House proposal increases education spending over Baker’s plan

The Massachusetts State House.Craig F. Walker/Globe Staff/Globe Staff

Massachusetts House leaders want to spend more on K-12 education than Governor Charlie Baker does, presenting a budget Wednesday that indicates they’re pursuing a more generous tack in revamping the state’s troubled education funding formula.

But just how generous remains to be seen. The $42.7 billion budget proposal contained few specifics on the broader effort underway to overhaul the state’s public education funding formula, which has emerged as a key priority on Beacon Hill this year.

The House budget proposal — the first under new chair Aaron Michlewitz — also avoided weighing in on another major policy debate swirling on Beacon Hill: whether, and how, to raise taxes. House Speaker Robert A. DeLeo said the House will have “further discussion” on potentially drumming up new revenue later this year. The House will debate the plan later this month, and after the Senate weighs in, lawmakers will hammer out a final version to send to Baker for the fiscal year starting July 1.

The House plan keeps — and tweaks — much of Baker’s own budget proposal to fund an array of state agencies and push hundreds of millions into the state’s savings fund. But it ditches some of the Republican’s revenue-raising ideas, including extending the state’s excise tax to e-cigarettes or accelerating how the state collects sales tax on its largest vendors, which was estimated to generate more than $300 million in one-time revenue.

House leaders also nixed from their budget a Baker-backed plan to levy a 15 percent tax on gross receipts of opioid sales in Massachusetts.

On education, the House proposal puts $17.7 million more toward the state’s contribution to public school funding, officially known as Chapter 70, than Baker’s proposal for fiscal year 2020. In total, the House proposal would mark a $218 million jump from what the state contributed to local districts this year.

But House budget writers also included a $16.5 million reserve fund to help districts with large concentrations of low-income students, an aspect of the current state funding formula that a 2015 legislative commission identified as needing changes. Top lawmakers described the reserve fund as a “down payment” on a larger legislative effort.

Whatever the final bill looks like, low-income students are “going to require additional funding, and I think this is an effort to show the House is aware that there will be a need for additional revenue,” said Representative Alice Peisch, the House education committee chair, told reporters Wednesday.

A key advocate group, Fund Our Future, welcomed the low-income student reserve fund as “notable” and “a symbolic deposit” but also said group members also want to see a bigger investment from the state.

“We hope that this budget proposal represents a down payment on the way to the massive school finance overhaul that we need to give every student a high-quality public education,” said the group, a coalition of teachers unions and other advocates.

The group is backing an education bill written by Senator Sonia Chang-Diaz that would boost state aid by more than $1 billion.

Like Baker’s spending plan, the House’s proposal also calls for modifying the charter school reimbursement formula, cutting the time that the state pays back districts for students who attend these schools. But House leaders, lamenting that the current formula has become “unsustainable,” say they’re also pouring more money — $113 million in total — toward the charter school aid.

“We need to press the reset button on this,” Michlewitz said.

DeLeo said he wasn’t sure if the House would debate a wider education bill before July 1, when the new fiscal year begins, but said he hopes it’s this year, given the wide interest among state leaders to tackle the issue.

Elsewhere, the budget plan follows other tracks Baker laid down months earlier. It requires online retailers to collect and remit sales tax, a move expected to generate roughly $40 million in revenue.

It also includes a measure to control the cost of expensive medicines for people covered under the state Medicaid program, called MassHealth. The House plan would give administration officials greater authority to negotiate drug prices directly with pharmaceutical companies, and to refer certain high-cost drugs to the state Health Policy Commission for further review.

While Baker’s proposal would allow the commission to refer certain drug makers to the attorney general’s office for investigation, the House proposal doesn’t include that step. Instead, the House proposal says that if a drug’s price is deemed unreasonable or excessive, MassHealth officials could take steps to limit use of the drug.

Robert K. Coughlin, chief executive of the Massachusetts Biotechnology Council, said the House proposal to curb drug costs would scare away biotech investors and slow the pace of research into new medical treatments.

“To have the state set prescription drug prices in MassHealth is the most severe and consequential piece of legislation for the Massachusetts biotech industry imaginable,” he said in a statement.

MassHealth covers about 1.85 million low-income residents. The program’s spending on prescription drugs has nearly doubled in recent years, according to administration officials.

The budget plan also features more than 50 policy proposals, including a provision that would hike the pay of the state’s 11 district attorneys and the chief counsel of the public defenders office. Each would get an 11 percent annual salary increase, or nearly $20,000, to push their pay from $171,561 to $191,000.

Blake Webber, Michlewitz’s chief of staff, said the district attorneys’ pay has not been raised since 2014 and described the hike as “a modest cost of living adjustment.”

Plymouth District Attorney Timothy J. Cruz said the district attorneys had previously discussed their pay with legislators, and noted that, taken over the last five years, the increases comes out to a 2.2 percent annual jump.

“I appreciate their efforts and their recognition of our work,” Cruz, president of the Massachusetts District Attorneys Association, said of legislators.

Another proposal would hike the fees the Department of Public Utilities charges gas and electric companies to help fund its budget. Currently, DPU can levy a 0.2 percent assessment on the utilities’ revenues. The House budget would raise it to 0.3 percent, generating an estimated $8 million more that House officials say could go toward hiring pipeline inspectors and making “other pipeline safety investments” in the wake of last September’s gas explosions in the Merrimack Valley.