Gov. Charlie Baker's $38 billion budget plan would slash the budget-busting Medicaid program and cut spending throughout state government, setting up months of wrangling with Democratic lawmakers over who will feel the most pain — and who won't.
"This is the first chess move with the Legislature," said Josh Archambault of the Pioneer Institute, who has studied the growing impact of MassHealth spending on state coffers. "We're going to be talking about this for at least the next two years. Given how MassHealth has been eating up education or cops or transportation spending, there needs to be discussion to get this program on a sustainable path."
The Swampscott Republican needs to plug a projected $1.8 billion budget gap created by growing costs, lagging revenues and what Baker called the "spending problem" he inherited.
To help close it, the governor wants to ax $761 million from MassHealth, the mammoth state Medicaid program, including reviewing the eligibility of more than 1.2 million subscribers, which his budget team estimates will save $210 million. His plan doesn't call for changes to what makes people eligible, but Baker called the program "one of the most generous" in the country, making it ripe for a so-called "re-determination process."
"If we're trying to close the structural deficit over time, it's something we're going to have to focus on," said Eileen McAnneny, president of the Massachusetts Taxpayers Foundation, "and I would say not just MassHealth but health care in general."
Baker aides said they also killed all earmarks dear to lawmakers. But most of the plan stuck to broad strokes, and several top lawmakers said they're still reviewing the details.
Both the governor and the House have made addressing MassHealth costs a priority, and like Baker, Speaker Robert A. DeLeo has pledged no new taxes.
The governor said he's already getting some guff from the Legislature, including over his proposal to ditch the state's film tax credit to help bankroll a boost to the state's earned-income tax credit. Lawmakers have also slammed his plan to give the embattled MBTA an extra $64 million in state aid before identifying the problems behind the agency's widespread collapse this winter.
"We're going to have a big debate with the Legislature about our priorities," Baker said. "I believe the proposal we made is a reasonable one, given the financial circumstances that we inherited. ... Most people will see some belt-tightening but not wholesale changes in existing services."
But some advocates were already howling, including trial court officials, who said Baker's proposal could force them to cut 550 staffers and make it hard for courts to stay open. Court officials were seeking $642 million, but Baker gave them $603 million.
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