Massachusetts budget chief seeking $400+ million more for depleted emergency family shelter system as report issues recommendations

Alison Kuznitz

STATE HOUSE, BOSTON, NOV. 12, 2024…..Massachusetts should slash its reliance on hotels and motels used as shelters, invest in rental assistance and rehousing support, offer more tailored resources for homeless families, and more clearly communicate policies, according to a draft report unveiled Tuesday as policymakers aim to better manage the state’s overburdened emergency family shelter system.

Also Tuesday, Gov. Maura Healey’s budget chief said the system is expected to run out of money in January and that the administration is planning to seek more than $400 million in additional funding from the Legislature. The system could end up costing the state more than $1 billion annually through fiscal 2027, according to estimates shared by Administration and Finance Secretary Matt Gorzkowicz.

With less than three weeks until its report is due, a special legislative commission, created this spring in response to the surge of migrant families in Massachusetts and skyrocketing shelter costs, reviewed recommendations in the 37-page draft.

Commission members plan to reconvene next week to approve a final report. Without explaining how the state would get there, the draft report recommends making the system “fiscally sustainable” and “operationally sustainable” by ensuring that family homelessness is “rare, brief, and nonrecurring.” Under those guiding principles, as chair Lt. Gov. Kim Driscoll described them, shelter demand and expenses would decrease, and caseloads among EA providers would become more manageable, the report says.

“My expectation is we are going to have to make additional recommendations for shifts in policy to try and address the shortage of funding that we will see in the next fiscal year, in fiscal year 2026,” Driscoll told members Tuesday morning as they as they grappled with the scope of their work in addition to the ongoing shelter challenges the Healey administration faces.

“It’s not as though you can take 7,500 families on July 1 (and) on July 2, not have 7,500 families, so this will take concerted action before July 1 to try and address that need,” Driscoll continued, as she referenced the administration’s shelter cap. “And we have viewed this commission as really about what are we building going forward, so that we have a better system for homeless families and one that follows the principles that we’ve talked about: brief, rare, nonrecurring, operationally and fiscally sustainable.”

With members still reviewing the draft report and weighing potential changes — such as the future of the commission or another panel focused on emergency shelter — Driscoll said the commission will meet next Tuesday afternoon to vote on the document.

Sen. Robyn Kennedy, a Worcester Democrat, said the commission’s work is not complete, as she insisted the state needs a “public body that continues to meet, that continues to look into and explore these issues.”

Rep. Paul Frost, an Auburn Republican, said the report does not address the crux of the problem — which he pinpointed as out-of-state applicants — that triggered an overflow of families seeking shelter here. Massachusetts does not have the resources “to provide emergency housing or long-term housing for folks outside of Massachusetts,” Frost said.

Driscoll said she heard “consensus” from commission members about moving away from a one-size-fits-all model to a shelter system focused on individual and family needs. 

“If there’s going to be a legislative change in law, that is the Legislature’s power to put forward,” she said. “And our goal for this is we’ve got to operationalize some of these recommendations, and I think we’re really working hard to try and ensure that we can build a better system that does that.”

The commission, created through a supplemental budget passed in April, is under a Dec. 1 deadline to submit a report to the Legislature with recommendations about the “sustainability, efficiency and effectiveness” of the EA shelter system, “how to best support and ensure the long-term sufficiency of those seeking shelter,” and “creating a regional based response to support families in need of shelter.”

The draft report stops short of previewing cost savings from the recommendations, or detailing any future policies the Healey administration may impose to further curtail eligibility and demand for the shelter system. To rein in costs, the governor has already set a system cap of 7,500 families, and instituted a controversial policy that says families can stay in overflow shelters for up to five days but are then disqualified from seeking more traditional shelter for six months.

Emergency shelter costs topped $1 billion in fiscal year 2024. The system is projected to cost just under $1.1 billion this fiscal year, Gorzkowicz said.

While roughly $582 million has already been steered to EA shelter in fiscal year 2025 — including $325 million in the budget and $250 million in supplemental spending approved by lawmakers — the administration needs an additional $426 million to keep the system afloat, Gorzkowicz said. Other shelter funding has come from a surplus account known as the transitional escrow fund.

“We know that we have a run-out date that’s probably in the month of January, and so we’ll be filing a supplemental appropriation to fund that,” said Gorzkowicz, who noted the transitional escrow fund has “allowed us to be able to address these extraordinary needs while insulating it from the budget.”

