Baker relies on revenues, spending cuts to close the budget gap

The proposal would cut spending across state agencies

BOSTON (WWLP) – After three weeks on the job, Governor Charlie Baker outlined his solution to close the state’s $768 million budget gap. He plans to rely on $254 million of new revenues and make $514 million in spending cuts.

“We inherited a spending problem. Even with all the adjustments that we’re making and proposing here today, state spending year over year in fiscal 15 is going to go up,” said Baker.

His proposal would cut spending across state agencies. Transportation funding will take a hit ($40 million), along with the state’s version of Medicaid – MassHealth ($168 million). Baker wants to look at people’s eligibility under MassHealth and says the state will hold back on spending money for services not covered under the federal government. Three areas will not be impacted by cuts: the Department of Children and Families, homelessness programs and state funding for cities and towns.

“We have held our cities and towns harmless relative to local aid and school aid and we feel that is the right commitment and it is the promise that we made,” said Lieutenant Governor Karyn Polito.

Some of Baker’s proposals will require legislative approval, including the use of capital gains tax revenue to fill the budget gap. That money would otherwise go to the state’s rainy day fund. There is no set date on when the legislature would take up Baker’s proposal. Governor Baker has to file his version of the fiscal 2016 budget by the first week on March.

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