Massachusetts Gov. Charlie Baker Files Nearly $40 Billion State Budget Plan

Republican Gov. Charlie Baker has filed a state budget that his administration says will target "unsustainable" spending growth in Massachusetts government.

The budget submitted to lawmakers on Wednesday calls for an overall 3.5 percent increase in state spending in the fiscal year starting July 1, but most state agencies will receive little or no additional money.

The administration says the state faces a $635 million structural deficit in the budget, caused by spending obligations rising faster than tax revenues.

To erase that gap, Baker is proposing several steps including nearly $300 million in savings through reforms in Medicaid.

The $39.6 billion budget calls for no new taxes and would return more than $200 million to the state's reserve, or "rainy day" account.