House budget puts off decisions on taxes, sports betting

  • House Ways and Means Chairman Aaron Michlewitz briefed reporters Wednesday on his committee’s proposed fiscal 2020 budget. shns photo

Associated Press
Published: 4/10/2019 10:27:40 PM

BOSTON — A $42.7 billion state budget unveiled by House Democratic leaders on Wednesday proposes additional spending on education but pumps the brakes on calls for new taxes and the legalization of sports betting.

The House Ways and Means Committee’s spending plan for the July 1 fiscal year was released by Speaker Robert DeLeo and the panel’s new appointed chairman, Rep. Aaron Michlewitz of Boston.

Gov. Charlie Baker submitted a proposed budget to the Legislature in January that envisions roughly the same overall level of spending by state government, but several targeted tax measures proposed by the Republican governor were dropped — for the time being at least — by House Democrats.

The House budget seeks a $218 million increase in the state’s share of support for public schools, along with a $16.5 million reserve fund for low-income students.

DeLeo called the increase in the so-called Chapter 70 funding a “down payment” on a potential overhaul of the education funding formula that is being considered separately by the Legislature.

Previous efforts to update the 1993 formula that critics say shortchanges students in poorer school districts failed because of disagreements among key lawmakers.

“Whether it’s the governor, whether it’s the Senate, whether it’s the House, I think there is a real feeling of the necessity to address the (formula) and because of that I feel confident we will get something done,” said DeLeo.

Baker has offered his own education reform plan and included about $200 million in additional funding in his budget request.

The House budget steers clear of any significant tax increases, which could disappoint some progressive Democratic lawmakers and activists who have pushed for new revenues to benefit education and transportation improvements.

DeLeo maintained, however, that tax proposals could come up for discussion later in the session after being vetted by House committees. Senate Democratic leaders have also hinted at a discussion about taxes later in the session.

Baker opposes increases in broad-based taxes such as income or sales, but in his earlier budget blueprint made several targeted proposals, including a tax on pharmaceutical manufacturers that sell opioid medications; an excise tax on e-cigarettes and vaping products; and an increase in the real estate transfer tax earmarked for initiatives related to climate change.

None of those tax proposals were adopted by the House Ways and Means Committee.

Also not included was $35 million in revenue that the administration had anticipated in the next fiscal year from the potential legalization of sports betting. By excluding the revenue, the House signaled a slower, more deliberative approach to whether gambling on professional or college sports should be allowed in Massachusetts.

“I think that is going to require a lot of discussion,” DeLeo said. “I’m aware it could be an important source of revenue, but how we are going to do it ... I don’t think it’s probably as easy as some people think it may be.”

Over the objections of Republican members, Democratic leaders Wednesday ruled out consideration of any amendments related to sports betting when the full House debates the budget later this month.

The House estimates $294 million in taxes next year from casino gambling, a projection that assumes a $2.6 billion Wynn Resorts casino in Everett will open as scheduled in June. But Michlewitz noted that lawmakers were keeping a close watch on the Massachusetts Gaming Commission, which has been investigating the company’s handling of sexual misconduct allegations against founder Steve Wynn. The commission is considering if the company should keep its state casino license.

In an effort to rein in health care costs, the House budget includes a proposal, similar to one offered by Baker, authorizing the state’s Medicaid program to directly negotiate drug prices with pharmaceutical companies. Absent an agreement, officials could hold hearings and order lower prices for certain drugs.

Such a policy would be “misguided,” argued Robert Coughlin, president and chief executive of the Massachusetts Biotechnology council.

“If passed, it would rapidly change the face of biotech innovation, scare away investors, and immediately harm patients who are awaiting the next treatment or cure for their disease,” Coughlin said in a written statement.

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