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CLT UPDATE
Friday, January 29, 2016
A Week of Good News and Bad
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Governor Charlie Baker on Wednesday unveiled a
$39.6 billion budget proposal that would add 281 workers to the
state’s child protection agency, add recovery beds for opioid
addicts, and make good on a campaign pledge to change the state’s
welfare system.
The Republican governor also pledged to slow the
rise of state health care spending on the poor as part of an effort
to bridge what administration officials have pegged as a
$635-million budget gap.
“Getting state spending under control,” Baker
said at a news conference flanked by top officials, “is essential to
the state’s economic health going forward.” ...
Baker’s plan includes no new taxes or fees, and
Citizens for Limited Taxation called the proposal “sweet
music to the ears of the taxpayers” in a
news release.
The Boston Globe
Thursday, January 28, 2016
Boosts, curbs in Baker’s $39.6 billion
budget
For the second straight year of his young
administration, Governor Charlie Baker will face a sizable budget
gap.
Administration and Finance Secretary Kristen
Lepore said Tuesday that Massachusetts is staring down a shortfall
of $635 million for the fiscal year that begins in July. The gap is
likely to mean cuts for a few state agencies, only modest increases
for a few others, and effectively flat funding for the rest of state
government.
“It’s a lot of belt-tightening,” she said. “We
kept spending below projected revenue and solved a significant
budget gap without cutting core services.” ...
But whatever the details, they are sure to
disappoint some liberal lawmakers and advocates, who are pressing
for dramatic new spending on the MBTA and early education — spending
that would almost certainly require new taxes.
“I think Baker is focused on running the
government as effectively and efficiently as possible, and that’s a
very good thing,” said Noah Berger, president of the liberal-leaning
Massachusetts Budget and Policy Center. “But I think the problem
he’s going to come up against more and more is that solving some of
our big problems like fixing our transportation system, making
higher education more affordable, strengthening our public schools,
and expanding pre-K require revenue as well as reforms.”
Baker, though, who pledged not to raise taxes or
fees, said state spending was increasing at an unsustainable rate
when he took office. He has repeatedly pitched his leaner budgeting
as a necessary corrective.
“You got to get to the point where your spending
is going up at a rate that’s consistent with the growth in your
economy,” he told reporters at the State House Tuesday.
House Speaker Robert A. DeLeo, a Democrat, has
also ruled out new taxes for the upcoming fiscal year....
Administration officials say they expect about
$893 million in new revenue available for the upcoming fiscal year’s
budget, but also more than $1.5 billion in new, essentially
mandatory spending, driven in large part by rising health care
costs. Thus, the shortfall....
On one side is Baker, who says residents are
tired of being nickeled-and-dimed by state government. With him are
his fiscally conservative allies, who insist that government must
learn to do more with less and that tighter budgets often make for a
more efficient public bureaucracy.
On the other side are progressive legislators and
activists, who argue that more revenue is desperately needed for
state government to do big things and invest in future generations,
like fixing the beleaguered public transit system.
Democratic Governor Deval Patrick and the
Legislature did raise the sales tax in 2009 and the gas tax in 2013.
The Boston Globe
Wednesday, January 27, 2016
Mass. facing $635 million budget gap, officials say
Administration officials said the spending plan
is predicated on reducing enrollment growth in the massive
MassHealth insurance program to its traditional rate of 3 percent,
and limiting the growth in spending to 5 percent.
State House News Service
Wednesday, January 27, 2016
Baker plans 3.5 percent spending increase in $39.55 billion budget
Gov. Charlie Baker today filed what he called a
fiscally responsible $39.6 billion state budget that calls for no
increases in state taxes or fees and shrinks a structural deficit
between the growth in annual spending and revenues.
"We believe that getting state spending under
control to the point where spending grows at a rate that is similar
to the economy is essential to the state's economic health going
forward," [Gov. Charlie Baker] said shortly after submitting to the
Legislature the spending plan for the fiscal year starting July
1....
The Massachusetts Democratic party said Baker's
"bare bones budget reflects his bare bones vision," for the state.
The budget goes first to the House and later the
Senate for review.
Associated Press
Wednesday, January 27, 2016
Baker says nearly $40B budget holds line on spending, taxes
The Legislature's Committee on Revenue on
Thursday morning gave its stamp of approval to a proposed
constitutional amendment that would establish a 4 percent surtax on
income in excess of $1 million in a bid to raise $1.9 billion.
The proposal (H 3933) seeks to raise additional
revenue for education and transportation initiatives by hiking the
tax rate for earnings in excess of $1 million to about 9 percent.
Without debate on the matter, the committee voted
12-4 to recommend that the bill ought to pass.
