Governor Patrick signs $30.6 billion state budget; no new taxes

Governor Patrick signs $30.6 billion state budget; no new taxes

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Gov. Deval Patrick on Monday signed a $30.6 billion annual state budget, putting a spending blueprint featuring government reforms and no new taxes on the books 11 days into the new fiscal year, the State House News Service reported.

Patrick did not veto any spending in the budget shipped to him by lawmakers ten days ago, but axed 16 outside budget sections including proposals dealing with cigar bars, prescription drug waste, reviews of small business health insurance rates, an audit of the MassHealth program, and implementation of school athlete head injury rules.

The bill depends upon two major strategies to help state government balance its budget, which last year was supported by $1.5 billion in federal funds that are not available this year. It calls for the Patrick administration to whack $750 million off projected spending in the massive Medicaid health insurance program and dodges a huge scheduled spike in public employee pension system costs by pushing those obligations into future years.

The bottom line on the new budget is $750 million less than projected spending in fiscal 2011, a year when Patrick and the Legislature adopted numerous midyear spending bills that drove the state’s spending baseline higher.

The new budget cuts K-12 public education funding, despite an increase in the state’s share of that funding, while increasing spending on special education and regional school transportation.

At a press conference, Patrick budget chief Jay Gonzalez also guaranteed that a planned $65 million local aid cut included in the budget will not take effect due to spending reversions that officials anticipate.

Municipal health care reforms in the budget will help communities control insurance costs, officials said.

According to the Mass Budget and Policy Center, the final budget cuts public higher education funding by about $60 million but allows campuses to retain out-of-state tuition rather than remitting it to the state.

In the area of reform, the budget anticipates savings from moving toward a higher percentage of public defenders rather than contracted legal services for indigent individuals. The budget shifts funds towards homelessness prevention and looks to target emergency shelter services to those who need it most. And the spending blueprint requires independent audits of each state authority that receives more than $500,000 in state funding.

The budget also eliminates funding for a 41-year-old program designed to improve the quality of police officers by offering salary increases as incentive for officers to pursue higher education. Patrick said he was disappointed that lawmakers scrapped the $5 million he proposed in January for the so-called Quinn Bill. The governor said he was interested in looking at ways to keep the program going without building benefits into base salaries.

There are no tax increases or decreases in the budget, which is the first to top the $30 billion mark. Patrick signed the budget at a press conference in his office. Legislative leaders did not attend the press conference.

The budget arrives as Patrick and Treasurer Steven Grossman strategize to pass a new round of pension system reforms, including an increase in the retirement age. Grossman estimates the reforms will save $5 billion over the long-term and give state government a chance to see an upgrade in its bond rating.

While Patrick and the Legislature can now start to distance themselves from budget deliberations that have consumed most of 2011, they will soon need to think about how to allocate a fiscal 2011 surplus expected to total hundreds of millions of dollars.

Budget writers drew $185 million from the state’s rainy day fund for the fiscal 2012 budget and efforts are expected to use the surplus to build that fund up again. The fund is projected to end next fiscal year with $585 million, ranking it among the top ten largest balanced among the states, according to the Patrick administration.

Patrick said he “reluctantly” approved an increase in spending on the state probation department with the understanding that the House and Senate will take up hiring reforms in the next few weeks — both branches have passed different versions of reforms that are being negotiated by a six-member conference committee.

Patrick said he vetoed a few outside sections but details were not available at the press conference.

Here’s a full list of the 16 vetoed outside sections:

— Prescription drug waste, Section 81. Patrick said current law “provides for the return and redispensing of medications, the Department of Public Health has guidelines in place governing those processes, and the Department retains the authority to make further rules and regulations as necessary.”

— Prescription drug waste, Section 82. Patrick called this section “unnecessary, as patients currently are permitted and are discharged with their personal bulk medication” and DPH has the authority to adopt regulations.

— Senior care options/PACE notice, Section 87. Patrick said this section would impose additional MassHealth costs “without a corresponding appropriation.” He said he’s prepared to recommend the necessary appropriation and to then approve the requirement.

— Division of Insurance Review of Small Group Health Insurance Rates, Section 107. Patrick said this section would “decrease efficiency and transparency” in the division’s rate hearings.

— Division of Insurance Review of Small Group Health Insurance rates, Section 108. Patrick said this section “inhibits the commissioner from conducting a thorough review of the carrier’s rate submission, and automatically allowing rates that have not been thoroughly reviewed could increase premium costs and create confusion in the marketplace.”

— Division of Insurance Review of Small Group Health Insurance rates, Section 109. Related to above.

— Natural Heritage and Endangered Species Program waiver, Section 134. Patrick said this section would remove the discretion of his Office of Administration and Finance to review and approve waivers. He said the secretary was prepared to “exercise his discretion when appropriate.”

— Inspector General MassHealth Audit, Section 156. Patrick said he doesn’t object to a MassHealth audit by Inspector General Greg Sullivan using other funds, but vetoed this section “because it expends scarce program funds from the Health Safety Net Trust Fund.”

— Prescription drug waste, Section 178. Patrick said this section requires a study of other budget outside sections he vetoed and believes are unnecessary.

— Cigar bars, Section 197. Patrick said this section “prevents local officials from protecting the public health of their citizens.”

— Competition among MassHealth managed care organizations, Section 203A. The outside section will “unduly interfere with the contracts resulting from MassHealth’s recent competitive procurement for its contracted managed care organizations,” Patrick said in his veto attachment.

— Senior care options, Section 204. Provides effective date for another section of budget that Patrick vetoed.

— DPH head injury regulations, Section 207. Patrick said the outside section would unnecessarily delay the effective date of an act protecting the health of school athletes “that schools have had ample time to implement.”

— Prescription drug waste, Section 216. Provides effective date for another section of budget that Patrick vetoed.

— Prescription drug coupons, Section 218. Provides effective date for another section of budget that Patrick vetoed.