Baker’s new tax tone

It was one of the most dissected lines from Gov. Charlie Baker‘s recent inaugural address, coming at the end of a victory lap about the recent budget surplus.

“And we did it without raising taxes,” Baker exclaimed to the crowd of officials and supporters in the House Chamber earlier this month.

That may have been a theme — though not a strictly followed rule — of his first term, but the governor has clearly taken a new tack in the budget he unveiled yesterday.

That budget bill, as detailed by the State House News Service‘s Matt Murphy, proposes a new tax on opioid manufacturers, an extension of tobacco taxes to cover e-cigarette liquids, and an increase in real estate transfer taxes. It also anticipates an additional $133 million from the burgeoning legal marijuana industry and $28 million from the forthcoming tax on short-term rentals, which Baker signed into law late last year.

The $42.7 billion budget would increase spending 1.5 percent over the current fiscal year — a fairly modest overall increase that should allow the House and Senate to pack on spending when they have their turns this spring. Nearly a month before Baker filed his bill, budget writers estimated that state tax revenues, the top funding source for state government, will grow 2.7 percent to $28.5 billion in fiscal 2020.

The governor highlighted some areas where his budget would make significant investments. The budget would boost opioid addiction treatment by $48 million, increase public education funding by $200 million, and send an additional $5.5 million to the Department of Public Utilities’ pipeline safety division.

The governor’s budget generally serves as a framework for the annual spending bill that will be passed first by the House and then by the Senate. The inclusion of proposed changes to tax law at this early stage could color the budget debates to come. Under the state’s constitution, only the House — not the Senate — can initiate a so-called money bill that makes changes to tax laws. If the House goes along with any of the governor’s tax proposals that could give the Senate a free hand in advancing some of its own tax policies.

Some other things to keep in mind: Neither the House nor the Senate has a chief budget-writer yet. In the House, Rep. Nika Elugardo defeated Jeff Sánchez, who was the House Ways and Means chairman, and the committee’s long-standing vice chairman, Stephen Kulik, retired. In the Senate, the former Ways and Means chairwoman, Karen Spilka, won the support of her colleagues to become Senate president last year, giving more responsibility to the committee’s vice chairwoman, Joan Lovely.

Theories abound as to who Spilka and House Speaker Robert DeLeo will choose for their respective Ways and Means chairs. Whoever takes over will have a substantial role shaping the final version of the bill Baker filed yesterday.

One of the prevailing questions of Baker’s first term was whether and when he would spend the political capital he has accumulated? The governor’s caution to get out ahead of public opinion on issues was a main point of criticism from his unsuccessful Democratic opponent last fall, who derided Baker as a “status quo governor.”

Raising taxes in any significant way requires a down-payment of political capital, as the proponent is sure to face blowback from those who stand to lose from the proposal. Wildly popular within the state as a whole, Baker’s middle-of-the-road approach has alienated a portion of his own party. About a third of Republicans voted for Baker’s right-wing primary opponent last fall.

The Massachusetts Fiscal Alliance, a conservative non-profit, came out against the governor’s tax proposals on Thursday, especially the real estate transfer fee. “These are the types of short-sighted mistakes we saw our neighbor to the south, Connecticut, make all through the last decade,” MassFiscal spokesman Paul Craney said.

With the party apparatus now under control of Jim Lyons, a conservative former state rep from Andover, it will be interesting to see how Baker handles criticism of his budget from those for whom few taxes are justifiable.

ANDY METZGER

BEACON HILL

Gov. Charlie Baker takes a new tack on taxes and new revenues in his fiscal 2020 budget proposal. (CommonWealth) The budget also calls for more K-12 school funds — and more accountability for local districts, an approach facing opposition on Beacon Hill and beyond. (CommonWealth). The budget also would establish a process for MassHealth to rein in the cost of high-priced drugs for which there is little competition by giving the state more leverage in setting prices. (CommonWealth)

Carol Mici, a veteran employee at the state Department of Correction, was appointed commissioner. (MassLive).

A Herald editorial opposes Baker’s proposal for a law allowing police to pull over drivers for not wearing seatbelts or using a handheld cellphone.

