Can the state’s business groups persuade the Legislature to shut off its shiny $300 million spigot, now that the money flows like water?
The Legislature adopted new assessments on businesses, ostensibly to help keep up with the state’s Medicaid costs, in mid-2017. The promise: These surcharges would last only two years, with a hard stop at the end of 2019. It was a pledge written in statute. But few business advocates are taking that sunset date for granted.
In fact, Associated Industries of Massachusetts just said it will make a push to end the new surcharges immediately, with the employer group arguing that they have brought in far more than expected already. The projections in 2017 called for $200 million in revenue annually, for two years. But roughly $300 million flowed into the state’s coffers in 2018 from the assessments.
AIM executive vice president Chris Geehern says the group is dead serious. The Legislature received a big windfall, and the MassHealth enrollment increases that state officials once used to justify the assessments have leveled off. (State officials say nearly 1.9 million people were enrolled in MassHealth, the state’s Medicaid program, in the last fiscal year.) AIM’s leaders, like those at several other business groups, also still feel kind of burned that the House and Senate never took up meaningful MassHealth reforms.
However, AIM’s legislative proposal sure looks like a long shot today. The language might be simple, but the politics are complex. Something like this takes time.
The new chief budget writers for the House and Senate haven’t even been named yet. And when the lucky Ways and Means chairs finally get their assignments, they’ll likely be consumed by budget deliberations. That annual ritual usually lasts until the end of June, at least. By the time the state’s new spending plan is done and dusted, the end of 2019 won’t seem so far away.
Of course, lawmakers might instead start talking about ways to keep the assessments alive past Dec. 31. That scenario already has many business advocates worried.
Geehern says the AIM bill isn’t meant as a ploy to give businesses a bargaining chip if that happens. But having that bill on the table sure could help when it comes time to negotiate.
While no one expects Governor Charlie Baker to include an extension in his upcoming budget proposal, the Legislature has the final say. Tax revenues are expected to rise again this year. But will they grow enough for lawmakers to forsake $300 million? The “success” of the new assessments makes it that much tougher to carve them out of future budgets.
This isn’t the first time that business advocates have argued for an early sunset. The National Federation of Independent Business and three other advocacy groups representing restaurants, package stores, and supermarkets pleaded with the former House Ways and Means chief last June. The ask: to end the new assessments once a $400 million threshold is hit. Lawmakers did create a waiver process to help struggling small businesses, and nearly 100 applications have been approved as a result. But the request for an early sunset didn’t go anywhere.
So now the business groups are gearing up to make sure the extra assessments die before next year rolls around. They know that once a big new revenue stream starts flowing through the State House, it’s tough to turn off the faucet.