Budget sets stage for ed reform, drug cost controls
There’s nothing like a booming economy pumping a few hundred million unanticipated new dollars into the state treasury to make the budget process flow more easily.
So perhaps it should come as no surprise that the Massachusetts budget for the year that began July 1 emerged $317 million richer in the end — $43.1 billion in total — than it was when House and Senate conferees began their work behind closed doors in early June. Rounding “up” makes life so much easier.
That’s not to say the final budget, now en route to the governor’s desk, doesn’t make some sound choices. It makes possible a generous contribution into the state’s rainy day fund of $476 million that will bring the fund to $3.3 billion. It also includes a $90 million reserve account to cover some inevitable but traditionally underfunded items like snow and ice removal.
Of course, the downside of the uptick in revenue is that the state has no particular need to look for those odd bits of change under the seat cushions. So the final budget dropped proposed taxes on e-cigarettes and vaping products — and that, from a health care and policy point of view, is unfortunate.
But expanding revenue (and Senate budget-crafters’ generous instincts) will mean the largest one-year hike in K-12 education spending in two decades — an additional $268.4 million for a total of $5.18 billion. It remains for the Education Committee to put the finishing touches on changes in the Chapter 70 school aid formula, but the final budget number surely makes that easier. The budget also changes the charter school reimbursement formula, front-loading those early years to provide reimbursements of 100 percent, 60 percent, and 40 percent (instead of the current 100, 25, and 25).
More revenue also means that the MBTA gets a boost — though likely only a down payment on the massive infrastructure investments the state needs.
UMass students can brace themselves for a tuition hike this year, even though the budget includes a $39 million boost in the state’s contribution. And while Senate Ways and Means chair Michael Rodrigues did step back from his proposed tuition and fee freeze, he did get in return a definite date (Jan. 15 for those marking their calendars) on which UMass president Marty Meehan will have to discuss his five-year plan for the university’s fiscal future. A little transparency can’t hurt.
Another small victory on the transparency front — and possibly the cost-containment front — is the compromise crafted on dealing with the most expensive drugs purchased by the state for its MassHealth clients. The final effort isn’t all it might have been — lobbying by the Massachusetts Biotechnology Council saw to that. But it does enough to make a gubernatorial veto pointless.
The new policy, even in the stronger version initially proposed by Governor Charlie Baker, was designed to apply only to a relative handful of high-priced drugs — those costing $25,000 per month per client, or $10 million in total a year. The legislative compromise would still allow the Health Policy Commission to hold hearings on pricing that seems unreasonable and level fines of up to $500,000 per instance on companies that knowingly inhibit the commission’s fact-finding. Sure, it makes no mention of a referral to the attorney general. But Rodrigues said lawmakers were assured Attorney General Maura Healey had all the powers she needs to intervene, if that were necessary. Healey has hardly been shy about dealing with Big Pharma when she has to.
But the fact remains that this tinkering with drug transparency falls far short of what states like Vermont, New York, and California have undertaken. And as Stat, a Globe sister publication, has pointed out, it will take some major reforms in a reluctant Washington (itself a hotbed of pro-pharma lobbying) to bring about real transparency and real cost containment.
So here we are, the very last state in the nation to get its budget act together for fiscal 2020. The budget has a way of sucking all the oxygen out of the State House until it’s passed. Now at least lawmakers can get back to the business of making, well, laws — say, that education funding formula and a housing policy, just for starters.