State House Column

Budget Update.  Last Thursday, the House approved the consensus Conference Committee budget—the Senate did likewise—and the FY11 budget now sits before the Governor.  As final remarks were being made in the House Chamber, word came in that the U.S. Senate had not made the FMAP money available.  Any of it.

Although one of our Senators (Kerry) thought the $687 million in FMAP funds were certain, the other (Brown) disagreed.  Right now, Brown’s right—the money isn’t coming.

What does this mean?  For local communities, there will be no additional effect on local aid and Chapter 70 funds (which already took a 4% hit), though Groveland Finance Director Greg Labrecque did mention to me that reimbursements to municipalities for state owned land got nicked again.  Haverhill, however, will lose about $1.9 million that was ear-marked for the Hale debt.

I voted against the first House budget and against the Conference Committee report.  Why?  Both of them spent money that we didn’t have and both passed up cost-savings proposals that could have saved $100+ million annually.

You can’t spend what you don’t have. And we didn’t have that federal money.

State House Column

The House Always Wins. It’s Day #2 of the Great Massachusetts Gambling Debate and the old adage that the House always wins has never been truer.

Formal session (the voting kind) started yesterday morning at 10 a.m. and finished up last night just before 9 p.m. Representatives are back at it today and, by sunset, the Commonwealth will have a bill that’s sort of similar to what was rejected just two years ago.

What a difference a Speaker – and a little TV time – can make. Legislators who twisted arms against the sins of a casino culture in 2008 went on television to praise it in 2010. Legislators who once locked-arms against gambling with Speaker DiMasi were delighting Speaker DeLeo yesterday by declaring that his legislation was really a jobs bill.

Wow.

The Tea Party on Boston Common. This was not a party for the faint of heart – or for those who enjoy watercress sandwiches without the crust. This was Sarah Palin’s day in Boston and she was greeted by a couple of thousand – supporters and detractors – and some interesting signs. One proclaimed that the holder could see November from his house!

Meanwhile, Under the Golden Dome… In the midst of the gambling debate, House Ways and Means released its proposed operating budget for FY-11. Things were pretty confusing, because the Committee had overall state spending up by 3.2% and local aid down by 4%. Since this seems to be the only time this has happened in 16 state budgets, a little midnight oil will be in order tonight.

State House Column

We’re Back! You are reading the first edition of the State House Column in blog format. This column was originally written for and published in the West Newbury News. It ran for nearly a dozen years. Recently, Ron and Lee Ann Delp closed the paper for the foreseeable future. The Delps gave the State House Column its beginning, and social media will provide its future.

A Hand Up or a Hand Out? A lot has been written about the $35 million dollar bond authorization bill for the city of Lawrence. My comments on the issue can be found in the Eagle-Tribune story here.

Basically, the intent of the Lawrence legislation is to allow the city to borrow upwards of $35 million, with the state being the guarantor for what Lawrence borrows. This means that all Massachusetts taxpayers would be liable for the debt in the event the city defaults. Because the possibility of a default exists, I think that the entire Commonwealth – not just the residents of Lawrence – has a stake in this legislation. That is why I argued for strong outside fiscal oversight.

There was also a personal angle. About 25 years ago, as an investment banker, I worked on a “special” financing for Lawrence. (It was “special” because the city had so many financial issues that no one would buy their bonds.) The Commonwealth had to get involved then, too, and not much has changed. Giving Lawrence another hand-out is not really the answer.

Casinos Back “On the Table.” It’s true. With the exit of former Speaker Sal DiMasi – long a gambling opponent –Massachusetts may become a casino destination. Honestly, It’s a proposal I’ve been on both sides of but every bill is different.

Win, lose or draw on this proposition, the Commonwealth still needs to consider how to spur the growth of innovative long-term (and good paying) jobs. Casinos offer more of those jobs than slots, but the Commonwealth needs every job it can get right now.

The 2011 Budget. The House is coming out with its own version of the state budget in mid-April. The Governor’s budget proposal sought to level fund local aid. But, as I emailed constituents, the Governor’s level-funding was based on projected revenue growth during the coming fiscal year, (very) high estimates of federal stimulus aid and additional taxes. While the Commonwealth may luck out on one of these, all three are unlikely to occur. After a controversial sales tax hike last year, the House won’t pursue increased taxes this year. (Which is good, because I wouldn’t support them.)

Latest estimate? A 4% cut in both local aid and Chapter #70 educational funding. Why? Not because legislators want to cut either account. Because the state’s tax revenues aren’t enough to level fund.

Holding The Line on Health Care. As the House Chair of the Health Care Financing Committee, I’ve spent a lot of time looking for ways to bring the annual (exponential) growth in health care costs under control. The emerging Massachusetts plan to rein in costs is a lot different than what is currently under consideration in Washington D.C.

This week, there were major hearings on the Massachusetts version of the issue and two factors emerged as culprits: medical price-inflation and the fee-for-service (FFS) system. Medical price inflation is about 3X regular inflation, and the FFS system often times drives over-testing and greater costs. What is currently being discussed on Beacon Hill is the potential for “global payments.” Global payments are a kinder and gentler form of capitation. You can read about the ongoing debate, as well as the differences between fee-for-service and global payments, here.