Negotiators agree on $32.5B state budget, branches to vote Thursday

By 
Matt Murphy, State House News Service
Jun. 28, 2012

The House and Senate on Thursday will vote on a $32.5 billion state budget for fiscal 2013 after negotiators struck a compromise that increases funding for local aid, keeps Taunton Hospital open, and makes some reforms to the state’s welfare and immigrant verification systems.

“Leading the way is local aid. We made a very, very strong commitment to local aid and I think as you look at the last several years and the challenges we faced, this is certainly moving us in a direction, putting us back on track to enhance our partnership with cities and towns,” House Ways and Means Chairman Brian Dempsey said.

The budget, which was reported out of a six-member conference committee Wednesday night and filed with the House clerk just before 8 p.m., directs $5.7 billion in state revenues back to cities and towns for spending at the local level, almost $289 million more than the current fiscal year.

With $899 million in unrestricted local aid and $4.17 billion for local school districts, the budget for the first time, would also dedicate $11.3 million to fund school transportation for homeless students mandated under the federal McKinney-Vento Act.

The budget reflects a continued dependence on one-time revenues to support spending, despite economic growth.

Dempsey said the budget proposes to draw $350 million form the state’s “rainy day” account, leaving roughly $1.2 billion in reserves, and spends the $516 million in one-time revenues, or $120 million less than last year and down from $2 billion in fiscal 2011.

After the Senate passed the last version of the budget in May with what officials described as the most current revenue assumptions, the bottom line of the budget grew by $58.7 million in conference.

Senate Ways and Means Chairman Stephen Brewer said the budget had a “strong emphasis on local aid, community college reform, EBT reform that’s fair and balanced, efforts to keep mental health beds in Southeastern Massachusetts and a few other items.”

In attempting to resolve what was one of the more contentious issues of the budget debate in both branches this year, House and Senate conferees agreed to fund 45 beds at Taunton Hospital to keep the facility open at a reduced capacity. The hospital currently has 169 beds, many of which will be shifted to Worcester.

Rep. David Sullivan, a Fall River Democrat and proponent for keeping Taunton Hospital open after Gov. Deval Patrick proposed closing it, called the compromise “better than the House version” but still not ideal. The House had proposed contracting for mental health beds in the southeast region.

“I still think that’s a disappointment. I don’t think it’s going to meet the needs of our region. I know it’s a tough fiscal year, but I think it’s going to cost money in the long run. I think it’s going to impact other services. I think you’re going to see problems in the courts, with the homeless population corrections. I think we pay more money in the long-run and that’s unfortunate,” said Sullivan.

Asked his thoughts on the Taunton Hospital compromise, Sen. John Keenan, co-chair of the Mental Health and Substance Abuse Committee, said, “I don’t know. I think I still need to see the study language.”

Later in the evening, Sen. Marc Pacheco (D-Taunton) said he was pleased that the budget adopted a proposal for an independent analysis to determine the overall mental health service needs in all regions of the state, and credited Somerset Democrat Patricia Haddad for keeping the issue alive in the House.

“I’m pleased Taunton State Hospital under the conference version will be able to keep the lights on and we’ll have the independent study we’ve been asking for done,” Pacheco said. He said now lawmakers will have to convince the governor not to veto the funding, given the fact that Patrick was the first to propose closing Taunton Hospital.

Both the House and Senate will meet in formal sessions on Thursday to take a final vote on the conference committee budget, which is not subject to amendment.
Gov. Deval Patrick will have 10 days to review the bill, sign it and return sections of it with vetoes or amendments. Earlier this week, the House and Senate passed and the governor signed a $1.25 billion interim budget to provide state government with funds to operate through July 10. The new fiscal year begins Sunday.

“There were six or seven major issues like any budget that will bog things down. This is about the art of compromise,” said Rep. Viriato deMacedo, a Plymouth Republican and member of the conference committee. DeMacedo said he believed the House and Senate did a “decent job” with the fiscal 2013 budget, pointing out that it was balanced without any new taxes or fees.

Brewer said the agreement on reforms to the electronic benefit transfer card system for welfare recipients includes a list of prohibited purchases and vendors and penalizes the “willful misuse” of benefits, including a cancellation of benefits after a third offense.

“It is firm, but it is fair,” Brewer said. Dempsey said the committee also agreed it was important to create a commission to study the potential implementation of a cashless benefit system.

Resolving what one source briefed on the deliberations described as a major sticking points in negotiations, the House and Senate also agreed to authorize drug coupons for brand-name pharmaceuticals with a five-year sunset clause, and make alterations to the medical device gift ban, a law proponents say represents a critical ethical reform.

Dempsey said the changes will allow “some spending” on gifts from medical device and pharmaceutical representatives to doctors, and require quarterly reporting. Brewer called it an “amalgamation of ideas and ideals.”

The conference committee also included a Senate-backed policy change that would force the disclosure of executive compensation for mutual companies, a response to media reports of lavish salaries and compensation packages for top executives at employee-owned companies like Liberty Mutual.

The conference report also includes popular reforms in both branches to the Community Preservation Act, giving cities and towns more flexibility to collect revenue for their local CPA funds and allowing for CPA funds to be expended to rehabilitate existing parks, playgrounds and athletic fields rather than only to build new ones.

The proposed budget allocates $25 million in additional funding to the state’s CPA matching-grant program from potential surplus revenues from the fiscal 2012 budget.

Other spending highlights include:

• $11 billion on MassHealth, the biggest and most expensive program in state government;

• $28.5 million in new spending on housing programs;

• $20 million for a human service workers salary reserve;

• $10.9 million for coordinating community colleges with the workforce development needs of students and employers;

• $6.25M for Shannon Grants;

• $4 million for police staffing grants.

[Colleen Quinn contributed reporting]