Rep. Walter Timilty, a Milton Democrat, joined
Republicans Sen. Ryan Fattman, Rep. Randy Hunt and Rep. Shawn Dooley
in voting to recommend that the bill should not pass....
Raise Up Massachusetts, the group behind the
proposed amendment, has estimated the surtax would affect 14,000
individuals, generating between $1.3 billion and $1.4 billion in
additional revenue, while the Department of Revenue estimated a
higher yield of $1.6 billion to $2.2 billion with $1.9 billion as
the median.
Opponents argued that the amendment would have
serious consequences that are not being considered by proponents,
like the possible outward migration of Bay State millionaires and
the impact on the state budget of the associated decline in capital
gains taxes.
"On principle, one thing I believe is that you
don't raise people up by tearing others down," Fattman, who said he
would be drafting the minority report, said after the committee
vote. "An income tax the way it is is a fair tax and everyone pays
the same thing, so in principle, when we talk about fairness, I
think that's fair."
Fattman also said that if the amendment were to
become law, it could dissuade corporations from choosing to base
themselves in Massachusetts....
Rep. Jay Kaufman, co-chair of the Revenue
Committee, praised the work of the Raise Up Massachusetts coalition
in gathering the signatures necessary to get the proposal before the
Legislature and said that he expects the question to go to voters on
Nov. 6, 2018 -- 1,013 days from now.
"This proposal come to us at the intersection of
two huge challenges, the challenge first to find the financial
wherewithal to meet the needs of Massachusetts families and have the
education and transportation that are a vital part of a vibrant
economy," he said. "And second the challenge to address the gross
wealth and income inequality in the state. We are number one in the
nation in our inequality, not a distinction we want or need."
If the proposal is advanced by House and Senate
members meeting jointly in Constitutional Conventions this session
and in the 2017-2018 session, the question could go to voters in
November 2018.
The next meeting of the Constitutional Convention
is Wednesday, Feb. 3, but it's not clear that the proposal will
surface for a vote then. Since it's a citizen-sponsored amendment,
the plan needs support from just 50 lawmakers in two consecutive
legislative sessions in order to qualify for the 2018 ballot.
Fattman said he is interested to see the
political dynamic of the convention, given that House Speaker Robert
DeLeo on Wednesday pledged to keep new taxes and fees out of the
fiscal 2017 budget.
"He said no new taxes, no new fees. When we go in
on Feb. 3 I think that's what a lot of members have to think about
when they vote. This is a tax, this is a tax increase," he said.
"This is a tax increase vote on Feb. 3. I'm encouraged by the
speaker's position and I think he will be with me."
Voting in favor of recommending that the proposal
ought to pass were Kaufman, committee co-chair Sen. Michael
Rodrigues, Rep. Timothy Toomey, Sen. James Timilty, Sen. Benjamin
Downing, Rep. Denise Provost, Sen. Daniel Wolf, Rep. James Dwyer,
Sen. Eric Lesser, Rep. Thomas Stanley, Rep. James Arciero and Rep.
Alan Silvia.
State House News Service
Thursday, January 28, 2016
Committee advances surtax plan to raise $1.9 billion
While Education Secretary James Peyser's firm
rejection of proposal that would generate $1.9 billion for
Massachusetts transportation and education evoked a strong
response from proponents and opponents of the measure, Gov.
Charlie Baker on appears comfortable taking a wait-and-see
approach on the issue.
After an education event at the Omni-Parker
House on Thursday, Peyser outlined his opposition to the notion
that higher taxes are necessary to improve education and said
the proposed constitutional amendment could "weaken our economy"
and "damage our ability as a Commonwealth to support the schools
and the other services we desperately need."
Tom Gosnell, president of the American
Federation of Teachers Massachusetts and Barbara Madeloni,
president of the Massachusetts Teachers Association,
subsequently blasted Peyser for allegedly not understanding the
needs of schools in the state.
In a statement released by Raise Up
Massachusetts, the coalition that is leading the amendment
effort, Gosnell said, "It's not surprising that the former
executive director of the Pioneer Institute opposes a tax on
millionaires, but it's incredibly disappointing that the state's
top education official doesn't acknowledge our Commonwealth's
urgent need for a new revenue to invest in education."
"It's shocking that Secretary Peyser is more
concerned about keeping taxes low for millionaires than he is
about providing our schools with the resources they need to give
all students an excellent education," said Madeloni.
State House News Service
Monday, January 25, 2016
Education secretary's view on tax hike draws jeers, cheers
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Chip Ford's CLT
Commentary
This was a week of good news and bad news.
