Governor Charles D. Baker inaugurated the centennial celebration of Associated Industries of Massachusetts today by telling more than 900 business leaders that economic growth “is always going to be the foundation of a great state.”

“Without expansion, it becomes very hard to accomplish much with our good works agenda,” Baker said during a keynote address at AIM’s 100^th Annual Meeting in Boston.

The governor said that his administration and the Legislature are making significant progress on a number of key issues, including balancing the state budget, regulatory reform and the MBTA.

Resolving an unexpected $765 million structural budget shortfall for the current fiscal year and a $1.8 billion deficit for Fiscal Year 2016 will permit state officials to develop strategic financial plans moving forward, according to Baker.

“It gives you the ability to think strategically about what to do with your resources,” he told the crowd.

On regulatory reform, the governor said it has been the 351 cities and towns of Massachusetts that have been the strongest voices for creating an efficient and modern system of regulations. Small and medium-sized towns, along with small and medium-sized businesses, Baker said, are the entities that will benefit most from reform.

The idea is “to create framework so the small can play on same playing field as the large. For small and mid-sized organizations, it is the difference between thriving and barely getting by or not getting by.”

Baker said every Massachusetts employer and resident has a stake in overhauling the MBTA since more than half of the revenue for the transit system comes from people who do not ride it. He also implored business leaders to involve themselves in solving the opiate crisis, which last year took more lives in Massachusetts than automobile accidents.

The governor noted that AIM has done well to survive and prosper in the rough-and-tumble world of Massachusetts politics.

“You should be enormously proud of the work that AIM has done for a century on behalf of businesses in the Commonwealth of Massachusetts,” Baker said.