United States: FY2016 Massachusetts Budget Update: The Conference Committee Budget

After many weeks of deliberation, the Massachusetts House and Senate sent a budget to Governor Baker's desk. This budget passed the Senate 31-5 and the House 153-1 and represents a compromise between the House and Senate versions, described in previous ML Strategies advisories. A conference committee aimed to resolve discrepancies between the two chambers and in doing so went past the June 31st deadline for the fiscal year. This required a $5.5 billion stop-gap funding measure, which is currently in effect and has kept the state government funded since the end of FY15 on July 1st.

The budget approved by the legislature totals $38.15 billion for FY16 and represents a 3.5% spending increase, lower than the projected 4.8% increase. While this reduced spending rate may surprise some in a year of record tax revenue, it comes after lawmakers struggled to close a $1.8 billion inherited budget deficit. Below, we have highlighted several key areas in this budget that address disagreements between the House's, Senate's, and Governor's initial proposals.

Transportation

  • The legislature has given Governor Baker many of his requested MBTA reform measures, in line with both the House and the Governor's budgets. This includes a three-year suspension of the "Pacheco Law," which required that the state Auditor certify that any privatization plan will save costs without reducing services. Many consider this requirement excessively restrictive. Others believe that it protected jobs. This provision generated the majority of the opposition to the conference budget in both chambers.
  • Also included in MBTA reform is a new five-member fiscal and management control board to oversee the T, which will aim to reduce costs for the transportation system. The legislature, however, adjusted the Governor's proposal slightly to integrate the board with preexisting transportation governance.
  • Other measures in this budget include giving the Secretary of Transportation the ability to hire an MBTA general manager and an increase in the size of the state Transportation Board. A separate transportation bill is also under consideration this session.

Health Care

  • The budget excludes a controversial initiative directing MassHealth, the state implementation of Medicaid, to contract with a health provider to establish an "accountable care organization." This would have allowed MassHealth to contract with a health care network to provide care for a certain population. Hospital networks such as Steward's advocated for the provision as a cost-saving measure, while current health plan providers accused the provision of creating insurance companies without the requirement of carrying insurance licenses.
  • The conferees created an oversight board for the Center for Health Information and Analysis (CHIA). This independent board consists of industry and government stakeholders and matches language in the Senate budget.
  • The budget excluded supplementary funding for "Disproportionate Share Hospitals." This money, which aids hospitals that serve large numbers of uninsured and low income patients, appeared in the FY2014 and FY2015 budgets but was dropped in the Governor's initial budget proposal for FY16.
  • The conference committee excluded language that would have increased income eligibility requirements for home health care assistance. Advocates for this provision, such as Senate Ways and Means Chair Karen Spilka, had claimed the state would save money by reducing nursing home entry rates.
  • Other drug treatment measures in this budget include $3 million for 250 new clinical stabilization beds to treat drug addicts, a bulk overdosing drug purchase program, and two new high schools specifically for youth recovering from addiction.

Education

  • The budget increased local aid by $34 million and education aid by $111.2 million.
  • The budget includes a 4% increase in funding for the University of Massachusetts system, although most believe attendance fees will still increase next year. The budget also allows the UMASS system to directly retain tuition revenue, rather than returning it to the general fund.

Economic Development

  • The Massachusetts Life Sciences Center is funded up to $10 million, down from last year's funding cap of $25 million. The Governor's budget and the House budget originally defunded the Center while the Senate budget funded it to $15 million.
  • The budget includes a provision banning any use of public funds to support the proposed Boston 2024 Olympics without the specific permission of the legislature. Opponents of the Olympic bid claim this provision leaves major loopholes that could end up permitting public funding of the games.
  • The conference committee provided $1.1 million in funding for the Massachusetts Capital Access Program, a successful small business loan program. Over the past 20 years, the program has provided over 5,000 loans to businesses with less than $5 million in revenue.

Tax Policy

  • The film tax credit remains in the budget despite the Governor's push to use those funds to pay for an Earned Income Tax Credit increase. Speaker DeLeo and other lawmakers defended the tax credit as a mechanism for job creation.
  • Despite retaining the film credit, the legislature has opted to expand the Earned Income Tax Credit for low-income families by 23%. They will pay for that expansion by eliminating a never-enacted tax cut for businesses, FAS-109. The Governor supports the legislature's alternative funding method, commenting that "I think that's a good thing and I don't believe it's a tax increase." Business groups such as the Massachusetts Taxpayers Foundation, Associated Industries of Massachusetts, the Greater Boston Chamber of Commerce, and the Massachusetts Business Roundtable have urged the Governor to veto the FAS-109 repeal.
  • The budget empowers the Commissioner of Revenue to institute a Tax Amnesty program in FY2016. This will allow taxpayers with outstanding liabilities to pay their tax debts at face value without the additional penalties that they would otherwise incur.
  • The conference committee rejected the Senate's plan to freeze state income taxes at 5.15%. This mans the tax will drop to 5% in the near future as a result of preexisting laws. The Senate proposal faced legal controversy from the beginning and required a ruling from the Supreme Judicial Court designating the budget a "money bill" so that the Senate could attach tax-related amendments such as this.

The Governor now has 10 days to sign the bill and issue line item vetoes. The House and Senate can then override any of these vetoes with a two-thirds majority vote in each chamber. The state leaders have until July 31st to finalize an FY16 budget before the current interim budget runs out.

* * *

ML Strategies will continue to monitor the budget process and report on the remainder of the process.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Max Samels
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions