Gov. Maura Healey made it clear this week that Massachusetts doesn’t have the cash to cowl main losses of federal funding, a dizzying situation that has thrust Beacon Hill into uncertainty simply as lawmakers are patching collectively a spending plan for the following fiscal yr.
However state price range observers and key lawmakers are cautioning in opposition to panic and rash choices at the same time as President Donald Trump takes a bulldozer strategy to slashing the scale of the federal authorities, reducing the movement of cash to states, and inserting tariffs on main buying and selling companions.
Rep. Todd Smola, who serves as the highest Republican on the Home’s budget-writing committee, acknowledged that Trump is “moving quicker than most” to chop waste, fraud, and abuse however with a brand new federal administration “comes new goals, new approaches.”
“We really don’t know what cuts are going to look like overall. Unlike many other people, I’m not ready to announce that the sky is falling,” he instructed the Herald Thursday. “Our job as state legislators is to watch this closely, get the best understanding we can of what those cuts may or may not be, and then determine how we’re going to prioritize those things that matter most to us in the commonwealth.”
Healey’s $62 billion fiscal yr 2026 spending plan depends on $16 billion in reimbursements from the federal authorities, almost all of which help MassHealth, the state’s Medicaid program.
Congressional Republicans are pushing by a federal spending plan that might require cuts to Medicaid or Medicare. The proposal nonetheless must clear the U.S. Senate, the place Democrats at first promised to place up a blockade however later confronted calls from their high chief to approve the invoice.
The threats to federal funding in Massachusetts stretch past the yearly price range cycle and into native grants. The Trump administration introduced final week the suspension of a $12 million grant for faculties within the Bay State to supply meals sourced from close by farms to college students.
Cornerstone industries in Massachusetts — training, healthcare, scientific analysis — have additionally come underneath hearth by Trump, who has argued he’s decreasing funding in areas that don’t align along with his coverage views.
The scrutiny on larger training led Harvard College to freeze hiring this month after Trump withheld $400 million in grants from Columbia College in New York. The UMass Chan Medical in Worcester additionally paused hiring and discretionary spending amid federal funding uncertainties.
One other effort to chop billions of {dollars} for analysis on the Nationwide Institutes of Health threatens Alzheimer’s and dementia analysis on the College of Massachusetts Amherst in addition to different initiatives at Brigham and Ladies’s Hospital and the Broad Institute of MIT and Harvard.
Throughout a radio interview Wednesday, Healey mentioned the state can’t cowl any substantial lack of federal {dollars}, both within the state price range or elsewhere, even when making an allowance for the $8 billion reserve account officers have constructed up over time.
“That’s not even enough to get us through what we had to get through back in the 2008 recession,” she mentioned. “The scale of this is massive, and it’s devastating for all states around the country, which is why people need to speak up. There needs to be pressure on Republicans in Congress to stop the madness and to shut this down.”
Massachusetts Taxpayers Basis President Doug Howgate mentioned he’s involved about “material changes” to the partnership between states and the federal authorities on a broad vary of issues, together with these might influence Massachusetts’ price range.
However the former State Home staffer warned in opposition to “preemptive panic,” or making modifications to coverage or spending choices earlier than figuring out the complete scope of what federal lawmakers and the Trump administration plan to do.
“I get that folks don’t want to wait until it’s too late to make changes. I totally understand that. But the bottom line is, especially when we’re talking about the state budget, it would not make sense to make preemptive cuts, preemptive revenue raisers,” he instructed the Herald. “We need to sensibly manage spending, absolutely, but it doesn’t make sense to make changes before you know what you’re changing in response to.”
Smola, the Warren Republican on the Home’s budget-writing committee, mentioned nothing Trump has accomplished at this level “is a nightmare scenario for Massachusetts or any other state.”
“I would also say that in less than two months of the administration being there, when they’ve made decisions that some may consider knee-jerk, the administration has recognized quickly in a number of cases that money or decisions need to be restored,” he mentioned. “I’m not as frightened as a lot of people are, and I don’t see this as the end of the world right now. I see this as a different administration, different approach, a different style.”
Massachusetts price range writers are within the means of holding public hearings to assessment Healey’s $62 billion plan for fiscal yr 2026.
The Home is prone to launch its model of the state price range in mid-April and debate it on the finish of the month. State senators will comply with go well with within the following months with their very own state price range proposal forward of the July 1 deadline to have a spending plan in place for the following fiscal yr.
Howgate mentioned high budget-writers have to clarify to lawmakers that post-pandemic financial “growing pains” and uncertainty in Washington “makes further extension on new programs, new policies, things like that, not a good idea right now.”
“I think, largely speaking, the governor’s budget, you’re not seeing a lot of new program proposals and things like that and I think that that makes sense,” he mentioned.
Initially Printed:
