High Finances Author Open To Concepts Throughout “Extremely Turbulent” Time
BOSTON, FEB. 27, 2025…..The Senate funds chief knocked the opportunity of dipping into the state’s greater than $8 billion wet day fund Thursday to handle monetary woes, but additionally warned that federal policymaking and looming cuts might cripple Massachusetts’s financial wellbeing.
“Our state’s financial and financial well being could be very a lot liable to being upended,” Senate Methods and Means Chair Michael Rodrigues mentioned throughout public “Commonwealth Conversations” remarks hosted by Related Industries of Massachusetts at Peabody Nixon’s regulation places of work in downtown Boston.
Whereas shifting priorities and the withdrawal of federal funding helps in Washington might have widespread results on folks, jobs and budgets right here, Beacon Hill seems to be ready for extra detailed indicators from Washington on the extent of the upheaval.
The Westport Democrat urged enterprise and labor communities to search out widespread floor with the state to safeguard the economic system “within the face of intensifying financial headwinds and geopolitical turbulence.”
“Whether or not it’s in schooling, well being care, infrastructure, workforce growth, tax coverage or unemployment insurance coverage, it’s crucial that all of us work collectively to make sure that Massachusetts stays strategically positioned to climate the storms forward,” Rodrigues advised dozens of enterprise leaders.
He continued: “The federal-state partnership could be very a lot in jeopardy, posing an existential risk to our state. In reality, the latest proposal to chop NIH funds represents an assault on Massachusetts’s economic system, for the reason that commonwealth is the most important recipient of NIH funds per capita. This motion not solely stifles innovation, however it will jeopardize medical analysis, blunt future scientific discoveries, and result in the eventual lack of jobs within the eds and meds sector of our economic system, whose overarching mission is to compete, is to enhance well being outcomes and save lives.”
Healey this week has ramped up her administration’s criticism concerning the Trump administration’s cuts to National Institutes of Health funding, saying the lack of cash will jeopardize the state’s life sciences ecosystem and hurt folks present process stalled medical trials. Even with Lawyer Common Andrea Campbell’s lawsuit towards the abrupt cuts, which led to a choose issuing a brief restraining order towards NIH, Healey advised reporters Wednesday the cash remains to be not flowing to Massachusetts.
U.S. Home Republicans authorised a funds blueprint Tuesday that would end in $880 billion cuts to Medicaid, a plan that Healey says might trigger 2 million Bay Staters to lose their health insurance coverage. To Rodrigues, that blueprint — which nonetheless have to be ironed out in committees and in negotiations with the Senate — alerts “clearly that this important income help could be very a lot liable to being reduce considerably.”
“This motion alone could be destabilizing for states like ours that depend on this help to help our Medicaid populations, these people who’re most susceptible, disabled and medically complicated,” Rodrigues mentioned. “It will even be devastating for our fiscally constrained hospitals and group well being facilities who’re doing what they’ll do to ship crucial companies populations want.”
Rodrigues famous MassHealth is the most important line merchandise within the state funds at almost $20 billion. Medicaid cuts would have an effect on almost all households in Massachusetts, together with these with family members in nursing properties or long-term care services, he mentioned.
“I’m simply going to stay day-to-day — that in the end, it can implode,” Rodrigues mentioned. “We get federal reimbursement of about 50%, not fairly, however about 50%. Any adjustment to that could be a killer to us.”
U.S. Home Republicans haven’t detailed cuts, however say their strategy is meant to tamp down on “unsustainable” Medicaid spending. Healey’s fiscal 2026 funds included greater than $16 billion in federal funding, with the bulk linked to Medicaid.
As Beacon Hill lawmakers watch for extra element, Rodrigues confused the significance of “exercising fiscal constraint and remaining vigilant throughout this extremely turbulent and unsure time.”
