December 10, 2015

Baker emphasizes energy, transportation at conference

Courtesy
Gov. Charlie Baker

Outlining goals and accomplishments at a gathering of government bond investors Wednesday, Gov. Charlie Baker said energy and transportation remain among his top priorities and key factors in the state's economic condition.

Given past state budget deficits and gaps, Baker projected "a couple of very difficult years going forward fiscally," but said his administration, the Legislature and constitutional officers are committed to working together on a path forward.

"Our greatest task is to make sure that we continue to build on the tremendous success this region has had in building its economic and intellectual infrastructure, while at the same time maintaining the fiscal discipline that's so critical to be able to make decisions about our operating and capital budgets going forward," Baker said during the Massachusetts Investor Conference at the Boston Convention and Exhibition Center.

MBTA service failures last winter angered commuters and also businesses where operations were affected when employees lost transportation access.

Praising transparency at the MBTA under the new Fiscal and Management Control Board, Baker reaffirmed his belief that the transit agency is ready for winter and said the state will continue to focus on repairing and maintaining existing infrastructure.

"It's really nice to build shiny new things in the public sector, and I get that and I know why people like to do it," Baker said. "I had governors that I worked for that loved to do it, but in the end, we have a lot of existing assets that we should be investing in and supporting, and we're going to make decisions to make sure that we're in the fix-it-first mode when it comes to a lot of our existing infrastructure."

Baker also said he will work with lawmakers "to see if we can get done a pretty comprehensive energy bill" in the first half of 2016, saying that legislation would likely involve wind, natural gas, hydropower and solar energy.

"If we really want to be competitive economically, this is something we need to get done," he said.

Higher energy costs and inadequate transportation infrastructure are among the challenges facing the Massachusetts economy, along with lagging housing production, climate change, and an achievement gap in urban schools, said UMass Dartmouth Public Policy Center Director Michael Goodman.

"Most of our challenges are long-run challenges," Goodman said. "They're going to require sustained levels of investment and leadership."

Goodman also identified building up the state's stabilization fund as a challenge, mentioning that money has been diverted away from the fund over the past several years to close budget gaps. He said the state should find ways to either generate new revenue or better align spending to revenue in order to prevent the drawing down of reserves.

A budget bill Baker signed last month to close out the 2015 fiscal year directed $120 million into the stabilization fund, the first time in three years the state did not draw from the fund to balance the budget.

Addressing the investors, Baker referred to the deposit as "pretty significant" and "something that I know is important to this crowd." He said a need exists to continue adding to the fund.

Treasurer Deb Goldberg, the conference's host, said she considered it a priority to build up sufficient reserves to "handle another economic downturn."

"As treasurer, I have always stated that it is my responsibility to ensure economic stability for Massachusetts and its residents," she said. "And it is my goal to consistently contribute to the state's long-term economic growth."

Goldberg described the treasury's new Office of Economic Empowerment as part of that growth effort. The office contributed to a report out last week that made 22 recommendations for improving the financial literacy of Massachusetts residents.

Next week, Goldberg said, she will announce the city where one of those recommendations -- a college savings account program that will also teach children and families about banking, savings and retirement -- will be piloted. Goldberg called the program "very unique."

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