Budget Accord Relies On $73M In Casino Licensing Fees

House and Senate leaders reached compromise Sunday on a $36.5 billion state budget for the fiscal year that starts Tuesday, but a Senate effort to expand the state's bottle redemption law and avoid a summer and fall ballot campaign did not make it into the final spending package.

The budget, which exceeds the estimated 4.9 percent revenue growth assumed when lawmakers built their original spending plans, also counts on $73 million in casino licensing fees and slot parlor revenues that could disappear in November if voters repeal the state's casino gambling law.

The agreement "strikes a careful balance between making vital investments in our commonwealth and continuing our practice of fiscal responsibility, which has served us well through challenging financial times," said House Ways and Means Chairman Brian Dempsey, a Haverhill Democrat.

The House and Senate have plans to meet Monday to ratify the agreement (H 4242), but with Gov. Deval Patrick leaving in the afternoon for Panama the new fiscal year will start without a formal budget in place. The governor has 10 days to review the spending plan once it arrives on his desk. Lawmakers last week approved a $4.6 billion interim budget to keep government running through July.

The House also plans on Monday to take adopt a welfare reform bill and take up a compromise, also reached Sunday, on compounding pharmacy legislation and a Senate bill to make substance abuse treatment more readily accessible.

Dempsey, in an interview, said negotiators were able to afford the increase in the bottom line — which surpassed spending approved by the House and Senate — by banking on increased one-time tax settlements and additional Medicaid and Group Insurance Commission revenues from new communities joining the state-administered health insurance program.

The budget also counts on $35 million in revenue from a tax amnesty program that affords scofflaws a window next year to pay back taxes without facing penalties, of which $5 million would be dedicated to substance abuse treatment.

Senate Ways and Means Chairman Stephen Brewer said in a statement that the budget "reduces the reliance on one time revenues, invests in new solutions to combat the issue of substance abuse, and delivers historically high levels of local aid to our cities and towns."

All six conference committee members, including Republicans Rep. Viriato deMacedo and Sen. Richard Ross, signed off on the deal. Rep. Stephen Kulik and Sen. Jennifer Flanagan were the other conferees.

On the policy front, the budget would for the first time allow for direct shipments of up to 12 cases of wine a year from out-of-state vineyards to Massachusetts wine drinkers.

After the House and Senate last week came together to pass legislation setting nurse staff ratios in intensive care units as part of an effort to head off a ballot question in November, the same type of agreement could not be reached to expand the bottle bill to include water and sports drinks.

The Senate slipped a bottle bill expansion into its version of the budget passed in May.

"I think we continue to have concerns about some of the issues relative to the bottle bill, in terms of the issue of it being really a fee. The speaker has expressed that as a concern so we just couldn't get there," said Dempsey, who noted that another consideration in leaving in out of the budget were the ongoing conversations of a special legislative task force exploring a deal on the issue.

Both the House and Senate had also counted $73 million in gaming revenues, including $53 million from casino licenses and $20 million in slot revenue. The Supreme Judicial Court last week gave the green light to a ballot question repealing casino gaming that could wipe those funds away.

"We're certainly aware of the events and will continue to monitor that. Should there be changes necessary we will revisit that collectively to address the issues depending on what happens," Dempsey said.

The budget accord, which is not subject to amendment, includes $18 million in new funds for substance abuse prevention education and treatment programs, including $10 million for a new trust fund that lawmakers said would provide services for 10,000 residents addicted to drugs.

House and Senate lawmakers also poured $15 million in new spending into early education to reduce wait lists for low-income families, and adopted many of policy recommendations made by the Child Welfare League of America to reform the embattled Department of Children and Families, including licensing for social workers.

The budget relies on $140 million in "rainy day" fund reserves, and boosts state contributions by $163 million to speed the process of covering the state's unfunded pension liability by 2036.

Other spending highlights include a $25.5 million increase for municipalities in unrestricted local aid, full funding at $257.5 million for special education and $70.3 million for regional school transportation to provide a 90 percent reimbursement rate for cities and towns.

The budget also includes $65 million for rental vouchers to expand the program to new families and a $21 million increase for state universities and community colleges. While the University of Massachusetts has agreed to freeze tuition and fees based on its budget appropriation, leaders of other public campuses asked for more funding that they did not receive in order to also guarantee costs would not rise for their students.

Dempsey said the cost of college continues to be a concern, and said lawmakers will work with college leaders to reduce costs and improve efficiency.

"It's the second consecutive increase and it demonstrates our ongoing commitment to higher education," Dempsey said. "Certainly they were looking for more. We're pleased to hear UMass has committed to not increasing tuition and fees, but community colleges had different views. Certainly it's a concern but we have to find balance and continue to look at the expenses side of the equation as well."

A panel of lawmakers negotiating legislation since last year to further regulate compounding pharmacies also announced a breakthrough on Sunday. The issue leapt to the forefront of the policy agenda in 2013 after a deadly national outbreak of meningitis was traced to a pharmacy in Framingham, but talks to reach compromise between the branches stalled.

The deal (H 4235) calls for the Board of Registration in Pharmacy to establish four new specialty licenses for retail sterile compounding pharmacy, retail complex non-sterile compounding, and institutional pharmacy license to apply to hospitals and an out-of-state pharmacy license for those doing business in Massachusetts.

Inspectors would be required to conduct planned and unplanned inspections of all licensed compounding pharmacies in the state, and out-of-state pharmacies must participate in the state's Prescription Monitoring Program.

To honor Brewer, who plans to retire from the Legislature at the end of the year, senators during their budget debate voted to make the Barre history buff the official reenactor laureate of the Commonwealth. Dempsey said the gesture was not included in the final budget at the request of Brewer himself.