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

ALSO ON THE AGENDA

  • Healey seeks $3M funding boost citing Trump policy shifts
  • McGovern tweets more Trump disdain
  • Casino competition heats up
  • Video: Top fiscal legislators talk about kickoff to budget season
  • State plans security audits as technology broadens government reach

THE BIG DEAL

Healey: ‘New threats’ in federal policy demand more action, funding for AG office

By Andy Metzger

Predicting the federal government will step back from its prior level of enforcement of environmental protections and civil rights, Massachusetts Attorney General Maura T. Healey said her office will see an added workload and will need more money to keep up.

Speaking to lawmakers who control her budget, Healey asked them to increase Gov. Charlie Baker’s recommendation of a roughly $47 million appropriation by about $3 million.

“We’re facing new threats to public safety, and the demands on our office really have never been greater,” Healey said at a hearing of the House and Senate Ways and Means committees, citing the ongoing opiate crisis and policy changes in Washington, D.C.

Sam Doran / State House News Service

State Attorney General Maura Healey spoke to reporters Thursday after she finished testifying before the Joint Ways and Means Committee.

“Whether you’re talking about workers’ rights, consumer rights, the environment [or] civil rights, we are not going to see enforcement like we’ve seen in the past from the federal government, from the federal administration,” Healey told reporters after her roughly 25-minute testimony. “They’ve been very clear.”

Healey and many others decried a Trump administration move rescinding earlier federal guidance to public schools about accommodating transgender students, though the move will not have direct bearing on Massachusetts students.

In his joint address to Congress last month, Trump said, “While we may be a nation divided on policies, we are a country that stands united in condemning hate and evil in all of its very ugly forms.”

The attorney general said she could not quantify with specificity the impact of the Trump administration on her office’s budget, but said “it’s certainly creating demands on our office that we have never seen before.”

President Trump has promised to cut regulations that he says hinder business growth, and has touted a “law and order” approach toward crimes like drug trafficking.

In February, Trump signed an executive order instructing U.S. Attorney General Jeff Sessions to establish a task force focused on “destroying transnational criminal organizations and drug cartels.”

“They have fueled addiction and fatal overdoses,” the White House wrote in a blog post. “They will no longer operate with impunity in this country or this hemisphere.”

Healey acknowledged the U.S. Department of Justice might step up efforts to crack down on criminal drug-dealing syndicates, which is a goal Healey shares.

On Thursday, Healey said the opiate crisis that has galvanized policymakers into action in recent years “hasn’t abated or diminished,” and asked for a doubling of a line-item under her office’s account to address the problem, bringing the funding up to $2 million.

Healey said additional funding would also help her office address “new legal challenges” associated with a new public-records law and “unprecedented issues around marijuana.”

Healey faced questions from four lawmakers on the budget-writing committees, including Senate Judiciary Chairman William Brownsberger, D-Belmont, who asked how many staffers are working on combating the threat of deadly and addictive opioids.

“Not enough,” Healey responded. She said her office has 574 employees, including 268 lawyers, and there is a team of State Police detectives and four prosecutors assigned to the enterprise and major crimes unit, describing the crime-fighting group as a “lean team.”

The Charlestown Democrat, who has repeatedly disavowed interest in seeking the governorship, said there has been an increase in wage-theft complaints, and she said immigrants are particularly vulnerable to being short-changed by employers.

“Our enforcement of wage theft is certainly increasing,” Healey said. “Immigrant workers have always been vulnerable in this area. I think they are feeling especially vulnerable right now.”

Healey said in the first six months of fiscal 2017, the Fair Labor Division sent $879,724 in penalties to the state’s General Fund, which is more than the total penalties assessed the year prior.

A LITTLE BIRDIE …

The political theater of social media, one tweet [or post] at a time.