MUNICIPAL MATTERS

Mayor Marty Walsh seems to be softening to the idea of safe injection sites in Boston after a visit to Montreal and Toronto where the practice is in place. (Boston Globe)

During a visit to the US Conference of Mayors in Washington, DC, Walsh says the rising cost of housing is a common theme among mayors across the country and mayors are looking at Boston’s housing production plan. (WBUR)

WASHINGTON/NATIONAL/INTERNATIONAL

President Trump gives in to House Speaker Nancy Pelosi and agrees to postpone his State of the Union address until the government shutdown is over. (New York Times)

The Herald’s Joe Battenfeld says former governor Bill Weld may be considering a presidential run — either under the Republican label he previously said he has abandoned or as the Libertarian he has become. (Boston Herald)

Rep. Alexandria Ocasio-Cortez gets three “Pinocchios” from the Washington Post for comments about wealth and inequality she made last weekend.

ELECTIONS

Bucking recent history, it looks like there will be lots of interest in running for Boston City Council seats this year. (Boston Globe)

BUSINESS/ECONOMY

Sen. Eric Lesser wants Massachusetts to adopt a policy being used in Vermont by offering a $10,000 relocation payment to people who move to Western Massachusetts to help goose the region’s economy. (Boston Globe)

State Street Corp. says it will move into a new 1-million-square-foot tower being constructed at One Congress Street. (Boston Globe)

EDUCATION

The Longmeadow School Committee is in limbo after four of the seven members retire rather than face a recall election spurred by angry parents. (MassLive) The controversy stems from the committee’s push to remove Superintendent Marty O’Shea. (Western Mass Politics & Insight)

Green Mountain College announced it will close after the spring semester, citing declining enrollment and financial pressures at the small Vermont school, the latest small private college in New England to announce it is closing or weighing a merger. (Boston Globe)

HEALTH/HEALTH CARE

Massachusetts ranked seventh in opioid overdose death rates in 2017, at 28.2 per 100,000 people. West Virginia ranked first at 49.6. Four of the New England states were in the top 10 and all six were in the top 15. Nebraska was lowest at 3.1. (Becker Hospital Review)

TRANSPORTATION

Cambridge Street in Boston could be in for a lot of disruption as Massachusetts General Hospital wants to build two new 12-story towers along the road and transit advocates want to tear the road up to put in a subway link between the Red and Blue Lines. (CommonWealth)

Unlike every other municipality in the state, Boston does not submit standardized traffic crash data to state officials, which means the city could be missing out on state-funded road safety audits. (WGBH News)

ENERGY/ENVIRONMENT

The Massachusetts Department of Environmental Protection is cracking down on companies that put materials that could be recycled in their trash. (MassLive)

The Nuclear Regulatory Commission reported Pilgrim Nuclear Power Station operators closed out on the final 40 items on a list of 156 deficiencies identified in 2017 in a recovery plan. (Cape Cod Times)

Falmouth leaders voted to shut down two municipal wind turbines whose sight and sounds generated heavy criticism along with electricity, leaving the town with long-term debt from the $10 million project. (Boston Globe)

Vineyard Wind officials reached an agreement with environmental groups to protect right whales and also offered to compensate Rhode Island fishermen for any damages caused by a planned wind farm’s construction south of Martha’s Vineyard. (Cape Cod Times) [CORRECTION: The initial draft of this item suggested the compensation package had been accepted.]

After a Haverhill resident complained about hunting occurring on land owned by the MBTA, the transit agency posted no-hunting signs and the city council is forming a committee to look at the issue of hunting within city-limits. (The Eagle-Tribune)

CRIMINAL JUSTICE/COURTS

Ralliers gathered in front of the Bristol County House of Correction to protest Sheriff Thomas Hodgson’s agreement with ICE that allows his personnel to perform the duties of immigration officers. (Standard-Times)

A smartphone location-finding app was instrumental to police locating Olivia Ambrose, the 23-year-old woman who went missing in Boston over the weekend. (Boston Globe) Police also made extensive use of video surveillance recordings from several locations. CommonWealth spotlighted in this 2015 feature story how video surveillance was becoming integral to criminal investigations, including the Boston Marathon bombing case.

Braintree Police led an investigation into suspected illegal marijuana grow houses located in Westford, Braintree, and Quincy, and arrested a Braintree man on marijuana trafficking charges. (Lowell Sun)

MBTA police arrest a Natick man at Ashmont Station in Dorchester who was using a leash to whip his dog. (MetroWest Daily News)