Senate budget cuts health care and local aid

The Senate budget committee advanced a $30.54 billion spending proposal for fiscal 2012 on Wednesday that attempts to tackle the thorny issue of municipal health care reform while closing a $1.9 billion gap through cuts to health care, local aid and other government services and by deferring plans to pay down the state’s unfunded pension liabilities.

The Senate Ways and Means Committee, chaired by Sen. Stephen Brewer, unanimously approved the budget plan for fiscal 2012 that spends just $2 million less than the budget approved by the House in April in what officials described as the smallest year-to-year increase of $35 million in a decade. That calculation includes $1.46 billion in midyear spending bills approved so far in fiscal 2011, when supplemental budgets have been plentiful.

Brewer, presiding over his first budget as chair of the committee, said the bill prioritizes investments in programs and services for needy populations, while reducing the state’s reliance on non-recurring revenues by 75 percent. It also reduces or eliminates 277 budget line items, with a projected $1.2 billion increase in tax collections offset by the exhaustion of $1.5 billion in federal funds used to support this year’s budget but not available next year.

“Cuts had to be made this year as in previous years during this recession,” Brewer said. “We have worked our way through this spending plan with a scalpel, making precise and educated cuts where necessary.”

The Senate budget bill, marked for debate starting next Wednesday with amendments due this Friday, would cut unrestricted local aid to cities and towns by $65 million and reduce overall spending on Chapter 70 aid for public schools by $81.5 million from fiscal 2011, despite the state actually increasing its investment in Chapter 70 by $139 million to partially offset the loss of the federal assistance.

The budget also level funds regional school transportation accounts, and increases funding for special education by $50 million to $183 million. Both Gov. Deval Patrick and the House had proposed $213 million in funding for the special education circuit breaker.

The spending plan includes 152 outside sections, including proposals for a police merger study, a study on re-procurement of inmate medical services contracts, expanded use of video conference technology in the courts, a commission to study the criminal justice system, proposals to lease surplus state properties, and plans to transfer all fiscal 2012 tobacco settlement funds into the state’s General Fund.

The Senate budget, as proposed, would also create an $8 million competitive grant fund for cities and towns to promote efficiencies through regionalization of education and public safety services and improve data collection.

Making due without approximately $1.5 billion in federal revenue supports that have propped up the last two state budgets, Senate Ways and Means Committee members said Wednesday morning that their proposal features $1.5 billion in cuts from fiscal 2011 spending levels.

Coming out of committee, the budget plan drew accolades from Democrats and Republicans who pointed not just to programs that were preserved in a tough fiscal climate, but the reform proposals also included.

“The Governor is pleased with the Senate Ways and Means Committee’s budget, and commends them for putting forward a proposal that is fiscally responsible, reflects many of the Administration’s plans to fundamentally reform the way government does business, and supports the Governor’s key priorities of job creation and health care cost-containment,” Alex Goldstein, Patrick’s press secretary, said in a statement. “The Governor does have concerns, however, about the lack of funding for summer jobs for at-risk youth and initiatives that would help close the achievement gap. We are hopeful that funding for these programs will be restored in the upcoming Senate debate.

Sen. Michael Knapik, the ranking Republican on the Ways and Means Committee, applauded Brewer’s stewardship of the budget and said he was “grateful” that the budget plan avoids broad-based tax increases and focuses on efficiencies in government. “It’s been awhile since we supported the budget out of the gate,” Knapik said.

The bill would establish three new initiatives to reduce spending, including a new auditing program for state agencies, a line item to support MassHealth auditing and recovery efforts, and a new unit to conduct vendor audits.

The budget plan also creates a new Office of Commonwealth Performance, Accountability and Transparency to track the effectiveness of programs throughout state government and make determinations on which deserve funding and which could be eliminated.

Another new office set up under the budget bill would make programmatic caseload projections to be used by the House, Senate and governor for budgeting, an idea intended to get a better handle on enrollment numbers and help the state avoid passing so many midyear spending bills in reaction to unexpected caseload increases.

“I’m particularly happy about the budget’s focus on program management,” said Sen. Steven Baddour, the vice-chairman of Senate Ways and Means.

