to release the administration's first workforce agenda, meeting the moment to attract, retain, and develop a future workforce. The agenda outlines four pillars that LWD, and collaborative agencies, and workforce partners continue to pursue towards a shared mission focused on reducing barriers to employment, increasing labor market participation, and supporting and developing programs to deliver good jobs and skilled workers to meet industry demands and to foster equitable and inclusive local economies statewide.
Building on this agenda, I will highlight a few key strategies that are also tied to critical line items in LWD's budget. This includes youth employment, sector based career training, and registered apprenticeship. On youth employment. As we invest in long term strategies and in consideration for the needs of high growth industries, we need to increase the employability of all young people. This is one of the defining messages expressed by businesses and stakeholder groups across the Commonwealth. Youth and young adults often lack soft skills, or sometimes described as essential or durable skills. However, LWD has a track record of investing in youth employment to help youth and young adults build these skills, tackling a major barrier that individuals may face without such foundational skills.
Thanks to the youth works program, we deliver 15 to 208218 hours of hands on curriculum known as signal success, which helps young people develop skills such as dependability, initiative, communication, and collaboration. This is referring to one of our line8232 items. This is combined with at least 125 hours8236 of work experience often subsidized for opportunities in the public8240 and nonprofit sector. And I know an opportunity to celebrate youth works in many of your, if not all of your, districts. The governor's proposed $15.7 million in FY 26 for the youth works program projects to employ approximately 4,580 youth and young adults for summer and year round employment throughout that next year. I'll now speak to sector based career training.
The FY 26 budget proposes continued investments in three key line items dedicated to sector based career training. First, let's consider the trades and technical training. Modeling suggests that over the next five to 10 years, Massachusetts will experience workforce shortages in the trades and construction. Electricians, plumbers, HVAC operators, construction laborers, and more are among many technical and licensed8297 roles the state will be looking to fill in the near future. This requires the Commonwealth to grow capacity and volume for training. The governor's budget for LWD invests in two models that will help fill these demands, including the career technical8312 initiative and registered8314 apprenticeship. The governor's proposed budget recommends a total investment of nearly $14 million for the career technical initiative known as CTI, including 9 million to support training for adult learners.
CTI offers industry recognized credentialing pathways for adult learners in technical and trade fields, leveraging resources at over 30 vocational schools across Massachusetts. In addition to this line item, the executive office of education's budget proposes an additional 4.8 million in partnership with this initiative. Funds go to vocational schools for tuition plus placement and wraparound services that benefit the unemployed and underemployed in training. Since CTI was first launched in 2020, the program has enrolled 2,280 students across 20 pathway programs with a projected 1,688 participating students in the current round of funding as of June of last year at the end of fiscal year 24. CTI vocational schools are also in six out of our seven workforce skills cabinet regions and 32 gateway cities.
As a second strategy for sector based career training, registered apprenticeship is a proven effective model in the construction and building trades in Massachusetts. It is also proving effective for expanded industries such as advanced manufacturing, life sciences, early education, and more, combining technical training with paid on the job training. The governor's proposed budget includes 3.3 million for registered apprenticeship programming to support expanded industries, growing free apprenticeship programs, and to diversify talent for the construction industry. This line item is crucial to address skills gaps and will support more than 3,000 new apprentices, including nearly 1,000 in our expanded industries. I'd like to also acknowledge the governor's recommendation to establish a new line item in the fiscal year 26 budget for the division of apprentice standards. This is a net neutral cost in addition to signaling the governor's commitment to registered apprenticeship. It will improve operations for the division of apprentice standards by simply moving operations out of the Department of Labor Standards to its own line item.
A final sector based job training strategy is reflected in LWD's commitment to the workforce competitiveness trust fund, another line item in the budget. The governor's budget recommends $10 million in state funding for WCTF, representing LWD's most flexible line item to collaborate with MassHire regional workforce boards, training providers, and8499 employers to deliver quality, training, and industry recognized certificates and credentials based on employer engagement and tied to employment goals. Over the past year, of the 3,000 participants enrolled in WCTF training programs, 61% self identified as people of color and 97% were previously unemployed or underemployed. WCTF delivers grant programs administered by Commonwealth Corporation, the quasi under LWD. And most notably, this includes Donnelly Workforce Success grants. In 2024, 76% of these grants represented critical in demand job training in healthcare and human services alone.
When fully resourced, Commonwealth Corporation has demonstrated an ability to move significant investments at scale and to address needs across many critical sectors in the Commonwealth. For example, looking back in fiscal year 24, through a combination of ARPA dollars, WCTF8568 dollars, CTI, and the use of the workforce training fund, awarded grants projected to serve 41,000 individuals8576 and partnering with 3,0008578 employers. And so this is a huge line item that gives us the flexibility and a tool for Commonwealth Corporation, by extension LWD ,to support our workers and employers. The Healey-Driscoll Administration's workforce agenda also calls for strategic efforts to support talent8597 development for key populations. In addition to youth, which I already highlighted, LWD is focused on formerly incarcerated individuals8605 and young adults with8607 disabilities.
The FY 26 H1 budget recommends $2.48 million in funding for the reentry workforce development demonstration program also administered by Commonwealth Corporation. Over the past five years, investments in this program have funded strategic program design and implementation via a sector based approach to support job training programs for individuals formerly incarcerated. These reentry partnerships typically provide behind the wall8641 case management that includes education, training, and engagement along with direct connection to employment organizations upon release, and supports individuals to increase employment and stability. Additionally, the governor's budget proposes $1million for the young adults with disabilities8660 program, an effective job training program for young adults8664 up to the age of 35 years old.
In fiscal year8668 25, LWD, in partnership with Commonwealth Corporation, awarded more than $850,000 to support job training for nearly 120 individuals in occupations such as culinary arts, retail, construction, and hospitality, and in partnership with training providers across the state. Now, I'll speak to a few other agency priorities within our budget. LWD's budget also represents programming and administration beyond workforce development. At LWD, our agencies, including finance, human resources, internal control, and information technology, are consolidated under one central service, creating significant budget savings through economies of scale. H 1 proposes $21.5 million for LWD's shared services, a $1.3 million increase from last year's budget.
This increased funding will allow LWD to invest in critical technology and better support of our agencies in delivering services. H 1 also proposes a slight increase in funding for the department of industrial accidents, the department of labor standards, and the department of economic research to support increases for IT, leases, and salaries. These proposed increases will ensure that LWD's agencies can provide the critical services within its mission. The Department of Labor Relations is a small but effective agency, historically charged with enforcing collective bargaining laws for our public sector workforce across state government and all 351 cities and towns. Within DLR, the Joint Labor Management Committee and the Commonwealth Employee Relations Board play key roles in managing and resolving labor matters or disputes.
More recently, DLR has been charged with the implementation of Mass General Law Chapter 150F, which was enacted following the passage of ballot question 3 in November. A first in the nation initiative to allow transportation network drivers the right to unionize and collectively bargain with transportation network companies.8804 DLR is responsible for oversight of this new8808 body of work. The H 18810 proposed budget includes an increase of nearly8812 400,000 in funding for DLR for a total of 3.9 million. DLR's proposed8818 funding increase is necessary for8820 the department to address new requirements as a result of ballot question 3 in addition to maximizing operational efficiencies and to support staff capacity to address the recent increase in illegal strike activity at schools across the state.
LWD is unique because a majority of our larger departments are significantly or entirely federally funded. Despite the evolving federal landscape, LWD remains committed to maximizing resources and partnerships to ensure the greatest level of impact. The state's unemployment rate is a factor for the amount of federal funds issued to the Department of Career Services and to the Department of Unemployment Assistance. The state's current unemployment rate, as of January, our most recent preliminary data, is 4.2%. And over the past 13 months, the state's unemployment rate has averaged to 4%. The governor's proposed budget of $2.1 million in state funding will support the Department of Career Services.
Additionally, the8886 governor's budget proposes 8.2 million in state funding for the one stop career centers, the line8892 item that supports MassHire career centers in regions across the state. As part of DCS, which again is federally funded beyond the line items I just cited, the MassHire career centers are tasked with providing job seekers with career guidance and referrals to jobs and job training, and with assisting businesses in finding qualified workers. DCS provides oversight to the 29 career centers, including 21 comprehensive full service centers, many across your districts, four affiliated sites with some services, and referrals to comprehensive centers and four youth specific sites. DCS also provides oversight to the 16 MassHire regional workforce boards, including policy guidance, technical assistance, and extensive monitoring on behalf of the US Department of Labor. It's a model in Massachusetts that other states across the country also adhere.
Across Massachusetts, in 2024, MassHire served as a resource for more than 126,300 job seekers, including but not limited to unemployment insurance claimants, and more than 15,400 companies. Finally, our department of career services partners with the Mass AFL CIO, often leveraging their proposed budget line item of a $150,000, which supports our active partnership, with MassHire's rapid response team that provides companies and workers with8985 services if there's a layoff. Our partnership with AFL CIO partners with rapid response if there is a focus on impacted union workers. Lastly, the department of unemployment assistance is the agency responsible for administering the state's unemployment insurance system, including processing unemployment compensation claims, payments, and dispute resolution.
DUA also registers employers, assesses employment status, and calculates levies and collects unemployment contributions. DUA also maintains the UI trust fund, which pays benefit payments to claimants from a fee assessed and collected by employers. The administration of DUA is federally funded through an allocation from the US Department of Labor's Employment and Training Administration. When economic times are strained and unemployment increases, the federal government, after a lag period of what can be more than a year or more, increases administrative funding in response to the growing need of the agency. The base federal administrative funding is determined by USDOL's cost model and does not fluctuate based on actual changes in expenses, such as increased salary costs due to cost of living adjustments, like we've seen in Massachusetts.
To illustrate, in January 2020, DUA maintained over $90 million through its federal grant. In January 2025, DUA operates with just over 60 million in federal funding, yet with a post pandemic backlog, increased complexity of claims, and implemented program integrity measures to combat fraud and improve fraud prevention. As such, DUA's administrative costs heavily rely on funding structure that does not approach operational funding the way the Commonwealth addresses its operational budget. It's also worth noting that DUA in person services are currently being established at MassHire career centers across the Commonwealth, a feature that will enhance customer service yet required DUA to identify already limited federal9116 funds to support. These new staff members are in the process of onboarding and, once in9122 our centers, will bridge the gap in services to address technical deficiencies and provide immediate relief for claimants. This is one of many strategies underway or recently deployed to improve DUA customer service, which is a top priority for both LWD and DUA.
While DUA is not part of the state's operating budget, I recognize this is9144 a major element of our services that you and your constituents experience. In May, thanks to state capital investments, DUA will launch the claimant experience for our multiyear modernization project known as EMT following the 2024 launch on the employer revenue side. We look forward to keeping you9166 apprised of this important project. Our team remains committed to working diligently to utilize the resources Massachusetts afforded to best serve impacted workers and partner with employers through our UI system.9179 Now in closing, once again, I would like to thank the joint committee for giving me the opportunity to present this testimony in support of the governor's proposed budget for the Executive Office of Labor and Workforce Development. I look forward to working with the committee and the legislature on advancing our initiatives and building on key investments that help to support workers, job seekers, individuals, and families across our commonwealth. I'm certainly happy to answer any questions you may have for me or my senior team today. Thank you very much.
SPEAKER1 - Thank you, madam secretary. At the, before the break, for those of you who are not. Wanna make sure everybody hears me. For the members, before the break, in case anybody was not here and did not hear me, I've instituted a new rule for the remainder of the rest of the afternoon, which is 1 question per member, and if absolutely necessary, 1 follow-up question. It is now a little bit past, the 02:00 hour. I just wanna be mindful of the fact we have 3 secretaries coming in. We just heard from the first, plus 2 more commissions, to do. This building is gonna close at 05:00, and so we're gonna squish everybody in. If you, are not I'm gonna allot up until 03:00, for the secretary of labor. Hopefully, we'll finish a little bit before that to add time to the boards and commissions. If you have a question after that, I think if you approach the secretary and9272 her staff, she will make somebody available to answer all remaining9276 questions. With that, I'm gonna ask the first question,9280 and then turn to my cochair, second.
FERRANTE - And the first question, Madam Secretary, is that, are there opportunities for workforce expansion with the recent influx of migrants into the state? And if so, what is EOL doing to capitalize on these opportunities?
JONES - I appreciate the question, Madam Vice Chair. As we think about our immigrant population as well as newly arrived migrants to Massachusetts, we appreciate their contributions and their skills. Over the past year and a half, the Executive Office of Labor and Workforce Development has been working very closely with the Executive Office of Housing and Livable Communities and the Executive Office of Health and Human Services in addition to the governor's office and A and F, to really have a cross secretariat approach to supporting the EA shelter challenges that we have experienced. At that front door, in welcoming migrants that have been living in our EA shelter, we have integrated an assessment of workforce development, which previously had not been part of those wraparound services that typically would include HHS or HLC.
Over the past 18 plus months, we have been able to lead by supporting work authorized individuals living in shelter as well as all resident or all individuals living in shelter, whether they were of migrant status or not. When looking at the current or exited EA shelter residents, really to help stabilize the9378 system, but also to lead to work and housing stability, we've been able to support over 4,675 individuals to gain employment opportunities thanks to this partnership. In addition to teaming up with MassHire and the regional9396 workforce boards who have added9398 this as part of their priority and commitment. And I see Senator Comerford nodding her head, a perfect example of many examples across many of your districts, and thank you for your partnership, is in Senator Comerford's region working with UMass Amherst. And we were able to team up with MassHire in Franklin County to provide employment opportunities around this time last year, in their culinary services.
We've seen examples from that region, to the Berkshires, to Worcester, to all parts along Massachusetts, especially recognizing where employers have been looking for talent. And so many examples, I visited a company in Worcester, for example. They were not able to fill the vacancies that they long had. But because of our intentionality, our investments, and the partnership, they're now at full capacity. And that's a great example. That example I just highlighted as a human service provider, where we've been seeing a lot of great results by leaning in and recognizing the needs in human services and the opportunities of transitioning these individuals to employment, and ensuring that essential component9472 to housing stability in Massachusetts.
SPEAKER1 - Thank you. Senator Olivera?
OLIVEIRA - Thank you, Madam Chair. Thank you, Secretary Jones and your entire team, particularly Undersecretary Cutler, who's no stranger to committee hearings like this. Thank you for going over how the unemployment system operates here in Massachusetts. I think for us on this side of the dais, we know. We've been getting the calls from constituents on customer service there in the backlog. And thank you to your team. When our offices call the department, they usually get somebody right away and can help out our constituents. Unfortunately, though, residents of the Commonwealth shouldn't have to call one of us on this side of the table in order to process their unemployment claim. So looking at9521 the structure of the Department of Unemployment Assistance in Massachusetts, understanding that that roughly $67 million within the budget is coming from the federal government, and looking at ways in which we can increase the customer service of the department to benefit our constituents. what can we do, absent of putting additional funds in, which, according to the department, could impact what we receive from the federal government? So even if we wanted9550 to put more money into the department, it could hit us on what we receive from the federal government. And I think that's extremely frustrating on our side because of it. But what are the types of policy, the policy changes within the department of unemployment assistance that your team is putting in place to improve that customer service and also ways in which we can be a little bit more forward thinking in anticipating those upticks in claims that need to be processed by the department?
JONES - I appreciate the question, senator. And I recognize that, through some outreach with many in the legislature, this is top of mind for you, and I wanna emphasize it's top of mind for me, for our director of the Department of Unemployment Assistance, and many of my senior9597 team that has been looking at this in very creative ways. To answer your question, senator, we saw an uptick in January that is part of a seasonal uptick that we would typically get. But at the time, we also recognize we had a staffing shortage. And that caused a greater need that I think each of you probably experienced on the receiving end. And most certainly, the solution for a very vulnerable person going through a most trying time shouldn't have to call their legislator to be able to reach someone. And that's not the goal.
Our goal is to make sure that we are providing greater capacity both on the phones and in our overall service. And some of the initiatives that we have deployed most recently integrates with our modernization project. So in May of 2025, as I mentioned, we're launching a modernized system, a new overhaul of our UI online system that will provide a more customized system that will be user friendly. We've been investing in this. We saw great success on the employer side and we're gonna see hopefully success on the claimant experience come May. Because we were planning for that in May, including an increase in staffing to support that launch, we moved up the opportunity to increase customer service on the phones from really the end of April to literally just last week. And we were able to increase adding140 more customer call staff to our department. And that's been through an emergency contract that9700 we look to have an RFP to then, have a long term support for the EMT launch9706 in May and for, hopefully, six months after that.
