Healey asking for $250 million infusion into state’s struggling shelter system

Governor Maura Healey declared a state of emergency last month amid an influx of homeless and migrants families into the state's emergency shelter system.Jonathan Wiggs/Globe Staff

Governor Maura Healey on Wednesday asked state lawmakers to pour $250 million more into the state’s overwhelmed emergency shelter system, sending them the proposal the same day National Guard members began deploying to understaffed hotels and motels housing homeless and migrant families.

Healey included the proposal in a $2.15 billion supplemental spending bill designed to close the books on the last fiscal year. The money for the shelter system, Healey wrote in a letter to lawmakers, would allow the state to house and support the more than 6,000 homeless families currently in the system for this fiscal year “as we work toward longer-term solutions.”

“This funding will enable us to meet that need as it stands today,” Lieutenant Governor Kim Driscoll said in a statement.

Healey is proposing to cover the increased shelter spending by pulling it from an estimated $1.2 billion escrow account built with money from last year’s record-breaking multibillion-dollar surplus. In signing the annual state budget last month, Healey vetoed a legislative proposal to spend a similar amount — $205 million — out of the escrow account, arguing the one-time funds should be used for “transformational investments.”

The bulk of the spending in her new bill, roughly $2.1 billion, would go toward covering costs in MassHealth, the state’s Medicaid program. Healey is also seeking to pull tens of millions of dollars from the escrow account to plug what her budget office estimates to be a $40 million budget gap.

Healey, who has pushed lawmakers to wrap up negotiations on a sweeping tax relief package, said in a statement that she believes the state can afford the new spending and “continue to pursue priorities such as meaningful tax relief.”

Covering costs for the state’s shelter program has become a growing problem. An influx of migrants over the past two years, coupled with a deepening housing crisis, has overwhelmed the system.

Healey last month declared a state of emergency and, weeks later, said she would activate up to 250 members of the National Guard to help families living in hotels that don’t have a contracted service provider, typically a nonprofit, to help families access medical care, find transportation, or organize food deliveries.

As of August, the state was spending $45 million a month on programs to help families eligible for emergency assistance, and is still struggling to keep up.

A separate spending bill Healey signed in March injected $85 million to the state’s shelter system, including money that could go toward local school districts absorbing new students whose families are moved to a state-subsidized hotel.

The state has also opened two new family “welcome centers” and a temporary shelter on Joint Base Cape Cod, as well as directed an infusion of money to local organizations helping migrants with case management and legal assistance.

But the numbers haven’t stopped growing. According to state officials, 6,409 families, including children and pregnant women, were in emergency shelters as of Wednesday. More than 2,730 of them were in state-subsidized hotels or motels.

Under a 1983 “right-to-shelter” law, Massachusetts is required to provide emergency shelter to homeless families, the only state in the country with such a requirement. The mandate doesn’t apply to homeless individuals.

At an unrelated event at the State House on Wednesday, Healey told reporters that while the state “will continue to take steps necessary to cover the expenses here,” her call is for the Biden administration and Congress to act.

“We’ll continue these operations as long as necessary every day we continue to pursue and demand funding from the Biden administration,” she said. “It is the failure of the federal government that has resulted in states like ours having to bear this burden right now.”

Last year, House and Senate leaders declined to advance funding, proposed by then-governor Charlie Baker toward the end of the legislative session, to shore up the shelter system, leaving officials scrambling to get money out the door as the numbers of new arrivals ticked up.

Healey’s new proposal also seeks to shore up the state’s finances from the fiscal year that ended on June 30. Massachusetts collected roughly $600 million less in taxes last fiscal year than it expected, state officials said last month, slimming a planned deposit into the state’s emergency savings account and creating a likely budget hole.

How big that gap is, however, depends on what lawmakers ultimately do with money raised under the so-called millionaires tax.

Healey’s budget office has estimated the state would pull in $240 million from the new surtax on annual income over $1 million, which voters passed last November. Roughly $103 million of that came from capital gains taxes, which doesn’t affect the budget’s bottom line, but the remainder — an estimated $138 million — is currently in the general fund.

Constitutionally, any money raised from the new surtax is mandated to go to education and transportation, not to simply balance the budget. Healey is proposing to move it into funds created under the recently passed state budget designed specifically to house the surtax revenue, in effect creating a $177 million hole.

But through spending reversions, collecting other non-tax revenues, and other moves, her budget office believes the gap is actually about $40 million. She is proposing to fill it using money from the same escrow account she’s proposing to tap to help cover shelter costs.