Setti Warren, the two-term mayor of Newton, entered the race for Massachusetts governor on Saturday, joining two other Democratic candidates hoping to unseat Republican Gov. Charlie Baker in next year's election.

Warren made the announcement in front of his home, telling supporters in prepared remarks that income inequality has become "the defining issue of our generation."

An Iraq War veteran who briefly ran for the U.S. Senate in 2011, Warren is touting two ambitious - and potentially expensive - ideas to make what he calls a "generational investment," and help close the gap between rich and poor: a government-backed single-payer health care system and free tuition at all public colleges and universities including the University of Massachusetts.

"We have to redefine what public education means in the 21st century," Warren said in an interview with The Associated Press.

He promised to flesh out details of his free tuition plan and what single-payer health care might entail in the coming months.

He also called for major transportation improvements, including upgrading the MBTA, pushing ahead on the long-promised South Coast Rail project and exploring a possible east-west high speed "bullet train."

Warren acknowledges that his initiatives come with a hefty price tag. The University of Massachusetts' flagship campus in Amherst, for example, reported $373.5 million in net tuition and fees in this fiscal year.

To meet the added costs, Warren openly supports new taxes, including the "millionaires' tax" likely to go before Massachusetts voters next year. The proposal calls for a 4 percent surtax on any part of an individual's income above $1 million.

Robert Massie, a longtime environmental activist, and Jay Gonzalez, a top state budget official under former Democratic Gov. Deval Patrick, previously announced their candidacies. Both Democrats also support the millionaire tax.

Baker is expected to seek a second four-year term but has yet to formally announce. The Republican opposes tax increases.

Warren was circumspect on what other new taxes he might consider, but did promise a review of all existing tax breaks the state offers to industries and businesses to see if taxpayers are getting the best return for their investment.

Doing nothing, he said, was not an option.

"Are we satisfied with what's happening? Are we satisfied as a commonwealth right now with people not being able to afford to put a roof over their head working as hard as they can, not being able to afford health care, getting buried with debt?" asked Warren, a father of two young children. "Are we satisfied with that as a commonwealth? I'm not. That's why I'm running."

State government, he argues, has failed to think big, instead lurching from budget crisis to budget crisis despite a strong economy and low unemployment.

Warren drew the ire of many Newton residents when, after being in office less than two years, he decided to challenge Republican U.S. Sen. Scott Brown. He left the race after a brief campaign, endorsing the eventual winner, Democrat Elizabeth Warren.

"I ran too early," Warren acknowledged.

All three Democratic gubernatorial hopefuls have their work cut out for them in trying to displace Baker, who remains popular in polls of Massachusetts voters and also sits on top of a pile of campaign cash - nearly $5.5 million as of mid-May.

By contrast, Warren had about $56,000 in his account. Gonzalez reported nearly $81,000 and Massie about $13,000.

"I am not a person who puts my finger in the wind and makes a decision based on which way the wind is blowing," Warren said. "My intention is to build the largest grassroots effort in Massachusetts history."