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Gov. Baker Rolls Out Budget Proposal, Seeks To Close $1.8 Billion Shortfall

Gov. Charlie Baker
Jim Levulis

Roughly two months after taking office, Massachusetts Governor Charlie Baker has released his first budget proposal. The Republican aims to close a $1.8 billion shortfall.The $38 billion spending planBaker is sending to the Democratic-controlled legislature is a 3 percent increase over current services. The Republican is sticking by his belief that the state has a spending problem, not revenue issues.

“A fiscally responsible state budget that avoids tax hikes and fee increases is key to sending a signal to families, young people and businesses that state government gets it and can be a reliable financial steward,” said Baker.

The Mass Health system is the biggest target for Baker’s proposed cuts. He says it’s grown 60 percent over the past five years and was on pace to expand another 16 percent. Through reforms including coverage redetermination, Baker says his plan sets Mass Health’s budget $1.6 billion below projected spending. He says the redetermination process hasn’t been done over the past year, meaning people are receiving both Mass Health and private coverage. He was asked about the impacts during a State House press conference.

“There are many people who currently have Mass Health who may or may not be eligible for it under the eligibility terms that exist here in the commonwealth,” said Baker.

“That’ll be a financial cut obviously for them?” Baker was asked.

“For many of them it’s going to mean just private coverage and not both,” Baker said. “For others, they need to enroll in the subsidized plans instead of in Mass Health.”

Administration and Finance Secretary Kristen Lepore says the budget maintains Mass Health rates. Baker’s budget does include $174 million in new health investments such as full-year adult dental benefits and behavioral analysis services for children with autism. Baker’s budget increases unrestricted local aid to towns by 3.6 percent to $980 million, a number he says could grow if gambling revenues exceed estimates.

“I know that every mayor and manager across our commonwealth will put those dollars to good use,” said Lieutenant Governor Karyn Polito. “It certainly builds upon our commitment to elevating the relationship between our state government and cities and towns.”

The Department of Children and Families would see a 3 percent increase. Higher education spending is also increased by an average of 3 percent under Baker’s plan while a hike of $20 for every elementary and high school student is also being sought. Following service failures at the MBTA this winter, Baker is proposing an overall transportation increase of 20 percent. The MBTA would see a 53 percent jump in direct aid.

“This is not a blank check,” Baker said. “It is a placeholder. Our advisory group of experts is working hard on a reform plan for the T which they will report back to us on by the end of March.”

Baker had already announced an early retirement incentive plan the administration estimates will save $178 million a year. The Republican wants to double the earned income tax credit from 15 percent of the federal limit to 30 percent. To pay for it the governor is looking to phase out the film tax credit over two years, an idea that’s already gained opposition among legislators who say production companies spur local economies.

Earlier this year, Baker worked with lawmakers to close a mid-year $768 million deficit.

“I’m saying that I think in the grand scheme of what we inherited we did a pretty good job of investing in some of the things we thought were really important to our economy and communities while working pretty aggressively to come up with solutions for the other parts of state government that would be effective solves,” said Baker.

Baker’s budget doesn’t draw from the rainy day fund for the first time in four years, according to his administration. He says he would’ve liked to invest more in urban development specifically around brownfields and main street programs. The budget process now shifts to the legislature. The state’s 2015 fiscal budget totaled $36.5 billion.

The state Democratic Party in a statement said the budget contains painful cuts and said it’s up to the governor to “deliver us a budget that allows Massachusetts to stay a national leader.”

Audio courtesy of New England Cable News.

Jim is WAMC’s Assistant News Director and hosts WAMC's flagship news programs: Midday Magazine, Northeast Report and Northeast Report Late Edition. Email: jlevulis@wamc.org
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