August 4, 2021

Volume XI, Number 216

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Governor Baker Releases FY2022 Budget Bill

During his annual State of the Commonwealth address, Governor Charlie Baker highlighted the heroic work of frontline workers and first responders throughout the COVID-19 pandemic, while reminding the Commonwealth that though we are close, we are not out of the dark quite yet.  Gov. Baker’s FY2022 (“H1”) budget recommendations support that perspective and indicates the state is still feeling the economic impacts of the pandemic. The legislation authorizes a $1.6 billion withdrawal from the state’s Stabilization Fund and a $300 million spending cut to support the bill’s $45.6 billion FY2022 budget bottom line.  In addition to the $1.6 billion withdrawal from the Stabilization Fund, H1 projects tax revenue to increase 3.5% over FY2021 collections while avoiding any new taxes levied on residents of Massachusetts.  H1 also outlines several policy initiatives, which are highlighted below:

Taxation

  • Cross Border Income Tax Plan:  In order to address the issue of income taxation on out of state residents who work in Massachusetts which has been exacerbated by the pandemic, Governor Baker proposed in his budget a process to account for this tax revenue.  According to the Administration’s summary, the purpose of this proposal is to extend “the statute of limitations for abatement filings and assessment adjustments related to deemed repatriation income.”

Health Care

  • Opiate Excise Tax and Drug Pricing Changes: The legislation proposes a 15% excise tax, based on gross sales, on opiates manufactured or sold in the Commonwealth.  Additionally, the budget bill targets the pharmaceutical industry relative to drug price increases by establishing new penalties for excessive increases on medications.

  • Direct Negotiations for Rebates by the State: Baker’s budget proposal allows for MassHealth, the state’s Medicaid program, to directly negotiate rebate agreements for drugs found outside of the Medicaid Rebate Program and for non-drug medical products like durable medical equipment.

Clean Energy

  • Solar Panels: A policy adjustment is made in the bill authorizing solar generating structures to be installed and maintained on fourteen state properties across the Commonwealth. 

Gaming

  • Professional Sports Betting: H1 relies on legalized sports wagering to bring in $35 million in tax revenue in FY2022.  In order for such revenue to materialize, however, the democratic run Legislature must first pass legislation legalizing the industry.  Debate on this issue is widely anticipated for this legislative session.

H1’s release will kick off the annual budget process in the state.  Next up, the House of Representatives will release their version of a FY2022 budget, followed by the Senate.  

©1994-2021 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume XI, Number 28
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About this Author

Steven A. Baddour, Vice President of Government Relations, ML Strategies, Mintz Levin, Law Firm
Senior Vice President of Government Relations – ML Strategies / Special Counsel

Steve’s government relations practice focuses on advising clients ranging from start-ups to Fortune 100 companies on a wide range of issues at the state and federal levels. As part of Mintz's Litigation Practice, Steve represents public and private sector clients in complex civil litigation matters. In both these roles, he uses his knowledge of government and the law to benefit clients in Massachusetts, New England, and beyond.

A former Massachusetts State Senator and former Assistant Attorney General, Steve has strong bipartisan relationships...

617-348-1686
Dan Connelly ML Strategies
ML Strategies - Senior Vice President and Compliance Officer

Dan is Vice President of Government Relations for ML Strategies. He has been directing policy in Massachusetts and the New England region for more than a decade. Dan represents trade associations and businesses across industries with interests before the executive, legislative, regulatory and municipal areas of government throughout New England.

Most recently, Dan served as Legislative Counsel in the Boston office of a large, international law firm. He previously served as the chief legal counsel to the Massachusetts Senate Committee on Ways and...

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Caitlin R. Beresin ML Strategies
Vice President Legislative Affairs

Caitlin is a Senior Manager of State Government Relations at ML Strategies. With over 10 years of experience with health care matters, Caitlin focuses primarily on mental health systems, substance abuse treatment, and behavioral health related issues. In addition to her healthcare expertise, Caitlin has worked on issues related to housing development, education, public health, criminal justice and economic development.

Prior to joining ML Strategies, Caitlin worked as a staff attorney on the House Committee on Ways and Means. There she gained an...

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Kaitlyn C. Sprague Government & Legislative Strategies Attorney Mintz Law Firm
Director of Government Relations

Kaitlyn is a Director of Government Relations at ML Strategies. With eleven years of experience in legislative affairs and Massachusetts state government, Kaitlyn brings a deep understanding of legislative proceedings, especially regarding the Massachusetts House of Representatives and Governor’s Office. 

Prior to joining Mintz, Kaitlyn was the Legislative Director in Governor Baker’s Office of Legislative Affairs. There, she drove the Governor’s legislative agenda from filing to passage, through bipartisan coalition building, legislative strategy sessions, and consistent...

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Taylor C. Shepherd Government Relations Attorney Mintz Law Firm
Manager of Government Relations

Prior to joining ML Strategies, Taylor worked as a Budget Analyst at the Massachusetts Department of Mental Health.  At the Department, she worked closely with the Chief Financial Officer and Budget Director to develop reporting mechanisms to project payroll, monitor operational spending and facilitate Western, Central and Northeastern Massachusetts regional areas in their spending and personnel ventures. 

Previously, Taylor worked as a Legislative Aide and then as a Fiscal Policy Analyst for the Chairman of the House Ways and Means Committee at the Massachusetts State House.  Under...

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