Baker: Budget Gap Estimate Rises About $200M More To $950M
BOSTON (AP) — The Massachusetts state budget gap for the new fiscal year is wider than originally thought.
Republican Gov. Charlie Baker told reporters the gap could be as big as $950 million. That's $200 million more than an initial estimate of $750 million for the fiscal year that begins July 1.
Baker said he's now estimating a gap of $650 million to $950 million partly because of the unknown impact from Britain's historic vote to leave the European Union — also known by the shorthand "Brexit" — which may affect revenue projections.
"We're making some assumptions for next year that are based on sort of best guesses at this point in time with the notion that Brexit fall into the category of sort of an unknown," Baker said.
State officials have also blamed the drop in expected tax dollars in part on a dip in capital gains revenue.
Baker said the administration has worked with the House and Senate to reduce the state's reliance on the often volatile capital gains revenue to pay for the state's ongoing expenses.
Baker also said that while the budget gap poses a headache for House and Senate negotiators trying to hammer out a final version of the approximately $40 billion state budget, it is easier to solve the problem now than halfway through the fiscal year, when any fix would require much deeper cuts.
"But it's a big number," Baker said, referring to the nearly $1 billion projected shortfall.
Also Monday, Baker signed a temporary $5.3 billion budget intended to keep state government running through the end of July while lawmakers work to come up with a final spending plan.
Despite the setbacks, Baker says he's still hoping the budget will be ready on time.
Democratic House Speaker Robert DeLeo sounded a more cautious note.
DeLeo said that while the six-member conference committee charged with coming up with a compromise budget is making good progress, it's still questionable whether they will be able to draft a final spending plan by the end of the week.
Once lawmakers agree to a compromise version of the budget, it must be given final approval in both legislative chambers before being sent to Baker for his signature.
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