Massachusetts Governor Charlie Baker has announced the state is facing a significant mid-fiscal year budget gap. The announcement raises the likelihood of cuts to state services as the Republican governor begins his term.
Baker said an agency-by-agency analysis has led his administration to calculate the state is facing a budget deficit of $765 million. He vowed Tuesday to work with his cabinet and the Democratic leadership of the state legislature to quickly fix the problem.
Baker claims the shortfall is a result of the state spending too much.
"Tax revenue for the most part has come in pretty much on benchmark," Baker said. " State spending on the other hand, after the governor's 9-C cuts from the previous year, will go up by about 7.3 percent, far in excess of the growth in state tax revenue and there in lies the $765 million problem."
The governor did not offer a hint on what steps he’ll take to close the budget gap. He has pledged not to cut local aid, raise taxes or dip into the “rainy day fund.”
" We will make these decisions as we go forward with great sensitivity and careful judgment," Baker pledged.
Because so much of the state budget is considered to be nondiscretionary spending, the areas that would likely face cuts are social services, higher education, and public safety, according to budget experts including State Rep. Stephen Kulik of Worthington, who is vice chairman of the House Ways and Means Committee.
" I don't think you can do it without impacting people and programs," Kulik said when asked where the budget might be cut. " You have to prioritize the true safety net programs people need," he added.
Because there are just five months left in the fiscal year, any cuts would be spread out over a shorter period of time, meaning the impact would be more acute.
"I favor an across-the-board small percentage decrease in all areas of state government," said Kulik. " That is fairer way to do it without picking winners and losers."
Kulik said he agrees with Baker that local aid should not be cut to balance the state budget.
The administration said healthcare spending is the biggest contributor to the projected deficit. This includes the expenses from last year’s complete breakdown of the state’s health insurance website. The failure led the state to enroll 300,000 people in a temporary Medicaid program without determining if they were eligible for assistance.
State Rep. Aaron Vega of Holyoke is also anxious for Baker to tackle healthcare spending, which accounts for 42 percent of the state budget.
" Where can money be saved in ( healthcare)? Can there be consolidations? Can we transfer the savings to other programs? This is where we need to look," said Vega.
After Baker’s election last November, the administration of former Gov. Deval Patrick revealed the state was facing a budget gap which was projected at $329 million.
A month later, the Massachusetts Taxpayers Foundation estimated the budget gap at $750 million, which was strongly refuted by the Patrick administration.
