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THE REVERE ADVOCATE – FRIDAY, AUGUST 4, 2023 Page 13 contracts before COVID—as well as those who are working towards signing a contract—to catch up to construction costs impacted by infl ation. • $50 million to accelerate and build capacity to support free community college across all campuses by fall of 2024, including: - $20 million for MassReconnect as a fi rst step toward free community college in the Commonwealth for those aged 25 and older. - $18 million for a free community college pilot program for nursing students to support a an in-demand workforce area and build toward universal free community college in the fall of 2024. - $12 million for free community college implementation supports to collect necessary data, develop best practices, and build capacity for free community college in the fall of 2024. • $25 million to encourage degree completion in disciplines that will address the workforce development challenges facing the Commonwealth. This expansion will provide fi nancial assistance to students pursuing graduate, undergraduate, or certifi cate programs for in-demand professions at public institutions of higher education. After graduation, students who accept this fi nancial assistance are required to work in an in-demand industry in Massachusetts for fi ve years. • $50 million to create Green School Works, a competitive grant program for projects related to installation and maintenance of clean energy infrastructure at public schools. The program will be administered by the Department of Elementary and Secondary Education (DESE) and preference will be given to schools serving lowincome and environmental justice populations. Transportation • $181 million for MBTA capital projects. • $100 million in supplemental aid for roads and bridges, half of which will be expended consistent with the Chapter 90 program, with the other half to be spent with a focus on the total mileage of participating municipalities. • $90 million for regional transit funding and grants to be used exclusively to support the work of Regional Transit Authorities (RTAs), more than doubling the total funding for RTAs to $184 million. • $20 million to address ongoing safety concerns at the Massachusetts Bay Transportation Authority (MBTA) that have been identifi ed by the Federal Transit Administration’s Safety Management Inspection. • $5.7 million for water transportation, which will cover one-time expenses for a pilot program covering operational assistance for ferry services. • $5 million for MBTA meansTested Fares, which will cover initial exploration of the feasibility of implementing a means-tested fare program at the MBTA. Education: Early Education and Care, K-12 and Higher Education The FY24 budget supports students across the full spectrum of the Commonwealth’s education system, from Massachusetts’ youngest learners to adults re-entering higher education. The budget report delivers historic levels of investment in education, including: • $6.59 billion in Chapter 70 funding, an increase of $604 million over FY 2023, as well as doubling minimum Chapter 70 aid from $30 to $60 per pupil. • $1.5 billion investment in early education and care—the largest-ever annual appropriation for early education and care in Massachusetts history. • $714 million for childcare for children involved with the Department of Children and Families (DCF), Department of Transitional Assistance (DTA), and for low-income families. • $475 million for the Commonwealth Cares for Children (C3) grants; FY24 is the fi rst fi scal year in which the annual state budget includes a full year of funding for C3 grants, signaling a historic commitment to maintain this crucial lifeline for our early education and care sector. • $85 million in rate increases for subsidized childcare providers across the Commonwealth. • $504.5 million for the special education (SPED) circuit breaker. • $97.1 million to reimburse school districts for regional school transportation costs, representing a 90 per cent reimbursement rate. • $20 million for childcare resource and referral agencies. • $17.5 million for Head Start grants. • $15 million for rural school aid assistance. • $5 million for early childhood mental health grants. For K-12 education, the FY24 budget meets the Legislature’s commitment to the Student Opportunity Act (SOA), investing $6.59 billion in Chapter 70 funding, an increase of $604 million over FY 2023, as well as doubling minimum Chapter 70 aid from $30 to $60 per pupil. Finally, complementing our ongoing eff orts to implement the Student Opportunity Act by FY2027 and ensures that all school districts are equipped with the resources to deliver high quality educational opportunities to their students, the budget requires schools to provide universal school meals to all students free of charge, making this pandemic era program permanent. The budget also includes two studies to examine school meal waste avoidance and nutrition standards under the program. In addition to early education and public K-12 education, the FY24 budget report expands pathways to aff ordable public higher education for all by building capacity for free community college for all students in fall of 2024. Laying the groundwork for this momentous change, the budget report provides $50 million to accelerate and build capacity to support free community college across all campuses by fall of 2024, including $38 million for free community college programs starting in the fall of 2023 for students aged 25 or older, as well as for students pursuing degrees in nursing to address a critical workforce need. To further increase the pipeline of qualifi ed nurses, the FY24 budget also directs the Board of Registration in Nursing to develop an alternative approval process to