Tax on opioids, school aid boost included in Baker budget

  • Massachusetts Gov. Charlie Baker takes questions from members of the media during a news conference at the Statehouse in Boston In January 2017. AP File Photo

State House News Service
Published: 1/23/2019 11:06:06 PM

BOSTON – Gov. Charlie Baker filed a $42.7 billion budget on Thursday that features the biggest overhaul to public education funding in decades and proposes new taxes on pharmaceutical manufacturers to help pay for opioid addiction services.

The education reform, which Baker teased in his inaugural address earlier this month, proposes to spend an additional $200 million on public education this year and increase the baseline amount of money that schools district must spend on education by $1.1 billion over the next seven years.

The plan, according to the administration, would “fully” implement the recommendations of a special commission that three years ago found the state’s education funding formula insufficient to meet the growing costs of health insurance, special education and services for English language learners and low income students.

The governor’s budget and the companion education legislation are the biggest highlights of what has been a fast start for the Republican governor to his second term. Baker has also put forward major proposals to legalize sports betting, toughen seat belt law enforcement, and ban hand-held cell phone use while driving.

The budget overall would increase spending by 1.5 percent over the current fiscal year, according to the administration, and includes $133 million in new revenue from anticipated recreational marijuana sales and $6 million from an expansion of the cigarette excise tax to e-cigarettes and vapor products.

Baker is also proposing to force online marketplaces like Amazon, Ebay and Etsy to collect and remit sales taxes on purchases delivered into Massachusetts for $42 million in new revenue and to accelerate the process for retailers to remit sales taxes to the state, netting $306 million in fiscal 2020 in one-time additional revenues.

Some of those one-time sales tax revenues will become part of a $297 million deposit into the state’s stablization account, which officials said would boost the “rainy day” fund to $2.8 billion by the end of fiscal 2020 as economists warn about a slowdown and public officials prepare for an eventual recession.

After working in his first term to pass two significant bills to fight back against the opioid addiction epidemic, Baker’s budget includes $266 million for treatment and other services, a $48 million increase over this year.

To help pay for that investment, the governor is proposing a 15 percent tax on opioid manufacturers on gross receipts from the sale of opioid products.

The governor also wants to give MassHealth, which would see its total budget grow to $16.54 billion in fiscal 2020, the ability to negotiate directly with drug manufacturers over price, and use a public rate-setting process for the high-cost prescription drugs similar to how rates for other Medicaid services are set.

The reforms, the administration estimates, will help save $80 million. In cases where drug manufacturers do not offer rebates to meet the regulated prices, they could be referred to the Health Policy Commission for possible public hearings, disclosure requirements or referral to the attorney general for action under the consumer protection law.

The governor’s budget filing is the first step in a months-long process designed to culminate over the summer in a new annual spending plan for the fiscal year that starts on July 1.




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