11 Issues to Watch in the 2017-2018 Legislative Session

WWLP

By Michael Norton, Katie Lannan, Andy Metzger, and Matt Murphy

BOSTON (State House News Service) – In addition to the wildcard that is Donald Trump’s presidency, here’s a look at 11 simmering issues that could escalate to a full boil in the 2017-2018 legislative session, which gets underway Wednesday on Beacon Hill.

CRIMINAL JUSTICE REFORM

Smaller prison populations and lower costs, better re-entry programs and services, and reduced recidivism rates are among the goals of criminal justice reform advocates who have seen their policy proposals wither in past sessions. Legislative leaders told Gov. Deval Patrick in 2012 that they would revisit criminal justice and sentencing reforms in the 2013-2014 session, but they didn’t.

The 2015-2016 session was also a wipeout for activists, who watched as policymakers and Gov. Charlie Baker punted the issues to outsiders to see if they could come up with a plan. Heading into 2017, administration officials and lawmakers are waiting to see what a special commission recommends after working with outside consultants from the Council of State Governments’ Justice Center. Activists pressing major reforms fear the CSG report — scheduled to be released in mid-January — and subsequent legislation will be narrow in scope, with a focus on probation, parole and other post-release services.

Frustrated after years of being told to wait for broad reforms, advocates are gearing up to fight for other measures including bail changes, repeals of mandatory minimum sentencing and greater use of diversion programs. Some initiatives that cleared the Senate in 2016, including expungement of juvenile misdemeanor records and raising the cash value at which larceny becomes a felony offense, are expected to resurface in the new session.

A new House chair of the Judiciary committee, to be appointed in January or February by Speaker Robert DeLeo, will play a role in determining how far those and other criminal justice issues make it through the legislative process.

HEALTH CARE

Total health care expenditures have outpaced the state’s economic growth rate for two straight years, a significant portion of the state’s population remains uninsured despite a mandatory health insurance law, and rising premiums and access to care, including oral care, are issues for many patients.

Massachusetts is also on the verge of having a staggering 2 million of its residents enrolled in Medicaid, the taxpayer-funded health insurance program for those who are income eligible and individuals with disabilities. Amid the rollout of health care access and cost control laws, the market itself has undergone dramatic consolidation in recent years and there’s continuing concern over the financial health of community hospitals.

Medicaid is now experimenting with an accountable care payment model, with results due in 2017 that will determine how those pilots perform on cost and patient care measures. At the same time, there’s talk in the Trump administration about converting Medicaid to a block grant program in an attempt to limit the flow of federal funds to the state. And a special commission looking at variations in prices charged by hospitals is closing in on possible recommendations.

If it sounds like a lot, it is. Per usual, the health care policy arena in Massachusetts is active, with plenty of uncertainty.

ENERGY

Diversification, costs and reliability remain the legs of the state’s three-legged energy policy stool. Heading into 2017, Gov. Charlie Baker and his administration are implementing a major renewable energy law to procure large-scale hydropower and develop offshore wind farms that will eventually help power homes and businesses around the state.

A big hitch is that the fruits of that labor are several years from ripening. In the meantime, expect battles to be fought along familiar lines. As the administration works to finalize a new tariff-based solar renewable energy credit program, solar advocates are pressing the Department of Energy Resources to come up with a plan to bridge the gap between January and the summer, when the new program takes effect, to keep the subsidies flowing to the industry.

Caps on solar net metering are also being bumped up against in most utility territories, meaning that debate will perk up for another round early in the year. And while hydropower might eventually address some of the demand and reliability concerns in the grid, a Federal Energy Regulatory Commission investigation of the ongoing maintenance issues at the Pilgrim Nuclear Power Station will continue to fire up Pilgrim opponents who are pressing Baker to demand the plant’s shutdown before a scheduled refueling in 2017 designed to keep the plant running until 2019. Any adjustments to the state’s energy mix – including new gas pipeline capacity – must all be balanced against greenhouse gas emission reduction requirements and targets.

Lawmakers like Rep. Jay Kaufman and Sen. Michael Barrett will undoubtedly continue to make the case for a carbon tax, but more likely is a more aggressive effort by the Baker administration to promote the purchase of electric vehicles. A boost in zero-emission vehicle sales would dovetail nicely with the aims of the new court-ordered emission regulations from the Department of Environmental Protection that are up for hearings in February. The Supreme Judicial Court ordered the state to spread its emission reduction efforts across all sectors, including transportation, but some critics would like to see stricter caps on power plants.

INSTITUTIONAL RIVALRIES

The battles in the 2015-2016 session were largely between the House and the Senate, both controlled by Democrats, rather than between the Legislature and the new Republican governor. In addition to famously disagreeing about rules governing the flow of bills, the more liberal Senate was often at odds with the more moderate House.

