I keep being amazed that this budget is referred to as a $27 billion budget, and that it's allegedly $400 million less than the House or Senate budgets. See, for example, Matt Viser's piece in the Boston Globe today, relative to Gov. Patrick signing the budget. Unfortunately, those numbers are simply not correct.
Let's review: this is a $27.4 billion budget if you count only the direct appropriations and retained revenue and leave out chargebacks and federal grants. In other words, if you only count section 2, and not sections 2B and 2D. Unfortunately for the spin-meisters, sections 2B and 2D are part of the budget.
So why are they engaging in this sleight of hand? They don't want people to know how much they're really spending. Here are the real numbers:
Direct Appropriations.......$26,907,008,724
Retained Revenue...............$499,891,667
Chargebacks....................$391,745,702
Federal Grants...............$2,484,750,685
Grand Total.................$30,283,396,778
So, how does this compare with the previous budgets. It turns out that the legislature is proposing to spend more in FY10 then they spent in FY09. Here are the real numbers, incuding direct appropriations, retained revenue, chargebacks AND federal grants:
FY09 Enacted................$29,729,332,117
FY09 after 9c Cuts..........$27,604,356,138
FY10 Governor...............$30,870,923,459
FY10 House..................$29,826,460,083
FY10 Senate.................$30,021,874,638
FY10 Conference.............$30,283,396,778
So in effect, with the increase to a 6.25% sales tax, the legislature is really proposing to increase the spending for FY09 from $27.6 billion to almost $30.3 billion.
Now, I'm not unsympathetic to the Legislature's desire stabilize spending on the budget and restore some of last year's 9C cuts. The voters tied their hands pretty good with their repeated insistence that the income tax rate should be only 5%, and previously, with their approval of Proposition 2½. Consequently, the Legislature turned to the one broad-based tax that they thought was still available to them, the sales tax. In addition, they enacted pension reform, transportation reform and ethics reform, in part to blunt Governor Patrick's threat to veto the sales tax and in part, one hopes, because it was the right thing to do.
But now they should do the right thing on budget transparency. They should admit that this is not a $27.4 billion budget but a $32.3 billion budget, and that is an increase over the FY09 budget. That increase is driven, at least in large measure, by the unexpected success of the Universal Health Law, and the continued increase in overall health care costs (an issue that most private businesses are intimatley familiar with.)
Posts
The "unexpected success" of the health law is not the cause of the budget going up.
ReplyDeleteFirst, who didn't expect the law to be successful? Certainly the legislative leadership, Governor Romney, Governor Patrick, Senator Kennedy, the business community, advocates, hospitals, health centers all expected success.
Two groups expected the law to fail: single-payer advocates, and hard-right groups like the Wall Street Journal.
Second, the largest new expense of health reform is the new Commonwealth Care program, which provides sliding-scale coverage to low-income adults previously uninsured. The state was paying for much of their care before health reform, through the free care pool. Free care expenses are down 40%.
Commonwealth Care is expected to be down next year, too. In fact, CommCare is taking deeply disproportionate cuts in FY 10. The maintenance budget for CommCare (what running the program would cost if no changes were made) for FY 10 was $954 million. The conference budget is $723 million, a 24% cut. Even if you add back in the Governor's proposed $70 million for a new program for legal immigrants, the program is taking a 17% cut.
Budget cuts are going to eliminate 30,000 immigrants and 17,000 other people from coverage. This will only raise costs in other accounts. With the overall budget going up, as you demonstrate, CommCare is absorbing more than its share, by a long shot.