The secretary continued, “And so as we go forward and we think about the demand for FY 26 at the current caseload and service level, we’d need an additional $682 million of funding, which is not currently available in the transitional escrow fund, and so that does present some challenges for us going forward.”

Another $682 million could be needed in fiscal 2027 too, on top of the Legislature’s projected $325 million shelter line item in the budget, according to Gorzkowicz’s presentation.

Healey, who has repeatedly urged Congress to pass immigration reform and send more financial resources to states bearing the financial brunt of the migrant crisis, now faces a changing landscape in Washington following Donald Trump’s reelection. In a television interview last week, Healey said the State Police here would “absolutely not” assist in mass deportations of immigrants if they were requested by the incoming Trump administration.

“I do think it’s important that we all recognize that there’s going to be a lot of pressure on states and state officials, and I can assure you that we’re going to work really hard to deliver,” Healey said on MSNBC. “Some realities also need to be noted, and that is in 2016, we had a very different situation in the courts, and while I’m sure there may be litigation ahead, there’s a lot of other ways that people are going to act and need to act for the sake of their states and their residents.”

Healey, mentioning the possibility of state legislation, regulatory authority and executive power, continued, “I think that the key here is that every tool in the tool box has got to be used to protect our citizens, to protect our residents and protect our states, and certainly to hold the line on democracy and the rule of law as a basic principle.”

The Safe Communities Act, which would ban Massachusetts police and courts from asking about a person’s immigration status, has failed to clear the Legislature since 2017. A version of the bill (H 2288) this session has been lodged in the House Ways and Means Committee since May 15, while the Senate bill (S 1510) was sent to study.

The EA shelter commission draft report does not delve into the expected impact of another Trump presidency on immigration. But Driscoll said Tuesday the election results present “some challenges for sure, and we are prepared to ensure we’re supporting families who are in shelter now in a way that reduces some of those fears obviously and moves forward with a system that is designed to address the needs of families in Massachusetts.”

Reviewing the draft report’s recommendations, Housing and Livable Communities Secretary Ed Augustus said the state should continue to emphasize “prevention, diversion and exit tools,” such as investing in Residential Assistance for Families in Transition, which provides families with up to $7,000 over a 12-month period, and HomeBASE, designed to help families find stable housing by offering relief that can total tens of thousands of dollars.

Augustus also stressed the state should cut back its reliance on using hotels and motels for emergency shelter, where he said almost half of families are staying.

The administration turned to hotels and motels to keep up with the surge in shelter demand, but Augustus said those sites are more expensive than traditional shelters. They also lack kitchen and laundry facilities that families need, and they’re often far from public transportation, which can pose a barrier for job-seekers, Augustus said.

“We should not be having nearly 50 percent of the families in hotel, motels,” Augustus said, adding officials should focus on “how to shrink our footprint in hotels and motels, and find more appropriate locations for families that really advance both our fiscal goals, as well as our operational and family outcome goals.”

Other recommendations in the draft report deal with setting “clear” expectations and outcomes for shelter polices, moving away from a “one-size-fits-all” approach to a model that focuses on the risks and needs of families, improving regional management of the system, bolstering access to affordable housing, and strengthening data collection to gauge whether the EA shelter system is making progress.

The report states that length-of-stay polices at EA shelters and overflow sites “show early promise of addressing longstanding challenges with the EA program, including improving the incentives for families and providers around developing exit strategies that are sustainable and responsive to family strengths and needs.”

“A clear policy and communication around expectations that shelter stay should be brief as appropriate for family needs would allow the EA system to be more sustainable, serve more families, and direct families on a path to exiting into stable housing,” the draft continues.

Driscoll said expectations and outcomes should be clear for both families and shelter providers, as she referenced concerns over how the five-day limit in overflow sites was announced. Housing and homelessness prevention advocates have decried the policy, warning it will lead to families sleeping on the streets. 

“I would say it has been a little bit of a roller coaster ride as we’ve welcomed a huge uptick in families,” Driscoll said. “How do we make sure folks aren’t feeling like they’re the last to know, or the implementation of new policies is being done with them, not to them? That can help ease not only family anxiety — I think we heard that from families, sort of not knowing what might come next — and I think we heard that from providers, as well.”