Gov. Charlie Baker addresses reporters on Jan. 21, 2021. Photo by Sam Doran | State House News Service

In his first in-person speech to the business community in two years, Gov. Charlie Baker said Tuesday he will offer some “unusual approaches” later this week to help people get back to work as he made a pitch for an agenda in his final year in office that includes investing in behavioral health and helping cities and towns redesign their downtowns for a post-pandemic future.

Baker spoke to a crowded ballroom of business leaders at the Westin Copley Place hotel in what used to be an annual event hosted by the Greater Boston Chamber of Commerce before COVID-19.

While Baker addressed the group virtually last year, the socializing and networking that is a hallmark of the breakfast returned this year and GBCC President Jim Rooney joked that he was glad his suit still fit. The speech was also streamed live by the chamber, and online by NBC10 Boston and New England Cable News.

Baker, who is in his final months as governor, outlined an ambitious legislative agenda that includes a $700 million package of tax cuts for renters, seniors, low-income families, and investors.

“Governor Weld will be pleased to know we do have a tax cut proposal before the legislature,” Baker joked, referring to his former boss in state government and political mentor Gov. William Weld.

Baker said his plan to increase the estate tax threshold and lower the short-term capital gains tax from 12 percent to 5 percent would make Massachusetts more competitive with other states and eliminate a disincentive for people to age and retire here.

The governor said he senses a “fair amount of interest” from the legislature in tax relief, despite Democratic leaders so far being non-committal on the administration’s plan.

“Our economy has dramatically overperformed relative to expectations and we think it’s important that we give some of that back to the people who made that possible,” Baker said.

Touting what he said was one of the highest labor force participation rates in the country of 65 percent, Baker said Massachusetts lost about 700,000 jobs at the height of the pandemic, but has gained back 580,000 jobs and has 250,000 open positions and 180,000 people looking for work.

Housing Costs, Downtown Struggles a Worry

Baker also plugged the $9.7 billion borrowing bill he has filed to invest in highways, transit and environmental infrastructure, and said he will soon refile a request with the legislature to use federal American Rescue Plan Act funds to help cities and towns adapt their downtowns to the new habits of workers, residents and commuters after the COVID-19 pandemic.

Baker requested $250 million in ARPA funds for the downtown initiative last year, but received no funding from the legislature.

“We will file again shortly significant resources for placemaking, reimagination and creativity around downtowns, and I would ask this organization and every chamber and every other organization to recognize and understand that the future of downtowns is going to be different, whether we like it or not, than it was before and we need to start the process of reimagining the placemaking of downtowns so they can thrive and be successful in what will be a slightly different world in many cases – a significantly different world in some cases – than the one we all had before the pandemic,” Baker said.

Citing the cost of housing as the biggest “headwind” facing the Massachusetts economy, Baker said it was a factor in two of his three children no longer living in Massachusetts.

He went on to tell the story of Amazon blaming the shortage of affordable housing and the complicated development process in Massachusetts for why the company chose not to locate its second headquarters in the state, only to then select New York City and the Washington, D.C. area.

“If we aren’t good enough compared to those two places with respect to the cost of housing and the ability to develop it, my, oh, my,” Baker said.

The governor said the legislature came through with some of the funding he requested from ARPA for housing development, but not enough.

As for what Massachusetts has going for it economically, Baker said it’s the people.

“We’re still wicked smart,” he said.