State House opens debate on nearly $40 billion budget
BOSTON — The Massachusetts House on Monday began weighing some of the hundreds of amendments proposed to the state budget but did not appear inclined to make major changes in the nearly $40 billion spending plan for the fiscal year starting July 1.
Among the amendments rejected during early debate was one calling for the elimination of a tax credit the state offers to motion picture producers. While critics have derided the tax credit as a giveaway to wealthy Hollywood interests, supporters say movie-making in the Bay State has a positive residual impact on many small businesses.
Lawmakers also shelved Republican-backed proposals that called for lowering the state sales tax and exempting municipal governments from the gasoline tax, by ordering both proposals put to study.
Rep. Brian Dempsey, D-Haverhill, who chairs the House Ways and Means Committee, said the budget which calls for a little more than 3 percent overall spending increase strikes a balance between fiscal discipline and maintaining high-quality services.
Debate could last over several days before the spending package is shipped to the Senate.
Here are some more things to know about the budget:
Boost for local government
Cities and towns have complained about being shortchanged by the state in the past, but the House budget calls for a record amount of state assistance to local governments. Unrestricted local aid would increase by $42 million over the current year, while education aid — known as Chapter 70 — would increase by $96 million. Under the House plan, school districts would see a state funding increase equal to $55 per student, while an earlier proposal by Republican Gov. Charlie Baker called for a $20 per pupil increase.
But not all programs fare as well in a budget that contains no new taxes. Higher education funding, for example, would increase by only 1 percent and some key state environmental agencies would absorb a cut of more than 7 percent.
Health care driving budget
Health care costs, largely in the Medicaid program, account for roughly 40 percent of the overall state budget. State officials are citing modest progress in controlling those costs. Baker's administration, with the support of House Democratic leaders, are looking to steer Medicaid toward accountable care organizations that stress coordinated and more cost-efficient care for patients.
The budget still calls for a 5 percent increase in Medicaid spending, higher than the overall state budget increase, but considerably less — officials argue — than what Medicaid would cost without the reforms. One area where the House and Baker disagree: The House keeps in place $15 million for a medical "safety net" for uninsured or underinsured state residents.
Saving for next rainy day?
The House budget, like Baker's earlier plan, would not rely on any withdrawals from the state's reserves, or so-called rainy day fund. In fact, it calls for depositing more than $200 million in capital gains tax receipts, which would bring the rainy day fund's balance to near $1.5 billion by the end of the next fiscal year. But some fiscal watchdogs are worried that the fund, which was drained considerably during the Great Recession, isn't being replenished fast enough, putting the state at risk of not having sufficient reserves in the event of another economic downturn.