- Associated Press - Friday, January 18, 2019

BOSTON (AP) - Gov. Charlie Baker is proposing an increase in the state excise tax on real estate transfers to help Massachusetts communities better prepare for the effects of climate change.

Baker said Friday the plan will be included in his proposed state budget for the fiscal year that begins July 1. The Republican will unveil his full budget plan next week.

Baker said the money from the proposed excise tax increase would help communities pay for “storm water upgrades, dams and flood controls, drainage and culvert improvements, drought mitigation strategies, nature-based solutions and other adaptation strategies.”

The money would also help state and local agencies prioritize and protect vulnerable assets including transportation infrastructure, critical care facilities, water resources, and other key infrastructure, Baker said.

“This proposal will build on the over $600 million we have already invested to mitigate and prepare for the adverse effects of climate change and help to build more resilient communities,” Baker said during a speech to the Massachusetts Municipal Association. “We look forward to working with the Legislature to get this passed.”

The program would be paid for by an increase of more than 0.2 percent in the state’s deed excise tax rate. The tax is paid by the seller upon the transfer of a property.

Baker said the increase, paid at the time of sale, would increase from $2 to $3 per $500 of property value. An exception would be in Barnstable County where the increase would go from $1.50 per $500 of value to $2.50.

Baker, who has opposed new taxes, didn’t say if he’s changed his mind about whether he may support other tax increases - arguing that his proposal is narrowly focused.

“This is an excise tax that’s basically about property and the proposal we’re making here is to protect property,” he told reporters after the speech. “We think, in the long run, the cost/benefit on this one is a good deal for Massachusetts residents.”

The proposal will be included in Baker’s proposed budget for the new fiscal year.

Baker is scheduled to file his roughly $42 billion spending blueprint with lawmakers on Wednesday. The plan will be based on a projection of 2.7 percent growth in tax revenues, a lower estimate than in the two previous years.

Also Friday, the administration announced that it will propose a $30 million increase in local aid for cities and towns.

Baker’s budget proposal is the first step in a long process. The House and Senate must still come up with their own versions and approve with a final, compromise version to send to Baker before the end of June.

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