The good news is that Governor Charlie Baker
filed his administration's fiscal year 2017 budget proposal, and it
included no new taxes or fees and no plan to hike any that exist.
The first of the bad news is that the Governor's
$39.6 billion "bare bones" budget proposal is $1.5 billion more than
the one the Legislature passed and he signed last July (CLT Update:
July 19, 2015, "Gov.
Baker signs $38.1 B budget — no tax hikes").
The Boston Globe reports ("Boosts, curbs in
Baker’s $39.6 billion budget")
One of the
biggest drivers of state spending is MassHealth, the
state’s health program for the poor and disabled. The
Baker administration has made curbing costs there a
central part of its effort to keep the budget in
balance.
Officials have
spent months verifying the eligibility of MassHealth
recipients and culling recipients who do not qualify for
the program.
The budget plan released Wednesday aims to continue that
effort and move more people into cost-saving managed
care plans, among other efforts. All told, the
administration hopes to save almost $300 million.
The Boston Globe further reports ("Mass.
facing $635 million budget gap, officials say"):
Baker
administration officials say obligatory spending
increases include $424 million more for MassHealth, the
state’s Medicaid program; $227 million more for other
health and human service programs; $127 million more in
debt service; and $75 million more for the Group
Insurance Commission, which oversees health insurance
for state and some municipal employees, retirees, and
their dependents.
I suspect that the state's mounting
expenditures on illegal aliens — estimated
by some to be $2 billion annually, much of that on health care —
could well contribute to the spending hole the state is digging
itself into.
A proposed spending increase of another
billion-and-a-half, but the state Democratic party is still
not satisfied. The kneejerk Democrats labeled the governor's
proposal a "bare bones budget" that "reflects his bare bones
vision."
The voters had enough of the 'visionary' budgets
of Deval Patrick and the Democrats, followed by tax hikes required
to pay for them. That's why we elected Charlie Baker governor, not
another profligate, 'visionary' Democrat. Gov. Baker now must first
clean up the mess Patrick and the Dems have created
— you know, the one, as they like to
say when the shoe's on the other foot —
he "inherited."
For the tax-borrow-and-spenders
— as we must so often recognize — More Is
Never Enough (MINE) and never will be.
Which brings me to the next
dose of bad news. Those same tax-borrow-and-spenders
are roaring ahead with — what else? — a tax
hike of course, always another tax hike. The latest
incarnation of a Graduated Income Tax raced past its latest hurdle
(if you can call a tax before a Democrat-controlled committee such)
and is flying toward acclamation by the full Legislature in
constitutional convention, again Democrat-controlled. When's
the last time we've seen the skids greased so thickly for a proposed
constitutional amendment? Perhaps not since the last proposed
constitutional amendment for a Grad Tax, on the ballot in 1994 (and
defeated for the fifth time).
I've often noted that
constitutional amendments proposed by the people through the
initiative petition process are generally a waste of time, are
invariably dead-on-arrival — unless proposed for the benefit of
legislators. Think Term Limits (DOA), or overturning same-sex
marriage (DOA), which never even come up for a vote in the
Legislature. That a graduated income tax amendment has flown through
the committee process and is on the fast track for a vote in
constitutional convention tells us all we need to know about support
by the Legislature. Elsewhere in this Update you'll find who on the
Committee on Revenue voted against a tax hike and who supported
defying the voters' decision made five times already.
It's almost incredible that
the usual cast of tax-borrow-and-spenders are still spouting their
blatant lie that all the $19 million in new revenue presumably it
would take in would be "dedicated," spent on transportation,
education, despite
CLT exposing them. Almost incredible — but the
teachers unions, labor bosses, and other public trough-feeders are
terrified of losing that phony talking point, won't give it up
easily. There's no shaming that cabal. Hawking pots of
gold at the end of every rainbow and unicorns for every family is
the best hope they have for duping voters, conning them into voting
against their own best interests.
That doesn't mean we won't
keep pounding away at them — exposing their lies.
And it doesn't mean we
won't publicize who they — and their legislative lackeys — are, and
who and what they represent.
We'll likely get one vote
this year at the constitutional convention. If so, that's one
big vote to hike taxes and kill our traditional flat income tax
which representatives and senators will need to defend in November
when they run for re-election. We won't let them forget how
they vote.
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Chip Ford |
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The Boston Globe
Thursday, January 28, 2016
Boosts, curbs in Baker’s $39.6 billion budget
By David Scharfenberg and Joshua Miller
Governor Charlie Baker on Wednesday unveiled a $39.6 billion budget
proposal that would add 281 workers to the state’s child protection
agency, add recovery beds for opioid addicts, and make good on a
campaign pledge to change the state’s welfare system.
