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Health care, education consume 63 percent of planned state budget

With the Medicaid program, subsidized insurance under the 2006 health care access reform law, and investments in state employee health insurance and public health programs, health care spending this fiscal year is on pace to rise to 43 percent of the overall state budget, according to an analysis of the spending bill being reviewed by Governor Deval Patrick.

One in five Massachusetts residents will have their health care largely covered through the budget, and taxpayer-
supported health care costs next year will gobble up most of new discretionary state revenue, hitting $15.14 billion, up from $14.65 billion.

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But education accounts will also get a big boost, according to a Massachusetts Budget and Policy Center analysis of the budget that lawmakers agreed to last week.

While lawmakers and the Patrick administration have ­described fiscal 2013 spending plans ranging from $32.4 billion to $32.5 billion, the center’s analysis estimates total state appropriations and transfers at $35.229 billion. Center officials say the higher figure reflects revenues collected and spent on transportation, school construction, public employee pensions, and health care based on directives that carve out such spending before deliberations on the rest of the state budget begin each year.

Patrick has until July 8 to sign the budget and announce his vetoes and amendments.

The center provides independent research and analysis of state budget and tax policies. Northeastern University Law School professor Peter Enrich chairs its board, which includes former governor Michael S. ­Dukakis, American Red Cross of Eastern Massachusetts chief executive Jarrett Barrios, Community Catalyst executive director Robert Restuccia, and former revenue commissioner Navjeet Bal of Nixon Peabody.

Aside from a proposed $546 million increase inMedicaid and health care reform, the fiscal 2013 budget, approved last week by the House and Senate, proposes $6.95 billion for education, up $302 million.

Most of the increased education spending, or $238 million, is targeted for the K-12 education system, with higher education in line for an increase of $58 million, and early education and care spending scheduled to fall to $500 million, from $507 million.

Together, proposed state spending on health care and ­education in fiscal 2013 will ­approach $22.1 billion, about 63 percent of all state spending.

But even with the 5.3 percent increase in spending on Medicaid, budget managers will need to secure about $500 million in savings to balance the budget next year. The savings, with spending cuts and $615 million in temporary revenues, are needed to close an ­estimated $1.3 billion gap ­between available revenue and projected state spending.

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