Slice healthcare costs, Cahill says
Treasurer calls 2006 law too pricey
State Treasurer Timothy P. Cahill has come out strongly against the $1 billion in tax increases approved by the Legislature, proposing instead deep cuts in the state’s landmark effort at universal healthcare, calling it a luxury taxpayers can no longer afford.
While Cahill has no official role in approving the tax hikes or overseeing the state’s healthcare initiative, he has indicated he may challenge Governor Deval Patrick next year, and his comments could alter the tone of the Beacon Hill budget debate.
In an interview with the Globe, Cahill sharply criticized lawmakers and Patrick for not looking hard enough at cutting what Cahill said were sacred cows in government, including healthcare and education, in an apparent attempt to position himself as the most fiscally responsible Democrat in the State House.
“Everyone wanted it to pass, to get it on their resume,’’ Cahill said of the state’s 2006 healthcare law. “Nobody asked the tough questions. It was expensive, even in good times. In tough times . . . it just doesn’t seem doable.’’
Cahill also said lawmakers were wrong to turn to additional taxes on merchandise, meals, alcohol, satellite television, and hotels, which he said will only prolong the recession.
“It definitely raises the specter of ‘Taxachusetts’ all over again, which we spent a long time trying to get out from under,’’ he said. “It’s more than being nickel-and-dimed. It has a bigger impact because of the conditions that we’re in.’’
Cahill’s criticism of the state’s healthcare initiative stands out amid widespread praise for the effort from within the state and beyond. With nearly 98 percent of Massachusetts residents now covered by insurance, the healthcare plan is seen by many as a model that could be replicated around the country.
At the same time, the healthcare initiative is expensive and getting more so, as more residents enroll, even though at some point, according to the law’s original intent, it is supposed to help pay for itself by shifting more people into managed care. The budget crisis forced state regulators yesterday to slow enrollment.
“We’re all still waiting for the savings,’’ Cahill said. “Universal healthcare was supposed to eventually save us money.’’
“It’s a warning for the federal government as it looks to do something similar,’’ he added. “I’m not saying we can’t afford any of it, but it certainly doesn’t appear that we can afford all of it.’’
Cahill’s comments add to the political pressure on Patrick as he weighs whether to sign or veto provisions of the Legislature’s proposed $27.4 billion budget for the next fiscal year. He has vowed to veto a measure to increase the state sales tax from 5 percent to 6.25 percent unless the Legislature first agrees to major overhauls of the state’s ethics, pension, and transportation laws.
Patrick is stuck between top lawmakers who would be furious with him if he vetoes the sales tax increases, and political opponents - including, perhaps, Cahill and Republican challengers - who could hammer him on the campaign trial if he approves it.
Patrick spokesman Kyle Sullivan said in an e-mailed statement that Patrick had already sliced billions from this year’s and next year’s state budgets, which Sullivan said have had “a real impact on families and vulnerable populations.’’
“In these difficult times, the governor has protected our investments and progress in education, healthcare, and job creation, and that is the best way to prepare Massachusetts for growth in the future,’’ Sullivan said.
Patrick invited hundreds of political supporters to a closed-door meeting with him at a Somerville social club last night. He planned to explain some of his positions - on ethics, transportation, and taxes - during a crucial week at the State House that will have a major impact on state policy and his own political fortunes.
Cahill and Patrick, both Democrats, have been at loggerheads for months, with the treasurer seizing almost any opportunity to differentiate himself from the governor.
Cahill, for example, came out in March with a plan to license slot machines that differed with Patrick’s goal of resort casinos. Last month, Cahill accused Patrick of “grandstanding’’ on pension law changes, in part because the governor did not file legislation of his own.
The treasurer has built a large fund-raising base and said that he is considering a run for governor, either by challenging Patrick in the Democratic primary or running in the general election as an independent.
In the interviews, Cahill avoided criticizing Patrick directly, but said the governor should have acted more swiftly to prepare the state for the economic downturn and should have cut further into the state workforce. Patrick first began cutting the budget in October and implemented two more rounds of cuts.
Cahill asserted that those whose legacies are tied to the healthcare initiative failed to take a hard look at the costs when the legislation passed several years ago and now are reluctant to cut costs. “If you’re going to bankrupt one group to help pay for another, at the end of the day we’re all poorer,’’ Cahill said.
Seth Gitell, a spokesman for House Speaker Robert A. DeLeo, defended what he called the Legislature’s “responsible budget.’’
“In the face of an unprecedented deficit, the Legislature has worked to shield our cities and towns and most needy residents from the pain of the current crisis,’’ Gitell said in e-mail.
Several lawmakers involved in crafting the healthcare legislation bristled at Cahill’s suggestion to cut back.
“To retreat at this point would certainly be premature,’’ said Senator Richard T. Moore, a Democrat from Uxbridge and Senate chairman of the Joint Committee on Health Care Financing. “He should stay being treasurer and keep saving money for us. We’ll figure out how to make healthcare work.’’
Healthcare accounts for about a third of the state budget, although it is difficult to determine precisely how much is attributed to the state’s overhaul.
A report last month by the Massachusetts Taxpayers Foundation, a business-funded group that advocated for the healthcare law, found that state spending on the healthcare overhaul has increased by about $88 million annually since it was implemented.
Matt Viser can be reached at maviser@globe.com. 