MassHealth 40 Percent of State Senate Budget Proposal

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By Colin A. Young

BOSTON — The Senate Ways and Means Committee on Thursday unanimously approved a $41.42 billion fiscal year 2019 budget proposal, touting the spending plan’s “robust and critical investments” in education, an “innovative approach to drug pricing,” and a focus on obstacles to growth.

Senate Ways and Means Committee chairman Karen Spilka, who is expected to ascend to the Senate presidency in July, said the budget plan recognizes “that when all people in the Commonwealth are given the opportunities to participate in Massachusetts’s economy — as well as the tools to succeed — we all benefit.”

The fiscal 2019 budget plan represents a 3 percent increase in state spending over the current year’s budget and is based on the consensus revenue agreement that state tax revenue will grow by 3.5 percent in fiscal year 2019, which begins July 1, 2018.

The Senate’s budget includes about $61 million more spending than Governor Charlie Baker’s budget plan (H 2), $97 million less in spending than the amount amended and adopted by the House (H 4401).

The Senate budget anticipates an $88.5 million deposit into the state’s “rainy day” fund. Fiscal watchdogs have cautioned Beacon Hill that its inadequate reserves could easily be drained in a recession.

For education, the Senate proposed funding Chapter 70 aid to local school systems at $4.91 billion — “its highest level ever, even after accounting for inflation” — to allow for a minimum aid increase of at least $30 per pupil, the Ways and Means Committee said.

The Senate also proposes $270.1 million for income-eligible childcare, $5 million for the Commonwealth Preschool Partnership Initiative to expand access for 3- and 4-year-olds.

There is $318.9 million in the Senate budget for the Special Education Circuit Breaker, which reimburses districts at the statutorily required 75 percent rate, and $62.5 million for regional school transportation reimbursements.

The Senate’s budget plan calls for $1.1 billion in unrestricted local aid, matching proposals from the governor and the House.

MassHealth, the state’s behemoth Medicaid program, is funded to the tune of $16.12 billion in the state budget — accounting for nearly 40 percent of the spending plan.

The Senate budget includes a $452 million Medical Assistance Trust Fund transfer in its budget bottom line, but the governor and House do not.

To tackle the rising costs of pharmaceutical drugs, the Senate budget plan includes an annual prescription drug spending target and authorizes the state’s secretary of health and human services to seek rebates from drug companies.

The release of the Senate budget, which will be debated beginning Tuesday, May 22, comes at a point when it appears the state is more flush with cash than in the past two fiscal years. Since the passage of federal tax reform in November, tax collections have spiked, leaving the state with $809 million more this fiscal year than it had anticipated.
Spilka said the budget represents “a cautiously optimistic approach” to spending given the state’s fiscal picture.