The Republican governor also pledged to slow the rise of state
health care spending on the poor as part of an effort to bridge what
administration officials have pegged as a $635-million budget gap.
“Getting state spending under control,” Baker said at a news
conference flanked by top officials, “is essential to the state’s
economic health going forward.”
The governor’s proposal drew a range of reactions from advocates,
activists, and lawmakers in the Democratic-controlled Legislature,
which will have the final say over state spending.
Attorney General Maura Healey, perhaps the highest-profile Democrat
in Massachusetts, thanked Baker on Twitter for proposing new money
for law enforcement to combat drug trafficking and curb the supply
of illegal opioids.
The state Democratic Party, though, panned the budget as a “status
quo” document, lacking vision.
Perhaps the strongest criticism came from advocates for the poor,
who savaged Baker’s attempt to cut welfare payments for the
disabled.
“To do something that is going to hit families that are headed by a
severely disabled parent, and pauperize them even further, would put
children at dramatically increased risk of homelessness, hunger, and
illness,” said Deborah Harris, senior staff attorney with the
Massachusetts Law Reform Institute.
But Jeff McCue, commissioner of the Department of Transitional
Assistance, said the state would take the estimated $29 million in
savings and pour it into job training, transportation to and from
work, and child care.
“It’s a pretty strong menu of true stabilization efforts for the
working poor,” he said, adding that the services would promote
self-sufficiency.
Harris said the job supports are worthy programs, but the disabled
people losing cash assistance would have little use for them because
they cannot work.
But many advocates praised Baker’s push to spend more on the
beleaguered Department of Children and Families, which has come
under fire for the injury or death of several children under its
supervision in recent years.
“With the release of this budget, Governor Baker has yet again shown
his steadfast commitment to protecting the children of the
Commonwealth,” said Erin G. Bradley, executive director of the
Children’s League of Massachusetts, in a written statement.
The governor’s budget, for the fiscal year that begins in July,
includes $12 million for 281 new hires at DCF, including scores of
social workers, 22 supervisors, and five regional substance abuse
coordinators, among others.
The administration has been moving, separately, to replace a
patchwork of department policies with what it describes as a clear,
standardized playbook. The new rules, for instance, require criminal
background checks in all cases of parents accused of abuse and
neglect.
One of the biggest drivers of state spending is MassHealth, the
state’s health program for the poor and disabled. The Baker
administration has made curbing costs there a central part of its
effort to keep the budget in balance.
Officials have spent months verifying the eligibility of MassHealth
recipients and culling recipients who do not qualify for the
program.
The budget plan released Wednesday aims to continue that effort and
move more people into cost-saving managed care plans, among other
efforts. All told, the administration hopes to save almost $300
million.
Baker’s plan includes no new taxes or fees, and Citizens for
Limited Taxation called the proposal “sweet music to the ears of
the taxpayers” in a
news release.
But Beacon Hill watchdogs said some of the fiscal maneuvers in the
spending plan were cause for concern, including Baker’s plan to help
plug the budget hole with $150 million meant for the state’s
emergency rainy day fund. That is what’s called one-time money —
cash that can’t be easily replicated from year to year.
The Baker administration has vowed to reduce the state’s reliance on
such money and trumpeted that Wednesday’s budget proposal had made
important strides in that direction.
Baker’s fiscal restraint has contributed to soaring public approval
ratings. But he faces increasingly vocal opposition from liberal
activists and lawmakers.
On Wednesday, state Senator Sonia Chang-Diaz, a Jamaica Plain
Democrat who co-chairs the Legislature’s education committee, said
the governor had failed to live up to a campaign promise that he
would increase K-12 spending at the same rate as the annual growth
in state revenue.
“I will say unabashedly: I’m very disappointed,” she said.
Tim Buckley, a spokesman for the governor, responded that “the
administration is pleased to have increased the investment made in
our public schools year after year now, despite billions in
inherited budget deficits.”
Baker also promised during his 2014 run to increase local aid to
cities and towns, a pledge he keeps with this budget. It would
funnel $42 million in new money to municipalities, to be used for
services like police and trash pickup.
Another Baker campaign refrain was overhauling welfare.
The change he proposed Wednesday had been pitched before. In 2009,
in the throes of the Great Recession, Governor Deval Patrick put
forward a similar cut. But the Democrat ran into opposition from
lawmakers and advocates.
Under current law, the state does not count federal disability
benefits as part of a family’s income in determining eligibility for
its Transitional Aid to Families with Dependent Children program,
which provides cash assistance to families with children and to
women in the final months of their pregnancies.
The state does count veterans benefits and other public payments,
though. And officials said including disability payments in the
calculus is a matter of fairness.
