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Governor Charlie Baker shaves $49m off budget

Massachusetts Gov. Charlie Baker spoke during a news conference at the Statehouse in Boston. Steven Senne/Associated Press/FILE/Associated Press

Governor Charlie Baker announced $49 million in budget cuts late Friday afternoon, leaving a number of vacancies unfilled across the state bureaucracy and slicing grants to hospitals and community health centers.

The midyear reductions were more modest than some on Beacon Hill expected; a small fraction of a state budget that runs over $38 billion.

“Today’s corrections do not raise taxes or fees and will not affect the state’s ability to deliver core services,” said Kristen Lepore, the governor’s budget chief, in a written statement.

Baker administration officials say the cuts were necessitated by revenue shortfalls in some places — such as the Plainridge Park Casino and registries of deeds — and higher-than-expected costs in others.

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The trims come amid mounting concern about the state’s long-term budget outlook. Standard & Poor’s Rating Services has warned it could downgrade Massachusetts’ strong bond rating if it doesn’t shore up its reserves.

And the Massachusetts Taxpayers Foundation, a business-backed budget watchdog, says the state could face a $1 billion shortfall for the fiscal year that begins in July.

But those are problems for another day.

On Friday, Eileen McAnneny, president of the Taxpayers Foundation, praised the governor for his midyear cuts. “We applaud the Baker administration for taking this proactive approach to the budget gap,” she said. “Challenges remain, but without today’s action, the decisions in the months to come would be even harder.”

The state’s Democratic Party took a swipe at the governor, though, for announcing cuts late on a Friday afternoon when few were paying attention.

“By slashing $50 million and hiding behind a Friday news dump, Governor Baker is proving that he lacks vision for the future and sees budgets as numbers on a spreadsheet and not the people behind the programs,” said Pat Beaudry, a party spokesman, in a written statement.

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“Reining in government spending and keeping taxes low is never bad news,” replied Terry MacCormack, a spokesman for the state GOP.

The administration is anticipating a $320 million budget shortfall for the current fiscal year. The $49 million in cuts it announced Friday, combined with some federal Medicaid dollars and other new revenue it identified, plug about $105 million of the hole.

Tax collections, unlike some other state revenues, are running ahead of expectations six months into the fiscal year — $114 million ahead. And the Baker administration is counting on continued strong returns to make up a substantial chunk of the remaining shortfall.

That would leave the administration with a relatively small budget problem to sort out at the end of the fiscal year.

Baker’s mid-year cuts were unusual in one respect. The Massachusetts Taxpayers Foundation reviewed state budgets dating back to 2001 and found that no governor had made cuts partway through the year when state tax revenues were running ahead of expectations, as they are this year.

The administration, though, cited shortfalls in non-tax revenue — at the casino, registries of deeds, and elsewhere — to justify the reductions.

The governor, among other things, cut $10 million in grants to small and mid-size hospitals and community health centers and $750,000 from the state’s cash assistance program for the poor, citing lower-than-expected caseloads.


David Scharfenberg can be reached at david.scharfenberg@globe.com.