- Associated Press - Friday, October 14, 2016

BOSTON (AP) - A top official in Republican Gov. Charlie Baker’s administration said Friday that the state’s budget appears to be nearly $300 million out of balance, an announcement likely to trigger spending cuts and a reduction in the state’s workforce.

In letters to Baker and legislative leaders, Secretary of Administration and Finance Kristen Lepore wrote that revenues in the fiscal year that started July 1 are “projected to be insufficient to meet authorized expenditures.” She said the shortfall is partly due to lower-than-expected revenues generated by the state’s 6.25 percent sales tax.

Baker also has faulted the Democratic-controlled Legislature for overriding many of his budget vetoes. Lawmakers voted in July to restore $231 million of $265 million in spending vetoed by the governor, potentially leaving the state without enough cushion to cover underfunded programs such as homeless shelters, legal assistance for the poor and snow and ice removal this winter, officials warned.

Lepore said immediate steps would be taken to close the projected $294 million deficit.

“The administration will bring the budget into balance with savings initiatives and spending reductions that could reduce executive branch spending by about 1 percent of overall spending,” she said in a statement.

The administration plans to begin on Monday offering voluntary buyouts for state government workers. Under the plan, executive branch employees eligible for retirement would receive a one-time $15,000 cash incentive if they choose to leave now. Others would receive a $5,000 payment for leaving.

Lepore, however, would not rule out layoffs if too few state workers opt for the voluntary departures.

A separate early retirement program offered by the state last year netted fewer takers than sought by the administration.

Baker has grappled with budget woes since taking office in January 2015, when he inherited a deficit pegged at about $765 million.

After a string of disappointing monthly tax collection reports earlier this year, the governor and lawmakers revised official revenue projections downward before approving the state’s current $39.5 billion budget. Revenues continued to miss benchmarks in the first two months of the fiscal year, July and August, before rebounding somewhat in September.

On Friday, Lepore reduced the state’s overall revenue forecast by $175 million after reporting sales taxes were likely to rise by 2.3 percent this year, well below the earlier estimate of 5.2 percent.

The editorial board of MassBenchmarks, a journal of the state’s economy published by the McCormack Institute at the University of Massachusetts, “strongly” recommended on Thursday that state leaders consider tax increases to fund “urgent unmet educational and infrastructure needs.”

Baker opposes new taxes.

Democratic House Speaker Robert DeLeo, who also ruled out tax hikes in recent years, said recently he would weigh the opinions of economists on the need for new revenues in the future.


This story has been corrected to show Baker took office in January 2015, not January 2014.

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