“We should forego any speedy temptation that will harm our state’s long-term financial well being, whereas fastidiously figuring out and assessing areas of considerations the place we, as a commonwealth, might must shoulder the burden within the absence of federal help,” Rodrigues mentioned, with out providing particular particulars.
Fearful concerning the lack of federal funding and Healey’s funds cuts, the Raise Up Massachusetts coalition, labor unions and health care advocates have just lately referred to as on Beacon Hill to attract from the state’s wet day fund to shut potential funds holes.
Rodrigues shot down the prospects of utilizing the bulging reserve account, as he fielded questions from Stephanie Swanson, a former Beacon Hill staffer and AIM’s government vice chairman of presidency affairs.
“There’s no speak of utilizing the wet day fund,” Rodrigues advised Swanson, who requested if the account may very well be used to fill potential gaps from NIH or different federal funding. “It’s going to be hard-pressed once we are experiencing income development.”
Finances writers have predicted a 2.2% enhance in state tax income, and Rodrigues mentioned the “acceptable time” to make use of the wet day fund is when revenues are declining. Rodrigues identified the state’s bond score elevated in 2023 for the primary time in virtually a decade, as he credited the Legislature’s “fiscal self-discipline.”
Pressed concerning the availability of different state sources or choices to assist Bay Staters who might lose MassHealth protection, Rodrigues famous Massachusetts has drained one other financial savings account over the migrant disaster inundating state-funded shelters.
“Massachusetts state funds can solely spend Massachusetts state income. So we’re trying very carefully at our projected income development, and it’s obtained to come back from someplace,” Rodrigues advised the Information Service.
“And I all the time say, you may solely spend a greenback as soon as,” he continued. “So, we’ve taken some huge cash out of financial savings during the last yr to cope with the emergency help program. That cash isn’t out there to spend on the rest, so it’s going to be a problem. I don’t have a solution. We don’t know the place it’s going to come back from but.”
Rodrigues, fielding questions from Swanson, wouldn’t say whether or not his department’s fiscal 2026 funds would come with new tax provisions. However he mentioned his staff is reviewing Healey’s proposed tax code modifications, together with subjecting sweet to the gross sales tax and imposing a brand new tax on pharmaceuticals.
“We’ll take a look at each certainly one of her proposals. Our mantra, as you recognize, has been to cut back taxes — scale back tax burden,” Rodrigues mentioned, as he invoked final session’s tax aid package deal.
“I imply collectively, we’ll have discussions within the Senate to see if any of her tax proposals — none of them are main, none of them are broad-based — they’re all very focused, whether or not it’s pharmaceuticals, prescribed drugs, sweet,” he added. “We’ll collectively decide, so it’s too quickly to say whether or not or not we’re going to undertake them. Any that we don’t undertake means we simply construct a gap within the funds, deeper and deeper.”
Rodrigues, requested whether or not his department is contemplating any tax will increase or coverage modifications past Healey’s suggestions, advised the Information Service, “Not as of but.”
“But when someone — we don’t low cost or dismiss any proposal,” Rodrigues mentioned. “So if somebody have been to come back to us with a proposed tax coverage, which nobody has, but when someone would, we’d take a look at it. We’re trying on the governor’s tax proposals as a result of they replicate actual {dollars}. It’s nonetheless too early to know whether or not or not what we are going to settle for or what we are going to reject.”
The Massachusetts economic system is also hamstrung by President Donald Trump’s stalled tariffs on Canada and Mexico, Rodrigues indicated.
The cranberry business, as an example, is “simply recovering” from tariffs imposed in the course of the first Trump administration, Rodrigues mentioned. Asia, which Rodrigues described as a big importer of cranberries, ended up shopping for the produce from Canada throughout Trump’s preliminary tenure.
“So Quebec and Canada now’s the No. 1 producer of cranberries on the planet. Massachusetts has slipped, however we’re starting to recuperate from that,” he mentioned. “So who is aware of what’s going to occur once more this time.”
