NewburyportNews.com, Newburyport, MA

Local News

January 24, 2013

Patrick outlines 'growth budget' built on tax increases

BOSTON — Gov. Deval Patrick rolled out an aggressive $34.8 billion spending plan for fiscal 2014 yesterday, calling it a “growth budget” that relies heavily on $1.2 billion in new revenue generated from higher taxes to support investments in education and transportation.

“This is a plan to grow jobs,” Patrick said at an early-afternoon press conference, proposing a 6.9 percent spending increase and fully lifting the curtain on a spending plan he has rolled out in bits and pieces over several days.

Patrick is seeking $1.9 billion a year in new revenue driven by a major reform of the tax code to increase the income tax to 6.25 percent and reduce the sales tax to 4.5 percent. Patrick’s budget proposes to repeal the exemption of candy and soda from the sales tax and increase the cigarette excise tax by $1 to $3.51 per pack, provisions not previously highlighted by the administration as it unveiled its plans for new state revenues.

The governor’s budget also includes $34 million to begin implementing last summer’s health care cost containment bill that administration and legislative leaders believe will save $200 billion over 15 years, and directs $30 million for rate increases to hospitals to help them shift away from fee-for-service to accountable-care models.

MassHealth, the state Medicaid program, would receive a 13 percent budget increase under the plan, allowing for 325,000 new members to enroll through the increased eligibility standards under the federal Affordable Care Act, which includes federal reimbursement.

The administration also hopes to take advantage of new federal supports through ObamaCare to restore full adult dental coverage to income-eligible MassHealth enrollees, a benefit that was cut during the recession.

Because the tax code changes he is seeking would not take effect until next January, the administration is balancing its budget for fiscal 2014 on $1.2 billion in new tax revenue, an $838 million increase in existing revenue streams, and $555 million in one-time resources, including $400 million from the “rainy day” fund.

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