The administration is hoping its push to change the rules will fare
better than Patrick’s because it has proposed redirecting savings to
supports for the poor, rather than simply using them to fill a
budget hole.
The Boston Globe
Wednesday, January 27, 2016
Mass. facing $635 million budget gap, officials say
By Joshua Miller
For the second straight year of his young administration, Governor
Charlie Baker will face a sizable budget gap.
Administration and Finance Secretary Kristen Lepore said Tuesday
that Massachusetts is staring down a shortfall of $635 million for
the fiscal year that begins in July. The gap is likely to mean cuts
for a few state agencies, only modest increases for a few others,
and effectively flat funding for the rest of state government.
“It’s a lot of belt-tightening,” she said. “We kept spending below
projected revenue and solved a significant budget gap without
cutting core services.”
Baker will announce the specifics of his nearly $40 billion spending
plan at a news conference Wednesday.
But whatever the details, they are sure to disappoint some liberal
lawmakers and advocates, who are pressing for dramatic new spending
on the MBTA and early education — spending that would almost
certainly require new taxes.
“I think Baker is focused on running the government as effectively
and efficiently as possible, and that’s a very good thing,” said
Noah Berger, president of the liberal-leaning Massachusetts Budget
and Policy Center. “But I think the problem he’s going to come up
against more and more is that solving some of our big problems like
fixing our transportation system, making higher education more
affordable, strengthening our public schools, and expanding pre-K
require revenue as well as reforms.”
Baker, though, who pledged not to raise taxes or fees, said state
spending was increasing at an unsustainable rate when he took
office. He has repeatedly pitched his leaner budgeting as a
necessary corrective.
“You got to get to the point where your spending is going up at a
rate that’s consistent with the growth in your economy,” he told
reporters at the State House Tuesday.
House Speaker Robert A. DeLeo, a Democrat, has also ruled out new
taxes for the upcoming fiscal year.
The budget gap that lawmakers and the governor will be wrestling
with is the difference between estimated revenue — from sources like
taxes, fees, and federal money — and obligatory spending.
Administration officials say they expect about $893 million in new
revenue available for the upcoming fiscal year’s budget, but also
more than $1.5 billion in new, essentially mandatory spending,
driven in large part by rising health care costs. Thus, the
shortfall.
Baker administration officials say obligatory spending increases
include $424 million more for MassHealth, the state’s Medicaid
program; $227 million more for other health and human service
programs; $127 million more in debt service; and $75 million more
for the Group Insurance Commission, which oversees health insurance
for state and some municipal employees, retirees, and their
dependents.
While the Democratic-controlled Legislature has the last word on
appropriating taxpayer dollars, the size of the final budget that
becomes law is unlikely to stray too far from what Baker proposes
Wednesday. That’s because the governor and the Legislature have
already agreed on the state’s expected income and because tax
increases are off the table.
Budget gaps on Beacon Hill are not new. The state has faced a
shortfall every fiscal year since the official end of the Great
Recession in June 2009.
And while the projected gap is smaller than previous years — and
smaller than the shortfall earlier predicted by a Beacon Hill
watchdog — yet another deficit will add fuel to a larger, more
divisive debate.
On one side is Baker, who says residents are tired of being nickeled-and-dimed
by state government. With him are his fiscally conservative allies,
who insist that government must learn to do more with less and that
tighter budgets often make for a more efficient public bureaucracy.
On the other side are progressive legislators and activists, who
argue that more revenue is desperately needed for state government
to do big things and invest in future generations, like fixing the
beleaguered public transit system.
Democratic Governor Deval Patrick and the Legislature did raise the
sales tax in 2009 and the gas tax in 2013. A broader fight is likely
to come to a head in November 2018.
That month, both Baker, who is expected to run for reelection, and a
referendum to raise income taxes on the wealthy are likely to be on
the ballot.
State Senator James B. Eldridge, perhaps the chamber’s most
outspoken liberal, said, “We’ve never addressed that lingering
structural deficit” by raising the income tax in the recent past, so
there are inevitably efforts to cut key parts of the budget every
year.
“It’s an extremely frustrating cycle,” the Acton Democrat said. “And
I really hope that over the next couple years we can have a more
comprehensive conversation.”
State House News Service
Wednesday, January 27, 2016
Baker plans 3.5 percent spending increase in $39.55 billion budget
By Matt Murphy and Michael Norton
Gov. Charlie Baker plans to boost state spending next fiscal year by
3.5 percent, making targeted investments while holding the line on
many government accounts despite back-to-back years of major jobs
gains that are pushing up state tax collections by an estimated 4.3
percent.
