A hole in the state’s recovery narrative

The state added more than 60,000 jobs to the workforce in 2014, the strongest growth in nearly 15 years, pushing year-end unemployment down to 5.5 percent. Tax revenues are flowing in higher than expected. The housing market is starting to recover, construction is on the upswing, and things are looking so rosy that a costly Olympic bid has more support than opposition.

So with the sunny side of life shining down on the City Upon a Hill, why is there a $765 million deficit staring new Gov. Charlie Baker in the face? Good question.

The Boston Globe takes a stab at trying to explain it, with observers citing everything from underfunding the Group Insurance Commission and state public defenders to the inevitable fallout from income tax cuts voters approved a decade ago. Much of the blame is being laid on health care, mostly the increased Medicaid funding from Obamacare and the state’s botched rollout of the exchange to comply with the federal standards.

Baker, who instituted a hiring freeze upon taking office, says it’s not a revenue problem but rather a spending problem, noting taxes are coming in about 4.4 percent higher while spending is running about 7.3 percent above last year. That’s not a sustainable recipe for balance.

The Boston Herald says the problem is twofold: the Legislature and former Gov. Deval Patrick and their inability to just say no. The paper points out that Patrick slashed about $198 million from the budget before he left town, bringing the actual deficit up to nearly $1 billion, a nice housewarming gift for Baker. Adding to the problem is that as of January 1, the state income tax dropped, by statute, from 5.2 percent to 5.15 percent, meaning about $70 million less will be available.

The parallels to Baker’s mentor, former governor William Weld, are obvious. Weld, too, inherited a fiscal mess and was tasked with cleaning up after his predecessor with a Legislature controlled by the opposition party. Baker was a big part of the Weld administration’s efforts to straighten out the budget disaster. Unlike 1991, though, the economy in the Bay State in 2015 is in stronger shape, making the task a little easier.

But also in 1991, Weld benefitted from a massive tax hike he opposed that brought in needed revenues to deal with the gap. Baker has, at this point, taken taxes off the table and House Speaker Robert DeLeo also says they are not on the horizon. New Senate President Stan Rosenberg has said the state has “both and spending and a revenue problem,” but there’s little he can do without the other two.

JACK SULLIVAN

BEACON HILL

Treasurer Deborah Goldberg, at her swearing-in ceremony, urges Gov. Charlie Baker not to use money headed for the state’s rainy day fund to balance this year’s budget, State House News reports. Meanwhile, the state Lottery, which Goldberg now oversees, is facing new pressure from New Hampshire, where the state lottery is selling bacon-scented scratch tickets.

Senate President Stan Rosenberg unveils his leadership team, with Sen. Karen Spilka of Ashland as the body’s budget chief and Sen. Harriette Chandler of Worcester as majority leader, CommonWealth reports.

Baker fills out his cabinet, naming a Worcester prosecutor as his public safety secretary, State House News reports.

Massachusetts has the lowest participation rate of any state in “workfare” programs for those receiving public assistance, according to a new report from the Pioneer Institute.

MUNICIPAL MATTERS

Boston Mayor Marty Walsh gets kudos for his first year in office from the Bay State Banner.

The Taunton Housing Authority has entered into a management agreement with its Stoughton counterpartto run the agency temporarily after Stoughton’s executive director was suspended for allegedly stealing prescription medication from a 90-year-old resident.

The Fall River City Council has tabled a request by new Mayor Sam Sutter to create two new administration posts to be filled by former employees of his at the Bristol District Attorney’s office.

Police and residents discuss race relations in Roxbury.

Changes in traffic flow and transit are proposed to help ease growth of the South Boston waterfront district.

OLYMPICS

Boston 2024 offers its vision of what a Hub Olympics would look like, and where the venues would be located. WBUR posts the group’s bid documents here. Mayor Marty Walsh is drawing criticism for signing an agreement with Olympics organizers that pledges that no city employees will criticize or disparage the Games. He calls it “boilerplate” language that he doesn’t intend to enforce. Lead organizer John Fish tells theSouth Shore Chamber of Commerce “the stars are aligned” for the region to host the Games.

Residents worry about how the Olympics might affect Franklin Park.

CASINOS

Mohegan Sun, which lost out in the competition for the eastern Massachusetts casino license, joins a lawsuit alleging bias by the Massachusetts Gaming Commission, CommonWealth reports.

Connecticut lawmakers and tribes meet to discuss the competitive threat from casinos in Massachusetts.

NATIONAL POLITICS/WASHINGTON

Elizabeth Warren’s next target: fair housing and the Supremes.

BUSINESS/ECONOMY

Google is looking to sell wireless service through Sprint and T-Mobile, a move that could bring down prices.

Is “Deflategate” yet another stain on the Patriots brand that has been such a commercial goldmine?

EDUCATION

A Scituate middle school has received a “cease and desist” letter from Georgia Tech, telling it to stop using the drawing of a yellow jacket because the southern university has a trademark on it.

More than 100 Lowell teachers picket at a School Committee meeting to protest the lack of progress on a new contract, the Sun reports.

Most South Coast lawmakers say they oppose Gov. Charlie Baker’s efforts to raise the cap on charter schools, saying they would rather struggling public schools be turned around first.

HEALTH CARE

Grief-struck colleagues remember Dr. Michael Davidson, slain on Tuesday at Brigham and Women’s Hospital, as an extremely capable and compassionate physician. The brother of shooter Stephen Pasceri, who committed suicide after the attack, says his brother “lost it” after believing a medication error led to their mother’s death.

CommonWealth columnist John McDonough says the Affordable Care Act is working.

TRANSPORTATION

Gov. Charlie Baker says his administration will look into the “contracts and the bid process” involved in a $566 million contract for subway cars with a Chinese company.

ENERGY/ENVIRONMENT

Casella Waste Systems proposes to enlarge its Southbridge landfill by expanding into Charlton, theTelegram & Gazette reports. Patricia Weatherbee, a seventh-grade science teacher in Lawrence, says the city generates too much trash. To illustrate the problem, Weatherbee and her students put on a fashion show with the fashions made entirely from recycled materials, the Eagle-Tribune reports. In Beverly, city officials are exploring moving from their five-barrels-a-week trash limit for each home to a system where residents pay a small fee for each barrel of trash they put at the curb, the Salem News reports. CommonWealth did a deep dive on the state’s trash problems in its latest print issue.

Natural gas leaks in the Boston area are far greater than previously projected, and are contributing to higher energy prices.

CRIMINAL JUSTICE

With jury selection slow going, court officials say Dzhokhar Tsarnaev’s trial will not begin next week, as originally scheduled.

A West Bridgewater man has reached a settlement with the town in a suit against the police department for excessive force and false imprisonment, the fourth settlement the town has paid out since 2007 over claims involving its officers.

MEDIA

Jim Braude is leaving NECN to replace Emily Rooney on WGBH’s Greater Boston.