- Associated Press - Tuesday, June 14, 2016

BOSTON (AP) - Gov. Charlie Baker says he’s working with state lawmakers to close an estimated gap in the new state budget of up to $750 million.

The Republican said Tuesday he’s spoken with leaders in the Democratic-controlled Legislature about the projected slowdown in tax collections.

Baker says those projections reflect an estimated drop-off of between $450 million and $750 million in anticipated revenues compared to original estimates for the 2017 fiscal year that begins July 1.

Baker says the number is relatively small considering that the entire budget is about $40 billion.

He also says that it’s easier to close the funding gap at the beginning of the fiscal year rather than halfway through it.

“It’s a big number in absolute terms, but we have a full year to deal with this,” Baker told reporters at the Statehouse. “We’re going to work collaboratively with the Legislature to incorporate that into our decision making.”

He said the state will likely see a 3 percent growth in tax revenue in the new fiscal year as opposed to a 4 percent bump.

House and Senate lawmakers are still trying to hammer out a final compromise budget to send to Baker before the end of the current fiscal year next week.

“We’re just going to have to work with (lawmakers) to make sure that the budget they send to us and the budget that we sign is balanced based on that new reality,” Baker added.

Senate Ways and Means Committee chairwoman Karen Spilka said she expects Baker will file a corrective budget reflecting the change in anticipated revenues for the new fiscal year.

“Meanwhile, the House and Senate are actively discussing and assessing our options,” the Ashland Democrat said in an emailed statement. “The Senate’s priority is to continue to protect the vulnerable and maintain critical services and programs for our residents.”

The projections for the new fiscal year come on the heels of news of a projected $300 million shortfall in state revenues in the current 2016 fiscal year.

Baker said last week that the sluggish performance of the stock market is the primary reason why tax collections have come in below projections in recent months. Baker added that the state continues to enjoy a “robust economy” with low unemployment.

The state unemployment rate dropped to 4.2 percent in April. That’s down from the March rate of 4.4 percent, which was lower than the national rate of 5 percent. So far this year, Massachusetts has added 35,600 jobs.

Democratic House Speaker Robert DeLeo said at the time that lawmakers may have to take a fresh look at revenue projections as they negotiate a final version of the new state budget.

The state’s fiscal year ends June 30.

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