Separately, the State Administration and Regulatory Oversight Committee has stamped its approval to a Senate bill (S 1900) aimed at improving government accountability, transparency and program management.

Though the budget proposal includes no new taxes, it would impose a new $5 surcharge on moving violation tickets that will be deposited into a fund to help play for state police cadet training programs. Patrick had proposed a surcharge on insurance policies to fund the state police class.

While imposing the $5 fee on traffic tickets, the Senate has also recommended making the $25 fee paid by drivers to challenge tickets in court refundable if the driver is found not guilty of the moving violation. Drivers currently do not get their money back even if the ticket is dismissed.

The Senate spending plan relies on $440 million in non-recurring revenues, senators said, down from $1.75 billion this fiscal year. The rainy day fund would be drawn down by $209 million and a planned $100 million contribution to that fund will not be made under the Senate plan.

Budget committee staff said they expected the fund to end fiscal 2012 with a $770 million balance, claiming they expect some fiscal 2011 revenues that have exceeded estimates to be poured into the fund.

Among the cuts are $775 million from the state’s Medicaid program known as MassHealth, according to budget leaders, who said the Senate adopted most of the proposals put forth by Gov. Deval Patrick and the House, including a rate freeze for nursing homes and reprocurement strategies.

The budget also trims $13.9 million for respite services for families of children with disabilities, but preserves so-called adult day health services, funding for mental health clubhouses, and state mental health beds that have been at risk of being cut. Overall, funding for mental health services rises $22.3 million in the Senate budget plan.

Families receiving direct assistance from the state would also see the clothing allowance for children reduced from $150 a year to $40 a year for $7.9 million in savings, and in-home assistance for families through the Department of Children and Services aimed at keeping children in their homes and out of foster care was reduced by $5 million.

The state’s Youth Works program would receive no additional funding for fiscal 2012, according to advocates, jeopardizing 2,400 jobs for at-risk teenagers this summer.

The budget would fund the Commonwealth Care Bridge Program at $42 million, an increase from the $25 million allocated by the House to help subsidize health insurance for roughly 19,000 legal immigrants that are not eligible for federal reimbursement.

The Senate budget also funds early intervention programs for children up to the age of 3 with developmental disabilities at $31.1 million, forestalling proposed cuts to the program by the governor and the House that would preserve services for the 33,000 children enrolled in the program.

Veterans outreach and homeless centers would see their funding increased by 15 percent, and anti-gang violence Shannon Grants would receive $7 million in fiscal 2012.

Arts and culture groups said the Senate budget, if approved, would leave programs cut by 41 percent since 2009.

Protesting a $2 million cut, the Aids Action Committee of Massachusetts called the Senate budget “a shortsighted approach to the state’s investment in public health,” while Health Care for All praised Senate leaders for adding $20 million in funding for public health programs over the House proposal, including early intervention programs.

Dealing with rising costs for legal services for indigent defendants, the Senate has also proposed meeting the governor half-way on his proposal to take over the Committee for Public Counsel Services by hiring public defenders to handle the caseload instead of paying private bar advocates.

The Senate budget proposes moving toward a 50-50 split between salaried public defenders and private attorneys over the next two years.

Weeks after labor leaders ripped a House plan to restrict their bargaining rights over municipal health insurance plan details, the committee also detailed its counter-proposal that would give unions a comparatively larger role in negotiations over plan changes while still holding out the promise of $100 million in savings to cities and towns.

The Senate proposal would retain the local option for cities and towns to pursue savings in their municipal health insurance plans while laying out a 40-day process for achieving savings should local government managers opt into the reform.

“This plan, and hear me clearly, provides municipal employees with a voice, but not a veto,” Brewer said.

Disputes between labor and management would be resolved by a three-person review panel, including a representative from both sides and a neutral third arbiter.

Though plan design changes that conform to the median co-payment and deductible levels of health plans offered to state employees through the Group Insurance Commission would have to be approved, labor could negotiate to share up to 33 percent of the cost savings.

The Senate municipal health proposal drew immediate support from the Massachusetts Municipal Association and Boston Mayor Thomas Menino, who have been pushing for reforms.

A representative from the AFL-CIO called the Senate plan a “thoughtful approach.”