This is helping to stabilize the customer experience so that people are actually able to get to someone in an expedited time. And we're seeing early success. Granted, it's only been the first few days, but we are monitoring it very closely. But we also recognize the number 1 driver for why people are calling is due to adjudication. People are calling because they have questions on the claim. Adjudication basically means there's something that is needing to be looked into for a claim. You have to call the employer to verify something. There's a ID verification issue. So we wanna make sure that we are staffing up to support that essential need knowing there's a backlog and a need that we will have moving forward. And we're continuing to explore those resources with A and F, as we also think creatively with how to leverage some DOA dollars, federal dollars that we currently have.
We also recognize we're in 2025 and we should continue to think with technology in mind. And so we are working closely with EOTSS, who I know testified just last week, in thinking about ways to augment AI or other technology services that will add more capacity9783 to our staff, whether it's note taking or other cumbersome things that they have to do after talking to9789 somebody. Ways to augment that through technology so that they can expedite it more efficiently and pick up the phone for the next caller. We are open to any and all ideas. I've had a wonderful conversation with Senator Oliveira, Senator Lewis, and Senator Jehlen. I look forward to hearing other ideas that you may have because it is a need for us to think quickly, and efficiently, but also creatively as well.
SPEAKER1 - Thank you. Representative Dix.
DIGGS - Thank you, Secretary Jones. It's an honor to be here with you guys because, you know, last year, I was with Chairman Josh Cutler, and I was the vice chair. So, I know we worked hard on a lot of issues on, our workforce, especially with our young adults and apprenticeship programs in the hospitality aspect. You know, I know that Cape9846 Cod Healthcare is our biggest employer and they're doing a lot of special things that we can try to make our apprenticeship9853 programs go even more and especially with even early education for the Cape. And knowing that this year you know, not this year, but every season, where seasonal communities, we need to make sure that we have plenty of jobs. I guess the only real question I have is, because we don't know what's going on9874 with the federal government, how do we know how much money we're gonna get or how much we're gonna have? That's my question.
JONES - I appreciate the question, Representative Diggs. As we know, it's kind of very much evolving times and we are maintaining a close pulse as to what's happening in DC and the impact that it would have here in Massachusetts. And for my purview, specifically on, workforce and our workers and employers, I think we need to stay closely attendant to this issue, and making sure that as you continue with your budget process, we'd be more than happy to continue to keep you apprised of what we learn and what could be informative for you. What I can tell you today is the investments that Governor Healey has proposed in her budget are critically important. Making sure that we are investing in opportunities to enroll more and more individuals, who either may be on the sidelines today or may be on the sidelines in the future to gain the skills to be competitive when employers are ready to hire. All of our programs require having employers at the table. And we have been and will continue to work closely with industry to9949 get a sense of what they're seeing, especially, in the times that we're in9953 today.
And so all this work that we do in workforce development, I often say, is very collaborative. In order for us to get this right we have to build strong partnerships that includes with industry, that includes with you, that includes our training partners. And I wish I could give you a more definitive answer on what's to come in the future, but I will certainly commit to staying closely connected to this committee, to the Labor and Workforce Development Committee, and others that are interested because we need to stay closely attended to this and continue to monitor every day has seemed to be very different.
SPEAKER1 - Thank you. Senator Comerford?
COMERFORD - Thank you, Madam Chair. Secretary, thank you so much, to you and your team, for today's testimony. I wonder if you could give us a look inside the workforce skills cabinet. How the cabinet comes together, where you meet, how that information, how the decisions that you make trickle down to the regions, how they influence vocational training programs or community college certificate programs, you know, how they engage with workers. I would just love to see it in 3D if you can.
JONES - I will try my best to illustrate it and will tap Alicia to compliment my initial thoughts. I also will offer a deeper dive,10035 recognizing time because we probably could talk about the workforce skills cabinet's portfolio much longer10041 than we will in our short response.10043 So, workforce skills cabinet, for anyone that does not know, is comprised of labor and workforce development, education, and healthcare and human services, and, obviously, what did I, labor and workforce development, education, economic development, and we added healthcare and human services when we came into our administration just over two years ago. This10065 has been a dynamic and really10067 essential function. We meet as a secretariat10073 level at least10075 quarterly, if not more frequently. We just met on Friday.
Our teams, including our undersecretaries in each of the respective secretariats meet weekly. And that touch point across secretariat is how we help to kind of build that braided approach in how education meets labor and workforce development, meets economic development. And we added that focus on healthcare and human services, not only because of the industry applicable10105 in every region, but because of the10107 vulnerable populations that HHS supports. I'll10111 just say when we then take what10113 we do within kind of the state house, we know we can't do that in a vacuum. And so we've extended our10118 reach by establishing seven workforce skills cabinet regions10122 across every region10124 of the Commonwealth, partnering with our MassHire regional workforce boards, also partnering with our community colleges, our vocational schools, and employer partners in each of those super cluster regions, if you will.
Through that engagement, we then created blueprints. The previous administration did too. When we came into office, there was not a blueprint post pandemic, and so we got to work early on to engage with our regional partners through a series of engagement, lending our labor market data, identifying the top industries that each of the regions are seeing unique to each region. What may be applicable in the Berkshires is not necessarily the same on The Cape, is not necessarily the same in Pioneer Valley. And by understanding those top industries, we then have now a blueprint. You can visit our website to see the ones that are relevant to your region, that identifies the top industries as well as the occupations that helps to serve10182 as a guide both in the grants that LWD helps to administer,10186 but also the partnerships with our community colleges and other institutions of higher ed.
Also amd working with our quasi, whether it's Commonwealth Corporation or the Mass Life Science Center, Mass Technology Collaborative, the Mass Clean10199 Energy Center. They all are10201 part of this kind of effort to make sure that we are singing from a similar sheet of music. And I think one of the initiatives that have come from this work under the Healey-Driscoll administration is Mass Talent. I will just touch on it very briefly. It's to add an extra front door, if you will. Our front door certainly within your communities are our MassHire regional workforce boards and career centers. But to try to navigate 1-800 government, it's kind of hard to make those connections if you don't know where to turn. And so if you visit mass.gov/masstalent, it's an opportunity to connect employers to skilled talent. And it's tied into the resources that MassHire already deploys, but with a filter for life sciences, healthcare and human services, clean energy, advanced manufacturing, and tech jobs, knowing that those are industries that we are seeing in many of the workforce skills cabinet regions. I don't know if I missed anything, Alicia, but that was a quick snapshot. We'd be happy to dive into more,10263 but if there is anything further to10265 say.
SPEAKER1 - Thank thank you, madam secretary. I think that was comprehensive. Thank you. Yes. Representative Souza?
SOUSA - Thank you so much,10286 Madam Secretary and Madam Chair. I have one quick question and10290 I'll try to make it as brief as possible. I was really encouraged to hear10294 the talent development for the reentering population.10298 I have the distinct honor of representing a part of Framingham where MCI Framingham is located. Truth is, 95% of our incarcerated population will join all of us at some point, and they should be, the better chance we have that everybody is a contributing member of society, I think the better we all are. MCI Framingham in many different areas, because it is women's population, they're smaller, they get overlooked for a great deal of many things. How does, within this program, this initiative, how is the female population, population of MCI Framingham being considered so that they're also prepared and not overlooked?
JONES - I appreciate the question, representative. And I will say at a high level, we recognize the value of our formerly incarcerated individuals, and that is why we appreciate the partnership with the legislature to be able to invest in our program to do so. We also work closely with Secretary Reedy and the Executive Office of Public Safety. I can't speak specifically to the outcomes at MCI, but we'd love to make sure that our team follows up with you, because we wanna10373 make sure that we are teaming up with EOPSS through our programming that we are highlighting in our budget, but also just generally recognizing they also have programming, and we should. Make sure we are doing10384 so in sync to meet the needs of the women population at MCI.
SPEAKER1 - Thank you. Thank you, senator Pagano.
PAYANO - Thank you, Madam Chair. Well, first of all, Madam Secretary, I wanna thank you for, your testimony and your service to the Commonwealth. It is always great seeing you at the district because that means that there are tons of individuals that are getting their opportunity for the American dream. I also wanna thank you for emphasizing the importance of training adult learners and, you know, talking about vocational education. I feel like, you know, every week, I'm out there marketing MassHire because sometimes, I don't know about all the programs but I know the folks at MassHire, do. And I've seen their efforts, and I'm always wondering, you know, what else can be done to try to make sure that this information is going out to general public.
And, you know, my question is the programs that we have across the commonwealth, are they, you know, are we basic are we at capacity? Is there still, you know, tons of room for folks to go in? And if there is tons of more room, you know, what are the key barriers that sort of halt or stop these programs for being at capacity? Because, like, I'm highly interested in trying to figure out how we10477 can get more individuals that are in districts like10481 mine where this is extremely important in these programs, so they're not working factories, they're not working jobs that, basically, they find themselves unable to pay, the increasing cost of living?
JONES - So MassHire is a terrific tool, and I appreciate that you're an ambassador for MassHire, and would appreciate others that continue to promote MassHire within your respective region. It is that front door experience for both job seekers and employers. And I would say, I hope that there is never an opportunity where someone goes to that front door and they can't gain service. The MassHire system is an extension of our service. And they partner with each of your respective regions to make sure that job seekers and employers are working together to meet both employer10531 needs and the opportunities for our10533 job seekers. The investments in the governor's budget helps to enhance each of our career centers' capacity. It is pretty much level funded this year but it was a huge increase in the previous year's budget, recognizing that by working closer with MassHire, they can help bring in more people into the industry and employer opportunities that we have.
We're always monitoring our labor market data statewide but also within each of our respective regions. And we know that there are unemployed or underemployed individuals in every region of the10571 Commonwealth. And we wanna make sure that10573 our career centers, who are right on Main Street often in your communities or other parts of the region. And then that's the brick and mortar, but10581 also online that people have that ease. So we have a terrific team in all10585 of our 29 career centers. We also have a team within our department of career services, most notably, our rapid response team.
So when someone sees an employer that may be experiencing a layoff, we try to quickly catch those impacted workers to reemploy them for opportunities within the region. But then also when we know that there's employers that are looking for work that may not have yet been able to take advantage, there's also the opportunity to make sure their skills, the job seeker skills can be transferred to another employer, especially having that regional lens. So I would10619 say, we hope that the investments represented in the governor's budget can continue to enhance the services that we look to deliver, and welcome your continued advocacy and support. But if you have more questions, we'd also be happy to talk in greater detail.
SPEAKER1 - Madam Secretary, I wanna thank you. I don't believe I have anybody else on Madam. My list. Oh, wait. Who's? Rep Holmes. Oh, okay. Rep Holmes. I'm so
HOLMES - Alright. Sorry. Madam secretary, I wanna go back to unemployment, and that, making sure I understand, there was a letter being drafted, you know, to sign and things of that nature. I didn't sign it because this has been an issue since the day I walked in the building. So to all of a sudden send you a letter to say unemployment's falling apart, doesn't make sense because it's been falling apart since we got here? So my question is, what do you do when you go from 90 million in a budget to 67 million? Does that mean that we go through an awful lot of layoffs? I mean, what happens when you have to, you know, substantially reduce, budget from year to year? And then embedded in that,10688 can you kind of just walk through, Madam Secretary, Undersecretary Cutler, can you kinda walk through, when you said there were 140 new members, this that still is not gonna solve the real problem?
Like, years ago, I heard the real problem was, like, the software was old, 50 years old. You couldn't put your whole name in. If your whole name wasn't spelled correctly, you can only put10713 certain characters in. All of those things I've heard for the last 15 years about the system. So does this new system, does it make it so I can put my whole name in? Does it make it so that I can get a status? Because you're saying no matter what, even if you have a call center, the person will not be able to move through the process until you still do the interaction of getting outreach from the employer, things of that nature. So will this new system at least give them a status? I log in, I say, hey, you can see contacting the employer. You don't even have to call a person if you can just do some of the basics because that's sometimes what my office is replying back to. They have to reach out. They have three days to give me back an answer. Will no one answer? Will this system communicate things of that nature because some of this has to be solved by technology? It'd be great.
JONES - Well, thank you, Representative Holmes. I know you're a long standing interest in DUA but most specifically in the UI online system and modernizing it. First, I wanna make sure that everyone here knows we are standing up an information session for you or your aids to get a preview for the modernization system. I believe that's scheduled for the end of March or the beginning of April. It is on the books, so we'll be making sure that you are personally invited, because we wanna make sure you have trust in the new system that we will be launching in May. That said, the new system is modernized. It is a proven product that other states have also deployed. We're working with Fast. We also know that it was successful on the employer side. And the claimant side, which is being launched in May, really reflects that automated support, more user friendly system. And we hope that it is going to correct what has been a broken system that we've been operating off of.
That combined with looking at our current needs, the 140 individuals are, through a vendor that we're working with to augment our staff that was intended for our EMT launch. And we basically looked at an opportunity to move it up, recognizing10846 the backlog and the severity and long wait times that individuals were experiencing. But we know that there is still a need to10854 go through that backlog, which is why we're continuing10856 to stay at the table to identify creative resources that we can use with the federal funding that we do have. And we're having close conversations with A and F to provide for those kinds of opportunities. I'll also acknowledge that when we look at DUA's budget, I know that you see firsthand the call center staff. DUA has a whole team that is supporting hearings and adjudications, other functions of the department. We10886 wanna make sure that we not just10888 solve one area and move resources around, because we do cross train staff when we know that there is a backlog. We also wanna make sure that we are, supporting all aspects of DUA now and into the future.
HOLMES - Alright. My follow-up, because I still didn't get the what happens when you go from 90 million to 67, does that mean that there are layoffs that happen? I mean, when you have that much of a deduction, over the last couple years, have we been having to lay off people?
JONES - Yeah.
HOLMES - And then you've mentioned the word backlog a couple of times. What is the backlog? How many people is that? How long it's gonna take you to clear that backlog? What are we looking at? That would be great.
JONES - So when I referred to the funding in 2020, that was in January 2020 before the pandemic, I can say here, and I'd be happy to follow-up in more detail, when you look at the outcomes in what DUA has been able to produce, whether it's responsive to initial claims filed or the active claims that we have10955 in our system, it's still pretty comparable. So pretty much our staff are doing about the same or if not more, and managing through with less resources. That's taxing certainly for10967 our team, but we also know that augmented staff is going to help provide some immediate relief. As I mentioned, we wanna get to the root of the problem. To your point, as Governor Healey has often said, this is not an administration that wants to kick the can.
In working with the DUA team, we are trying to get at the heart of some of the issues, including the adjudication backlog. And that will take some additional resources, which is why we're continuing to explore. The backlog includes individual areas. And so it's not where it's a backlog where we haven't been able to reach x number of individual people. It's the number of actual issues. And so I'd rather make sure that we focus on strategies for moving forward and getting out of that, and that's what we're focused on right now. And we hope to, in the coming weeks, have an update for you because it is something that we are trying to address in the moment.
SPEAKER1 - Thank you. I wanna turn now to our Republican colleagues, and, I just wanna apologize. The ranking member sent me a text, and that text didn't go through. So I don't want anybody to think that that's just, like, rep smaller.
SPEAKER6 - I'm completely insulted, madam chair.
SPEAKER21 - Thank you very much.
SMOLA - Thank you so much for your testimony and for being here today. Quick question. I wanna talk, very quickly, about the census. So we heard from the secretary, Secretary Galvin last week relative to the calculations being used in order to, get what our census numbers are now. That we now are counting the number of individuals and it's boosted up our population number. I'm not as concerned about that number. I'm more concerned about the correlation between out migration in the Commonwealth of Massachusetts. So, my question is, who are we losing in Massachusetts? There's been some studies recently released relative to Massachusetts seeing out migration of talent, of wealth. And, obviously, we can point to whether it's tax policy, new regulation, cost of housing, cost of transportation in Massachusetts.
