House Unveils $38B State Budget, Modest Hike In Spending

Massachusetts House leaders unveiled a nearly $38 billion state budget proposal Wednesday that calls for a modest increase in state spending and offers the troubled Boston-area transit system more flexibility to enter into private contracts.

The House Ways and Means Committee's proposed budget for the fiscal year beginning July 1 would hike overall spending by 2.8 percent, about $100 million less than Republican Gov. Charlie Baker's spending plan.

The budget still needs approval from the full House before moving to the Senate.

Both the governor and lawmakers are seeking to close a $1.8 billion structural gap between projected revenues and spending levels. The Democratic-controlled House followed Baker's lead in calling for no new taxes and no withdrawal from the state's "rainy day fund."

With the massive winter breakdowns that plagued the Massachusetts Bay Transportation Authority still fresh in the minds of lawmakers, the panel proposed offering the T a five-year reprieve from the state's anti-privatization law to give the system more freedom to enter into private contracts.

Often referred to as the Pacheco Law after its sponsor, Democratic Sen. Marc Pacheco of Taunton, the law restricts the ability of government agencies to enter into private contracts for services that were previously provided by public employees.

The committee also called for an independent assessment of the MBTA's maintenance protocols and allows the governor to hire an independent financial consultant to examine the agency.

"What we saw demonstrated over the course of the winter months cries out for a change in the status quo," said committee Chairman Brian Dempsey, D-Haverhill.

A recent report from a special panel appointed by Baker found a "pervasive organizational failure" at the MBTA and recommended that a five-member financial control board be set up to oversee the T for the next several years. While not contained in the budget, that proposal could be taken up separately by lawmakers later this year.

Dempsey also defended the House proposal not to significantly hike spending for the state's higher education system, pointing to past increases and arguing that the more modest increase shouldn't be used as a reason to increase tuition or fees.

"I'd like to hear them say occasionally, they'll look at their expenses and maybe before they jump to raise fees, they'll look at maybe some kind of consolidation," he said. "We all have a responsibility to look at the expense side."

Spending for most government agencies would be kept at the same level as the current year, but the House panel said it was recommending $17 million more for the state's court system than did Baker, eliminating the need for hundreds of layoffs.

Supreme Judicial Court Chief Justice Ralph Gants had complained that the governor's budget did not provide funds necessary to operate the courts in a "safe and effective manner."

The committee also said it was making an additional $5 million available for child care vouchers in an effort to move another 833 children off the state's waiting list for early education services.

Dempsey said the House plan would increase spending on elections after state Secretary William Galvin warned Massachusetts would not be able to hold a presidential primary next year under Baker's budget. Dempsey said the House budget also relies on a slightly higher revenue estimate from the opening of the state's first gambling establishment, a slots parlor in Plainville. The original estimate of $87 million has been bumped up to $105 million.

The $15.3 billion appropriation for the state's Medicaid program is the same as in the governor's budget, with the panel calling for $665 million in savings through eligibility redeterminations and accounting tools. Baker's plan anticipated $761 million in Medicaid savings.

Associated Press reporter Steve LeBlanc contributed to this report.