allow nursing faculty to teach the clinical or skills lab component of a nursing course with a baccalaureate degree and any additional experience required by the Board. Finally, the FY24 budget also provides access to in-state tuition for students without a documented immigration status. All students who have attended a Massachusetts high school for at least three years and graduated or obtained a GED in the state will qualify for in-state tuition rates at Massachusetts public colleges or universities, regardless of immigration status. Tuition equity will help accomplish the Commonwealth’s goals of growing the middle class, building the state’s workforce, and supporting the economy. Health, Mental Health and Family Care Investments in the FY24 budget allow more than 2 million people to receive aff ordable, accessible, and comprehensive health care services. Health care investments include: • $19.81 billion for MassHealth, representing the largest investment made in the state budget. • $2.9 billion for services and focused supports for people with intellectual and developmental disabilities. • $597.7 million for Department of Mental Health (DMH) adult support services. • $582 million for nursing facility Medicaid rates, including $112 million in additional base rate payments to maintain competitive wages in the Commonwealth’s nursing facility workforce. • $213.3 million for a complete range of substance use disorder treatment and intervention services. • $119.8 million for children’s mental health services. • $42.9 million for Early Intervention (EI) services, ensuring supports remain accessible and available to infants and young toddlers with developmental delays and disabilities. • $33.8 million for Family Resource Centers (FRCs) to grow and improve the mental health resources and programming available to families. • $26.3 million for grants to local Councils on Aging to increase assistance per elder to $14 from $12 in FY 2023. • $25 million for emergency department diversion initiatives for IRS REVENUE RULING 2023-2 T he Internal Revenue Service in March of this year confi rmed that the assets of an irrevocable grantor trust that are not included in the grantor’s gross taxable estate do not receive the step up in cost basis upon the grantor’s death pursuant to Internal Revenue Code (IRC) Section 1014(a)(1). The types of irrevocable trusts that are the subject matter of this revenue ruling are irrevocable gifting trusts where the grantor of the trust is gifting assets out of his or her estate in order to avoid having those assets includible in his or her gross taxable estate for estate tax purposes. For larger estates, such a technique may well be a good strategy as once your estate is taxable for federal estate tax purposes, the federal estate taxes are signifi cant. Although the federal estate tax exemption is currently $12.9million for taxpayers dying in 2023, it is slated to drop down back to $6million in 2026, failing legislation to extend the estate tax provisions currently in place. When assets are transferred to such a Trust, a completed gift has occurred for gift tax purposes. If the grantor retains powers pursuant to IRC Sections 671-678, the grantor will be treated as the owner for “income tax” purposes. However, with an irrevocable gifting trust, the assets held in such a trust are not afforded the step up in cost basis. This means that the assets held in trust upon the grantor’s death will not receive a new cost basis equal to the fair market value at the time of death. The grantor’s original cost basis of the assets will be passed along to the benefi ciaries of the trust. This ruling confirms that you cannot have your cake and eat it too when it comes to these irrevocable gifting trusts. The assets in the trust must be includable in the grantor/decedent’s estate for estate tax purposes in order to gain the valuable step up in cost basis. This ruling does not aff ect the typical Medicaid irrevocable trusts which are designed to achieve grantor-type trust status for income tax purposes and to provide for the inclusion of highly appreciated assets, such as stocks and real estate, in the grantor’s taxable estate. Provisions included in these trusts are designed to prevent a completed gift from occurring when assets are transferred to the trust. It may very well be that no federal estate tax will be paid or no Massachusetts estate tax will be paid, but if the trust assets are included in the taxable estate, the step up in basis will be achieved. The Massachusetts state legislature will hopefully increase the estate tax exemption to $2million. It is currently $1million. It would be great if the legislature adopted estate tax portability thereby providing a married couple with a total estate tax exemption of $4million. Upon the death of the fi rst spouse, everything could pass to the surviving spouse estate tax free based upon the unlimited marital deduction. Upon the surviving spouse’s subsequent death, he or she would then be entitled to the deceased spouse’s $2million exemption plus his or her own $2million exemption, for a total of $4million. You would see less taxpayers leave Massachusetts for a more tax-friendly state. Joseph D. Cataldo is an Estate Planning/Elder Law Attorney, Certifi ed Public Accountant, Certifi ed Financial Planner, AICPA Personal Financial Specialist and holds a Master’s Degree in Taxation. children, adolescents, and adults. • $20 million to recapitalize the Behavioral Health, Access, Outreach and Support Trust Fund to support targeted behavioral health initiatives. • $6 million for Social Emotional Learning Grants to help K-12 schools bolster social emotional learning supports for students, including $1 million to provide menBUDGET | SEE Page 23

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