But I'm concerned about the out migration numbers in Massachusetts. Who are11096 we losing? What are we doing about that? Because I imagine that's a huge issue, no doubt, for the governor and for your11104 team, particularly because how do we fill those gaps if we are losing in this talent pool? And what are we gonna do as a legislature in order to address policy that may discourage this from happening? Because that's really, it's not just bottom line numbers, but at the end of day, the policy that we write has a huge impact on what people do. And those people that have more resources, they can pick up and they can take off. Most of11125 the constituents that we represent here, whether you're from Berkshires to Cape Cod, can't just pick up and and take off out of Massachusetts. You got to kinda suck it up and deal with it. But there's a lot of folks out there with those resources that can do that. So I'm just wondering if you'd like to address the out migration issue. Thank you.
JONES - I appreciate the question, representative, and I would say a couple of things to answer your question. First, we recognize the in migration. And wanna also make sure that as we bring in new talent, we are supporting them and connecting them to jobs. But to your question on out migration, that is11159 also top of mind. If you look back on11161 the past five years, the way11163 people work has drastically changed. People are more mobile, talent can be more mobile, and there's more choices for individuals to make. I think that's exactly why Governor Healey has invested in partnering with the legislature on a dramatic housing production bond bill. It's why the governor, and with the support of the legislature, is investing in the Mass Leads Act because we wanna make sure that we are being bullish in ensuring that we are not only a commonwealth that can attract new talent, but ensuring that we can retain talent.
And investing in opportunities like the Mass Leads Act so that we can remain a global leader in life sciences, so we can remain a major leader in clean energy and grow in that area, so11209 that we can be a leader in AI, are critical to have Massachusetts be an attractive hub. It's also important that we're investing in our infrastructure and the resources that11221 are coming through our housing bond bill. The infrastructure, as we look at more shovels in the ground in all of our regions, is gonna be critical to create opportunities for people to live and work here. And so this is an area that I find is top of mind, but it's also an area which I really appreciate that I'm able to collaborate across the governor's cabinet because it is something that is an intersection talent with housing, with economic11247 development, with transportation. And that's exactly why the governor was always team Massachusetts because the investments that we're making in one area is gonna have a direct impact in ensuring that we are able to attract and retain the talent that we have here.
I will also say that in our labor and workforce development budget, the investments in areas like11269 workforce competitiveness trust fund support unemployed and underemployed individuals. Some investments also support retaining existing talent. Not included in the budget is our workforce training fund, which is built through a fee through the UI trust fund that helps to stand up roughly $20 million annually. And that's totally focused on retaining and11293 upskilling existing workers. Employers across the Commonwealth have been able to generously leverage this. It's investing in dollars they're putting in to help retain and11303 upscale their own talent, becoming more productive. Supporting anything from higher, credentials that they can leverage in various industries like manufacturing, to even leveraging the workforce training fund to upscale and retain talent with ESOL. It's been very creative use, and we see that also as a great opportunity if we look at specifically the tools within LWD's11326 toolbox.
SPEAKER1 - Thank you. Next, we have rep McKenna.
MCKENNA - Thank you, Madam Chair, and thank you, Madam Secretary, and thank you for visiting Blackstone Valley Vogue Tech last week to highlight women in construction. It was a great visit. And that shows one of the highlights of my district, a very diverse district that has both wealthier communities but also some areas that are struggling a little bit, and that have seen some direct benefit from investment in opportunity zones and areas like that, as I think many of our districts have. Looking at the budget, it looks like11361 there are some caps and some limits placed11363 on incentivizing that sort of investment in opportunity zones. And I'm wondering if you11369 can detail what went into that decision making and whether the potential revenue recapture was weighed against any potential decrease11380 in investment in our communities.
JONES - I appreciate the opportunity to be with you just last week celebrating Women in Construction Week. And just to illustrate, to answer your question, I'll illustrate with, after I visited Blackstone Valley, I went up the road by about 15 minutes to the workforce hub. And it was a perfect example of where there are state dollars reflected in Governor Healey's budget, including programs like our workforce competitive trust fund, registered apprenticeship, and other tools11410 in our toolbox. But it's also a perfect example where that workforce11414 hub is leveraging other things within our workforce ecosystem. I was joined by MassHire regional workforce director, Jeff Turgeon. And he helped to broker relationships with the Blackstone Valley Chamber of Commerce to stand up that workforce hub. It's a resource to provide job training, to meet the exact needs of employers in the Blackstone Valley.
And so while we certainly stand by and appreciate the governor's investments that she's proposing and the support from the legislature, we really go a step further in extending our reach and capacity through our workforce system and making sure that that partnership is reflected not only in leaning on our Mass Hire regional workforce directors who help to further extend my reach and my team's reach by being local, but also working closely with regional chambers, statewide business groups, industry organizations to have those dollars go as far as possible.
SPEAKER1 - Thank you. Representative Peace.
PEASE - Thank you, Madam Chair, and thank you, secretary. Appreciate it. And it's great that we're here in Gloucester. I mean, they got this mural up here just for you, I believe. They're, you know, not build that for today alone, but for the future as well. But my question is, according to the Massachusetts Taxpayer Foundation, total workforce spending in this year's budget is actually down 8.6 million from last year. And so I'm wondering how the, you know, how did the governor's office arrive at this decrease? Because did the governor, did we expect a dip in demand for the services among the residents or where do we come about them?
JONES - Representative, I'm unfortunately not familiar with that exact citation that you're referring to from the Massachusetts Tax Foundation. But I can tell you that we certainly use their research as a source. And we have been closely monitoring labor market trends, year over year. And we are basically at roughly where we were right at the time of the pandemic. We've been able to recover jobs and we look forward to continuing to make investments to grow our labor force participation as well as our workforce. As we look back over the last year, we actually have grown our labor force participation, and that's kind of how you look at the unemployment rate. More people are looking for work, and so our unemployment rate has also gone up from, you know, 4.0 to now 4.2 as more people look. So it's why we wanna make sure the programs we're investing in could be intentional to then help get those people not only looking for work but actually employed as well. I'd be happy to follow-up with you, though, on that specific citation so that our team can dive deeper into it.
SPEAKER12 - I appreciate that. Since we're getting close on time, I've talked to you.
SPEAKER2 - Okay. Great. Thank you.
SPEAKER1 - And and thank you, representative Peace, for being cognizant of the time. Representative Jason?
CHAISSON - My question was already kind of hit on by Representative Holmes over there. So just wanna say thank you, madam secretary, and your team for testifying today.
SPEAKER1 - Thank you. Thank you. Representative Marcy?
MARSI - Thank you, Madam Chairman. Hi, secretary and team. Thank you for coming. So sort of follow-up on Rep Pease's question a little bit. So, you know, funding for the technical education programs is down a bit, right? You know, for example, one of the ones I took note of were Commonwealth's Career Technical Institutes, MassHire Career Centers. They're seeing some cuts, probably about almost a million and a half for that. And, you know, the genesis behind my question was, you know, a lot of11641 the unemployment calls that we get every day, all day, in all of our districts. And I thank you for addressing that earlier. You know, I know we11649 need to tighten our belts in this budget, but are these the right programs to11653 cut?
JONES - I can speak to, you may have to remind me of the second line item, but when you were citing the Department of Career Services, we have the One Stop Career Center line item. The slight deduction in that line item reflects the ending of a program that was a pandemic era program supporting market makers in each of our regions. That was given the influx in ARPA dollars to be able to extend reach within our MassHires to employers. We've been able to sustain that model with11687 our existing model that we have through the MassHire regional workforce boards, our career centers, and11693 the technical support through our Commonwealth Corporation team that has really helped to kind of fill whatever resources were when we were at the height of the pandemic with a significant federal funding increase.
And I think the second one was our career technical initiative. And we know that this is a relatively new program in comparison to some long standing programs in our budget. And we appreciated that there was increased funding, especially support through ARPA dollars to help support this, and also in the the early stages of getting this program off the ground. We are appreciative of nearly 30 plus vocational schools teaming up with us, along with the executive office of education. And we wanna be able to continue11737 to sustain this program to best reach individuals. It11741 is a program that also supports very specific industries, including construction and manufacturing. So as we look at where we see a need, certainly, in supporting CTI, we also know there's other tools in our toolbox, including the WCTF program that is our most flexible program combined with investments like registered apprenticeship. I hope this answers your question.
MARSI - It does. Thank you.
SPEAKER1 - Madam secretary, with that, thank you. Thank11769 you very much, everybody. And, of course,11771 if anybody has any, follow-up question, feel free to talk to the secretary or her staff on her way out. Thank you. Thank you.
FERRANTE - And, secretary, if I may just say, it was very good, hearing an overview of what you're doing. Unfortunately, I think between folks that are in the a system, folks that are just11791 arriving, folks that are being laid off by the federal government, I think you're gonna be very busy. But it's like you have a plan to11797 to deal with.
JONES - I'm on my third espresso shot, so thank you very much, vice chair.
Thank you. Thank you.
SPEAKER1 - Okay. For the members, it's now 03:00. We have 2 hours late. In budgeting the time, I'm gonna up, Bruce Babbitt from, the cultural council, then, mass status, of women, commission on the status of women. I'm gonna allot each 1 of them 15 minutes, and then the remainder of, the day, an hour and a half, will be dedicated to housing and economic development. So, mister Babbitt, if you can come up.
Michael, I'm sorry. I don't
SPEAKER4 - know where all good.
SPEAKER1 - Bruce came from.
SPEAKER4 - It's all good.
SPEAKER1 - But, Michael, I'm sorry. Yeah. Bruce didn't got my attention. Okay.
SPEAKER4 - All good.
SPEAKER1 - Sorry about that.
SPEAKER34 - No worries. No worries.
MICHAEL BOBBIT - MASS CULTURAL COUNCIL - Good afternoon, Chair Ferrante and Chair Oliveira, and through you to the members, great to see everyone's faces. Thank you for the opportunity to testify today here in beautiful Gloucester City Hall with these historic, beautiful, and awe inspiring murals before us. For the record, my name is Michael J Bobbitt. I am the director of Mass Cultural Council, your independent state arts agency. I'm joined11883 by Bethann Steiner, our11885 senior director of public affairs. We're honored to be here to speak to you on behalf of Massachusetts' creative and11891 cultural sector and to outline our funding request for fiscal year 2026. First, I wanna express my sincere gratitude for the partnership and support that this committee has consistently demonstrated towards our sector and our work.
Mass Cultural Council is eager to continue our collaboration with11911 you to implement strategic policies11913 and investments that will strengthen the cultural sector and contribute to the economic11917 growth and competitiveness of our state. Mass Cultural Council is requesting a $28 million appropriation for fiscal year 26, with a new dedicated and funded $15,000 earmark contained within our line item to support the governor's new state poet laureate position, as we are working with the administration to implement this new program, which was established last month through executive order. This figure, which matches our fiscal year 25 request, and is a $1.15 million higher than our current $26.85 million appropriation, will allow us to make additional investments in grants supporting creative individuals, youth arts, and operating support for cultural organizations. It would also strengthen our local cultural council, tribal cultural council, and cultural districts initiatives.
Additionally, this funding would enable Mass Cultural Council to continue advancing our equity goals by expanding engagement with underrepresented communities and addressing systemic inequities across the state. A $28 million appropriation would be the largest in our agency history and would advance key goals outlined in both the Commonwealth's economic development plan and Mass Cultural Council's strategic plan. First, some good news. Massachusetts is a recognized leader in tourism, arts, and culture. Our sector is a significant economic driver contributing $28.6 billion in economic impact, 4.1% of the state's economy as reported by the US Bureau of Economic Analysis. That economic activity supports more than 133,000 jobs statewide.
According to federal data, our sector supports more economic activity than construction and transportation in Massachusetts. Furthermore, Massachusetts was recently ranked the third most arts vibrant state in the nation for the second consecutive year by SMU Data Arts, the National Center for Arts Research. We want to beat New York and New Jersey. Yet despite the success, Mass Cultural Council finds we contend with substantial and growing unmet need for financial support every fiscal year. Every grant program we administer has become more competitive with record breaking levels of applications received, meaning we are12072 saying no to more of your constituents than ever before across all programs. Not because they are ineligible, but because the agency has limited resources available. And this makes sense.
From Great Barrington to Gloucester, the Massachusetts cultural sector is as vibrant as it is vast. New data that are set to release this week, the 2024 cultural asset inventory data shows that Massachusetts is home to 15,063 arts organizations and 112,190 creative individual generators defined as people who12111 make a majority of their income from12113 their creative practice. These folks represent 3% of the state's workforce and Mass Cultural Council is proud to bolster their efforts. However, due to these mounting numbers of declined grant applications, and our greater understanding of the size of our sector, this year we implemented some new rules for our grant making. In fiscal year 25, for the first time, Mass Cultural Council informed cultural organizations that they would be eligible to only receive one form of operating support. This change allowed us to spread our public dollars farther and make more grants to more cultural organizations than ever before.
In fact, in fiscal year 25, we awarded unrestricted grants to 129 cultural organizations who had never received such support from the agency before through our new operating grants for organizations program. I am thrilled to expand our grant making and invest these new recipients, and I hope the committee agrees that it is our duty to invest in as many as eligible recipients as possible. Even with continued robust investment made by this committee to Mass Cultural Council, we know we will never be able to say yes to every eligible grant application. As such, our work is guided12191 by dual strategy, making12193 equitable public investments with the public dollars we have on hand while advocating for policies that integrate12199 the sector into broader economic12201 and social initiatives.
Creativity is central to problem solving and arts and culture have a profound impact on healing, community enrichment, economic growth, accessibility, and individual empowerment. Mass Cultural Council is dedicated to ensuring that the creative sector remains a priority across government and economic development efforts. My hope is that by working in this fashion, together, the Commonwealth will embrace policies and initiatives that will embrace arts, culture, and creativity as necessary economic development tools and invest in the sector accordingly. I wanted to update you, the committee, on our partnership with the National Endowment for the Arts. As the state arts agency, each year, we receive a small grant from the National Endowment for the Arts, which is used to further Mass Cultural Council's financial support for Poetry Out Loud, arts in education, arts in underserved communities, and folk in traditional arts.
In fiscal year 25, our partnership grant from the NEA totaled a little over 1.2 million. I am grateful that even with the turbulence in Washington DC these days, we have received all these funds, and as such, our grant awards have not been affected. However, Mass Cultural Council is a national leader among state arts agencies with a commitment to equity, diversity, access, and inclusion. We have developed and our governing council has approved a racial equity plan as well as two further plans outlining our goals as we work to support the arts in native American and indigenous people's communities and with the deaf, and disability community. Regardless of decisions made in the White House, Mass Cultural Council is not looking to change direction when it comes to this scope of work. As such, we may be unable to receive NEA funds if the current federal administration imposes rules on limiting or prohibiting DEI initiatives, as it has done with other NEA programs.
1.2 million is not a major part of our annual spending. It is only about 3 to 4% of our total annual resources. But if we do lose those federal funds, which supplement our grant making dollars, it will affect the size and number of our grant awards we make to Massachusetts cultural organizations next year. Lastly, I wanted to take a moment to explain our request regarding the official poet laureate of Massachusetts. Again, Mass Cultural Council is requesting the committee to provide dedicated funds for this position through a new funded $15,000 earmark in our line item. These12366 funds will support an honorarium for the state's first poet laureate in the history of the state. It is our strong position that artists should be paid for their work, their time, and their creative expertise.
We are thrilled to partner with the Healey-Driscoll administration on matters that impact the cultural sector. And as such, we enthusiastically helped the governor's team12388 draft the executive order that established12390 this new position. I am serving as a chair of the nominating committee that will review the applications for this position and make a recommendation to the governor. And with our partners at Mass Humanities, Mass Cultural Council staff have thoughtfully developed guidelines and an application to support this process. Due to the timing, the administration was unable to include funding for the poet laureate in H 1. However, they have indicated, in our conversations, that they will support our efforts to secure it through the committee and budgeting process. As such, I'm hopeful you will agree that the state's first official poet laureate should receive an honorarium for their appearances, travel, and writing time. Mass Cultural Council suggests $15,000 and hope this will be included in fiscal year 26 budget.
In conclusion, I hope it is apparent that Mass Cultural Council is proud to lead this vibrant sector. I urge your support for $28 million appropriation in the fiscal year 26 budget. This investment will help sustain and expand the critical work being done across the Commonwealth to foster creativity, economic vitality, and community well-being. We are ready to partner with you to ensure that Massachusetts remains a national leader in arts and culture. And to further establish that those working and leading our sector are dynamic economic revenue generators, thought partners, and creative problem solvers willing, ready, and able to partner with other sectors in innovative venture new ventures. Thank you for your time and consideration. I welcome any questions you may have and happy to provide12489 additional information if you need.
