BOSTON (AP) — Massachusetts Gov. Charlie Baker has his work cut out for him as he prepares to unveil his first state budget proposal.
Baker has until Wednesday to file his spending plan for the 2016 fiscal year that begins July 1.
Baker has already grappled with a projected $768 million budget shortfall for the current fiscal year. The Legislature recently approved a plan to close an estimated $768 million shortfall for the fiscal year ending June 30.
State lawmakers quickly approved his plan to close that hole through a series of cuts, a tax amnesty program, and the use of capital gains tax revenue that typically would go into the state’s rainy day fund.
On Saturday, Baker announced that the 2016 fiscal year budget proposal will include a tax amnesty program to generate $100 million. The program is for taxpayers of all tax types who have not previously filed in Massachusetts (non-registrants), plus taxpayers known to DOR who have not filed and have not yet been assessed by the Department of Revenue (DOR) for failing to file. The amnesty program would run for all of fiscal year 2016.
“Creating incentives for businesses to follow through and pay what they owe will help generate much needed revenue as our administration fixes the budget problems we inherited and brings filers into the system for future payments,” said Baker. “This amnesty program will help craft a fiscally responsible budget that protects taxpayers, delivers much needed services to those who need it the most while protecting local aid for our cities and towns.”
The last non-filer tax amnesty program ran in 2002, and generated $176 million.
But a key taxpayer watchdog group says Massachusetts’ budget shortfall could be as high as $1.5 billion for the upcoming fiscal year.
The Massachusetts Taxpayers Foundation’s projected shortfall assumes funding for programs considered discretionary, from public safety to aid to municipalities, stays level.
Meanwhile, a top administration official says Baker plans to file legislation that would allow thousands of state employees to retire early, and if that doesn’t work, the state may resort to layoffs.
Baker’s budget chief Kristen Lepore tells The Boston Globe the administration projects that 4,500 will take advantage of the early retirement program if it is passed by the Legislature, which would save $178 million.
