The cost of running the state’s emergency shelter system through the next fiscal year will cost taxpayers more than $1 billion — a steep increase from the $915 million estimate Massachusetts officials had been communicating for months.
The new estimate was first announced at the state’s emergency shelter commission meeting earlier this month, and reflected in a biweekly report on the state of the shelter system sent to the Legislature Monday night.
For the better part of nine months, the state has estimated that running emergency shelters through the end of the fiscal year that began July 1 would cost $915 million. The Healey administration revised estimates in July to account for the four overflow shelter sites that currently house families waiting for a more permanent shelter placement.
“For well over a year now, the Healey-Driscoll administration has been clear that the current size of the Emergency Assistance shelter system is unsustainable — both in terms of physical space and financially,” Matt Murphy, a spokesperson for Healey’s budget secretary said in a statement.
That $1 billion tab would mean the state will spend almost as much in the current fiscal year on the emergency shelter system than it spent on the program in the last 20 months. The need reflects the reality that in the last two years, parallel migrant and housing crises gripping Massachusetts have greatly exacerbated the need for emergency housing in the state — to the point where the Healey administration has taken a serious of increasingly drastic actions to deter new arrivals ― many fleeing economic strife, violence, and unstable governments in their home countries — from seeking refuge in the state.
The largest share of the $1 billion price tag is the shelters themselves, which are projected to cost about $776 million this fiscal year. The state also expects to spend $76 million on overflow shelter sites and another $48 million in reimbursements and other payments to school districts and local governments that have absorbed families into their communities. Other costs include funding for welcome centers that provide resources for newly arrived families, health care and immigration assistance for new migrants, and workforce training.
The state, however, doesn’t have $1 billion to pay the bills.
The budget Governor Maura Healey signed into law Monday includes just $325 million for the emergency assistance system. In April the Legislature approved a request from the administration to spend an additional $175 million from the traditional escrow account, which stores one-time savings from surplus dollars left over from fiscal years 2021 and 2022. In other words, the Healey administration has less than half of what she says they need to get through the fiscal year.
According to administration officials, there is another $475 million left in the fund, but the Legislature would need to pass a bill giving the administration permission to use any of that cash. If they don’t, money will run out in January. If they do, the fund still only has enough money to carry the state through the end of the fiscal year, which ends June 30, 2025.
After that, the emergency assistance system will have to be funded out of the state’s general fund or other sources, administration officials say.
According to Murphy, the administration is in contact with legislative leadership to keep up with the demand for emergency shelter and other services.
In the meanwhile, the state has been working to keep the program from expanding further.
Last week, Healey announced that as of Aug. 1, stays in so-called overflow shelters will be limited to just five days, and importantly, would require people to wait at least six months before they could qualify for placement at a longer-term facility. For long-term shelter sites, which have long been at capacity, the state will expand its priority list to include families with veterans or who become unhoused by natural disasters, which Healey last week acknowledged means prioritizing vulnerable Massachusetts residents over newly arrived migrants.
The move is just the latest of actions the administration has taken to control the costs of the program, which was born out of the state’s 1986 right-to-shelter law. The law requires the state to quickly provide shelter and other necessities to homeless parents with children and pregnant women, though the administration has put restrictions around the shelter system in an effort to save money.
In October, the state capped capacity in shelters at 7,500 families and then in April limited shelter stays to nine months. Families overstaying the new nine-month policy got 90-day notices to leave, and those staying in Logan Airport were kicked out. The state advertised a “reticketing” policy to fly families out of state and in June, Healey’s staff went to the US-Mexico border to convey a clear message to those at the border: Massachusetts no longer has room to shelter migrants. The administration has also turned to outside consultants.
After signing the budget for the current fiscal year on Monday, Healey defended the choices. She has been adamant the state is not abandoning the decades-old law, the only statewide right-to-shelter requirement in the country, but rather sending a message to those outside the state.
“We don’t have an unlimited checkbook or unlimited capacity,” she said.
Samantha J. Gross can be reached at samantha.gross@globe.com. Follow her @samanthajgross.