House leaders unveiled a $41 billion spending plan on Wednesday that rebuffs Governor Charlie Baker’s budget proposal on several fronts, thwarting his efforts to move 140,000 poor adults from Medicaid to private plans and insisting on tighter oversight of the scandal-scarred State Police.
The $40.98 billion budget proposal also ditches Baker’s call to shift millions of dollars of MBTA salaries from its operating budget onto its capital spending plan, a move House Speaker Robert A. DeLeo likened to paying people with a credit card. Instead, the House opted to funnel more money toward the T to help prop up its budget.
“I feel right now, fiscally, this is a responsible budget,’’ DeLeo said Wednesday, adding that it serves the needs of the state’s people while preparing for future economic downturns. “This is sufficient.’’
DeLeo had telegraphed a desire to target the State Police in the budget plan after the agency was rocked by allegations that dozens of troopers in Troop E put in for overtime shifts they didn’t work.
As a result, House leaders included a provision to create a “special audit unit’’ within the State Police that would operate independently of the department and under the direction of the inspector general’s office.
House leaders also want to assemble a special legislative commission to study promotion policies at the State Police, in addition to tasking UMass Boston’s Collins Center for Public Management with making recommendations about how to improve the agency’s “overall management structure.’’ Reports for each would be due at the end of the year.
The proposals come on top of a raft of changes Baker said he’d pursue to overhaul the agency, including eliminating Troop E.
The House leader’s spending plan matches Baker’s significant increase for the Department of Mental Health, which put $83 million in new funding to bolster community-based services for adults with serious mental illnesses. And the House budget matches Baker’s increase for the Earned Income Tax Credit, which helps the working poor.
But it also deviated from some of Baker’s priorities.
The governor’s $40.9 billion budget proposal in January included a plan to move 140,000 low-income adults off Medicaid and onto private plans to save the state money. Baker said at the time the state could “basically’’ give people the same benefits, but, under the funding formula, also net the state an additional $120 million in federal funds each year.
But the proposal — which Baker had unsuccessfully pushed last year — was met with vocal opposition by advocates and in the Senate. The House rejected it, and Representative Jeffrey Sánchez, the chairman of the House Ways and Means committee, said he had concerns that Baker could not guarantee people’s benefits would be protected.
Baker suggested his office can make the bottom line work without it.
“We’ve managed to work our way through some pretty tough budgets over the course of the past few years,’’ he told reporters Wednesday. “And I’m sure we’ll be able to do it this time.’’
Baker had also sought approval to move some employee salaries at the MBTA to the agency’s debt-financed capital budget, a maneuver designed to slice $27 million from the agency’s operating budget.
Sánchez — in charge of his first budget for the House since being named chairman in July — opted against the proposal, criticizing it as “kind of broad.’’ The House did, however, include $154 million in stopgap funding for the T — which is exactly $27 million more than what Baker proposed.
T officials have contended the shift is appropriate because it includes employees working directly on capital projects. Brian Lang, a Fiscal and Management Control Board member who was vocal about the potential for cuts if the Legislature balked, said he had yet to see the details on the House’s budget but said the extra funding “sounds like a temporary solution.’’
The entire budget process comes amid uncertainty over how state tax policy will look next year. Two separate ballot questions — one raising income taxes on the very wealthy and one lowering the sales tax for everyone — may be put to voters in November, which could scramble the state’s revenue picture.
Sánchez said House officials didn’t factor the potential impact of the ballot questions into crafting the initial proposal but said they’ll have to adjust if they pass.
Baker, who has not detailed his position on either measure, said Wednesday he hopes the Legislature can address the tax issues before the vote in November.
“I’ve said several times that I would like to have the ballot stuff get dealt with in this legislative session because I think we’ll get a better product,’’ he said.
Like Baker’s spending plan, the House leaders’ budget calls for a relatively modest investment in the state’s emergency rainy day fund, plowing $96 million into the account. That would leave the savings account with about $1.5 billion in it by June 2019, or about 3 percent of the state’s budget.
State revenue is currently running $892 million above benchmark, but House officials say they estimate that number is actually closer to $142 million, given the higher figure may be fueled by people simply filing some of their taxes earlier in anticipation of the new federal tax law.
“There is no contingency plan if the state sees a $600 or $700 million decrease in sales tax halfway through the fiscal year,’’ said Eileen McAnneny, president of the Massachusetts Taxpayers Foundation, referring to possible passage of the ballot question. The foundation is a business-backed budget watchdog. “That’s why we think any and all [surplus] money should go into the stabilization fund.’’
Matt Stout can be reached at matt.stout@globe.com. Joshua Miller can be reached at joshua.miller@globe.com.
