Mixed reviews on Baker budget
Forced to close a projected $1.8 billion budget gap, Gov. Charlie Baker's first budget — a $38.1 billion spending plan — leaned heavily on efforts to wring efficiencies and savings out of budget-busting accounts such as MassHealth while making smaller, targeted investments in areas like transportation and local aid to make good on some campaign promises.
Despite holding spending levels steady in much of state government, Baker won early plaudits from many lawmakers, including liberal Democrats, with his proposal to double the earned-income tax credit for low-income families. However, his proposal to pay for the tax credit by phasing out the controversial film tax credit for Hollywood movie-makers found skeptics in the House.
Other proposals, such as a plan to entice state workers to retire early, will now undergo a review by House and Senate budget leaders as they prepare their own fiscal 2016 spending plans, and balance their priorities against those of the new Republican governor.
"The Senate is committed to making government work more effectively and more efficiently for working families across the Commonwealth. As we study the Governor's budget proposal, we will be looking for clear cut evidence that this budget is intended to fulfill these same objectives," Senate President Stanley Rosenberg said.
Baker acknowledged that cities and towns and various interest groups would always like to see more funding for their programs, but called his budget plan "a reasonable one given the financial circumstances we inherited."
The budget put forward by Baker manages to keep spending growth to 3 percent, even as revenues are projected to climb 4.8 percent, without drawing from the state's $1.2 billion reserve account. To balance the budget, Baker has proposed ways to generate or use an estimated $646 million in tax revenues without raising broad-based taxes, including $573 in one-time sources.
In order to generate $761 million in net savings from the state's Medicaid program, Baker said he's taking steps to secure additional federal reimbursements, will shift $116 million in payments from the last day in June to the next fiscal year, will pursue bulk purchasing, and hopes to limit prescriptions for certain opioids to 14 days to produce some savings and limit abuse.
The biggest savings in MassHealth are projected to come from a year-long redetermination process to weed out some of the 1.7 million enrollees who may no longer qualify for Medicaid. Administration and Finance Secretary Kristen Lepore said the administration hopes to generate $400 million in gross savings through redeterminations, or about $200 million after accounting for lost federal reimbursements.
"This budget is consistent with our vision for a great Massachusetts. It will allow our economy to grow and invests in our schools and it signals our strong commitment to building healthy communities across the Commonwealth," Baker said.
After House Majority Leader Ronald Mariano on Wednesday called it "crazy" to increase funding to the MBTA by $64.5 million without first diagnosing the problems at the T, Baker said the increase was "not a blank check" and would be a placeholder until his special task force reports back with recommendations at the end of the month.
Massachusetts Taxpayers Foundation President Eileen McAnneny said it would bear watching how the Legislature responds to Baker's proposals to phase out the film tax credit and implement an early retirement program, the success of which she said will depend on ensuring people aren't rehired to fill the jobs vacated by early retirees.
"I think that this budget is a great first step in slowing the growth in spending, certainly, and they did it in a way that was responsible, all things considered," McAnneny said.
Not everyone was happy with the budget.
As Baker began to take questions on his budget, protestors outside of the room began audibly chanting, "No cuts, no fees. Education should be free." Baker's budget increases funding for higher education by 3 percent, but officials said it may not be sufficient to avoid tuition hikes or fees increases on all UMass and other college campuses.
Massachusetts Budget and Policy Center President Noah Berger said the governor delivered a positive message, but failed in some respects to back up the rhetoric with dollars.
"There's no increased investments in early education, nothing that will make public higher education more affordable and the transportation levels are well below what everybody knows it will take to fix our transportation system, so I think the priorities are right but there aren't the level of investments it would take to really achieve those priorities," Berger said.
Supreme Judicial Court Chief Justice Ralph Gants said he was "deeply disappointed" by the budget, suggesting the proposed funding levels would require the elimination of 550 employees at the Trial Court and jeopardize the court's ability to keep all its courthouses open.
"This proposed budget does not provide the necessary funding for us to operate or staff the courts in a safe and effective manner," Gants said in a statement.
Baker, himself, said he wished he could have done more to fulfil the campaign promises of his "urban agenda," and suggested he could be "back to the table later this year" with proposals to create "opportunity zones" in distressed cities and neighborhoods and facilitate the cleanup of brownfields for redevelopment.
Suffolk County Sheriff Steven Tompkins, a Democrat, also attended the budget proposal's rollout. His office would be level-funded at $103 million, he said. "I feel good right now," he said.
"We'd like to see more. What we don't want to see is more cuts," he added.
Tompkins said he was encouraged by the governor putting increased money towards early education and an "urban agenda."
While saying he wanted to include more money for the "urban agenda," Baker has proposed $3 million, with $1 million for planning and implementation grants for affordable housing and $2 million for a competitive grant program on jobs and skills, including workforce training, according to the Executive Office of Housing and Economic Development.
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