With a strong focus on fiscal restraint, Baker's budget reflects the
ongoing reality that fixed costs required for MassHealth, pensions,
debt service and other expenses continue to consume large chunks of
new revenue, limiting the areas where policy leaders can spend new
dollars without turning to taxes or reserves.
The governor's $39.55 billion spending plan for fiscal 2017, which
he intends to file Wednesday, further reduces the volume of one-time
revenues in the annual budget to $250 million, down from $1.2
billion in the fiscal 2015 budget that Baker inherited from his
predecessor, Gov. Deval Patrick.
The Baker administration plans to roll over between $400 million and
$500 million in MassHealth payments, but is not counting those among
its one-time revenue sources. And government accounts not targeted
for discretionary spending increases or facing rising fixed costs
will see an average increase in appropriations of 0.6 percent.
To address the risk of a credit rating downgrade, Baker plans to
drive $206 million into the state rainy day fund and possibly
another $76 million depending on whether the Massachusetts Gaming
Commission issues a casino license in its southeastern Massachusetts
region.
But in the face of a $635 million structural gap, the administration
plans to sweep $150 million in excess capital gains taxes that would
otherwise go to reserves into the general fund to cover expenses.
The MBTA will see about a $15 million increase in funding from
dedicated sales tax revenues, but the administration said it would
commit the same amount of discretionary subsidies - about $187
million - to the agency that it did in last year's budget. The
governor's spending plan would deliver a total of $1.187 billion to
the MBTA.
Administration officials said the spending plan is predicated on
reducing enrollment growth in the massive MassHealth insurance
program to its traditional rate of 3 percent, and limiting the
growth in spending to 5 percent. The spending plan does not
anticipate rate decreases to MassHealth providers or any reduction
in benefits, but will increase rates by 1.5 percent for behavioral
health providers and introduce protocols such as prior authorization
to address an increase in long-term care services, including home
health care.
If Baker and the Legislature use next year's budget to reduce
one-time revenue use and to address MassHealth spending growth and
rainy day fund concerns, it's possible that the scope of spending
increases could expand in 2017 and 2018, when Baker is up for
re-election.
Facing the $635 million gap between projected resources and spending
demands, Lepore said the governor's budget relies on a mix of
MassHealth savings, capital gains taxes, surplus land sales, such as
the delayed sale of the Sullivan Courthouse in Cambridge, and
administrative savings to balance spending.
After the Legislature last year rejected Baker's proposed changes to
state employee health insurance plans, the administration will once
again call for all employees to contribute 25 percent toward their
health insurance premiums. Currently employees hired before 2003
contribute 20 percent to their coverage, but Lepore said the
governor believes it's a matter of fairness that all employees be
treated the same.
The state would realize an estimated $33 million in savings from
plan design changes at the Group Insurance Commission, which would
help offset the $75 million in additional spending required at the
agency.
Lepore said that after reducing headcounts by more than 2,000
employees through an early retirement program last year, the
governor's budget does not assume any new layoffs, and will, in
fact, put money into targeting hiring.
The Department of Children and Families would receive a $30 million
increase to hire 280 new employees, including social workers, and
the Department of Transitional Assistance will be staffing up to
meet the job training goals of a welfare reform law approved a few
years back with new work requirements for beneficiaries.
Substance abuse treatments programs would receive a $40 million
increase, in part to open 45 new treatment beds at Taunton State
Hospital, and education aid, including higher Chapter 70 spending,
would grow by $100 million overall, including an additional $20
million to fully fund the first two years of reimbursements to
public schools under a revised charter school funding formula.
Since fiscal 2012, the average balance of state stabilization funds
as a percent of operating budgets has steadily climbed, but in
Massachusetts since fiscal 2013 the opposite has occurred. Lepore
said the proposed deposit into reserves would halt that trend,
raising the fund's balance to $1.54 billion, or 3.7 percent of the
operating budget.
Associated Press
Wednesday, January 27, 2016
Baker says nearly $40B budget holds line on spending, taxes
Gov. Charlie Baker today filed what he called a fiscally responsible
$39.6 billion state budget that calls for no increases in state
taxes or fees and shrinks a structural deficit between the growth in
annual spending and revenues.
"We believe that getting state spending under control to the point
where spending grows at a rate that is similar to the economy is
essential to the state's economic health going forward," the
Republican said shortly after submitting to the Legislature the
spending plan for the fiscal year starting July 1.
The budget calls for an overall 3.5 percent increase in spending,
but many state agencies will receive little or no additional money
over current levels. Tax revenues are projected to rise 4.3 percent
in the next fiscal year.