While Gov. Baker’s working relationship with legislative leaders is not likely to entirely fizzle in 2017, 2018 is an election year and Democratic legislative leaders just in December bumped heads pretty hard with the Republican governor over spending cuts they viewed as hurtful to people and unnecessary. Democratic legislative leaders have settled their rules reform differences and have a new party chair, Gus Bickford, who is taking an aggressive posture toward Baker out of the gate.

There are some Democrats who would probably be fine with Baker in the Corner Office for another four years – they can score points for bipartisanship when things are going well and have a convenient target when things are not. But many other Democrats are hoping a strong candidate will step forward to challenge the governor.

Another session featuring divided Democrats in the Legislature would bode well for Baker, who like his mentor Bill Weld has made bipartisanship one of his main political selling points. But if Democrats draw clear lines with Baker on a series of issues – the income surtax for example or privatization or new taxes on marijuana or online rentals – the dynamic could shift back to the traditional Republican-versus-Democrat format. And no one can say at this point whether Donald Trump in the White House will be good politically for Baker, or bad.

The conventional wisdom is bad, but we saw what happened to conventional wisdom in 2016.

ETHICS REFORM

Eight years after passing a reform package strengthening ethics laws in the wake of the indictment of the former speaker on corruption charges, lawmakers plan to revisit the state’s approach to conflict of interest laws. A 13-member task force led by the chairs of the House and Senate Ethics committees and the co-chairs of the Committee on State Administration and Regulatory Oversight has a deadline of March 15 to produce a report reviewing conflict of interest, financial disclosure laws, and the regulations of the State Ethics Commission, which enforces state ethics laws.

In February after publicizing the idea of the review of ethics laws, House Speaker Robert DeLeo said it was intended “with the idea that some may be strengthened because they haven’t been looked at for a period of time, some may have to be updated, again, because they haven’t been looked at in a period of time, and some have to be clarified actually.” Before agreeing to the task force, lawmakers removed directives from an earlier version to study campaign finance, lobbying and the feasibility of extending the lobbying law to cities and towns.

While the task force’s mandate has been honed, its charge also remains open-ended. House Ethics Chairman Chris Markey in November said he hopes the process will make the law “more manageable for municipalities as well as appointed and elected officials.” Any moves by lawmakers to alter state ethics laws bears watching.

FULL-TIME BUDGETING

Gov. Charlie Baker will propose a fiscal 2018 budget Jan. 25, but budgeting has become a year-round necessity for Baker and the Legislature and the story is far from written yet on fiscal 2017. Legislative leaders fuming about Baker’s unilateral budget cuts in December are pondering a supplemental budget to restore spending and directly challenge the governor, but their next move will depend on how revenues perform in the next month or two. Around the same time new lawmakers are getting sworn in on Wednesday (if not before), the Department of Revenue will be preparing its latest revenue report for December after mid-month collections showed positive signs with 4 percent growth.

With an expected re-election effort in less than two years, Baker’s next budget will be viewed through that prism as well as through the usual spending and policy lenses. Baker and the Legislature are under pressure from Wall Street credit rating agencies to boost the state’s rainy day fund balance and not back off its pension-funding schedule. Money saved and invested in future pension liabilities, however, is not the stuff campaigns are built on. Everyone involved in the budget-making on Beacon Hill also has to be concerned about relatively anemic tax revenue growth during an economic recovery and the state’s positioning should the next economic downturn come sooner rather than later.

One concern for early 2017 that appears to have been alleviated for now is how the state planned to come up with the cash to pay for the new Cannabis Control Commission and the enforcement and regulation of recreational marijuana. By passing a six-month delay, lawmakers not only bought themselves time to consider changes to the law, but ensured that paying for the new bureaucracy would not put additional spending pressures on the fiscal 2017 budget.

INCOME INEQUALITY

Many pundits are interpreting President-elect Donald Trump’s win this year to the frustration of the American worker, both with their own situation and the availability of good jobs and with the widening gap in America between those who make the least and the super wealthy.

Backed by a powerful coalition of interest groups, low-income workers in recent years have racked up big wins in Massachusetts with a ballot law broadening access to earned sick time and a law increasing the minimum wage from $8 to $11 an hour, effective Jan. 1, 2017. Now workers are threatening to place on the 2018 ballot a proposal to boost the wage floor to $15 an hour, which could be coupled with a constitutional amendment adding nearly $2 billion in higher taxes on households with incomes above $1 million.

The issues are forcing lawmakers and voters to take sides – with workers and tax raisers or with businesses and other opponents of new taxes. The minimum wage and income surtax loom as potentially huge policy matters on Beacon Hill and political issues in November 2018.

POT POLITICS

Sooner or later, Massachusetts lawmakers were going to get around to debating marijuana legalization. 2017 qualifies as later, much later. The Legislature’s new Committee on Marijuana next year will jump into the debate after not one, not two, but three marijuana-related laws were placed on the books while legislators stayed on the sidelines, unwilling to intervene on an issue with far-reaching societal impacts. Now that adult use of marijuana is legal, lawmakers say they want to make changes to the 2016 voter law. On Dec. 28 the Legislature rushed a bill to Gov. Baker’s desk pushing back retail marijuana implementation dates by six months. Baker signed it.