McGovern’s Trump barrage continues, this time starring Medicaid

LOOKING AHEAD

Tribes offer first look at potential third Connecticut competitor for MGM Springfield casino

The facility pitched by the Mashantucket Pequot and Mohegan tribes in East Windsor, Connecticut, about six miles from the Massachusetts border, is expected to cover 200,000 square feet and include 2,000 slot machines and 50 to 150 table games, according to the tribes.

The rendering from Hartford-based Tecton Architects shows a building bearing the names of both Foxwoods and Mohegan Sun, the two casinos the tribes already operate in Connecticut. The tribes are working together under the name MMCT Venture on the East Windsor project.

In downtown Springfield, MGM Resorts is building a $950 million resort casino that is expected to be the first full casino in Massachusetts when it opens its doors in September 2018. The Massachusetts law legalizing casinos was passed in November 2011.

Connecticut’s campaign for a casino near the Massachusetts border will complicate the MGM Springfield project, financial analysts have warned.

In its rating of MGM last year, Fitch Ratings said the return on investment for MGM Springfield is “less certain given the Connecticut tribes’ effort to build a casino that would cut off the Hartford traffic going north to Springfield.” The Fitch forecast assumes a third of MGM Springfield’s revenue will originate from the Hartford area.

— Colin A. Young

VIDEO OF THE WEEK

Dempsey and Spilka, Ways & Means chairs, discuss initial 2018 budget moves

IN THE NEWS

State plans security audits as technology broadens government reach

State auditors are “beefing up” their capacity to conduct audits focusing on cyber security, an effort that will include a review of how state government uses the so-called “Internet of Things.”

In testimony before legislative budget writers, state Auditor Suzanne M. Bump stressed the importance of secure technology usage, citing statistics from the information technology research company Gartner Group that said the number of internet-connected devices is expected to reach 30 billion by 2020, though only 10 percent of IT security budgets will be dedicated to protecting such devices.

She said her office plans to conduct a multi-agency audit examining the “Internet of Things” — the name given to items like cars, kitchen appliances, televisions and lighting systems that connect to the Internet and collect data.

“Just as the number of internet-connected devices in homes has grown exponentially in recent years, a similar expansion is occurring in government,” Bump said. “However, instead of streaming the latest shows from Netflix or asking Alexa for a weather report, government uses these devices to gather data on traffic patterns, instant pressure readings of water flow in pipelines, and infrastructure repair needs.”

Sam Doran / State House News Service

State Auditor Suzanne Bump testified Thursday afternoon at the Joint Ways and Means Committee’s first budget hearing.

The audit, Bump said, would examine ways to protect internet-connected devices from physical loss and to safeguard the data they contain.

“This is the future, and in Massachusetts we pride ourselves on being ahead of the curve, taking chances to harness innovations,” Bump said.

As an example of the work of her office’s IT audit unit, Bump highlighted a recent audit of the Massachusetts Housing Finance Agency, which she said “identified deficiencies related to the protection of confidential data, oversight of contractors, IT inventory and processes for backing up information.”

Bump asked Beacon Hill budget writers for a $351,350 increase to the $14,358,611 budget her office received this year. Gov. Charlie Baker recommended a $143,586 increase in his fiscal 2018 budget proposal.

The bulk of the extra money would go toward hiring additional staff for the IT audit unit, according to Bump’s office.

At a cyber security conference at Boston College on Wednesday, Harold Shaw, the special agent in charge of the FBI’s Boston Division, called the Boston area a “target-rich environment” for cyber criminals, pointing to its collection of major companies, defense contractors, startups, university-based research and development programs, and the tech sector.

“It will be a daily struggle to stay in front of all the cyber threats that confront us today,” Shaw said.

Baker has said keeping data secure from hackers is one of the things “I lie awake at night worrying about,” and the state has taken steps to foster cyber-security ties with Israeli firms, and devoted research dollars to the subject. Senate President Stanley Rosenberg, D-Amherst, in January said he has considered establishing a task force within the Senate to look at cyber security.

— Katie Lannan

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