SPEAKER1 - Thank you. Rep.
DIGGS - Thank you, Michael. You know, arts and culture are so important to all of Massachusetts, especially Cape Cod. We're a seasonal community and anything that we can do to make sure that people come to visit us, and that means, I want all the artists and the poetry to come down to show off because, honestly, that's where we have revenue. So the more revenue that we can create is gonna help all our districts. So thank you very much.
SPEAKER35 - Just really have this today.
SPEAKER34 - Thanks.
SPEAKER1 - Thank you. Rep x Ferris?
SPEAKER15 - Thank you, madam chair. And representative Ferris,
SPEAKER1 - I'm sorry.
SPEAKER15 - That's that's good enough.
SPEAKER1 - FedEx confuses you.
SPEAKER15 - Rep x makes it work.
XIARHOS - Sir, it's good to see you again and your team. Your presentation was, as always, powerful. But, now I'm on the Mental Health Committee and Substance and Recovery.12558 It's a huge issue. People are struggling and dying every day. I wear this12564 ring, which is called the 2212566 kill ring, because today, 22 veterans will kill themselves in America. These are12575 two of my friends. Corporal Toville took his life as a marine while serving. And here's another one, Joshua Tipton,12587 US army veteran,12589 came home and took his life. Their families are devastated. Is there something in your world, in arts that can help heal? You use the word healing. We're looking for something to help these people, veterans, first responders, anyone that struggles with mental health. Is there a way that arts can help?
BOBBIT - Thank you, Rep X. Thank you so much for uplifting those fallen soldiers' names. We appreciate you so12622 much. Thank you also for teeing that up for me. I think the arts, like technology, is one of the only sectors that can be infused in every other sector into its benefit. I'm really excited that, last summer, Mass Cultural Council launched the first in the nation statewide solution to social prescribing. If you don't know what this is, this is a program whereby healthcare providers, social workers, school counselors can prescribe 12 doses of arts and culture to their patients, which include a companion ticket and transportation. And all of this is funded by third party payers, including insurance, managed care providers. We also just heard from the town of Franklin that they're using some of their opioid settlement funds. We're hearing from the Bureau of12679 Substance Abuse, housing authorities. Everyone is pouring into this program because they know that the arts can help people heal.12687
Our former surgeon general12689 said that loneliness is an epidemic. Your chances of furthering your health issues are expanded if you're lonely. Loneliness is equated to health deterioration as much as smoking 15 packs of cigarette a day. The arts are a place to bring people together. And if you can imagine people in our communities being able to go to the museum, or to a class, or to a writing program, or kids that are struggling12720 with whatever issues they're having at home being able to go to a recording studio, all of this is available. We have 430 arts organizations in our network now, and doctors all over the state. And mental health providers and counselors are all prescribing arts to their patients. And we have a 77% adherence rate. People are taking their arts medicine. And, medicine, a drug, that is prescribed only has a 40% success rate. So it's a pretty cool thing. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Doctor Bob, thank you for your testimony today.
SPEAKER34 - Thank you so much.
SPEAKER1 - Any of the members have any further questions, please catch them. But, unfortunately, just due to the time management here, we're gonna move to the commission for the status of women.
SPEAKER34 - Thank you so much, Sarah.
SPEAKER1 - Thank you. If there
SPEAKER33 - are I think so.
SPEAKER1 - If there are any other commissions here whom we haven't called today, please see Drew Tarr in my office. He's waving12788 with the suit and the red tie.
MARY-DITH TUITT - MCSW - Good afternoon, everyone. And first and foremost, I wanna thank you, Chair Ferrante, and Chair Comerford, and all of the members of this Joint Committee Ways and Means for allowing and giving us the ability, the Massachusetts Commission on the Status Woman, to come and testify before you today on behalf of our FY 26 budget. My name is Mary-dith Tuitt. I'm the chair of the Massachusetts Commission on the status of woman. I12839 am a United States Navy veteran. I serve as the only veteran on the 19 Commission. There's 19 of us across the Commonwealth. And as many of you know, we have 11 regionals across the Commonwealth, that gives us an additional 103 strong voices, strong women, diverse, geographic, all ages, ethnicities, and so on. To my left is our vice chair, Christine Monska, and I'm gonna let her introduce herself and give you her day job other than her position as a commissioner.
CHRISTINE MONSKA - MCSW - Thank you so much, Chair Tuitt. It's an honor to be with you here today. My name is Christine Monska. I'm the vice chair of the Massachusetts Commission on the Status of Women. I am an appointee of the Caucus of Women Legislators, now serving in my second term. And I am originally from Western Massachusetts, all over Western Massachusetts, including, my hometown in Easthampton. I also worked in Pittsfield, all throughout the Berkshires, Hampden County, Hampshire County. And then got to work in Roxbury and Boston for a12906 number of years. And I spend most of my time in New Bedford, Massachusetts, in my day job as executive director of the Women's Fund South Coast. And I live in Newton, so really span across the state. I'm very honored to be with you here today to talk to you about the Massachusetts Commission on the Status of Women. Turn it back to you, Chair Tuitt.
TUITT - Thank you so much. And to my right is our executive director.
SHAITIA SPRUELL - MCSW - Hello. Some of you all might recognize me. Shaitia Spruell, the executive director. But I always like to introduce myself with a little bit12940 of history. I used to serve, I had the pleasure of serving as a Hampden County12944 Commissioner when I lived in Springfield, where I was born and raised. And then I was also a state commissioner myself,12950 so I really am committed to the mission and the work of the commission. And now I am in front of you as executive director. So thank you for giving us the time and space to present our FY 26 request. And always available to you if you have any questions.
TUITT - Thank you to my sisters here. And that also shows you that the work that the Massachusetts Commission on the Status of Woman works, the pipeline works from a regional commission, to a state commission, to executive director and so on. So, that's an important part because our budget, as you know, has increased over the years since 2021 to where we are now. And we wanna talk to you about what we do12991 so you can understand why the support from the joint committee is important. As you know, we play a12997 crucial role in shaping policies and12999 initiatives that promote gender equality13001 and women's empowerment, and our young sisters' too13005 overall13005 health and wellness as citizens of the13007 Commonwealth Of Massachusetts, right?
And I'm excited that we're here today, March 10, because in the month of March, the theme13015 of moving forward together is important, and feeling off of the energy of Saturday, International Women's Day, where we are talking about accelerating action. And during the time of Ramadan, connecting. Think about that. Moving forward together, collaborating and activating ourselves with action, and connecting everyone, all the women and13035 girls across the Commonwealth with you, our legislators. We proudly acknowledge all of that work. And we are excited that, you know, when the United Nations did their international theme, and they urged all of us across the nation to accelerate action, we ask you to act with an urgency to protect the rights and the standards of women and girls across the Commonwealth of Massachusetts.
And we are currently ranked number 1 state for women. Think about that. Massachusetts is the number 1 state for women, right? So we've got to keep that up. We've got to continue on that. You know? We wanna reflect on the theme. And we wanna initiate investment into what we do here in the Commonwealth of Massachusetts. I know a lot of you know about all of our events. We're gonna talk about that in a little bit that we do, right? And we know that you are aware of some of the reports that we've done over the years, but you don't know that we've just now restructured our strategic plan. We're doing a three year plan because we get audited every three years. So we decided we're gonna focus on three years. What can we do in the next three years to continue the growth of the women and girls here in the Commonwealth of Massachusetts?
And we've also created an Emerita13117 program. We13119 have sister commissioners that have served on our regionals and in our state that we, you know, we lose them. So we started deciding that we don't wanna lose them anymore. So we've created this awesome emerita program. And we are trying to hope that once we keep them, and we grow our youth piece that we are doing with our regional commissions, that we'll be able to collaborate with more agencies such as EOVS, Women's Veterans Network, such as the arts and culture, and all of the different commissions, the LGBTQ youth commission, the governor's youth advisory council. So we wanna do all of these collaborations, right? So those are things that we are working on, but we're gonna do so much more. And we wanna talk about what we've done in the past. And I'm gonna pass it to my13166 sister.
MONSKA - Thank you,13168 Chair Tuitt. This is truly our mission13170 in action, which is why we come before you today. Established as an independent state agency in 1998, the MCSW operates under Massachusetts Chapter 3, Section 6.6 of the Massachusetts general laws, empowered to study, review, and report on the status of women in the Commonwealth. Our responsibilities include advising executive and legislative bodies on the impact13196 of proposed legislation, informing leaders across various sectors on issues affecting women and promoting collaboration among commissions and organizations statewide. Over the past 27 years, the MCSW has diligently served the women and girls of Massachusetts, collaborating with local and state officials to enact 11 regional commissions.
Together, we have conducted countless regional public hearings to collect valuable insights into women's issues and our concerns. In turn, these stories and issues directly inform our legislative and policy priorities. Our data collection serves as a basis for our reports as evidenced by our 2023 status of LGBTQ plus individuals and families in Massachusetts and related policy implications. I wanna read to you a stat from one of our reports. Only 3% of survey participants have not experienced discrimination based on their identity. In addition, in 2021, the MCSW released a report on the impact of COVID 19 and related recommendations to improve the status of women of color here in the Commonwealth. As we reflect on13278 five years since COVID 19, we're releasing an updated survey and holding a public hearing to provide an updated snapshot of life for women in the Commonwealth five years post COVID 19.
This is one reason our budget is important. Because to complete our surveys and reports, we need the funds, which helps our research collaboration. We need the data. We really need to hear the voices of women all across the Commonwealth so they're reflected in our policies and our priorities. This kind of data gathering and reporting is unique and crucial to our ability to serve women, children, and families in Massachusetts. Finally, we're slated to launch our 2025, 2026 legislative priorities to coincide with our biennial advocacy day, Prioritizing more than a dozen bills across a variety of categories. We anticipate bringing more than 250 women and girls to the state house to advocate for these legislative priorities at our upcoming advocacy day on Monday, March 24.
This is13342 such a powerful day. I've been going to advocacy day since I was a much younger woman. And in my day job, I usually work with a lot of young women and youth,13350 and I bring them with me every single time we host this event. Despite operating on a truly shoestring budget for more than 20 years, our impact has been substantial as evidenced by our numerous accomplishments, including hosting hundreds of girls and young people at our in person girls empowerment and leadership initiative summit and honoring more than 125 remarkable women every year through our Commonwealth Heroines program, where we proudly work alongside elected officials from13382 all 351 cities13384 and towns to honor the women who don't always make the news but who always make the difference.
The MCSW has a lasting impact on every single person that we reach. The current funding enables us to maintain essential programs and regional support while fulfilling our statutory mandates, which include the following, studying, reviewing, and reporting on the status of women and girls in the Commonwealth, informing leaders across various sectors about issues pertaining to women and girls, serving as a liaison between government and private interest groups, acting as a clearinghouse for information related to women's and girls' issues, identifying and recommending qualified women for appointed positions, assisting state agency programs and practices as they affect women, advising executive and legislative bodies on the impact of proposed legislation, and finally, facilitating collaboration among local women's13445 commissions, and women's and girls serving organizations.
SPEAKER1 - Interrupt you? If that's typed out, would you13451 be so kind as email that13453 to us? We
SPEAKER37 - we certainly will following13455 us.
SPEAKER1 - Unfortunately Yes. The committee has given us a big assignment today.
SPEAKER36 - Yes.
SPEAKER2 - I said
SPEAKER1 - that I was gonna stop at 03:30. It's now 03:28. Okay. So I need you to wrap up because I need to take the I'll wrap it. Substance of 2 secretariats in an hour and a half.
SPEAKER36 - No problem. So we'll wrap it. And, also, you will get the13473 email and you get the slideshow that we have13475 prepared for you.
SPEAKER1 - Thank
SPEAKER36 - you.
TUITT - What we ask, however, is that, you know, we know the, we're asking for a 1% increase in13483 our FY 26 budget, which will give us to a total of $1,031,256. That's not enough, but that's what we're asking for this year. You know? So it's not gonna be hard. We're not asking for a lot. This modest increase will enable us continue our vital work of elevating women and girls across the Commonwealth of Massachusetts towards full equity in all of the areas of life. We wanna thank you for allowing us to testify. I'm appreciative of you cutting it short because, you know, we know you have13513 to hear everybody else, and we know you already have a13515 positive, you know, favorable13517 vote for our increase. So I thank you so much for that. and I look forward to seeing you guys next Monday, lobby day, advocacy day. I'll look forward to seeing Commonwealth Heroine nominees. I look forward to seeing all of your names when it comes to supporting our bills that we are filing for our technical amendments. And I appreciate you allowing us to be here. Thank you so much, and safe travels home. Alright?
SPEAKER1 - Thank you. And if any member has any question, please feel free, to ask that question, in the auditorium, before our guests leave. Next up, I wanna call secretary of justice.
SPEAKER35 - Good afternoon.
SPEAKER1 - Good afternoon.
ED AUGUSTUS - EOHLC - Chair Ferrante, Chair Oliveira, members of the committee, thank you very much for the opportunity to come, before you this afternoon and to talk about Governor Healey's, House 1 budget proposal for the Executive Office of Housing and Livable Communities. Before I get started, I wanna introduce our deputy secretary, Jennifer Maddox, and our undersecretary, Chris Thompson, who will be here to help answer questions that you might have. Since the first day in office, the Healey-Driscoll administration has remained steadfast to its commitment to tackling the housing crisis. As part of that work, Governor Healey signed the Affordable Homes Act in August of 2024, the most ambitious housing legislation in Massachusetts history.
The Affordable Homes Act includes13634 funding and policy proposals to create or save 65,000 homes, helping ensure that people who work in our communities can afford to live in our communities. And I wanna thank members of this committee and the entire legislature for your support of this important law. At the same time, the Healey-Driscoll administration has partnered with our MBTA communities to pass new zoning that support increased transit oriented housing. To date, 119 communities, have made those zoning changes. Currently, 3,700 units of new housing are already in the pipeline in those newly created zones. In 2024, Governor Healey's billion dollar tax cuts went into effect, putting money back in the pockets of nearly every Massachusetts resident, including 868,000 renters who have benefited from expanded rental deductions.
Further, the administration's increase to the housing development incentive program, HDIP, and the low income housing tax credit program, LIHTC, are bolstering the development of the state's housing stock. The fiscal 26 budget, House 1 budget recommendation furthers the administration's housing goals with a record 1.2 billion in targeted and strategic investments at the Executive Office of Housing and Livable13725 Communities to make housing more affordable and accessible in Massachusetts. This includes investing in our public housing and supporting our local housing authorities. The fiscal 26 budget House 1 budget proposal recommends $125 million for public housing programs. That's a 4% increase over the fiscal 25 GAA. Public housing provides affordable and safe housing for vulnerable populations at higher risk of housing and security, including low income families and individuals, the elderly, and persons with disabilities.
Massachusetts' state aided public housing portfolio houses approximately 70,000 people, in those 43,400 units. These are operated by 229 local housing authorities across the state. The administration's fiscal 26 proposal includes 115.5 million for subsidies to local housing authorities, a $2.5 million increase above fiscal 25 GAA. Increasing funding will allow for an increase in the per unit budget caps to help local housing authorities keep pace with inflation. This proposal also includes 7.5 million for resident service coordinators program to provide dedicated funding to local housing authorities to hire resident service coordinator. That's a $1 million increase above fiscal year 25 GAA.
This investment will allow local housing authorities to hire about 15 additional coordinators who connect residents with services, immediate disputes, to help, preserve tenancy for families, elderly, and non elderly disabled. 150 of our 229 local housing authorities currently participate in this program, and this investment would increase that number. The program successfully preserved more than 2,600 tenancies last year, safeguarding vulnerable populations from entering homelessness, shelter, or other unstable living conditions. The Healey-Driscoll administration's fiscal '26 budget proposal adopts a multifaceted approach to address homelessness through prevention, outreach services, temporary shelter, and other rapid rehousing mechanisms.
