Speaker DeLeo: No New Taxes In Mass. Budget

Massachusetts Speaker Robert DeLeo says the House of Representative's proposed budget for the next fiscal year will not rely on any new taxes or fees.

"For the past two years, this House has rejected balancing the budget with new taxes and fees," he said. "Any changes to revenue policy should be approached with extreme caution and should never be done piecemeal. As such, we will release a budget ... that does not rely on new taxes and fees."

DeLeo's comments, made in a speech to House members on Wednesday, appear to deal a blow to Gov. Deval Patrick's plan to raise new revenues — worth more than $120 million — by hiking the cigarette tax 50 cents a pack and applying the state sales tax to candy and soda.

In a statement, the Patrick administration said none of the governor's proposals would hurt economic competitiveness, and that the extra revenue would help avoid cuts in education, safety net funding and local aid.

The speaker outlined priorities for the remainder of the two-year legislative session during his address.

DeLeo said he believed "broad agreement" could be reached on a plan to reduce health care costs in Massachusetts. He did not specifically endorse Patrick's plan for creating a global payment system to replace the current fee-for-service approach to paying for health care.

He did back Patrick's call to reform and unify community colleges.

"With greater coordination and support these institutions can be an even more vibrant and integrated component in our overall workforce development system here in the commonwealth," DeLeo said.

With reporting by The Associated Press and the WBUR Newsroom

-- Here's DeLeo’s address, as prepared for delivery:

Members of the House, welcome. I thank you for giving me this time to talk with you today.

But before we begin, on behalf of the House of Representatives, I’d like to extend my condolences to the families of two public servants we recently lost – Mayor Kevin White and Governor’s Councillor Kelly Timilty.

More than three years ago, you chose me to lead this House. I want you to know that I appreciate that honor as much now as I did then.

And, as we gather, I’d like to recognize one of our members who has returned to us recently after serving in the Army in Iraq. Representative Jerry Parisella. Welcome home. Rep. Parisella, Chairman Vallee and Chairman Naughton, who is currently serving in Afghanistan, and former Representative, now Senator Rush, are all citizen-soldiers, who have made numerous sacrifices for our nation.

This House embodies public service. Even in the toughest times, the fourth year of the worst financial downturn since the Great Depression, you have demonstrated a remarkable record of achievement and commitment to the public good.

The steps we have taken as a legislature have insulated our Commonwealth from the more dire conditions other states have experienced. In Massachusetts, there have been no lawsuits between the different branches. In Massachusetts, we have delivered our budgets on time and remained committed to fiscal stability as evidenced by our strong stabilization fund. As other states and nations have seen their credit standing falter, we have seen Standard and Poor’s increase our bond rating to the highest point in the state’s history, AA+.

We should all be proud of our work.

Massachusetts stands as a remarkable example of cooperation and partnership. We have worked together as a House. As a body, the House has worked with the Senate, and as a legislature we have worked with the governor to get things done.

Our success stands in direct contrast with the goings-on in Washington where too often progress is obstructed by political gamesmanship. And we don’t want that to
happen here.

Our work has won national acclaim. Look no further than last year’s municipal healthcare reform, which is expected to save far more than $100 million for cities and towns annually. When Governor Patrick signed the bill last summer, union leaders stood with municipal officials and good government advocates alike. This action will save the jobs of fire fighters, police, teachers and DPW workers in the cities and towns of our Commonwealth.

Our pension reform will save $5 billion over the next 30 years.

Our gaming legislation will generate thousands of jobs and hundreds of thousands of dollars in annual revenue in the years ahead and help to address what is referred to as “the blue collar depression.”

We have also turned our attention to restoring public trust on Beacon Hill. Our redistricting plan has won the praise of advocacy groups, public officials and the press because of unprecedented transparency and public involvement. We passed a Judicial Reorganization and Probation Reform plan that received the support of Chief Justice Roderick Ireland and other justices of the Supreme Judicial Court as well as good government advocates.

Even as we’ve begun our new initiatives to close the achievement gap, we remained the number 1 state in the nation as determined by the National Assessment for Educational Progress, the so-called “nation’s report card” which tests students across the nation. We are widely recognized as a national leader and are at the top at promoting educational success for our students.

We are justifiably proud of our accomplishments but this is no time to rest: We must work to maintain our competitive edge.

I hear time and time again from business leaders that predictability and consistency in the tax code are what’s most important. For the past two years, this House has rejected balancing the budget with new taxes and fees. Any changes to revenue policy should be approached with extreme caution and should never be done piecemeal. As such, we will release a budget from the House Committee on Ways & Means that does not rely on new taxes and fees.

