Massachusetts House Democrats' state budget seeks to slow spending growth

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BOSTON >> House leaders unveiled a $39.5 billion Massachusetts budget proposal on Wednesday that calls for slowing the growth of overall state spending, including on Medicaid, while offering a slight boost in funding for local school districts.

The spending plan for the fiscal year starting July 1 was approved Wednesday by the House Ways and Means Committee and could go before the full Democratic-controlled House as early as next week. Mirroring many aspects of the budget proposed earlier this year by Republican Gov. Charlie Baker, it calls for no new taxes and in total would spend nearly $80 million less than the governor's plan, according to a summary prepared by House leaders.

In both of the last two fiscal years, state leaders have been forced to make midyear adjustments to the budget after finding that spending increases were outstripping revenue growth.

The House budget calls for a $105 million increase in state aid to public education — formally known as Chapter 70 — compared to a $72 million increase proposed by Baker. Cities and towns had complained that the more modest boost would fall short of recommendations made by a special state commission on per-pupil spending by school districts. It was unclear how much closer the House budget would move schools toward those goals.

The House, meanwhile, is recommending a $5 million increase in state reimbursements to school districts for charter school tuition, well below the $20.5 million hike in the reimbursements sought by Baker, who backs a major expansion of the charters.

House leaders and the governor are both calling for a series of reforms aimed at limiting growth in the $15.4 billion Medicaid program, which provides health insurance for low-income residents and represents the single largest spending area in state government, to 5 percent over the current year budget. While the plan would not reduce eligibility or benefits, it calls for changes in caseload management and a new $250 million fee on hospitals that would in turn be used to encourage more efficient delivery of health care services.

The House budget — like Baker's plan — also calls for less reliance on so-called one-time revenues, which are accounting gimmicks or other temporary fixes used to balance prior year budgets. Baker has called for the eventual elimination of one-time revenues.

The House and the governor also agreed on using for general purposes $150 million in capital gains tax revenues that would otherwise be earmarked for the state's reserve account, or "rainy day fund."

Budget monitors including the nonpartisan Massachusetts Taxpayers Foundation have warned that a shrinking balance in the reserve fund in recent years could have future implications for the state's fiscal health, especially if another economic downturn occurs.


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