The fiscal year 26 House 1 recommendation also maintains $110.8 million investment in homeless individual shelters that support 2,500 shelter beds. Facilitating across access to shelter13890 beds is critical, especially for the growing number of individuals who13894 are not in shelter. The US Department of Housing and Urban Development projects that individual homelessness is an all time high across the country, including the number of people who are not in shelter and sleeping in places not meant for human habitation. House 1 recommends a $10.1 million for sponsored based permanent supportive housing, a $1.2 million increase over fiscal 25 GAA. This is to adjust for fair market rent increases and to expand the permanent supportive housing pipeline by approximately 16 additional units.
This strategic investment will allow the most vulnerable individuals to exit shelter and enter permanent housing and to access case management services, ultimately increasing the availability of shelter beds for others with unmet needs. House 1 budget recommendation further underscores the administration's commitment to actively targeting populations who are most likely to experience challenges in accessing affordable housing. House 1 budget recommendation incorporates the following investments to combat the affordability crisis. $19.5 million for the alternative housing voucher program to provide rental assistance for persons with disabilities. House 1's proposed investment will support13975 more than 800 vouchers, an increase of 19% over the previous year's budget.13981
16.5 million rental program for the Department of Mental Health clients, which coupled with additional funding from DMH, will support 2,877 vouchers for DMH clients, an increase of 265 vouchers over FY 25. And 3 million for housing assistance for reentry transition to provide service intensive programming and vouchers for folks exiting incarceration in partnership with the Executive Office of Public Safety and Security with the goal of reducing rates of recidivism. The House 1 budget proposal recommends a historic investment of 253 million of the Massachusetts rental voucher program, a 16% increase from fiscal year 25. This funding level maintains the current payment standard of 110% of small area fair market rents. Crucial initiative that came into effect during the Healey-Driscoll administration in fiscal 24.
Preserving the payment standard is a critical component to ensuring the14052 affordability of housing units. The14054 fiscal year 26, House 1 proposed level of funding is expected to support continued leasing of just over 11,000 vouchers, including 130 new project based vouchers. Ensuring a strong investment in the Massachusetts rental voucher program is an important step in the administration's effort to keep people securely housed in their units during a time where housing inflation is increasing across the country. The House 1 budget proposal also notably includes an outside section to eliminate renter paid broker fees. Broker fees can be financially burdensome for renters. And eliminating this is an integral step in making housing more affordable in Massachusetts. The fiscal year 26 proposal will require the fee to be paid by whomever high is the broker, which is usually the landlord.
Over the past year and a half, the Healey-Driscoll administration has worked to make the emergency assisted shelter system more fiscally sustainable, responsible, and operationally manageable. In December of 2024, the administration announced policy and programmatic changes to streamline the state's shelter portfolio by phasing out the use of hotels and motels to shelter families by facilitating access to programs that expedite exits from shelter. On February 28, the governor signed the FY '25 supplemental that provided needed funding for the EA program through the end of the fiscal year and makes important policy changes to ensure the EA program is safe and sustainable into the14153 future. I wanna thank you all, and the entire legislature for your partnership in getting this over the finish line.
Fiscal year 26 budget, House 1 proposal, maintains these stabilization efforts with an investment of 325 million in the emergency assisted shelter and services program, and 57 million for home base, a flexible assistance program to rapidly rehouse families. House 1 also proposes 202.5 million in rental assistance for families in transition, RAFT. A short term eviction and homelessness prevention program. RAFT is a successful and flexible tool averaging $3,700 per family per year to keep a family safely in their home and out of the unstable nature of the shelter system. Diversion tools and case management services are critical in preventing more families and children from entering shelter. These programs are recommended and recommended funding combined represent an indispensable, multilayered system, that meets the critical needs of Massachusetts residents throughout our state. I look forward to your questions. Thank you.
SPEAKER1 - Thank you, mister secretary. I'm gonna, turn to my left here to my, cochair and ask him if, senator Olivera14237 has questions.
OLIVEIRA - Thank you. Thank you, Mr. Secretary, and thank you for your team. I'm glad you mentioned the Massachusetts Rental Voucher Program and the significant investment to the tune of about a 16% increase in that line item. We know and we just had the labor secretary here right before us talking about that net migration issue outside of Massachusetts right now. And one of the largest demographics we see of people leaving the Commonwealth are 25 to 40 year olds, a demographic I'm holding on to by dear life person. But we14270 know that young people tend to rent a little14272 bit more right now. And seeing costs are increasing so greatly, obviously, a 16% increase in this line item is very important, and the hundreds of millions of dollars we invest in that program to try to keep rents down, which have been far outpacing the rate of inflation.
In fact, in my district in the city of Springfield, in order to afford the median family rent within the city, you need to earn 210% above the median family income. It's becoming out of reach for so many families right now. Given that we're seeing a 16% increase in the governor's budget, how can this program become more sustainable over time in meeting the rising cost of rent rates? And there are14315 other ways in which we can help renters afford to stay, live, and work here in the Commonwealth.
AUGUSTUS - Thank you, senator. I appreciate the14323 question. I think it's probably a question on the mind of every legislator here and of every resident of Massachusetts as either they themselves or someone in their family is struggling with housing affordability, whether it be somebody who's trying to launch their career, and move out of their home, nd and start their life or a family member who wants to downsize and find an appropriate place to do that. We don't have enough housing in Massachusetts. Pure and simple. That's the, you know, the law of supply and demand. Anything that is in strong demand and short supply can demand prices that are far in excess of what many folks, particularly some of our lower wage or lower income residents can afford to pay.
And that's why it's so important that we not only provide the resources for these safety net programs, but that we build more housing. Because, ultimately, that is really what's gonna take some of the pressure off this housing market, is creating more units to allow for more vacancy levels. We have some of the lowest vacancy levels in the country here in Massachusetts. And so that means that when somebody needs to move or wants to move, they often don't have affordable, options within proximity to their job or their school or wherever they need to be. And that's why the Affordable Homes Act is so important. That's why implementing the MBTA Communities Act is so important. That's why some of the recommendations that were just made in the unlocking housing production commission report, are so important.
We really need to tackle, at multiple levels, creating more housing and preserving the housing we have, which is why some of the investments in our public housing stock are critical because we know what is an important safety net. You know, many of those individuals and families are living on less than 30% AMI. And if those 43,000 units are not online available to those residents in this housing market, it is gonna be very challenging for them to find appropriate affordable places to live. So I think it's maintaining our safety net while we all work together on new policies and new investments, many of them in the capital side of things, to help us build more housing across the Commonwealth.
FERRANTE - Thank you, Mr. Secretary. Mr. Secretary, I wanna ask you a question about the emergency shelter system. The first part of that question is, do we know what the split is right now between long term residents of Massachusetts and newer residents to Massachusetts?
AUGUSTUS- It's still about 50 50, within the system. However, the demand, so the folks coming into the system, that's skewing much more 75, 25, Massachusetts residents. So 75 of the folks who are presenting at the14485 front door are longtime Massachusetts residents, 25% new arrivals.
FERRANTE - Thank you. And just a follow-up question. I know there's been talk throughout the EA system, just the whole discussion of it and14500 the controversy of it. And at various times, we talk about trying to get folks work permits and trying to get them in workforce development training programs so that there is a pathway out of the EA system where they can afford their own apartment and their own housing.14516 Can you just tell us a little bit about what's happening on that front?
AUGUSTUS - Absolutely. And I appreciate Secretary Jones who was here earlier and her team who've just done amazing work in this space, not only of working with ORI and other groups to set up the legal claims to make sure that the new arrival families have the work authorizations necessary, but then to take those authorizations and turn them into accessing14542 job training opportunities14544 where jobs are actually available. And Secretary Jones and her team have really worked with a lot of employers around the state and helped them often in cases where they were struggling to meet the needs of their business14558 or the services that they provided by taking these motivated individuals14564 and giving them the14566 resources necessary to plug into those14568 much needed jobs. So we've seen that be a very important partnership. And we've seen that help expedite the exiting of shelter for many of those families once they get that work authorization and that job. They are very much motivated to begin their lives and, you know, get stable housing. And we see that as a model that we'd like to continue to support.
SPEAKER2 - Thank you. Representative Smollett?
SMOLA - Thank you, Madam Chair and Mr. Secretary. Thank you for your testimony here today. Out of respect for the chairlady's request that we ask one question, I'm gonna pack three questions in all at once.
AUGUSTUS - Expect nothing less.
SMOLA - Just roll with it. Okay. And, hopefully, I don't get in too much trouble with her. But, actually, it's a continuation of where the chair had had just come from in terms of the EA program. So we just passed a supplemental budget for $425 million, money that comes from transitional escrow, which is not a long term fix. We all know that. So that supplemental also had some reforms in it relative to the EA system. So let me roll with these questions first. Are there any plans? Number 1, where is transitional escrow? That's kind of where it is now outside of this $425 million. Do we plan on going after any additional transitional escrow for this purpose in the future? Because I know one of the things in the legislature we've been concerned about is this rising number, and we get a supplemental that comes back around, and then we have to put more money into the system. And with respect to the reforms, do we anticipate that we're gonna get any money back? So as a result of these new things that we have included for reforms in the supplemental budget, do we anticipate that we're gonna have any savings as a result of those reforms?
AUGUSTUS - In terms of the status of the escrow account, what might be available, I'm gonna defer to Secretary Gorkowicz on that. But I do know that that has been a source of the supplemental funding that we've needed to date. And it's been very helpful in helping us meet this unprecedented demand. You know, if you think back about a year and a half ago, we were seeing 1000 families a month arriving at the front door of the EA system. We all read the stories about emergency rooms filled with families, the waiting areas at Logan Airport. That no longer is the case. And so by many of the actions the governor's already taken and some of the new reforms that were in the supplemental, continuing to drive that demand piece down and able to focus a little less on the front door and a little more on the back door.
And we've transitioned from about 100 exits a month to now 700 exits a month. And those families are exiting to permanent housing, which is where they wanna14733 be and where we want them to be as14735 a system. That's better for the families and14737 certainly better for the taxpayers14739 of the Commonwealth. So some of the changes and the reforms that were in the supplemental, we do think are gonna help us realize additional, but we are in a transition period as we just start implementing some of those changes and see the impacts14755 that they're gonna have. But we do expect to see the cost of the14759 system come down, as well as the quality of the programming that we're providing and the supports that we're providing to the families, in hands.
Sure.
SPEAKER2 - Thank you, representative Kearns.
KEARNS - Thank you, Madam Chair.14780 Good14780 to see you, secretary. Appreciate the work of your staff. I've shared my thoughts over the course of the last several months on both the efforts around shelter. But my question slash statement is, I represent Middleton. Tiny town, no MBTA access that is meaningful. Really none. 20 minute drive to a train stop. I guess14809 they could drive another 15 minutes to get to a14813 bus. Can you please assure14817 me and perhaps share some steps that you and your team are taking to help a town like Middleton get through this process?14829 I think they would like to comply. I14832 have other small towns, I know Rep Kassner has small towns. These smaller towns need you to work with them. I'm wondering to what extent is that happening, and can you share any details? Thank you.
AUGUSTUS - Thank you, representative, through you, through the chair. Representative, I think we have tried to work with our communities, and we continue to stand ready to do that. We've provided $7.8 million of grants and technical assistance to 157 of the 177 MBTA communities. To my knowledge, no community has requested a grant that hasn't been given one or technical assistance. So, we stand as partners with our local communities to help them comply with the zoning changes that are called for by the MBTA14882 Communities Act. And we wanna be as reasonable and flexible as the law law allows us to be in supporting these communities. And a few things that we've done, I think you're familiar, we created the MBTA catalyst fund. That's a capital program that has communities create their zones to the extent that housing is built in those zones that requires some infrastructure improvements, maybe a new sidewalk, a traffic signal, water sewer hookups. We now have a grant program that is only available to MBTA compliant communities for projects within MBTA zones.
So we see that as us listening to communities, hearing some of their concerns, hearing some of their challenges, and trying to come up with new tools that we can partner with them on those legitimate concerns so that we can reach our common goal of getting the housing that we need for all the reasons we've discussed already but helping communities that, you know, sometimes don't have the capacity at the local level or concern about some of the costs of actually building the housing. We wanna be partners, and we've tried to demonstrate that. We continue to be willing to work with communities to help them get there.
KEARNS - Thank you. Hope it continues. Thank you.
SPEAKER2 - Senator Doona.
DOONER - Thank you, Madam Chair. And I just wanna quickly echo Rep Kearn's remarks. I've been on the emails with some of my communities that are trying. And if this is our way of trying, I would just ask that we try to go the extra mile a little bit further to help those communities comply, especially the small ones such like Middleton, Berkeley with, you know, they're just very, very tiny. But back to my actual question with the budget. For line item 7004-009, I don't expect you to have this information handy, but if you could get back to me relatively soon on the safety net line item, specifically with 7004-0101, which is a subsection of what I just see, 0099. My concern with the safety net item is just that's a very large item for $565 million. Just if you could break that down a little bit further, whether it's housing, food, transportation, education. I just think having a line item that large without having a breakdown of how you're coming up with that safety net number, I think it could just be, like, a little bit more transparent.
AUGUSTUS - We're happy to get back to you with that.
DOONER - Thank you.
SPEAKER2 - Next is representative Holmes.
HOLMES - Thank you, Mr. Secretary. Mr. Secretary, thanks for last year's testimony and your 25 years of great service here in the Commonwealth, and the House and all of the other places. I don't know, Mr. Secretary, if you got the question I was gonna ask you from the governor or not, so I wanted to make sure I
AUGUSTUS - She told me so. I'm ready.
HOLMES - Yeah. I'm coming your way. I told her I was in particular, but I'm gonna only give one question. It'll be loaded, not as loaded as the as minority leader. But, my big concern has been we as a Commonwealth has said, yeah, we've done great with this millionaire's tax. And we've been able to add some funds for education, some funds for transportation, but the place where we're killing ourselves is housing. And we need a, it'd be great if we can get another billion. I mean, obviously, we'd expect 2 billion, but we've gotten a billion each year for housing, I mean, for transportation and education. It'd be great if we could do something similar for housing. And one of the things that came up in Ways and Means last week was a dedicated 2 and a half percent towards the endowments that might generate another billion that could be used for housing. I said the housing piece, they had some other things inside the bill.
My big question has been, as I go your page 46 of the summary, I'm thinking what has happened is, I take public housing program, and it says the average cost is about $2,781 a year per unit. When I did my math, I just took the 125 million divided by 43,000. I came to about 2,800, So about that number. And I'm thinking you did the same thing for MRVP, you did the thing for, AHVP, and that's how you got to these approximations. I'm assuming you just take the number from the budget and divide it by how many people you serve. Did that? Okay. So nothing is more effective than public housing at $2,700, you know, per unit.
All I'm asking is, what I keep asking, I hope you have the answer now, of the 43,558 units that we brag about having, how many of those are actually vacant? And then how much would it cost? Madam Secretary, if you recall when Chelsea fell apart and we did the whole public housing commission, we were able to get to spending money to get as many units as possible online by spending 50,000 or less. And that's how we15222 got as many units we could online at the time.15224 Since nothing's more effective than these housing units, how many are offline? How much would it take to get them online? And do we know where they are across the state?
AUGUSTUS - It's a multipronged answer but I'm gonna do the best I can to tackle. There's about 2,200 units that are vacant, at this particular time. A decent number of those, and we can get you a follow-up with the exact numbers, are units that are vacant because the public housing is being repositioned. In other words, we're gonna tear down some of the existing public housing, build back new public housing units as well as often workforce and market rate units, mixed income areas. We're doing this in multiple locations across the state. We've got two large projects in Worcester that are underway. We've got the last phase of Old Colony in South Boston. We're getting ready to start Mary Ellen McCormick also in South Boston. Chelsea has very much embraced this strategy. So there are literally hundreds of units that are purposefully vacant because we knew we were15295 gonna be tearing down these units.
And so at some period before they15299 were gonna come offline, we stopped back filling them so there'd be less families who would15303 have to be relocated to hotels for periods of time. So that's short term pain for long term gain. And that we'll have brand new units with the latest kind of green technologies and benefits that come with those units. Some of the vacancies had to do with the CHAMP system. We have made significant increases. And you may know, I'm trying to visit every housing authority in the state. I've been to 99 of them so far of the 232. And as I've talked to executive directors, members of the boards, I'm hearing significant reductions in the amount of time it takes through the CHAMP system to actually fill units that become vacant because we now are doing centralized screening.