Administration officials said the deficit currently stands at $635
million, down from $1.8 billion when Baker took office last January.
Governors and lawmakers have typically relied on an array of
one-time revenues and other temporary fixes to close annual
shortfalls, a tactic Baker said he was determined to gradually move
away from. The fiscal 2017 budget calls for $253 million in one-time
solutions, down from $1.2 billion in fiscal 2015.
To erase the remaining gap, Baker is proposing several steps
including reforms intended to save nearly $300 million in Medicaid
costs without reducing benefits. Overall Medicaid spending would
still rise about 5 percent.
The budget also calls for depositing at least $206 million into the
state's reserve, or "rainy day" fund, replenishing some of the
millions that have been diverted to the general fund in recent
years, much to the alarm of credit rating agencies.
"Saving money for a rainy day, especially in good times, is a must,"
said Baker.
Some areas of state government would see spending increases in the
administration's budget.
The state Department of Children and Families, for example, would
receive additional funds to hire 281 new social workers and reduce
staggering caseload levels. The spending plan also sets aside $140
million to address the state's opioid addiction crisis, much of it
to support treatment and recovery services.
Baker previously announced a $42 million increase in unrestricted
local aid to cities and towns, and a $72 million hike in direct
assistance to public schools. The budget also calls for a $20.5
million increase in reimbursements the state makes to school
districts for charter school tuition.
Still, the plan is likely to be a disappointment to those advocating
for greater state investment in areas such as education and
transportation.
Noah Berger, president of the independent Massachusetts Budget and
Policy Center, said it was largely a "status quo" budget despite
some positive elements.
"There are no major new efforts to expand access to early education,
to make higher education more affordable, or to make new investments
in fixing our transportation infrastructure," Berger said in a
statement.
The Massachusetts Democratic party said Baker's "bare bones budget
reflects his bare bones vision," for the state.
The budget goes first to the House and later the Senate for review.
State House News Service
Thursday, January 28, 2016
Committee advances surtax plan to raise $1.9 billion
By Colin A. Young
The Legislature's Committee on Revenue on Thursday morning gave its
stamp of approval to a proposed constitutional amendment that would
establish a 4 percent surtax on income in excess of $1 million in a
bid to raise $1.9 billion.
The proposal (H 3933) seeks to raise additional revenue for
education and transportation initiatives by hiking the tax rate for
earnings in excess of $1 million to about 9 percent.
Without debate on the matter, the committee voted 12-4 to recommend
that the bill ought to pass.
Rep. Walter Timilty, a Milton Democrat, joined Republicans Sen. Ryan
Fattman, Rep. Randy Hunt and Rep. Shawn Dooley in voting to
recommend that the bill should not pass.
Supporters pressed lawmakers last week to advance the proposal,
arguing that the "fair share amendment" would allow the state to put
money into transportation projects and education without hitting the
middle class with a tax hike.
Raise Up Massachusetts, the group behind the proposed amendment, has
estimated the surtax would affect 14,000 individuals, generating
between $1.3 billion and $1.4 billion in additional revenue, while
the Department of Revenue estimated a higher yield of $1.6 billion
to $2.2 billion with $1.9 billion as the median.
Opponents argued that the amendment would have serious consequences
that are not being considered by proponents, like the possible
outward migration of Bay State millionaires and the impact on the
state budget of the associated decline in capital gains taxes.
"On principle, one thing I believe is that you don't raise people up
by tearing others down," Fattman, who said he would be drafting the
minority report, said after the committee vote. "An income tax the
way it is is a fair tax and everyone pays the same thing, so in
principle, when we talk about fairness, I think that's fair."
Fattman also said that if the amendment were to become law, it could
dissuade corporations from choosing to base themselves in
Massachusetts.
"We just attracted GE to come here and I don't think it makes sense
to give anybody any questions about where we're going as a state
with the business climate. We want to make sure that we continue to
attract people," he said.
Rep. Jay Kaufman, co-chair of the Revenue Committee, praised the
work of the Raise Up Massachusetts coalition in gathering the
signatures necessary to get the proposal before the Legislature and
said that he expects the question to go to voters on Nov. 6, 2018 --
1,013 days from now.
"This proposal come to us at the intersection of two huge
challenges, the challenge first to find the financial wherewithal to
meet the needs of Massachusetts families and have the education and
transportation that are a vital part of a vibrant economy," he said.
"And second the challenge to address the gross wealth and income
inequality in the state. We are number one in the nation in our
inequality, not a distinction we want or need."
If the proposal is advanced by House and Senate members meeting
jointly in Constitutional Conventions this session and in the
2017-2018 session, the question could go to voters in November 2018.
