Massachusetts Gov. Baker, facing $1.5 billion spending gap, to unveil first state budget plan


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FILE - In this Feb. 20, 2015, file photo, Gov. Charlie Baker speaks to reporters at a news conference at the Statehouse in Boston. Baker faces the toughest hurdle of his brief tenure as governor Wednesday, March 4, 2015, when he unveils his proposed state budget for the fiscal year that begins July 1. (AP Photo/Elise Amendola, File)

BOSTON — Gov. Charlie Baker faces the toughest hurdle of his brief tenure as governor when he unveils his proposed state budget for the fiscal year that begins July 1.

Baker already has dealt with pounding snowstorms and a $768 million budget shortfall for the current fiscal year.

For the new state budget he plans to release on Wednesday, Baker must close an estimated $1.5 billion spending gap — all while vowing not to hike taxes or fees.

Baker has said he won't cut state aid to cities and towns. He's also pledged a nearly $65 million increase in state subsidies for the beleaguered Massachusetts Bay Transportation Authority after weeks of snow-related delays and cancellations.

"We've said all along that support for cities and towns and support for local education was going to be a major priority of ours and we meant it," Baker told reporters Tuesday. "If you have a really tough budget situation, you still find a way to support those things that are fundamental priorities for you."

He's also called for doubling the earned income tax credit for low-income working families and the elimination of a state tax credit designed to boost the film industry in Massachusetts.

Baker said increasing the earned income tax credit makes more sense than maintaining the film tax credit.

He said the film tax credit produces what he called "middling results" without giving Massachusetts taxpayers the bang for the buck to which they're entitled.

In contrast he said those who would benefit most from an expansion of the earned income tax credit are single women with children who are working.

"It's one of the best ways I can think of for the commonwealth to send a loud message about wanting to make work pay, especially for those who are working hard every day to pay the bills and pay the rent," Baker said.

House Speaker Robert DeLeo said Tuesday that he's been a big supporter of the film tax credit. He said small businesses get a big boost when movies are shot in the state.

The Winthrop Democrat also said that he'd prefer to hold off on additional funding for the MBTA until it's determined whether the agency has its financial and management house in order.

The Massachusetts Taxpayers Foundation, a budget watchdog group, has said the state could face a $1.5 billion budget gap.

Baker says he's ready to work with Democratic House and Senate leaders on a final budget — which he said he realizes will be a collaborative enterprise.

"Budgets are statements of intent certainly, but this is a democracy with a small 'd' and I get the fact that in the end this will be a combo platter," he said.

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