So the preferences that folks, or the priorities that folks might be eligible for if they're homeless or they're veteran, that isn't being left to the responsibility of local housing authorities, which are often so poorly staffed that they just can't manage those list pools. So we're taking on that responsibility. And we're seeing quicker filling of those vacant units and we're seeing higher percentages of locals getting those units. So we're back up to 65 to 70% of locals getting those available units. The third thing we're doing is we're getting ready to start a new pilot. We just put out15390 a request for proposals, got that back. We're gonna stand up two regional kind of SWAT teams, if you will, that are gonna15398 be additional maintenance and skilled laborers.
We're gonna be located in two larger housing authorities that will be deployed to smaller housing authorities. And as I've been out to these housing authorities, I've seen some housing authorities with one maintenance person or 1 and a half maintenance people. If15418 one person is out injured on duty, or vacation, or paternity leave, then you're down 50% or down % of the person who turns over units. Add to15428 that if you've got winter storm and that same person is plowing or doing the other things that are necessary. We just don't have enough staff in these places to keep up. And every once in a while, we get, like, a particularly large number of vacancies at one time or the units, you know, that need a lot of work and they're not just a paint job, they're much more involved in the turnover.
So we wanna be able to surge these additional staff out to those smaller, less well staffed, more particularly staffing challenged housing authorities to see if we can move those unit turnovers more quickly. And if that works in this pilot program, we wanna take that to scale and create more of those around the state so that we can really kind of supplement the staffing at some of our smaller housing authorities. I guess the fourth thing I would add is what I talked about in my testimony. We need to continue to try to invest in the subsidy because the subsidy that we provide and the rents are the only two things that really go to how many people are working there. At the end of the day, to paint the unit, to put the new appliances in, to do the repairs, is people. You need the staff or you need the dollars to contract with the skilled workers to do that and get those units back online. But it is a very high priority of mine as is public housing. I'm trying to literally not just read about it in the office, but physically look at units, walk through with the maintenance staff as well as the other staff so I can really educate myself on what's needed. And we're trying to bring some of those lessons back to what we're doing day in and day out.
HOLMES - Alright. I think I have a follow-up. I think that was allowed. So is one of the 99 you visited, is one of them Fall River? The reason I ask is because if you haven't, Maple Gardens, which is where my sister lives, there's two buildings that are literally empty at this moment that she said she had moved in one of them, and then they moved her back into an older building. And so if you haven't visited Fall River, can you please find out why those units are offline? Because they seem to be newer than the units that people are actually in. And as you're doing that, just the other part of the bonding money, since we don't have a dedicated revenue at this moment, will you be pushing hard to get the bonding money, not just the, of course, we wanna repair some of the older units, but pushing hard out of that bonding money to get these, because we actually only have what, you're saying to me is we don't have 43,558. We actually have 41,238. That's what we're actually saying. Correct?
AUGUSTUS - The units are there or they're in process of being restored because they're gonna be replaced. So the buildings are torn down so we haven't taken those units out. But they're not online with someone in them, but they're in the process of being, you know, built new with new buildings. I have not been to Fall River yet. I do commit to going and checking out that particular building. And as far as the capital investments, I would tell you since this governor has been in this position, we've increased public housing capital by 43% in the last two capital improvement, plans, and I expect a similar increase in the plan that we'll be putting out the end of May or early June.
HOLMES - Thank you much. Appreciate it.
SPEAKER2 - Thank you. Next up, we have Rep McKenna.
MCKENNA - Thank you, Madam Chair. Mr. Secretary, unfortunately, Rep Kearns asked much of my questions, so I don't know that I necessarily need an answer. Just wanna amplify that point. And from my district, the town of Sutton is 18 minutes of a drive through neighborhoods and back roads to get to the nearest T stop. That's not practical access to an MBTA station by any reasonable estimation. And I'd just like to point out that last week at our kickoff hearing, we heard Governor Healey bemoan the actions of President Trump in withholding funds or threatening to withhold funds from states that fail to comply with his priorities, which I can't argue against that. It's problematic. And yet we see the Commonwealth doing the same to communities that fail to comply with the MBTA Communities Act. So, I hope that we don't go down that road and that we work in a more collaborative spirit with our communities rather than a punitive one for those communities that really don't fit that mold of transportation adjacent community. Thank you.
SPEAKER2 - Senator Comerford?
COMERFORD - Thank you, Madam Chair. Secretary and team, thank you very much. And, I wanna start by thanking you for continuing this now long conversation around regional equity and really seeing the folks out in Western Massachusetts and the communities as worthy and eager for investment. So thank you. I wanted to talk about federal funding, and the impact of federal funding, and how HLC is considering or perhaps creating contingency plans around federal actions. When we talked with the governor, when she spoke about H 1, you know, we asked 16 plus billion dollars, right, is on the table for Massachusetts. How is the administration considering and planning around potential federal cuts? And she spoke, I think, well about each agency making plans, thinking about priorities, thinking about ways in which to respond quickly. So I'd just like to understand how is HLC as we look at the array, it's actually jaw dropping, right, of critical federal funding that we get to power programs that our constituents need like LIHEAP, for example?
And, actually, that was one of the first votes I took back in the first Trump administration. Donald Trump and his administration cut LIHEAP. We put it back in in the administration. That was 30 or $40 million in 2019. Now we're looking at potential billions of dollars of cuts. So I'd love to understand how HLC is thinking about the federal funding that you have. How are you looking at the existing investments proposed in H 1? How would you initiate a planning process that would weigh these investments and make quick decisions about where potentially to fill holes? Understanding we won't be able to, as a commonwealth, fill all these holes, how can we talk to our afraid constituents, frankly, about ways in which the administration is creating a net for15834 them?
AUGUSTUS - Well, I appreciate the question, senator. I 'm probably gonna disappoint in the answer in that we don't know,15842 specifically where the cuts may be coming. We're hearing all sorts of rumors and announcements, but trying to stay as informed as possible. I just on Friday met with our regional HUD folks to try to understand as clearly from them what are they hearing, what areas might be facing some kind of cuts. So we're really in a kind of wait and see and listen mode, talking to a lot of our partners because some of the money that comes into the state doesn't necessarily come through us but goes directly to homeless individuals, homeless providers, and others. You know the block grant program that we administer from the state level, 65% of those grants go to rural communities, many in your district.
COMERFORD - Aware.
AUGUSTUS - As you're well aware. And that is a program that often, you know, we try to prioritize housing infrastructure that supports housing programs. So that is a federally funded source that really helps us advance our housing goals, as well as our community development goals. So, those would be very worrisome if we were to see any kind of reduction in those programs. Also, on the housing development side of the house, the IRA, the Inflation Reduction Act, there were many tax credits that were offered to developments, whether they be economic development projects or housing projects that incorporated green technologies, things like solar arrays or heat pumps, which are, you know, best practices in terms of helping us lower our carbon footprint to meet our climate goals.
And there's some question about whether those programs, even though projects move forward on the assumption that those programs were gonna exist, those tax credits were gonna be available because it takes, you know, two or three years to develop a plan for a project, to design the plan and start to construct the plan, and the credits wouldn't come till after the project was online. There's a lot of fear that projects that anticipated those tax credits may or may not be able to see those tax credits. So, we're waiting to see how that shakes out. And are there projects that are gonna have holes in their pro formas that are gonna delay the production of new units that we desperately need? So there's multiple streams of15985 funding that we're trying to keep15987 an eye on.
You probably know that about half of our housing authorities15993 also have federal units in their portfolios or federal vouchers that they also administer. Those are important parts of our safety net system, that happen on the ground to make sure that folks who are eligible for those vouchers or folks who use those federal housing authority units, are maintained and operational. So, I met with the team, as I do quarterly from Mass NAHRO, talking with them, finding out from them what they are hearing,16024 sharing what we're hearing. So really trying to stay engaged with all of our partners and16029 share information and notes in real time so that16033 we can stay on top of it and work16035 with the governor's office and her team as they work with the attorney general and others on what the right strategies and approaches are as things become clearer.
SPEAKER2 - Thank you. Rep. Peace.
PEASE - Thank you, Madam Chair. And, again, I think, I was gonna have a question about the local housing authority, but I think you addressed that rather well. So I will say that, what I'm very glad to hear the trend is 75% more Massachusetts residents now as we move forward. And I appreciate you coming out and visiting our housing authority out there in Westfield. So thank you.
SPEAKER2 - You. Rep, Marcy?
MARSI - Thank you, Madam Chair. Thank you, Mr. Secretary and team. Also on housing authorities, like, you touched on16087 a lot of it but I just felt it16089 important. I get a lot of calls from constituents that, you know, have a hard time getting in, right? So I know that, like, in this budget, I wanna make sure that we're supporting our housing authorities as best we can. It's not just having to say no to local people is very difficult for them, and I don't have a good answer for them. So just implore the administration to, like, you know, keep them in mind as they make decision. I know we all hear about CHAMP and, you know, that it's pluses and minuses. But, you know, for this budget, I know we're doing our best to support but I wanted to make sure you heard it from me.
AUGUSTUS - Appreciate that. Thank you.
FERRANTE - Thank you, Mr. Secretary. One last question. The question is, I didn't see this16136 morning's full paper but I know over the weekend the Trump administration was talking about increased tariffs on lumber. Do we have any idea where that tariff stands and what the implication would be on new housing?
AUGUSTUS - My understanding is it's a 25% tariff on wood coming from Canada, which is one of our biggest sources of wood for housing production here in Massachusetts. What that impact is gonna be is obviously too early to say. I think one of the things that I'm concerned about is some of the uncertainty that we see. What developers tell me is equity, which they are usually pursuing in order to get the financing to build a unit, equity doesn't like uncertainty. And the idea that this project may cost 10 or 15 or 20% more than they're projecting it doesn't often attract that investment. And so what I'm hopeful is that we'll get to a period of time soon where there's more certainty, as much certainty as you can have, in what a project will cost so that we can get that equity in to support the creation of the units that we desperately need that are gonna take some of the pressure off our housing crisis here in Massachusetts.
SPEAKER2 - Thank you, mister secretary. Thank you for your testimony today. Thank you for answering our questions. With that, we'll conclude your portion of the hearing, and we'll welcome, secretary Howup of economic development. If any of the members have a lingering question, just direct that16234 to the secretary and his staff on his way out.
SPEAKER4 - I don't
SPEAKER1 - know if I know Harrison.
SPEAKER4 - On the water.
SPEAKER7 - 1 1 on the water is cloud.
Right? That's fine. Nobody everybody
SPEAKER4 - Yeah.
SPEAKER12 - God. I'm putting them everywhere?
SPEAKER13 - Do you need a bracelet?
SPEAKER12 - I'll save your bracelet.
SPEAKER14 - You can just click it at us after me.
It's
SPEAKER13 - Alright, friends.
SPEAKER14 - I will take another. Yeah.
SPEAKER4 - Hello?
SPEAKER2 - Okay. We're in the, last stretch here of the last 45 minutes of this hearing. Madam secretary, we have a hard stop at 5. So I'm gonna ask you and your team to begin, and, let's go.
YVONNE HAO - EOED - Great. Well, thank you so much. We are so grateful to be here. I'm just very consistently annoying with my bracelets because we do have the best team in our state and really starting with all of you. So thank you so much for all the incredible work you do for16463 your districts and also for our whole16465 state. And a special thanks to Vice Chair Ferrante, a special thanks to16469 Senator Oliveira.16471 This16471 is a really great honor16473 to be in this position as secretary of economic development for our state. It's my third budget hearing and third time in Gloucester. Thank you for hosting us. It's always really exciting to be here and especially here in also. Thank you for that. And I also just wanna take a moment to acknowledge, Chair Rodrigues, Chair Michlewitz, and all of the members of the committee, and also all their incredible teams.
I know we are living in interesting times and people are talking about what the role of government is. I think we in our state, with our awesome team Massachusetts, we've proven that we know how to work together, and we know how to get things done. So I just wanna just, call out that last session, the 193rd16509 General Court of the Commonwealth, was one of the most remarkably productive sessions in the history of our state. And we in our office especially appreciate all the support. Just to highlight, we developed our statewide economic16519 development plan called, surprisingly, Team Massachusetts, leading future generations. And many of you who are here were involved in that, including Vice Chair Ferrante. We passed the most significant tax relief package in decades to make our state more affordable and more competitive. We implemented several operating budgets, making Massachusetts more equitable through many initiatives such as free school meals and free community college for all residents.
And finally, and very important for our conversation today, we passed the, Mass Lease Act, which was a very large, very important economic development bill. And I think given the national context, that bill is more important than ever. So thank you so much for working together on that. So today we're gonna turn to looking at H 1, our budget recommendation. So our proposal has $146 million for economic development. This is an increase of $5.8 million over our last proposal. It's a 4% increase. And just to remind everybody, this is a very small part of overall state budget. So this makes up 0.25% of state budget. So it's a very small number. And, however, we, I'm a business person, so I always think about things in terms of some things are expenses. You have to spend it. It goes away. I would think about all of the investment in economic development as really something that will pay back.
So I think a lot about these as planting the seeds that are gonna return multiple fold. So if you just think about it here, we're talking about $146 million proposal. We expect to generate from that, at least $254 million in nontax revenue from assessments, fines, fees, and penalties. And also on top of that, all the tax revenue from new jobs, new companies, all of the growth that we expect to see. So what I think about when I think about our office is, we are really, like, investing in r and d and sales for the state. We make these investments now, and this will pay for many, many years of success in the future for us. So, let's get into the details. And what we decided to do was to maybe talk about how our H 1 budget proposal lines up with our economic development plan.
That plan was very well thought out. It had a an overall North Star. The plan really was aimed at making sure our state remains the best place for every person to live their best lives, to have great careers, to raise their families, and to be the best place for any company or organization to start, scale, grow, and be wildly successful from here in our state. So that was the goal of the plan, and there were three big pillars to that plan. In case anyone forgot, the three pillars are fundamentals, talent, and sectors. So we're gonna talk about our budget in those three buckets. So the first pillar is around fundamentals. And so we did something unusual on the plan and we said, we can, you know, spend a lot of time on all these fancy ideas. But to do economic development, we have to have the fundamentals in place. And many of those fundamentals are actually in my colleague's areas.
So you just heard from Secretary Augustus in housing, that's a big fundamental. You'll probably hear from Secretary Tibbets Nutt in transportation, also a big fundamental. And then we invest a lot in fundamentals from our office around the community 1 stop and MassWorks, which Undersecretary Stobla runs. A lot of that is actually in the capital budget so I won't go into that today. But the fundamentals are across many different areas. For the fundamentals that is part of the budget proposal, we have a few areas to highlight today. So one is that, we are proposing again level funding for the Mass Downtown16714 Initiative16714 at16714 $600,000. This is a16716 very popular, very high impact program. I think many of your towns and cities have benefited16720 from this.
It really works as part of the community 1 stop, ande that's the single application portal that has all16726 these different programs as part of it, and it goes to revitalizing downtowns. Another part of the fundamentals that is in this year's budget16734 is really around the rural area.16736 So we are so thrilled to16738 have former Senator Ann Gobi on our team now, first time ever that we've had a full time person dedicated to rural economic development. I know very near and dear to Senator Comerford's heart as many as well as many of you. And we were just in Covington with Rep Sabadosa on Friday, a town of 800 people and doing amazing great things. So, former senator Ann Gobi is now our full time rural affairs director. And in this budget, we propose really defining, what the rural development fund is and making sure that that is supported as part of this H 1.
So that's section 1 around fundamentals. Section 2 is around talent, and we actually have a lot in this H 1 proposal around talent. As we all know, the success in our state is really because we have wicked smart people here. And so, keeping our talent, making sure our talent is well trained, this is a huge part of our economic success. So, a couple of different areas I wanna highlight. We know that the broad context right now for our state is that we are living in a tight budget year. So as we thought about talent, we've tried to be creative and tried to be finding ways to be more flexible to fund some of these things. So one of the real changes that we've made is, as part of the Mass Lease Act, we were able to get a change to the workforce investment trust fund.
This trust fund16810 is off budget. It's a funding source, which comes from sports wagering. And because of this change we made in the Mass Leads Act, it means that we can access these funds for a much more broad range of different programs, and that is very, very helpful to us. Let me just highlight a couple of the things that the workforce trust fund will be, aimed at. One is $15 million for the community empowerment and reinvestment program. This is, again, a very popular program that goes across many, many communities and really looks at folks who have had difficult backgrounds and really we need to invest in them to help them get back on track. Another program here is $2.5 million for the community workforce partnership grants. Grants.
