Trump-fueled uncertainty is adding chaos as officials try to craft a state budget

Boston Globe

13-04-2025

That volatile mix is injecting chaos into a process that thrives on predictability. One state budget watcher is calling on lawmakers to pare back revenue estimates by $1 billion — as a starting point. The House's top Democrat, while pledging not to raise taxes or fees in the budget his chamber is
expected to release next week, said he'll likely seek to fund many agencies and accounts at the same level as last year, given the uncertainty. But he warned the state may be unable to avoid mid-year budget cuts if federal aid dries up.
'We're treading on thin ice,' House Speaker Ron Mariano told reporters Wednesday, 'and we don't know what the final numbers are really going to be.'
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That's not to say state lawmakers haven't budgeted in unsteady fiscal times before. The Great Recession forced the state to
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Ultimately, officials didn't have to take that drastic step. And in both cases, the state benefitted from federal help offered as a cushion against economic stress: billions of dollars through a
No such backstop appears on the horizon now. The Trump administration is aggressively pulling back federal spending through a
frenetic series of
Meanwhile, Congress is pursuing a spending blueprint that Democrats and state officials warn could mean
for its MassHealth program. In all, the state budget typically leans on roughly $16 billion in federal aid — most of which is tied to health insurance for 2 million Massachusetts residents, including children, low-income families and those with disabilities.
The state's own tax revenue also relies directly on its, and the nation's, economic health. Trump's
'Unlike recessions of the past which were created by cheap money, faulty mortgages, excessive risk taking or COVID, this one is self-inflicted, carried out by a single individual,' said Mark Williams, a Boston University finance professor.
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Given the 'fragility' of the economy, he said, lawmakers should be downgrading their spending plans to reflect the growing likelihood the state's own tax collections will take a hit.
'Trump['s] economic policies should be keeping state lawmakers . . . up at night,' he said.
President Trump holds an executive order in the Oval Office of the White House.
Uncredited/Associated Press
Evan Horowitz, executive director of Tuft University's Center for State Policy Analysis, said state officials should already be aggressively paring back their spending plans; that should include, he said, cutting their revenue estimates by $1 billion.
He said lawmakers also shouldn't be 'squeamish' about tapping the state's now-record $8 billion emergency savings account should the state slide into a recession. Unlike before, there's 'zero chance' that Massachusetts will get the same kind of substantial help from the federal government during a major downturn, he said.
'We've gotten a lot more certainty on the economy [in recent weeks]. And it's all bad,' he said, adding that the risk of a recession or federal funding cuts have long been hanging over the budget process.
The state has other exposures to changes at the federal level. The salaries of roughly 4,000 state workers — or about 10 percent of the executive branch workforce — are supported through federal funds, according to the Massachusetts Taxpayers Foundation, a business-backed budget watchdog.
The state also leans on $5 billion in other federal grants that don't directly prop up the state budget but nevertheless are vital to state government operations, the group said.
'We're building the budget with the best information that we have in front of us at the moment,' state Representative Aaron Michlewitz, the House budget chief, told reporters
Wednesday.
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He then added: 'That does change on a daily basis.'
Mariano said his chamber wouldn't seek to automatically scale back spending, but cautioned that lawmakers need to 'be selective' about where they commit funding in the upcoming budget. He said he's repeatedly warned rank-and-file members 'not to expect business as usual' with the budget process.
That could include the House scaling back the
that virtually all lawmakers ask leadership to add to the budget.
The Quincy Democrat provided some clarity on the House's plan on Thursday, when he
told the Greater Boston Chamber of Commerce that the House's budget plan would not raise taxes or fees on residents or businesses in Massachusetts.
Other states have responded to the uncertain fiscal moment in a variety of ways. Some are seeking to cut taxes, including Mississippi, where the governor
But others are seeking a mix of ways to generate more revenue, too, either by hiking or implementing so-called sin taxes, said Brian Sigritz, the director of state fiscal studies for the National Association of State Budget Officers, a nonpartisan trade group that tracks state spending plans around the country.
'The proposals have been more limited and more mixed than what we saw a couple years ago' coming out of the pandemic, Sigritz said. 'They're already facing tighter fiscal conditions and tight budgets."
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It's likely Massachusetts budget plans could continue to morph. The House will likely pass its plan by month's end, after which the Senate will craft its version in May, with the goal of getting a final proposal to Governor Maura Healey this summer.
A lot, of course, could change by then. Much already has since Healey released her own
'We've got a responsibility to make sure that anything that I sign is within . . . what we can sustain,' Healey told reporters Wednesday. 'The reality also is that every day we continue to see cuts and harm done to us from a federal administration that, you know, just doesn't seem to get it.'
Samantha J. Gross of the Globe staff contributed to this report.
Matt Stout can be reached at