The next meeting of the Constitutional Convention is Wednesday, Feb.
3, but it's not clear that the proposal will surface for a vote
then. Since it's a citizen-sponsored amendment, the plan needs
support from just 50 lawmakers in two consecutive legislative
sessions in order to qualify for the 2018 ballot.
Fattman said he is interested to see the political dynamic of the
convention, given that House Speaker Robert DeLeo on Wednesday
pledged to keep new taxes and fees out of the fiscal 2017 budget.
"He said no new taxes, no new fees. When we go in on Feb. 3 I think
that's what a lot of members have to think about when they vote.
This is a tax, this is a tax increase," he said. "This is a tax
increase vote on Feb. 3. I'm encouraged by the speaker's position
and I think he will be with me."
Voting in favor of recommending that the proposal ought to pass were
Kaufman, committee co-chair Sen. Michael Rodrigues, Rep. Timothy
Toomey, Sen. James Timilty, Sen. Benjamin Downing, Rep. Denise
Provost, Sen. Daniel Wolf, Rep. James Dwyer, Sen. Eric Lesser, Rep.
Thomas Stanley, Rep. James Arciero and Rep. Alan Silvia.
State House News Service
Monday, January 25, 2016
Education secretary's view on tax hike draws jeers, cheers
By Antonio Caban
While Education Secretary James Peyser's firm rejection of proposal
that would generate $1.9 billion for Massachusetts transportation
and education evoked a strong response from proponents and opponents
of the measure, Gov. Charlie Baker on appears comfortable taking a
wait-and-see approach on the issue.
After an education event at the Omni-Parker House on Thursday,
Peyser outlined his opposition to the notion that higher taxes are
necessary to improve education and said the proposed constitutional
amendment could "weaken our economy" and "damage our ability as a
Commonwealth to support the schools and the other services we
desperately need."
Tom Gosnell, president of the American Federation of Teachers
Massachusetts and Barbara Madeloni, president of the Massachusetts
Teachers Association, subsequently blasted Peyser for allegedly not
understanding the needs of schools in the state.
In a statement released by Raise Up Massachusetts, the coalition
that is leading the amendment effort, Gosnell said, "It's not
surprising that the former executive director of the Pioneer
Institute opposes a tax on millionaires, but it's incredibly
disappointing that the state's top education official doesn't
acknowledge our Commonwealth's urgent need for a new revenue to
invest in education."
"It's shocking that Secretary Peyser is more concerned about keeping
taxes low for millionaires than he is about providing our schools
with the resources they need to give all students an excellent
education," said Madeloni.
The proposed constitutional amendment (H 3933) would establish a 4
percent surtax on income in excess of $1 million, raising the tax
rate for those earnings to about 9 percent.
A conservative group that promotes tax-limiting fiscal practices
embraced Peyser's comments and called them "refreshing."
"Finally an education secretary is giving us an education in
economics," said Paul Craney, spokesman for the Massachusetts Fiscal
Alliance. "It's kind of refreshing to see people in the
administration that understand the economy, that if you tax people
in the state that those people are going to leave the state. He said
it perfectly."
According to a report issued in October 2015 by the Foundation
Budget Review Commission, a group led by Democratic lawmakers and on
which Madeloni served, the state education budget underestimated the
cost of educating students by at least $1 billion per year.
The commission concluded that high costs for employee health
insurance and special education have reduced the resources school
districts can invest in other areas, including extended learning
time, books, technology, arts, and counseling.
The Baker administration announced Friday it will increase Chapter
70 education aid by 1.6 percent, or $72.1 million, in the fiscal
2017 budget the governor plans to unveil on Wednesday. That boost
falls short of Baker's pledge to increase local aid, including
education and unrestricted aid, at the rate of revenue growth, which
is 4.3 percent.
Supporters of the constitutional amendment are confident that they
can secure the 50 votes needed this session and in the 2017-2018
session to place their proposal on the statewide ballot in 2018.
Asked Friday if he stood with his cabinet official's position on the
measure, Baker said he wants to see how the issue plays out.
"First of all the ballot question stuff has a long way to go," the
governor said. "We haven't even had the first constitutional
convention, much less the second one, much less the trip to the
ballot. We've talked a lot about living within our means as an
administration and not raising taxes and fees on Massachusetts
taxpayers and depending upon what happens with this, we may or may
not be having a conversation about it in a couple years. But we'll
wait until then."
The Legislature's Revenue Committee held a public hearing on the
constitutional amendment and is reviewing it. The next
Constitutional Convention is scheduled for Wednesday, Feb. 3. Senate
President Stanley Rosenberg, who has supported a graduated income
tax structure over the years, presides during the convention.
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