This was formerly known as urban agenda, also a very popular program and has a very big impact on urban neighborhoods. And then also related to that is the, an entrepreneur residence program. Actually, that is not part of that. Okay. In any case, so we're gonna use the workforce investment trust for a bunch of these. Separate in addition to the workforce investment trust, we do have other aspects of talent. So for H 1, we are going to be expanding the entrepreneur residence program. This is a really important program. It's run by our quasi mass ventures. We've renamed it to called Thrive. Very catchy name. It's called Talent H1B retention visas for entrepreneurs. If anyone16893 remembers that later, that will be impressive. But the goal here of Thrive is to make sure that we16899 support the most talented entrepreneurs from around the world to help them stay here and start their businesses here in our state. If you think about the examples of this, people think about people like Nubar, who was the, founder of Moderna and flagship pioneering. He stayed in our state after coming here to study.
So the focus of Thrive is to make sure we provide funds to help these folks stay in our country and then grow their businesses here. So, we propose in H 1 $750,000 for Thrive. It'll support at least 30 entrepreneurs. We're gonna be partnering very closely with universities to identify these folks and to work with them. Okay. So then we also, in addition to that, have 1.35 million for internships and mentorship programs through MassTech. This is, again, very important. This goes out to all different parts of our tech community to find our talented folks here. And then we also wanna continue the work with the advanced manufacturing training program, which is really looking at investing $2.5 million through the workforce investment trust fund in helping to find folks who can get back on track and get highly skilled, very16961 advanced manufacturing jobs. So, that is another piece of this.
And then lastly, a really exciting program that's part of Mass Life Sciences is our Pathmaker16969 program. So we first launched this program16971 a couple years ago, and we are now16973 gonna be, again, funding it through the workforce investment fund trust fund. It's gonna be funded at $10 million. This is, again, helping folks who, you know, have lots of skills and talents but may not wanna go to college and that we train them through Pathmaker, partnering with, colleges, with vocational schools, with nonprofits, and then partner with companies. And then get them amazing jobs doing biomanufacturing at the end of that. I have gone to the graduation ceremonies. There's always tears. These are people who were, you know, working at fast food or working in, grocery stores and then go through this training program funded by the state. And then they leave there with jobs making 50, 60, $70,000 a year in life sciences with career paths. So this is a really, really important program, and it's very important to the life sciences companies. They love this pool of talent. Okay. So that is all section 2, the talent section, and there's a lot here again in H 1 around talent.
And the third17024 and last section of the economic development plan is around sectors. So let me just talk about some of the H , programs in the sectors piece. So couple things here. We are very lucky in our state that we already are the world leaders in a bunch of key sectors. However, we all know we're living in very competitive times, so we don't wanna rest on our laurels and let others surpass us. We wanna lengthen our lead in these areas. And top of that list are places like life sciences, healthcare, advanced manufacturing, robotics, and also AI. We also have new areas that we think we should be leaders in and we wanna make those key investments as well. For example, climate tech is a new big focus for us in the economic development plan and also on our H 1, and also tourism and the creative economy. And, we are, Undersecretary Stanton is working a lot on the 250th, which is right now this year and next year.
And the other thing is that we wanna make business easy for every kind of company in our state. So really finding ways to support all of our businesses, including all of the ones that are under Undersecretary Leila D'Amelio that we license and that we work within all of our different commissions and things. So let's go through these different areas. So first of all, we are a 780 billion GDP now, which is pretty incredible. Again, we're bigger than many countries, bigger than the country of Ireland. We're a third the size of Canada. And we are the leaders in so many of these areas. However, as we all know, this last month and a half has been very interesting with what's happening in the federal arena. And we are seeing real threats of funding being cut from the NIH and many other federal programs. This is why it's more important than ever for our state to invest in these key sectors.
So our House 1 budget, proposes a $12 million transfer to the Mass Life Sciences Center. This is the time for us to make sure that we stand up for our leaders and that we continue to invest in science and research. We continue to invest in taking care of patients. We continue to invest in helping to cure the hardest diseases and doing the right things for everybody in our state, the country, and the world. So this investment is very, very important. And we've tried to do this year, to make sure that we can be fully, transparent is we've tried to, propose the funding in two chunks. So it's a $12 million in total split out into different areas, 7 million and 5 million so that the legislature can have full transparency into what these funds are going to.
We also are really thrilled that we have a new CEO of Mass Life Sciences, Doctor Kirk Taylor, who is here somewhere. Where's Kirk? Here we go. And he and his team are working very, very, hard on making sure that as we hear from the different changes in DC that we are reacting in our state to try to fill as much of that gap as we can. Okay. So then in addition to that, we also wanna propose funding for MassTech. Again, these are very important areas for our state and for the country. So in MassTech, and we actually have Carolyn Kirk's picture up there. And her person is right here. I think she's no stranger to Gloucester. She is our CEO of MassTech. And we're proposing $2.5 million for programming and operating support across all of the key divisions.
These are areas like fintech, which is very important for cybersecurity, areas like artificial intelligence, again, a place that we wanna lead, and this is early days in AI, quantum computing, robotics, and blockchain, and many other important key tech areas. We also are proposing another $1.2 million for the Center for Advanced Manufacturing, also under Carolyn and MassTech. This is really to encourage all of our local manufacturers to invest in automation, invest in upskilling, invest in all the latest technologies so they can stay competitive. And then finally, we're funding another $950,000 for the Mass Cyber Center. And, again, this is a very important area as we have more and more technology, making sure that we are the leading front edge of protecting data. So that is all that we're doing on life sciences and MassTech on lengthening our lead.
Let's switch gears a little bit and talk about the sector that we should be winning in and investing more in, which is tourism and the creative economy. We have so much to offer in our state in terms of history, culture, food, arts, sports, mountains, oceans. We have everything in our state. We have historically, you know, not invested as much. But right now, with the 250th anniversary of the founding of the country, which started here, we have a really unique opportunity. And we have MOTT, the Massachusetts Office of Tourism and Travel. They've already distributed 1.5 million in grants, and they're offering additional 2 million, support all kinds of programming marketing for the 250th. And we would like to ensure that we continue to invest in these areas. So we have all the assets and all of the revolutionary history here. We wanna make sure we invest in these areas to get the most out of the 250th and to bring all kinds of people to our state to celebrate this.
In addition to that, we have all of the rest of our sectors, including all of our small businesses. So let's talk about what we're doing for small businesses. So H 1 continues our commitment to the small business arena. This is the majority of businesses in our state. It's the majority of the employees in our state. It's also the best place for immigrants, for minorities, for women to get a foothold into the door and to grow their businesses. So we are again committing $7.5 million for the small business technical assistance program. This is the highest level of funding consistent with the last couple of years. And I travel around and do small business tours all the time, including with many of you in your districts. And, again, there are tears when I meet with small businesses17349 and they talk about the fact that they would not17351 be able to survive had it not been for that17353 SBTA grant.
Again, we are17355 seeing interesting challenges with the federal17357 small business administration, so these grants are more important than ever that we continue to do the right thing from our state. We also wanna continue to provide a million dollars for the innovation voucher program. This is to help early stage small businesses out of UMass Amherst. This is a really important program and, again, works with all of our different university talents to help small businesses. And then17377 the last thing that we're very excited to launch is what we call the business front door. I think many of you have heard about this already.17383 Undersecretary Stobel and her team have been working very hard on this. We've traveled17387 around the state. And as part of our economic development plan as well, we heard everyone say, we keep hearing about all these different grants, and workforce training, and all the support you do. How do we access it? It's so confusing. We don't understand the forms. We don't understand the websites. It's so hard to figure out who we have to talk to.
And so the idea here with business front door, similar to what we've done for community 1 stop, is to bring it all together in one single portal and to have a concierge service so that any business can come to this portal and just ask very simple questions. What do you need help in? What regulation are you struggling with? Do you need help finding people? Do you need help with another state's trying to steal you away? And then we will work to find the right resources and get you the right help that you need. So that is all the work that we're doing for small businesses as part of H 1. And then last let me just turn to the office of consumer affairs and business regulation, which is a very important part of our office. And, OCABRA, which Undersecretary D'Amelio leads, covers many different areas. And these are very important areas for the kind of smooth operations of our state economy.
So we're proposing here in H 1, $3 million for OCABRA for all kinds of important regulatory programs under consumer protection. Examples of this are the consumer outreach efforts, data breach repository, the lemon law arbitrations, and the do not call registry. I also wanted to make sure we all highlight that OCABRA has done a lot of work to transform the home improvement contractor program to ease the claims processes for homeowners and to make it so much easier for contractors. That is a big, big, amount of work, and it's gonna make that program so much better for everybody. We also have another important sector of our economy, which is the banking sector. So we have the division of banks led by Commissioner Mary Gallagher, who's also here. Yay. And so she oversees 140 banks and credit unions and 1,630 nondepository licensees, and they have to conduct examinations of all of the state chartered banks, credit unions, and DOB licensed nonbank entities to make sure that we have a sound financial system in our state. So we're proposing a $29.2 million budget for this Division of Banks.
We also have the Division of Occupational Licensure led by Commissioner Cheryl Wilkinson, also here. Yay. So we have under the DOL, under Commissioner Wilkinson, we have 26 boards of registration, the Office of Public Safety and Inspections, and the Office of private occupational school education. So we issue 500,000 licenses a year, with over 250 license types and a broad range of trades and occupations. This is plumbers, hairdressers, massage therapists, electricians, the whole range of, you know, of different occupations, realtors, all of that. So H 1 is proposing $34.9 million to support all this ongoing work, including a modernization effort. This is really important to take a pause on. It's not very sexy, but it's very important. So for those 500,000 people who are getting licensed, if you're up for getting relicensed or if you're trying to get licensed, today, we have four or five different IT systems. None of them talk to each other. None of them will work very well. And you have to call by17564 phone and wait, or go in17566 person to an office, or fill out a paper form to get licensed.
We're in 2025. So we have an IT project underway to17572 get all of us pulled under one IT system where you can check and see where's your license, fill out forms online, you know, get status updates. You know, the very basics, but this is gonna be, a huge improvement in service levels and also efficiency and also. So that project is underway and is very important. We also have the Division of Insurance headed up by our new commissioner, Michael Caljouw. Yay. We stole him from Blue Cross Blue Shield. But the insurance market is very important in our state as well. Michael and his team regulate all of our insurance industry. We are the number 13, market for insurance in the country, believe that or not. And we also are the 26th largest insurance market in the world. So, our budget proposes $18 million to support the regulation of this industry, and this industry again writes over $70 billion in terms of premiums. And we all know the insurance industry is changing a lot with climate change and with healthcare pressures and all of that. So, thrilled to have Commissioner Caljouw here.
Another important part of OCABRA and another important sector of our economy is telecommunications and cable led by Commissioner Karen Charles. Yay. Okay. Great. She regulates 213 telecommunications carriers and eight cable providers. And last year, they investigated over 1,800 complaints and secured more than $280,000 in consumer refunds. So this is a great return for our consumers. So we're proposing $3.5 million to support their ongoing work. And finally, in OCABRA, we have the Division of Standards. And he's our commissioner not here. That's okay. He's busy testing and then making sure we inspect everything. So this is a make sure that all of our, kind of weights and measures and everything is consistent across the state. Again, this is changing as we have new protocols with things like EV chargers. But, Commissioner Dave Rodriguez is, doing a lot of this work. And we're proposing $3.4 million in H 1 for the Division of Standards. So that wraps up the sectors piece of it. So, again, fundamentals, talent, and sector, using H 1 to invest in all of these key areas.
So in closing, I just wanna say we appreciate your time. We're very grateful for this opportunity to talk with all of you. We wanna hear what questions are on your minds. We are living in very interesting times, and this is, you know, I said this in cabinet the other day. It's easy to win when times are good. When times are hard, that is when the best teams step up. And that is when the best teams work together and we're creative and we hustle and we're nimble and we do the work to make sure that we win. And that's the job that we have right now. So this is our moment to make sure we lead. And I am very confident that by working together with all of you and by making the investments in H 1, we will continue to make sure that the Commonwealth is the best place for every talented person, every great organization, and that we lead not just for our state, but for the country and the world, especially right now. So with that, I will end, and we're happy to take any questions.
FERRANTE - Thank you, madam secretary. Before I ask you, my question, I just wanna acknowledge that former mayor Sefatia Romeo Theken was here as the assistant director of fish and wildlife. Carolyn Kirk is here, former mayor, now the head of MTC. Gloucester has a tradition of promoting its mayors to great public service in the state arena. And I wanna thank them both for being here today. My question is actually a request. Your testimony, thank you for it. It was comprehensive. And it's hard to believe that 0.26% of the whole state budget goes to fund all that you just mentioned and how important all of those sectors and all of those buckets are to making our economy run and for Massachusetts having one of the strongest economies within the whole 50 states. Yep. So thank you for the job that you're doing to
HAO - We have an awesome team. I should say that I'm the one, you know, presenting but really it's these folks here and behind me who have done all of the work. So I'm very grateful.
FERRANTE - And if any of the members did not get their bracelet that says team messages Yes. Please make sure you see the secretary on the way out today. But my request is this. On the front page of today's globe, it mentions that our fishermen within the Commonwealth do not know when and if they're going to be able to fish this year. That is 100% unacceptable. And it's because the federal government has slashed so many jobs, the administration has slashed so many jobs that the people who are responsible for putting the framework in place to manage our fisheries may or may not be in their offices. So I think this is gonna be one where they're gonna have to do a do over and see what's happening in the New England region because it wouldn't even just be the Commonwealth of Massachusetts, it would be all of New England Fishermen that wouldn't be able to fish. And as the daughter of a fisherman, I can tell you it's probably one of17867 the most difficult professions that we have here in Massachusetts. It's17871 weather dependent, it's life threatening, it's overregulated. And to now just have this burden opposed on that sector and on our fishing communities is just a little bit too much.
And the sad reality is some people may think I'm making a partisan statement, but I'd be the first to say, for fishermen it doesn't really matter if there's a Democrat or a Republican that heads up the presidency. It seems to be that we get it from both and all ends. So anything that you could do to talk to your counterpart in Washington, the secretary of commerce, as fisheries comes under a lot of people. I don't think it comes under interior, or environment, or something else. It doesn't. It comes under the secretary of commerce. Anything that you could do to advocate for our fishermen and to give them some certainty in terms of when they can start to fish and how they can would be greatly appreciated from this community.
HAO - Well, Vice Chair Ferrante, you know, I've spent a lot of time here in Gloucester and visited with many of our amazing, fishermen and and fisheries here. It is a really important part of the economy here and many parts of our state. We will 100% be happy to follow-up and help advocate. I just wanna make two comments, related to this, though. One is that, so I'm a business person. This is my first time in state government. It's a tremendous honor and I feel really so grateful that we have some people in our government, and I've learned so much. But as a business person, people have often said, oh, well, you must love, you know, all this, like, this business stuff happening in DC. What is happening does not make sense for business.
If you have amazing businesses that are really strong parts of your economy, like the fisheries, you do not cut the legs out from under that. You wanna support them and help them thrive. And so I think it's really important to remember that our goal here is to support all of our amazing businesses, all of our amazing talent, and help them thrive. That is our role in government. And what we are doing, what's happening right now, not just in fisheries but in so many places, is the opposite of that. So this is not good business in my view. The second thing I will say is that, I think this is a very important tangible example. Again, you can read the newspapers and people are like, oh, sure. This sounds great. Let's do, you know, all these cuts. In reality, these are gonna affect so many humans and families, and their kids, and their ability to make a living. And it's gonna ripple through in very real ways. And so we all need to work together to have a voice and to advocate with the people that matter in DC on these important areas, especially our fishermen here. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER2 - Thank you. Thank you. Senator Olivera?
