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Why Massachusetts Shelter Spending Has Little to Do with Stoneham's Override

12 min
right to shelterhotelsmunicipal financestate aidbeacon hillmaura healeymigrant crisisimmigrationrefugeesasylum seekers
Snowy photo of downtown Boston.

A persistent argument has emerged in discussions about Stoneham's budget crisis, often framed in inflammatory language about "illegals draining state resources" or claims that "Massachusetts is spending billions on migrants instead of helping towns." Some critics argue that if Massachusetts simply stopped funding its emergency shelter system, or redirected those funds to municipalities, towns like Stoneham wouldn't need tax overrides. Others blame the shelter crisis for forcing cuts to essential services and claim the state is "choosing illegals over citizens."

These arguments rest on fundamental misunderstandings of how the shelter system operates, where its funding comes from, the demographics of who actually uses it, and the nature of municipal budget challenges in Massachusetts. More importantly, the argument is designed to drum up outrage. Outrage that obscures the fact that 85-90% of current shelter residents are longtime Massachusetts families--not recent arrivals--and that the crisis which did occur is already in the rear-view mirror.

Massachusetts' Right to Shelter Law

Since 1983, Massachusetts has guaranteed emergency shelter to homeless families with children through its Right to Shelter law. For decades, this system functioned as a stable component of the state budget, costing between $155 million and $203 million annually from FY2015 through FY2022. The program served approximately 3,500 to 4,100 families during this period, providing temporary housing while families worked towards stability. Massachusetts stands as one of the few states in the nation to offer this guarantee, reflecting a commitment to ensuring that children have safe places to sleep regardless of their parents' economic circumstances.

The system worked efficiently because it operated within predictable parameters. Traditional shelter units costs were stable, and with a relatively stable population of families cycling through the system, annual costs remained manageable and represented a small fraction of the state's overall budget.

The Crisis Years: When Other States Exploited Massachusetts' Compassion

Beginning in 2022 and accelerating through 2023, the shelter system faced unprecedented strain. The family count doubled from its historical baseline of 3,500-4,100 families to a peak of 7,500 families by November 2023. This surge stemmed largely from an influx of migrants from countries experiencing political instability into the United States. Massachusetts, as a federal donor state that contributes billions more towards other "taker" states than it receives in federal aid, found itself bearing the costs of failed policies in other states. Governors in Florida and Texas actively transported migrants and asylum seekers to Massachusetts, knowing the state would fulfill its legal obligation to provide shelter.

The fiscal impact was staggering. Costs jumped from $274 million in FY2023 to $932 million in FY2024, ultimately reaching $970 million in FY2025. This 240% increase stemmed from two factors: the doubled population and sharply higher per-family costs. With traditional shelter capacity exhausted, the state resorted to housing families in hotels and motels at approximately double the cost of traditional shelters. At peak in December 2023, 3,832 of the 7,542 families (51%) were housed in over 100 hotels across the state, requiring additional contracts for food service, transportation, and security.

Reform and Resolution

The Commonwealth responded with comprehensive reforms rather than abandoning the program. The state implemented mandatory CORI background checks to screen for criminal history, residency verification requirements to confirm families had legitimate Massachusetts connections, strict eligibility criteria limiting access to those with documented need, and time limits capping shelter stays at six months for most families. Work authorization assistance programs were expanded to help families transition to employment and self-sufficiency more quickly.

The reforms worked. By August 2025, the state ended its emergency declaration and closed all hotel shelters six months ahead of schedule. The family count dropped from 7,500 at peak to approximately 4,000 by September 2025. Currently, 85-90% of shelter residents are longtime Massachusetts families--exactly the population the 1983 law was designed to serve. The FY2026 budget for the shelter system is $275 million, which is much more in-line with the usual spending--after taking the massive inflation that also occurred during the crisis years into consideration.

What does this cost Stoneham?

Nothing.

The emergency shelter system is funded entirely by the state, with towns paying nothing for shelter operations. The Commonwealth covers 100% of operational costs through the state budget. In fact, the state does provide $75 million annually to municipalities to offset educational expenses for children in the shelter system. But over the past few years, Stoneham has hosted exactly one shelter family which means any shelter-related impacts to the town are completely negligible.

More importantly, the state funded the crisis-year spending almost entirely through emergency reserve funds, not by redirecting any municipal funds. Approximately $1.35 billion of the roughly $2 billion spent on shelters during FY2024-2025 came from the Transitional Escrow Fund, a temporary account holding COVID-era surplus revenues. The remaining $650 million came from the shelter system's regular annual budget appropriations--funding that existed in the state budget every year for this specific purpose. Massachusetts did not cut municipal aid, divert education funding, reduce transportation budgets, or take money from other ongoing programs to fund shelters.

Why Redistribution Wouldn't Work

Even if Massachusetts had chosen to redirect shelter funding to municipalities, the math reveals why this wouldn't solve Stoneham's budget crisis. At peak spending of $915 million in FY2025, divided equally among Massachusetts' 351 municipalities, each town would receive approximately $2.6 million. Stoneham's Override Study Committee's report dictates that we need approximately $12.5 million annually, leaving a near $10 million gap. And in reality, if that money were dispersed, it is highly unlikely it would be distributed in a manner where Stoneham would receive $2.6 million.

The historical costs of this shelter program makes the argument even weaker. The shelter system's normal operating cost averaged $155-203 million annually for nearly a decade before the crisis. Again, distributed equally across 351 towns, that represents roughly $500,000 to $600,000 per municipality per year under normal conditions. The billion-dollar price tag existed for only two years, funded by drawing down a finite reserve account that is now largely depleted. When shelter spending returned to $275 million in FY2026, there was no pot of freed-up money to redirect. The reserve account was empty, requiring the state to focus on rebuilding fiscal stability rather than finding new spending priorities.

Moreover, the shelter crisis spending came from one-time surplus funds, not recurring revenue. You cannot solve permanent structural budget problems with temporary money from a now-empty savings account. Even if the full $915 million from the crisis year had been redirected to Stoneham--which obviously could not happen--it would have provided only temporary relief for two years while the town's structural problems continued to compound.

The Truth of it All

The Massachusetts emergency shelter crisis was a temporary problem funded by temporary means--a drawdown of one-time surplus reserves accumulated during exceptional pandemic fiscal years. The crisis lasted two years, cost approximately $2 billion total, and has now been resolved through policy reforms that reduced the system to near-historical spending levels. Even if every dollar of crisis-year spending had been redirected to Massachusetts municipalities, Stoneham would have received roughly $2.6 million over two years--less than 1/4 of the town's need and applicable only to those two years rather than the ongoing structural deficit the town faces.

Stoneham's budget crisis stems from the cost of level service far exceeding Proposition 2 1/2's 2.5% revenue growth limits, including things like special education costs rising from $10.8 million to $15.5 million in two years, healthcare costs growing 5-8% annually, inflation averaging over 3% for 35 years, and so much more. These are permanent structural problems requiring permanent solutions. The state shelter system, whether costing $275 million or $915 million, operates entirely independently of Stoneham's finances and was never funded through mechanisms that could be redirected to municipal purposes, nor would redirecting those funds solve our problem.

Stoneham needs to address its structural budget gap through sustainable local revenue measures. That means an override. Waiting for the state to redirect non-existent shelter funds, or hoping for dramatic increases in state aid that may never materialize, does not constitute a plan. It constitutes an excuse to avoid making difficult local decisions about the level of services residents want and the taxes required to fund them.

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