Ilir Miller Joshua 

FW: Spring Update

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Frum: Baker. Gian-e 

SentrTuesda A n25 2m 5:53 PM
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swim: Spring Update

Dear Fellow State Employees --
There is an African proverb that goes something like 
"It you want to go tast. go alone. It you want to go tar. go together,"

Given the ongoing situation with tax revenue growth. which remains pretty modest, we need to keep that
teamwork notion in mind. As of today -- and these numbers may change between now and the end ol June
-- year over year tax revenue is projected to grow by around $550 MM. On a $26 billion tax revenue base.
that is a pretty modest Income tax revenues have been solid, but we've seen softer growth in sales
tax and capital gains related inoome.

Many of you have asked me what we think is going on. First. the good news: we have record employment
-- more people working today than at any time since the Commonwealth began oollecting jobs data this
way in 1976. It's also good news that the prices of many taxable goods have remained either flat or have
gone down over the past couple of years.

The not so good news? Despite the rise in employment. personal income growth overall has been modest
over the course of the past tew years. This is probably due to a number of tactors, but two seem pretty
clear-- many people are not working as many hours as they were belore the reoession of 20092010. and
wages overall have shown modest growth In addition. flat or negative growth in the prioe of taxable goods
-- which is good for consumers -- means very little growth in sales tax revenue. even as we work hard to
make sure the tax collection playing field between online sales and traditional retail sales is as level as
possible.

Put it all together. and it translates into lower tax revenue growth than we've seen in previous reooveries.
That said, most economists seem to think the global economy will continue to perform reasonably well this
year and next. Let's hope they are right.

In the meantime. we will need to continue to seek out opportunities to work better and smarter. and
continue to invest in education and infrastructure. and get better and better at all the stufl our constituents
expect from us.

For example. there is a lot ol really good work being done in education. despite the tight budget times we
live in.

. It our House One budget proposal lor K-12 education stands. it will represent an increase ol more
than 300 million dollars in new state aid tor public schools since we took office in 2015. and the single
biggest state investment ever in our public schools,

. Our high school graduation rate continues to climb, with 87.5% of our students graduating on time in
2016. with a very low 1.9% dropout rate. the lowest in decades.

Our students continue to outperform their counterparts around the country, finishing first in the
National Assessment Exam in English and Math for the sixth year in a row, and finished first on AP
exams.
A new, Massachusetts­specific “next generation MCAS” exam has been developed, and will be offered
online to 4th and 8th graders.
Our budget proposes a $30 MM increase in early childhood education funding, which will provide a
sorely needed boost to workers’ wages, and significantly increase available capacity for kids and
families.
Our Commonwealth Commitment program for MA high school graduates, which gives kids and
families a shot at an all­in cost of $30,000 for a four year degree – before financial aid is factored in –
is off to a strong start, and will be expanded for the next school year.
This administration is the first to issue capital grants to vocational and technical schools and
community colleges to support investments in resources that have significant connections to local
employers and lead to permanent employment.
We also continue to partner effectively with our colleagues in local government, recognizing that 351
strong, vibrant communities make up a strong, vibrant Commonwealth.
Our budget proposal continues to increase our investment in general local aid for cities and towns, so
they can continue to do the critical work they do serving and leading their communities.
Our Chapter 90 road and bridge program continues to pour $200 MM each year into local roads and
bridges.  We also continue to infuse tens of millions of dollars annually into local “complete streets”
programs and local bridge reconstruction and repair work.
There are now 276 communities that have voluntarily signed at least one Community Compact with
us, working, with our help and technical assistance, on almost 650 best practices.
And we – YOU – continue to do great things throughout state government.
Last year, we did something that had been promised for 30 years – got women who were committed
to custody due to an addiction into treatment, instead of into jail.  This year, we did something else that
had been promised for 30 years – reconfigured Bridgewater State Hospital into the clinical forensic
hospital it is supposed to be, serving those on civil commitments.
The reforms at the Department of Children and Families, which was in disarray when we arrived,
continue to move forward.  Caseloads are as low as they’ve been in years, clinical support is on
board, new policies are in place, the Western MA office only serves WESTERN MASS, and there is
progress across many other service elements.
RFPs will be out this summer soliciting thousands of megawatts of clean, renewable hydroelectric and
off shore wind power, made possible by the clean, affordable energy bill we signed into law last
summer, and our solar program is, FINALLY, sustainable.
GE breaks ground on its new corporate headquarters in Boston in May, but they are hardly the only
brand name to move its operations here, or expand its existing footprint here in the Commonwealth.
Our administration continues to do more of what works to grow our economy in every corner of the
Commonwealth.  For example, we recently awarded $19 MM in incentives to 22 small and medium­
sized life sciences companies located outside Greater Boston that are focused on manufacturing,
creating 1,300 new jobs.
The MBTA continues to make serious progress getting its fiscal house in order and increasing
efficiencies and performance.  For example, its operating budget has not gone up for the past two
years – which has never happened before in its history – yet it has more drivers today than when we
took office.  Smart dollar management has made it possible for the T to hold the line on overall
spending, while investing in critical functions that improve service for riders – more drivers, $100 MM
in snow resiliency spending, more new Red Line cars, and a host of other desperately needed and
long overdue investments.  Look for the T to spend big on its core infrastructure over the next several
years, made possible in large part by getting its act together on its basic operations.  Bravo!
All Electronic Tolling – which many people told me was going to be a disaster – has been a big hit. 
The folks at DOT say eliminating the delays caused by toll booths reduces greenhouse gas emissions
by thousands of tons annually, saves up to 2,500 gallons of gas a day, and over 250,000 hours of time
saved that would have otherwise been spent in the car on the Turnpike cursing state government.

 The RMV is rocking (for the most part – those learner’s permit tests during school vacation week were
kind of a problem, no?), the Health Connector, which was fundamentally broken when we took office,
is doing very good work and adding subscribers at each new open enrollment, and we managed to
background check over 70,000 Uber, Lyft and other Transportation Networking Company drivers a
year early – setting the table for a more informed public hearing process on permanent regulations for
ride sharing companies.
We have much to do going forward, no doubt about that.  On workforce development and skill building, the
regional collaboration being led by the Workforce Skills Cabinet will create regional blueprints to ensure we
do all we can to assist those looking for work, and those seeking employees.  Cybersecurity remains both
an economic opportunity for us here in the Commonwealth, as well as an issue for state government as a
big user of digital services & capabilities.  Cleaning up our own house when it comes to deploying and
investing in technology remains a major priority for us, and one on which we have much to do.
Finally – congratulations on being citizens of the #1 state in the United States, according to U.S. News and
World Report.  50 states, over 60 metrics, and we landed at the top of the pile.  Pretty great, if you ask me.
Two personal notes.  First, for those of you who worked with and/or got to know former DUA Commissioner
Rob Cunningham, you know his sudden death at the age of 44 was a terrible loss for us all.  Keep his wife
Jen and their kids in your thoughts.  Second, the Commonwealth's 33rd annual Performance Recognition
Program will include a new award – The Governor Paul Cellucci Award for Leadership and Mentoring in
State Government – in honor of the former governor who spent his career engaging others to embrace
public service and instilling a philosophy of “paying it forward.”
The lives and careers of these two good men and great public servants should serve as models for all of
us.
 

Best,
Charlie Baker