OLIVEIRA - Thank you, Madam Chair, and thank you, Secretary Hao and your entire team. Just to add to the point, I don't have a coastal community in my district at all, but I also know that the funding cuts to NOAA, which puts weather balloons in the air the fishing community is relying upon accurate weather. And when you cut that, you impact the fishermen and the people who are going out on the ocean risking their lives. If you walk up the stairs, you see the names of people who lost their lives here from this community because of not accurate weather. And that's something, because we're all team, Massachusetts. I almost said Western Massachusetts. I had a w on here, but now that I'm promoting Gloucester, I might need to erase that out. My question does have to do with Western Massachusetts and looking at the Mass Leads Act that was signed into law by the governor and the varying different sectors that you mentioned before. There are a couple of sectors that are very near and dear to the hearts of the Western Mass Legislators that were included within that bill. You mentioned one of them, quantum computing.
You know, Western Massachusetts, despite, our distance out of Boston, our economy is tied much more North South than it is East West. And as Connecticut and the Hargreiter Hartford area rises and falls, so does Western Massachusetts. So looking at some of the key areas that builds upon our investments with great institutions like UMass and Senator Comerford's district, and looking at the potential for Western Massachusetts as an economic hub. You know, Western Mass really didn't benefit a lot from biotech investment. They didn't benefit as much from life sciences. There are emerging sectors right now that could be a great benefit to our region. 1 of them could be, quantum, but the other that you didn't mention in the sectors was food science. That's something that many of the Western Mass Legislators worked on. We have an amazing ability to connect with that sector because of the universities that we have in our region, but also the agricultural history that we have. And so I'm wondering as we're looking at these sectors to invest in, what is the administration doing to look at those sectors within the LEADS Act in making those investments?
HAO - Well, I love this question. I think everybody knows. I love all of our state, but I especially love the 413. That's my first time in Massachusetts was was going to college in Western Mass, and I have a house out there. So I am out there as much as I can be. But for all of our state, it's really important. So, in our economic development plan, and this is something I think about all the time, we talked about how we are the wealthiest state. We're the highest income per capita state. We should all be very proud of that. That's a big deal. We are one of the most income unequal states. That is really shameful. That's not what Massachusetts is about. And when you look at the income inequality, some of it is by education, some of it's by, you know, background. A lot of it is really correlated to geography.
So if you live in Western Mass or some of the other18206 areas of the state, your family income on18208 average is half of what it is in Boston Cambridge. And yet we know we18212 have wicked awesome talent in every part of18214 the state, and we have universities and colleges in18216 every part of our state. We should be doing better. When we were putting together the Mass Leads Act, we looked a lot at the past, try to learn for the future. And one of the reflections we had was that too much of the gains from the past economic development bills, were really for Boston Cambridge18232 and didn't spread out. So as we18234 think about the Mass Leads Act we're being very intentional about, helping these industries develop in every region. So for life sciences, helping, you know, all of the r and d that are sent you know, in Kendall Square and in Boston and Cambridge, helping them build life sciences, you know, manufacturing facilities in Western Mass, in Central Mass, in North Shore and South Shore for climate tech. We're already starting.
Again, spinning out of universities, having the r and d center in Boston and Cambridge. But when you build your manufacturing site for a concrete, do it in Holyoke. When you're building your big, you know, first prototype manufacturing site, do it in Devens. And so trying to get climate tech to be in all parts of our state. And quantum is a big piece of it, and I was just talking to Chancellor Reyes on Friday in Springfield about climate tech and food science because we have a real jewel there with UMass Amherst and how do we invest more there. So this is a very intentional part of our implementation of Mass Leads is to make sure that there's we take advantage of all of the parts of our state and all of our talent. I don't know if you wanna comment more on quantum because that's an area that you work on closely.
UNIDENTIFIED SPEAKER - EOED - Thank you all for having me so much. I'm always happy to talk about to talk about Holyoke. So the Massachusetts Green High Performing Compute Center in Holyoke is really gonna be an anchor for that part of the state around a investment, workforce training. It's gonna be job pipelines and emerging technology that other states just won't be able to compete with. It's incredible partnerships with our local nonprofits, our workforce providers, as well as our educational partners. So I know we're really excited, and Carolyn Kirk is nodding happily in the back that MassTech is taking the lead on this. I also wanted to add around the alternative food proteins, Massachusetts is really taking a lead here around partnering with colleges like UMass Amherst and Tufts to become a biomanufacturing hub for that.
It's not something that five years ago, I think, would18338 have had such a footprint, but now between the city of Worcester, regional efforts that are taking place out in Holyoke and Springfield, the Tufts and UMass Amherst programs, we're partnering not only within our state, but also with, you know, the University of Connecticut around being a leader in alternative food proteins. So it's not only incredible for our research institutions but it's job pipelines for new, exciting, emerging technologies for many of our millennial. And what's the one below? The younger ones? Yeah. Spoken from the little lady over here that's like, what is it?18379 Many folks in the Gen z generation are finding the work around alternative food proteins to be really meaningful. It's helping combat climate change. It's working towards a moral imperative. So the jobs are not only meeting the market for something new and emerging, but it's serving sort of a moral purpose for folks that are looking to come out of college and do good and interesting work that's serving our country.
SPEAKER2 - Thank you. Next, we have, representative Diggs.
DIGGS - So I live on Cape Cod. So, of course, I'm very much into making sure that our fisheries and lobstermen are all set. But not only that, you know, with what's going on in Washington. My buddy wrote the book, finest hour, and we need to be ready for if there is another finest hour, we need to be ready so that we make sure that no one is hurt or in those type of problems. So, you know, I really love living in Massachusetts because I know that we're so blessed to be here. We have so many things that are number 1. Being a competitor that I was of a world champ boxer, what's important is our athletics, our schooling, our sciences, all of that means something. And I want us to make sure that, you know, I want everybody, I want The United States to know that we are the best, and we are willing to do whatever we have to do to make sure that everybody is successful. So that's all I have to say, but thank you very much.
SPEAKER16 - Dave Carter. Yes. I agree.
COMEFORD - Thank you, Madam Chair. Secretary and team, thank you so much, for this. I actually don't think you took a breath. So it was like a tour de force. Secretary Hao, I don't know, did anybody hear the sec, I don't I don't think so. Thank you. You are a great champion. And just listening to you, I felt energized to fight, right? And so thank you. I'm very, very grateful. I have a question, but let me just say on the on the food science hub out of UMass, my hope just, as a UMass perspective, is that we're lifting farmers, as well as the alternative the science around alternative protein. I think there's a virtuous cycle there for us. And, you know, I think we need to bolster and strengthen farmers even as, yeah. I see the thumb. Even as we look at the new science.
But I wanted to to talk a little bit about the the workforce skills cabinet. We talked to Secretary Jones earlier about this. I I think for us in Western Massachusetts and actually probably in every region around the state, it is nothing but a good news story if legislators18544 can see the planning and see how it comes down into these regions and then support18550 the MassHires and other entities. And I don't know, and we don't have time to have a full conversation around this, but this is just me putting a plug in, and I believe it's shared by my colleagues for us to see it more, get more information, see the plan come down to the 413, for example, Figure out who's moving that plan, where the money is coming.
For us out in Western Mass, as you know, we talk a lot about regional equity and wanting to make sure that the investments that are coming into our different regions are equitable. And so I do think that if we could see the planning, see how it hits, see the money that's coming in to support the planning, see the outcome, the impact of that investment, that kind of information would help us be better advocates. I mean, we're already, you know, supportive and very interested in your work, but it would be, I think, really exciting and also make visible the state's interest in bolstering, the economy, bolstering businesses, bolstering a workforce.
HAO - Yeah. That's a great suggestion. We should definitely do more of that. There's so much cool stuff happening. I just came this morning from MIT where a professor came up to me and said that he was so excited about partnering with the BIC on doing robotics workforce training at the BIC in Pittsfield. So there's a lot of good examples. I don't know. Sarah helps represent us on the workforce skills cabinet.
STANTON - Yeah. I mean, I think it's a great point to remind to get the work outside of the room, right, that a lot's taking place that we're investing in across the Commonwealth. There's a real deliberate strategy of which I'm sure Secretary Jones spoke to around our investment in ESOL, how we're partnering with our existing community colleges and our MassHires. It's often the first front door that many employees are looking at to say, okay. I know this is in my community. How do I get access to these jobs? How do I get training? So I think as part of workforce skills cabinet, we've taken a really deliberate look at licensure. We've looked at streamlining, and I'm sure that will be talked about at the HHS hearing. But also how are we making18670 it just a generally more invested in part of the Commonwealth. So it's something that's coming up often. We had a meeting on Friday, actually, just talking exactly about that. So it's good feedback. No. It's great. No. No. It's great feedback.
Rep Small?
SMOLA - Secretary, thank you very much for your testimony here today. Appreciate it. Very helpful, I think, to the committee. Wanna bring up something that we haven't talked about, mills. So I'll jump on the Western Mass bandwagon, but I think many of my brothers and sisters that are here actually today on Ways and Means are from primarily the Western part of the18705 state, but it's not unique to Western Massachusetts, all over the Commonwealth. Is so many of our mills that are sitting particularly in rural territories, small communities, in the heydays of these communities when they're up and running, you know, they were doing great. They provided jobs. There was, you know, a population that was able to fill those mills. And as time went on, obviously, you know, situations sort of changed. But now many of these mill buildings are vacant.
And to those individuals that may, you know, try and keep them going, but at the same time, don't really have18736 much of a project to go into them because it's cost prohibitive. So I'm wondering if there's been any thought put into perhaps, a longer term goal of trying to help out our mills and, you know, perhaps, you know, incorporating even some housing components. So we've done some conversions in Massachusetts that have actually been, like, super successful. And I can think of some in Western Massachusetts, some in the districts of my Senate colleagues that are here that have just been dynamite and have done wonderful things. But, when you come into really small communities, you know, 4,000 people, 5,000 people, 8,000 people, Senator Oliveira and I, we represent the town of Warren. It's got a beautiful mill complex. It's owned, and it's reasonably maintained, but there's nothing in it because, again, it's cost prohibited. So I'm just wondering if there's been any thought, like, into trying to see if, to keep our character in Western Massachusetts with the, you know, the water resources that we have and not just that they built them up in these small towns, but just wanted to get your thoughts about it really.
HAO - No. This is something that we actually, have invested a lot in and we should do more. We were just in Lawrence two Weeks ago at an old mill building,18800 that had been, abandoned and derelict. And this group there had worked for many years in partnership with Mass Development in the state and18808 with some a little bit of federal funding and some philanthropy. And they've converted that mill now into housing, a pharmacy, a grocery store, a doctor's office. Kind of the whole, the whole community now is gonna be changed because of this converted mill. So there are definitely examples, and Mass Development, our quasi does a bunch of that work. And I'll let Undersecretary Stobel chime in because this falls under her community 1 stop area.
ASHLEY STOLBA - EOED - Oh, sure. I also do wanna recognize that Navjeet Bal is here representing Mass Development. So we partnered with them. Yes. Our new CEO.
FERRANTE - He used to run the DOR?
STOLBA- Yes. We used to run DOR. Yes. But we have put a lot of thought into this. We heard from folks like you, and I know senator Oliveira and Ludlow has benefited from our programs that help Mills. So the underutilized property program, MassWorks, these are all capital programs that are included in our capital plan, were reauthorized in the Mass Leads Act. A18858 lot of that funding does actually go to mills. But I hear18862 you, there's so much work to do, and there's also more money that it really needs. So what I suggest as a next step is probably Navjeet and I and we can kind of brainstorm with you all on on other ideas, in addition to those capital investments. But we really have seen the transformation a lot of these mills that's powerful.
SMOLA - I appreciate that. Just as a quick follow-up, you know, because I do think there's interest in a lot18883 of these complexes, but it is just so overwhelming.
STOLBA - It's overwhelming. The cost is so huge.
18888 SMOLA18888 -18888 You18888 know, it always amazes me, especially when we move around our districts to see the size of these places and say how the heck did they do this, you know, 100 years ago, 80 years ago, but they did it, and they made it work. I was like, boy, as opposed to letting the elements destroy these places over time because unlike wine, they don't improve with age.
STOLBA - They certainly do not.
SMOLA - Unless we're doing something, you know, with them and we have some sort of a plan to look towards the future, and I know it's a big expense Perhaps something that we could work with you on.
STOLBA - Yes. And that's something also Ann Gobi has been focusing on too. So we should all get together to talk about that. And you, Senator Comerford, too.
SPEAKER2 - Excellent. Representative Kazner.
KASSNER - Thank you. Thank you, Secretary Hao and all of you for being here today. And thank you for the business front door. I've heard it's gonna be super awesome, and the One Stop was super awesome when it went into effect. My question is really kind of around community readiness, kind of echoing some of the questions of other members. But it's kind of a comment and a question. But is there kind of within looking in terms of Mass Leads and growing emerging tech and life science across the Commonwealth from where it's kind of clustered a little closer in the inner suburbs to Boston, but across the Commonwealth and out, helping communities to kind of understand and identify opportunities, especially as we're seeing kind of post COVID office, we have a lot of office space, but for many other reasons, we have, you know, mill buildings and other?
But kind of working to help communities identify opportunities, but also be ready and create that regulatory framework to be that magnet to I mean, potentially even do some pre permitting for, you know, we wanna bring labs18994 out here. We wanna bring advanced manufacturing. We wanna bring next gen green18998 tech and identify potential spaces, but really work with communities and partnering with communities to really help become those magnets because it's wonderful to attract businesses to Massachusetts, but they do have to land somewhere. And working with our communities, they can be like, hey, come this way. You know? And how can we prepare our communities to really benefit from those opportunities that are coming in, I think would19023 be fantastic. But I think you are doing part of19027 that bit a fantastic arm that I hope we as legislators can help communicate with our communities as well. So thank you so much.
HAO - This is really important. And we have examples, and we know that this works, and we know we can do it. So, you know, Cambridge and Boston is the number 1 life sciences hub in the country, probably the world, actually. And then, actually, Worcester is number 15, punching way above its weight. And, Deven's under, Navjeet in MassDev, Deven's has become the destination for climate tech companies to expand in. So we know we can do this. And one of the programs that is aimed at this is the regional tech hub program.
STANTON - Yes. There's a couple different things taking place, Rob, that I think are helpful. And you know that municipal permitting is my love language. Like, I love it so much, and it gets so helpful. You know, it speaks to me. Sad love language, but also joyful love language. I think there's a19074 few things. We're doing work around existing permitting reform, looking at our office around how can we have more of an ombudsman process. We're looking at the Center for Advanced Manufacturing around-site readiness relative to19084 advanced manufacturing. What do you need for utilities? We're working with the Mass Office of Business Development under Undersecretary Stolba to help communities get ready. And then the Mass Life Sciences Center under Life Sciences 3.0 is looking to do a more concierge effort to help cities and towns outside of Greater Boston get through the permitting process with greater ease. So there's a lot of different lanes that this work is taking place. And I think overall, it'll help cities and towns benefit from these opportunities outside of MetroWest.
KASSNER - Just a quick follow-up comment. In terms of the buyer ready communities process that has been in place for quite some time, I think that process was really successful and actually kind of had communities kind of compete against each other of who's, you know, bronze, silver, gold, platinum. So it just things like that to kind of help communities. Just really help with education, but also help communities kind of working with each other. So thank you.
STANTON - Just a small plug for our quasi because I think it's important to highlight. There is a real drive around regional equity from all of our major quasi around where that investment is going. So even if a company is saying, I might wanna have r and d in Cambridge, there's an active push to say, look outside. There's more opportunity. There's greater land. There's public transportation. So in addition to trying to streamline the permitting, there is an active effort to make sure that we're spreading the wealth.
FERRANTE - Thank you, madam secretary. I wanna thank you and your team, Undersecretary D'Amelia, Stanton, and Stolba. You have such a talented team. Thank you for bringing them all out today and for answering our questions. To the members, it is now, just I'm gonna say five o'clock because that was our aim. We are so so close. I wanna thank you all for being judicious in your questions. You19188 got a chance today to be in19190 historic Gloucester, and I thank you for taking19192 that opportunity. To the boards and commissions that appeared before us today, I thank them for answering their questions. And to all of the secretaries, I wanna thank them. Not once did we hear from our secretaries that they wouldn't answer a question. They answered all of them. And I think the public can be proud of the fact that today Democrats and Republicans came together not to fight, not to argue, not to protest, but to work to declare to make sure that their tax dollars are being spent wisely, and did it in front of the public sphere. So thank you to everybody on this committee. Thank you to the administration. And, it's five o'clock, and we wanna adjourn.
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