- Associated Press - Monday, June 20, 2016

BOSTON (AP) - Beacon Hill leaders say they’re hoping to close a budget gap without cuts to school aid, opioid addiction programs or aid to municipalities.

But officials said nearly everything else was up for debate as Massachusetts House and Senate negotiators scrambled to come up with a revised budget to send to Republican Gov. Charlie Baker.

Baker told reporters Monday that while he agreed “everything should be part of the discussion,” many municipalities have already set their budgets based on the current local aid numbers.

“My goal is certainly to try to preserve predictability around local aid for cities and towns,” Baker told reporters after a meeting with top Democratic lawmakers in his Statehouse office. “I’d hate to go back and make them revisit that.”

The state is facing an estimated drop of up to $750 million in revenue for the fiscal year beginning July 1.

Among the items up for discussion is whether the state should have another sales tax holiday. Sales tax holidays are popular with retailers and shoppers, but could cost the state up to $28 million in revenue in the 2017 fiscal year.

Baker agreed that the question of whether to skip a sales tax holiday should be part of the discussion.

Democratic Senate President Stan Rosenberg said senators have become increasingly skeptical about the tax holidays. Democratic House Speaker Robert DeLeo said he wanted more information before staking out a position on another sales tax holiday.

DeLeo said it would also be hard to cut money for opioid programs given the state’s ongoing addiction crisis. Baker said that fighting opioid abuse was one of his top priorities.

Baker also said he doesn’t plan to make any recommendations to cut Medicaid eligibility in an effort to rein in spending there.

Senate Ways and Means Committee Chairwoman Karen Spilka blamed the drop in expected tax dollars in part on a dip in capital gains revenue.

The administration has pointed to lower-than-expected income and corporate tax payments that likely stem from stock market volatility and reduced investment returns.

Spilka cautioned that the information the state is receiving is still in a state of flux.

“Overall the Massachusetts economy is still very strong,” the Ashland Democrat said.

House Ways and Means Committee Chairman Brian Dempsey said the state has worked to respond quickly whenever there is a change in expected revenues.

“I think the bond rating agencies view that favorably,” the Haverhill Democrat said.

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