July 23, 2017

On Beacon Hill: Signed, sealed and delivered

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Sam Doran / State House News Service

ONWARD: "It's moving day," former Rep. Brian Dempsey chuckled on Thursday as he and his former staff lugged boxes out of the House Ways and Means office. Dempsey is bound for a top post at lobbying firm ML Strategies.

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

BOSTON — A budget, a pot bill and a shuffle of House leadership. Teary goodbyes, promotions and demotions. Take a deep breath, it’s finally the weekend.

House Speaker Robert DeLeo opened the floodgates early last week when he announced he had chosen a successor to Brian Dempsey as Ways and Means chairman, though not necessarily a successor to DeLeo’s long-held speakership.

The call to the bullpen went to state Rep. Jeffrey Sánchez, a Jamaica Plain Democrat and the first Latino to hold the powerful position in the House. In time, and if history serves, Sánchez could one day become a contender for the throne, but for now he’s meeting staff and worrying about how to handle Gov. Charlie Baker’s budget vetoes — $320 million, to be exact.

Baker signed a $39.4 billion spending bill for fiscal 2018, striking $42 million in local earmarks and revising revenue projections downward by $749 million, below the mark  — 1.4 percent — legislators had agreed would be sufficient in light of sluggish growth over the past year.

Antonio Caban / State House News Service

Gov. Charlie Baker

Perhaps most significantly, Baker returned a $200 million assessment on employers — his idea in the first place — with a summer reading assignment for lawmakers. The governor said he wanted the assessment, which many prefer to call a tax, packaged with reforms to MassHealth eligibility that were laid aside by legislative budget negotiators. And he wants it in the next 60 days.

How to proceed now will likely be decided by a triumvirate of DeLeo, Sanchez and Rep. Peter Kocot, D-Northampton, and they’ve scheduled hearings on the issues this week.

House members arrived at the State House Monday prepared to ratify Sánchez’s appointment to lead the budget-writing committee, and most seemed supportive of the selection. But Sánchez’s elevation meant a line of dominoes would fall behind him, and for at least one representative, the news wasn’t good.

Kocot, the gentle giant from Western Mass., took over the Health Care Financing Committee from Sánchez and will work together with the new budget chief to respond to Baker’s budget amendment on MassHealth.

Caught in the dust cloud of rotating chairpersons and newly minted vice-chairpersons, Rep. Russell Holmes, D-Mattapan, the immediate past chairman of the Black and Latino Caucus and vice-chairperson of the Housing Committee, found himself without his post in leadership.

Holmes had the temerity to suggest that with Dempsey gone, more liberal factions of the House should have a conversation about who the heir-apparent to DeLeo should be, and even prepare for a speakership fight in 2019.

That apparently did not sit well in the speaker’s office, and few were buying DeLeo’s insistence that Holmes’s demotion had nothing to do with his comments, but rather teamwork and chemistry.

Rather than quiet Holmes, the speaker’s punitive action only seemed to embolden the legislator as the week wore on. “If they believe that, then call me because I have a bridge in Brooklyn that I want to sell them,” Holmes said, incredulous about DeLeo’s explanation.

While representatives contemplated their place in the new House depth chart, the six House and Senate negotiators working on a pot law compromise retreated to the private confines of the Members Lounge for the last time to sign a deal that will raise the tax on retail marijuana to 20 percent and create a new structure for regulation and local control over pot stores.

— Matt Murphy

ALSO ON THE AGENDA

  • Legal marijuana law awaits Baker signature
  • Chang-Diaz and Forry on pot, McGovern on #NoKidHungry, Healey on DACA
  • New Ways and Means chairperson pledges ‘thoughtful’ approach to MassHealth
  • Watch: DeLeo and Sánchez on historic chairmanship
  • Final tally: Tax revenues leave $431 million hole in fiscal 2017

LOOKING AHEAD

Legal marijuana law awaits Baker signature

After opposing a legal marijuana ballot question for much of 2016, Gov. Baker is now all that stands in the way of the industry’s full-scale retail launch in Massachusetts in 2018.

The Legislature finally got the marijuana bill off its back recently, and Baker and his team are looking it over. The governor, who is headed out of state through Wednesday, is expected to sign the bill.

He’s placing the will of the voters ahead of his own beliefs, but it’s possible he could seek to amend it. Baker took issue last November with the construction of the ballot question to legalize marijuana use. “It was written by the corporate recreational marijuana industry, for the corporate recreational marijuana industry,” he said before Election Day.

