Week Ending May 20, 2011
Senate Committee on Ways and Means Releases Budget
On Wednesday, the Senate Committee on Ways and Means released its $30.5 billion FY2012 budget, which is within a few million dollars of the budget passed by the House and proposed by Governor Patrick earlier this year. The Senate’s recommendations require $1.5 billion in spending cuts from FY2011 levels, $440 million in non-recurring revenues and $209 million in rainy day funds to close the deficit. Amendments to the budget are due at noon today and debate is expected to begin on Wednesday, May 25th. Last month the House approved their own version of the $30.5 billion budget bill, which contained cuts across almost every line item.
Municipal Health Reform Included in Senate Budget
The Senate included municipal health reform as part of the Senate budget process by offering a proposal that would give unions a larger negotiating role than in the House approved plan, while maintaining $100 million in health care cost savings. The House approved a plan last month as part of the budget that would give municipalities more autonomy in designing health insurance plans, including the setting of co-payments and deductibles, and limit collective bargaining. The House plan enraged public employee unions, who vowed that Democratic members who voted in support would face political consequences. The Senate version establishes that if an agreement between labor and management cannot be met on health care issues, then a three member committee must be established to continue negotiations. In compassion to the House plan, the Senate proposal increases the time for negotiation from thirty to forty days and sets aside 33% instead of 20% of first year savings that can be used to mitigate the impact on municipal health care subscribers. Public employee unions issued a more measured response to the Senate’s proposal. Given the differences between the House and Senate proposals, this matter will be subject to conference committee negotiations before the budget is finalized.
Committee Holds First Hearing on Governor’s Payment Reform Legislation
On Monday, the Joint Committee on Health Care Financing listened to testimony for six hours on Governor Patrick’s health care payment reform bill. The Governor’s bill, HB 1849, An Act relative to improving the quality of health care and controlling costs by reforming health systems and payments, would move Massachusetts away from a fee-for-service model of payment and towards an integrated patient care model that creates incentives for doctors and hospitals to focus on preventive medicine and global health outcomes. Governor Patrick and members of his administration testified, along with health care providers, insurers, and consumer and public health advocates. Among the concerns raised were over-regulation of the health care industry, concerns about jobs losses, consolidation of providers and increased market power and loss of market innovation. The Committee on Health Care Financing will hold a series of hearings on this bill across the state over the next two months. Speaker DeLeo said earlier this year that he expects action on this issue to be completed before the end of the two year legislative cycle.
Court Reform Bill Passes Unanimously in the Senate
Following the passage last week by the House of HB 3395, which would reorganize the Massachusetts Trial Court and reform the Probation Department, the Senate on Thursday voted unanimously to pass the bill with some changes. A Boston Globe series on alleged corruption and a report last year by an independent counsel detailing hiring patronage precipitated the bill’s passage. Neither the House nor the Senate version included the Governor’s proposal to merge the probation department into an agency within the executive branch and instead leaves the agency as part of the judiciary. The bill will now go to conference committee to resolve the differences between the House and Senate versions.
Massachusetts Unemployment Below 8% for First Time in Two Years
Unemployment in the state was down .2% in April to 7.89%, according to a Patrick Administration jobs report. Massachusetts gained 19,500 jobs last month, as the statewide unemployment rate fell below 8% for the first time since 2009. The highest gains were in the accommodations and food services sector, which added 6,400 jobs.
Tax Collection Figures for first half of May Released
Following last month’s dramatic increase in tax revenues, on Wednesday the Massachusetts Department of Revenue released the tax collection figures for the first half of May. The state collected $61 million less during the two week period compared to one year earlier. According to Navjeet Bal, the state revenue commissioner, she attributed the decrease to processing and timing factors and said that the large surplus in April appears to have been borrowed from May. Previous supplemental budget spending this fiscal year has erased much of April’s benchmark gains in revenue.
John Nunnari, Assoc AIA
Executive Director, AIA MA
MA Chapter of American Institute of Architects
The Architects Building
52 Broad Street, Boston MA 02109-4301