Massachusetts House OKs Budget Gap Fix

The Democratic-controlled Massachusetts House on Wednesday approved the bulk of a plan offered by Republican Gov. Charlie Baker to close a projected $768 million shortfall in the state budget.

The deficit-reduction package was passed on a near unanimous vote without floor debate and sent to the Senate, where it could come up for action within days.

Baker applauded the House vote, the first on a major bill submitted by the governor since he took office Jan. 8.

"We look forward to swift action by members of the Senate and to working closely with both houses in the future on a commitment to craft a fiscally responsible and sustainable budget plan for next year that continues to protect local aid and Massachusetts taxpayers," Baker said in a statement.

The governor and legislative leaders had ruled out new taxes or cuts in state aid to cities and towns as means of reducing the deficit.

The House did eliminate from the plan one Baker proposal that lawmakers said would have given the administration more power to restructure benefits for some Medicaid recipients.

The plan includes a $40 million cut in state transportation spending, of which $14 million would come from the Massachusetts Bay Transportation Authority. House leaders assured members that the reduction would not cause further headaches for the MBTA, which has been plagued by equipment breakdowns and service disruptions during the recent spate of severe winter weather.

Rep. Brian Dempsey, chairman of the House Ways and Means Committee, said the cuts would be achieved through a hiring freeze and by reducing administrative overhead at the T.

In an unrelated development Wednesday, Beverly Scott, general manager of the MBTA, announced she would be stepping down from her post in April.

The deficit-reduction plan also calls for a 1.5 percent reduction in the budgets for state colleges and universities, and a similar reduction in funding for non-executive branch agencies. Baker had already moved to trim $145 million in executive branch spending, cuts that did not require legislative approval.

The bill would also create a tax amnesty program for Massachusetts businesses with overdue tax debts and use $131 million in anticipated capital gains tax revenue to reduce the deficit. Those funds would otherwise have been deposited into the state's rainy day fund.

The shortfall in the state's $36 billion budget has been blamed on a number of factors, including the breakdown of the state's health connector website and less than anticipated revenue from non-tax sources such as state fees.