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Legislature, Governor Lurch Toward Budget, Tax Resolution

Posted on July 3, 2013

The Massachusetts Legislature and Governor Deval Patrick lurched toward final approval yesterday of a $34 billion state budget for the fiscal year that began Monday and a $500 tax package required to fund that budget.

Massahcusetts State BudgetThe Fiscal Year 2014 spending blueprint includes several measures affecting the cost of health insurance ” it eliminates the Fair-Share Assessment created under the 2006 state health reform, drops the requirement that employers collect and retain the Health Insurance Responsibility Disclosure (HIRD) form, and replaces the current $67.20 per employee contribution to the Medical Security Trust Fund with a $50 per employee contribution to fund subsidized health care.

The measure also appropriates $2 million for the Massachusetts Manufacturing Extension Partnership.

Governor Deval Patrick has 10 days to consider the budget, which passed Monday after largely party-line votes in the House of Representatives and Senate.

The governor yesterday rejected and sent back to the Legislature the $500 million transportation finance bill because he believes it does not include enough revenue to fix the commonwealth’s roads, bridges and public transit systems. The governor proposed that the finance package, which increases the state gasoline and cigarette taxes and imposes a levy on software services, also boost the gas tax at least three additional cents beginning in 2017 when the tolls on the western portion of the Massachusetts Turnpike are set to come down.

House Speaker Robert DeLeo and Senate President Therese Murray immediately declared the governor’s proposal dead on arrival. The Legislature is expected to vote on the bill with the changes proposed by Patrick after the July 4 holiday.

Associated Industries of Massachusetts has maintained throughout the debate that lawmakers should fund transportation improvements with transportation-specific sources of revenue rather than business taxes such as the one on computer software. The association nevertheless believes that the legislation passed by the House and Senate takes positive steps toward fixing the transportation system without crippling increases to the income tax or other broad-based levies.

“Last week, the Legislature passed a carefully calibrated revenue proposal that solves long-standing financial problems within the transportation system,” Murray and DeLeo said in a statement.

“The administration’s proposal tying the question of tolls in Western Massachusetts – a plan not even mentioned in its original bill – to a 4 cents gas tax increase places too high a burden on the taxpayers of our state. This threatens working families and businesses still fighting to overcome the financial downturn. Therefore, we will ask our respective chambers to reject the administration’s proposal.”

Elimination of the Fair Share Assessment and the HIRD form were priorities of the AIM Health Policy Committee.

“We’re delighted that the Legislature included these items that will have an immediate benefit for employers struggling with the high cost of providing good health insurance coverage to their employees,” said William Grant, Chair of the Health Policy Committee and Chief Financial Officer at Cummings Properties in Woburn,

House Ways and Means Committee Chairman Rep. Brian Dempsey said lawmakers have been prudent about rebuilding the state’s reserves after the recession.

Dempsey said the spending plan would leave Massachusetts with more than $1.5 billion in its stabilization account at the end of fiscal 2013, making it one of just four states with more than $1 billion in its rainy day fund. He said the Legislature also approved the first increase in unrestricted local aid for cities and towns in five years, and made investments in early education and elder care to reduce waiting lists for pre-school and home care services.