March 12, 2017

On Beacon Hill: Fingers crossed as Trump turmoil tests budget makers

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Sam Doran / State House News Service

The Joint Ways and Means Committee last week held its first hearing on the fiscal 2018 budget as it begins reviewing Gov. Charlie Baker's $40.5 billion proposal. Members looked at documents Thursday afternoon while state Treasurer Deborah Goldberg offered testimony.

Recap and analysis of the week in state, and federal, government
from State House News Service

Budgeting, state officials like to say, is a year-round process.

Sure, lawmakers work with the governor to put a balanced budget plan in place each year by July 1. But it’s not exactly a set-it-and-forget-it proposition. Never has that been more true than this year.

House and Senate lawmakers last week kicked off the annual budget hearing process with uncertainty swirling around Capitol Hill regarding the future of healthcare financing, state revenues reaching a fork in the road, and the governor’s Medicaid rescue plan on thin ice.

“For the coming fiscal year, modest tax growth, rising fixed costs and uncertainty at the federal level all make balancing a fiscally responsible budget for the needs of the commonwealth a challenging task,” House Ways and Means Committee Chairman Rep. Brian Dempsey, D-Haverhill, said.

The future of the Affordable Care Act, or lack thereof, has the potential to throw state policy leaders the biggest curveball of all.

Congressional Republicans finally pulled the curtain back on their plan to repeal and replace Obamacare, but the transition to Trumpcare, should it come to pass, is fraught with pitfalls for Massachusetts.

Members of the state’s Congressional delegation, including Democratic Reps. Richard Neal and Joseph Kennedy, spoke up loudly against the GOP’s plan to turn Medicaid from a claims-based reimbursement system to one in which states get a set amount of money per MassHealth enrollee.

The change, according to many in Massachusetts, could cost the state significant federal revenue at a time when Medicaid expenses are already overflowing and expected to cost the state an additional $600 million next year.

Gov. Charlie Baker has proposed in the short-term to address the MassHealth spending problem by levying a $2,000 per employee assessment on businesses with more than 10 employees if they don’t offer or can’t get a sufficient number of their workers to accept the private coverage.

Since floating the idea in his fiscal 2018 budget proposal, the business community, with whom the governor is traditionally allied, has pushed back hard, and the Massachusetts Taxpayers Foundation, as reported by State House News Service, is preparing an analysis that will claim the assessment is based on a “flawed premise.”

Sam Doran / State House News Service

State finance chief Kristen Lepore

While Baker’s team has blamed the ACA, in part, for facilitating a shift of full-time workers from employer-sponsored coverage to MassHealth, the pro-business-leaning think tank, in a draft policy brief, questioned the rationale for holding employers to account for a trend they may have little to do with.

This all formed the backdrop for state Administration and Finance Secretary Kristen Lepore going before the Joint Committee on Ways and Means and opening the door to a compromise: “We have said all along that this is a proposal, that we’re open to other suggestions, but clearly we have an issue here.”

On that much there is agreement. House Speaker Robert DeLeo, D-Winthrop, spoke before the Greater Boston Chamber of Commerce this week and told the audience that the House would probably have to craft some type of response to ballooning MassHealth enrollment and spending in its budget proposal next month.

“The question is how,” DeLeo said.

— Matt Murphy

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