In the midst of our relative success in weathering the recession, I have noticed developments that drew my attention and offer opportunities for improvement.

As I meet with business leaders across the state, increasingly I am hearing about us losing the innovation battle to other states. Too often, I’m learning that our innovators and entrepreneurs are packing-up and leaving. I don’t like seeing Massachusetts finish second to any other state.

I was struck with a sense of lost opportunity, when I heard comments from Mark Zuckerberg, the founder of Facebook, saying if he had it to do over again, he would have kept his innovative company in Massachusetts.

Think of it.

This is a company with $3.7 Billion in annual revenues and recently announced plans for what is sure to be a multi-billion dollar initial public offering and it could have been based in our state.

We must do everything we can to create the most competitive economic climate. To Mark Zuckerberg, and other leaders of new companies, we want you here. And for those who are starting companies in Massachusetts, we want you to stay. In this legislative session, I will look to find opportunities to create a friendlier, better climate for the creation of new jobs.

Whether it’s blue-collar jobs, life sciences, green jobs, or manufacturing, our focus has been and will remain on growing employment opportunities for our residents. Just as in 2010, when we reorganized our economic development agencies through a measure that streamlined the system and saves taxpayers millions of dollars every year, we will continue to focus on legislation that promotes economic growth, strengthens our fiscal stability and creates good jobs throughout the Commonwealth.

In this session, we will pursue policies to maintain Massachusetts’ competitive edge in the innovation economy and continue to attract the investment and jobs that come with it. And we must continue to prepare our students to fill those jobs by strengthening our commitment to education in the STEM fields of science, technology, engineering, and math.

We can also generate new investment by continuing to make it easier for businesses to start, locate, and expand here. Massachusetts has successfully nurtured new economic activity by pioneering innovative approaches to development and public infrastructure improvements. We will build on that success by exploring new ideas that promote growth and improve public services. And for businesses already committed to growing here, we will make it easier for them to recover from the recession and get their projects back on track. By facilitating new development, we can create jobs across industry sectors, across pay scales, and across the Commonwealth.

As we pay attention to start-ups and the innovation economy, we also are focused on the workforce of the future. We in the House have long believed that we can do a better job of making sure our community colleges address the needs of potential employers.

That said, we know that community colleges are important gateways for the student who is in pursuit of a four-year degree. Thanks to an innovative transfer compact, universities, such as Salem State, routinely accept credits for students who have attended community colleges. Others, such as UMass-Lowell, in turn, recruit and welcome students who receive the pre-requisites at community colleges.

I have also long recognized community colleges as an important piece of our state’s ability to attract and retain employers. Community colleges can build on their existing relationships with our state university system as well as their own capacity to prepare individuals with skills to support our existing and emerging industries. With greater coordination and support these institutions can be an even more vibrant and integrated component in our overall workforce development system here in the Commonwealth.

Because of the important role community colleges play in workforce development, we designated $45 Million of gaming revenue to support colleges in this work. In addition, we designated approximately $20 Million-per-year in annual revenue for higher education.

We look forward to working with the business community, educators and Administration to achieve our goals.

These funds can support and build upon the ongoing work of our colleges with employers such as General Electric, Raytheon and Partners Healthcare to prepare students for the demands of the workplace by meshing hands-on training with classroom instruction.

As I meet with small businesses across the state, I frequently hear about the high cost of health care. I remain committed to reforming our health care system. Last year, I asked Chairman Steven Walsh and members of the Committee on Health Care Financing to travel the state, visit providers in our communities, meet with health plans, and, most importantly, actively engage consumers to develop a well thought-out plan we can all be proud of.

Signs are encouraging. Already the market is responding. Health insurers are forging agreements with health care providers to cut costs.

And we can do more.

We can, I believe, reach broad agreement to significantly cut the cost growth of our health care sector while improving upon our already extremely high standards of quality-care and innovation. We will continue to monitor the market disparity between our large providers and those in your neighborhoods that are offering low-cost high-quality care and we will thoughtfully implement the most appropriate mechanisms for balancing out the system. More importantly, we will build on existing "system-transparency and disclosure-initiatives" in order to provide consumers with all of the information they will need.

Health care is extremely personal. When we are at a time of need, we want to make sure we are able to get the very best care available. That will not change under any plan offered in this House. Nevertheless, we have to find ways to reward quality and efficiency and make sure our system is sustainable for years to come.

There is no question that the past years have been challenging. But you, the members of the House, have risen to the challenge. You have helped Massachusetts outpace the nation. In the coming weeks, we will all be challenged again. Once again, I am confident, that we will meet that challenge and thrive.

God Bless the House of Representatives, the Commonwealth of Massachusetts and the United States of America.

Thank you.