Other potential areas for meddling include tax rates, startup regulatory costs, edible marijuana products, marketing and advertising tactics. The debate will bring marijuana industry lobbying off the campaign trail and onto Beacon Hill, where some of the people rewriting the voter law opposed the ballot question. Legislative leaders hope to tackle this issue over the first six months of 2017.

TAXES

A riddle that has perplexed lawmakers all year – anemic tax revenue growth amid surging job growth – could receive an answer from the Democrat-led Legislature in the form of new taxes next session. Short-term room rentals, marijuana sales and seven-figure incomes have all emerged as likely candidates for new or increased taxes.

Gov. Charlie Baker will not be able to wield his veto pen against a proposed constitutional amendment adding a 4 percent surtax to incomes over $1 million. In a 2016 joint session the House and Senate advanced the measure, which would need one more vote by the branches in constitutional convention – scheduled to begin meeting no later than Wednesday, May 10 under the current joint rules – before potentially advancing to the 2018 ballot. The Democrats who control the flow of business in the House and Senate have raised taxes in 2009 and 2013, and in recent weeks have refused to rule out tax hikes in 2017.

Lawmakers are already making time in the first part of the two-year session to grapple with changes to the legalized marijuana sales law passed by voters, with some suggesting the 10 percent combined state sales and excise tax on pot is not high enough. Generally ill-disposed toward tax hikes, Baker initially supported a Senate move last summer to subject vacation rentals to the hotel room tax – a move also backed by Airbnb, the highest-profile online repository of private room rentals. The governor then reversed course arguing the legislation would “impose burdensome taxes and government bureaucracy on folks who utilize short term vacation rentals.” A tax bill, which would need to originate in the House, could open the door to a variety of revenue-raising proposals.

EDUCATION FUNDING/REFORM

Lawmakers have identified education funding reform as a priority for the upcoming session, but a combination of overspending (versus budget) and slow revenue growth leaves the question hanging of where any new funding would come from.

School aid formula changes wouldn’t come cheap — a 2015 report found the current system’s starting point underestimates the cost of educating students by at least $1 billion. There’s considerable overlap between backers of a funding formula overhaul and the opposition campaign that shut down a 2016 ballot question that would have allowed the up to 12 new charter schools each year.

While teachers unions, public school parents, local school committees and others who pushed against the ballot question aren’t likely to back down, expansion proponents are rallying supporters for Round 2. “Although we took a punch, we’re back at it,” KIPP Boston parent Dawn Foye wrote in Dec. 21 email from Great Schools Massachusetts campaign, continuing, “We’ll come at it in a different way.”

A signature issue of Gov. Charlie Baker’s in 2016, charter expansion was defeated on two fronts with the loss at the ballot coming after the House and Senate failed to agree on an expansion bill. Baker called for a lift of the charter cap in his State of the State address last year and could use that platform in 2017 to lay out a new plan to ensure there are no gaps in education adequacy or to send a message to forces looking for major new investments.

A Senate-backed plan to tie a modest charter cap lift to an big infusion of money across all public schools didn’t pique interest in the House, but the distaste voters showed in November for the broader expansion favored by many representatives could change their minds.

Baker has also pledged to boost education aid by the projected growth in state revenues, a promise that will be sized up when he releases his fiscal 2018 budget on Jan. 25.

ONLINE GAMING, LOTTERY WOES

It’s been five years since lawmakers came around to embrace the idea of casino gambling as a panacea for its transportation, local aid and economic development spending desires. But apart from the trickle of slot revenues from Plainridge, that dream is still just that.

MGM Springfield isn’t expected to open until 2018, and Wynn Resorts won’t start dealing cards until a year after that. In the meantime, the Lottery – the state’s main source of profit for local aid to cities and towns – is showing its age, or maturity.

Treasurer Deborah Goldberg testified last month that profits next year would likely fall by $3 million to $965 million. Scratch ticket sales through November were down 3 percent and the Keno market is “virtually saturated,” the treasurer said. In other words Lottery revenues are slipping and casinos haven’t even opened yet.

Though not cataclysmic, Goldberg’s forecast for a period of “stagnation” could be the potion needed to get lawmakers to come around to the idea of moving the Lottery online to reach a different, and younger, audience. A grab for more gaming revenues could prove enticing because it would not require raising taxes and could be a tact legislative leaders can convince the governor to go for. It wouldn’t be easy though. Convenience store owners have never warmed to the idea, and critics will argue safeguards to protect problem gamblers will be difficult to enforce online.

Gambling opponents warned casinos would not be the end of expansion and it appears the chase for the eternal gambling dollar is headed into the online world.