“Even people who have said they theoretically support the idea behind the question have said they think the question’s a mess,” Baker added.

Given the governor’s strong feelings on the topic, it will be interesting to see whether he quietly signs the bill or holds some type of ceremony to mark the landmark legislation, which augments the voter law approved in November.

Baker’s communication director, Lizzy Guyton, said Friday the governor was still reviewing the legislation. “Governor Baker appreciates the Legislature’s work on this bill and will carefully review it in the coming days,” she said.

A LITTLE BIRDIE …

Chang-Diaz, Forry trumpet less-heralded benefits of legal pot bill

McGovern on #NoKidHungry

Healey among 20 AG’s to back DACA

NOTED

Sánchez, new Ways and Means chairperson, pledges ‘thoughtful’ approach to MassHealth

Three days after Gov. Baker issued a MassHealth policy challenge, the new chairperson of the House Ways and Means Committee on Thursday declined to outline a path forward on the issue, saying he needs to talk to committee staff first as he adjusts to his new role.

Rep. Jeff Sánchez, during an appearance on Boston Herald Radio, said he intends to work cooperatively with Baker and Senate leaders and wants to hear feedback on Baker’s MassHealth changes from legislators and outside stakeholders.

“We have to be really thoughtful about how we go about this,” the Jamaica Plain Democrat said. “This is lives. These are people’s lives at stake, and we want to know we’re careful.”

Sam Doran / State House News Service

State Rep. Jeffrey Sánchez emerged from a Democratic caucus on Monday afternoon as chairperson of the powerful House Ways and Means Committee.

Baker on Monday returned new employer health care assessments and proposed unemployment insurance rate relief to the Legislature, telling members he’ll take corrective action on the budget if they don’t act within 60 days on a package of reforms that he said will make the costly MassHealth program more sustainable.

According to the Massachusetts Taxpayers Foundation, Baker vetoed nine of the budget’s outside sections and $320.3 million across 169 line items, including $202 million related to the MassHealth changes he proposed in June. The net impact of the vetoes, after accounting for federal revenues, is $193 million, according to the foundation’s analysis.

“If history is any guide, many of these vetoes will be overridden in the months ahead, as since FY 2012 almost 90 percent of all spending vetoes have been overridden by the Legislature,” the foundation wrote. “The more spending overrides, however, the greater the midyear budget cuts.”

Sánchez, who was named chairman Monday after former House budget chief Brian Dempsey’s sudden resignation to pursue a lobbying job, said Baker has an “ambitious agenda” and the Legislature has “been thoughtful with him.” Before making any decisions on overriding Baker’s vetoes, the new chairman said he wants to hear from his new committee staff and meet with Speaker DeLeo to figure out how to move forward.

“There’s so much that you have to learn,” Sánchez said, citing the learning curve that comes with his new position. He said he wants to hear from Ways and Means committee staff about “their direct understanding of the budget, the process, the principles that they’ve worked on in this past budget process.”

Sánchez was formerly the chairperson of the Health Care Financing Committee and before that helmed the Public Health Committee.

— Katie Lannan

VIDEO OF THE WEEK

DeLeo and Sánchez discuss historic chairmanship

IN THE NEWS

Final tally: Tax revenues leave $431 million hole in fiscal 2017

State tax collections for the fiscal year that ended June 30 rose only 1.4 percent from fiscal 2016, but were up 3.1 percent in June compared to June 2016, the Department of Revenue reported on Friday.

Final fiscal 2017 collections fell $431 million below budget benchmarks, contributing to state budget adjustments that Gov. Baker has been making in recent months and that are continuing into fiscal 2018, which began July 1.

Massachusetts Revenue Commissioner Michael Heffernan offered a bullish take on the state’s fiscal picture.

“We saw solid year-over-year increases in withholding and in sales and use tax revenue. These results indicate continued growth in the economy,” Heffernan said in a statement. “The categories of estimated payments, payments with returns, and corporate and business taxes, which are most prone to volatility, were down year-over-year and generated the FY2017 shortfall. We will continue to closely monitor those categories.”

Sales and use tax collections of $6.209 billion were $19 million, or 0.3 percent, above benchmark and $155 million, or 2.6 percent, greater than fiscal 2016. Withholding collections of $11.970 billion were $20 million, or 0.2 percent, above benchmark and $543 million, or 4.8 percent, more than 2016.

Heffernan was named this week by Gov. Baker to serve as the state’s next budget chief, taking over from Kristen Lepore as she transitions into the governor’s office as chief of staff, replacing Steve Kadish.

— Michael P. Norton

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