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Administration proposes raising indirect cost recovery to 15%; unions warn of impacts on workerscomp and pushback on restricted-receipt changes
Summary
The governor's budget would raise the state's indirect cost recovery rate on receipts from 10% to 15% and create technical restricted-receipt accounts, including Medicare Part D billing for the state psychiatric hospital; labor leaders warned the change could pull money from workers' compensation funds.
State budget officials told the House Committee on Finance that the governor's recommended budget increases the state's indirect cost recovery rate on applicable receipts from 10% to 15% and creates several technical restricted-receipt accounts; labor groups and agency directors raised concerns.
Sharon told the committee that "section 2 increases the indirect charge itself on receipts from 10% to 15%." The administration said the change aligns the state's recoverable rate with a recent federal minimum and that the budget assumes roughly $6.8 million of additional revenue from the change.
State Budget Officer Joe Cadiga explained the policy parallel to federal practice: "we are proposing the same thing for state restricted receipt accounts, moving…
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