Massachusetts Governor Maura Healey released her budget proposal for the state last week. Healey said the bottom line was $62.8 billion. But at the same press conference, her Lieutenant Governor, Kim Driscoll, held up a hard copy of the budget and said, “this is $63 billion right here.” State House News Service reporter Alison Kuznitz explains the the difference between the two figures is greater than just rounding figures.
Alison Kuznitz, SHNS: The bigger issue is that the administration is continuing to insist is that its budget is actually a lot smaller than it is. Healey is saying that her budget represents only a 1.1% growth over fiscal year 2026, but that's actually only the case if you exclude $2.7 billion dollars in income tax revenue and another nearly $550 million transfer to a medical assistance trust fund.
Carrie Healy, NEPM: Ah, okay. So, speaking of that surtax revenue in that budget, Healey seems to have left zero margin for error. Does she have a ‘plan B’ for the state's essential services if that push to expand the fair share surtax to business income fails? Or is the administration simply crossing its fingers at the federal cuts won't outpace their projections?
I think this is the same situation that we saw last year when Healey's budget chief essentially said that they did not factor into their budget, yet, what massive federal funding losses would entail. But there is a tax tweak within Healey's budget proposal this cycle: basically, the Healey ministration wants to expand the pass-through entity excise tax and subject a greater share of surtax income revenue to that tax. And Healey's team says that would generate an additional $296 million for the state in fiscal 2027.
The Healey administration is pushing back on federal policy on many fronts. Yet this budget includes a $30 million compliance down payment. So, this money, well, $21 million for it isn't going to be used for better health care. It's for the infrastructure required to enforce the federal tax and spending bills, stricter rules like six-month eligibility checks and work requirements. So, state taxpayers are going to be asked to fund this mechanism. That could eventually kick up to 300,000 residents off health coverage. When that $1.5 billion funding cliff hits next year. Has anyone pinned Healy down on whether she plans to use state revenue to backfill that, or if she's quietly preparing for a massive contraction of MassHealth?
You know, the governor at her press conference said that the state cannot bankrupt itself by filling in these federal funding gaps. But I think the administration would argue that it's actually making some of these investments to comply with federal law to lessen the blow of how many people could get kicked off.
I think there's the idea that if the state really invests in its infrastructure, it could find a way to keep more people on MassHealth rolls. And you're also seeing a similar investment with the Healey administration investing in Department of Transitional Assistance caseworkers to keep the state's error rate down, to make sure that Massachusetts really doesn't end up paying hundreds of million dollars to pay for SNAP benefits by itself.
So, what comes next for the Massachusetts budget?
So, this is only the governor's proposal. This is now going to go to the House and to the Senate. And then those branches will come together to hash out the differences.
This budget by Healey is very much viewed as an election year budget. So now it's also going to be a tougher decision for Democrats in the House and Senate if they feel that Healey has adequately funded some of these accounts, and if they're going to have to make some tougher funding cuts of their own.
Last year, the budget was signed on July 4th, the same day that President Trump signed the One Big Beautiful Bill act. And it remains to be seen, though, if the Legislature will move at the same pace for this budget cycle.
Moving on, Governor Healey has rolled out executive actions and legislation to limit ICE activity and block out-of-state National Guard deployments, as Black and Latino Caucus lawmakers pushed the 'Protect' act to curb local cooperation with federal agents. So, is the governor moving in step with the Legislature on immigration, or is this a more cautious approach from Healey?
The governor is definitely moving in line with the Legislature, but I think she's also saying that she can't wait for the Legislature. So, there’re certain things that she can do right now as governor to say, ‘I want to ban further agreements that would allow state officials, law enforcement to cooperate with federal immigration officials.’
But Healey has also filed a bill that would really require the Legislature to get on board and that would protect other entities, facilities, schools, after school programs, houses of worship, and being protected from Ice agents entering the properties.
