Latest news with #MassachusettsTaxpayersFoundation
Boston Globe
4 days ago
- Business
- Boston Globe
Amid unsettled times in Washington, Mass. collects $2b more in tax revenue than expected thanks to millionaires tax
'The narrative hasn't really changed from what folks have been talking about over the last few months,' said Doug Howgate, president of the business-backed Massachusetts Taxpayers Foundation. 'Starting the fiscal year having met revenue targets puts you in a slightly sounder place than was the case last year at this time.' State officials have treated money from the millionaires tax separately from other types of tax collections because under the state Constitution, the surtax revenue can only be spent on education and transportation. Advertisement But even leaving out capital gains and surtax from the millionaires tax, the state still collected $52 million more than expected. The result sets the state up with a modest Revenue collections for the fiscal year 2025 totaled approximately $43.7 billion, which is $2.9 billion or 7.1 percent more than the state pulled in over the prior fiscal year. Advertisement Healey administration officials said Friday that some major categories such as revenue collected from state income tax payments or sales tax came in at, or above, what the state collected last year. The only category that dipped was revenue brought in from corporate and business taxes, which totaled $355 million, or 7.1 percent, below expectations and $171 million less than in fiscal year 2024, state officials said. Despite the relatively positive report, the state still faces a hazy fiscal future due to the months-long uncertainty emanating from Washington. President Trump has already withheld or cut Just last month, Governor Maura Healey asked lawmakers to Healey also plans to stretch an existing hiring freeze across the executive branch through the fiscal year and pause a 2 percent salary increase that thousands of executive branch managers were slated to receive in January. Howgate, of Mass Taxpayers, said the state's sound fiscal forecast builds in capacity to 'guard against potential decline . . . and the impact of federal policy changes.' Advertisement 'All these unknowns are kind of descending on us at the same time,' he said. Samantha J. Gross can be reached at
Boston Globe
15-07-2025
- Business
- Boston Globe
Amid uncertainty from Trump's Washington, Mass. Democrats trimmed the budget. They left their earmarks intact.
While earmarks make up a relatively small slice of the state's $61 billion budget, they are coveted on Beacon Hill, delivering pots of money directly to members' districts and nonprofits serving the voters who elect them. This year's list of earmarks would fund programs ranging from senior centers and food pantries to $35,000 for a robot lawn mower in Topsfield, $50,000 for pickleball courts in Peabody, and $10,000 to restore Andover's Advertisement They also quickly became a target for potential belt-tightening. Citing pending federal funding cuts and a potential economic slowdown, Healey said she intends to delay releasing $125 million of those local earmarks until at least October. Advertisement But it remains unclear exactly which ones Healey will hold back. Matt Murphy, a spokesperson for Healey's budget office, said officials 'do not have a complete list that we could share.' Legislative leaders told the Globe the final budget deal represented an effort to practice fiscal restraint while still delivering for communities. House leaders also noted they added less money in earmarked spending this year than last; analyses from the Massachusetts Taxpayers Foundation, a budget watchdog, found the chamber's plan included about $5.6 million less even though the House actually tacked on more individual earmarks ( 'At a time when Legislative leaders, however, found one common target in trimming the budget plan: a half-dozen Republicans who voted against their chamber's initial budget plans when they came to the floor in April and May. State representatives John Gaskey, Alyson Sullivan-Almeida, Ken Sweezey, and Justin Thurber had all of their earmarks snipped from the final budget bill, even though none of their districts' relatively modest hauls topped $70,000, the Globe found. State Senator Ryan Fattman had all $500,000 of his earmarks slashed, while his fellow GOP senator Kelly Dooner, a first-term Taunton lawmaker who also got a half-million in earmarks, had all of hers cut except for $15,000 that funded body-worn cameras for police in Seekonk. Advertisement Another of Dooner's requests and one of Sullivan-Almeida's also ultimately survived, but only because different lawmakers asked, and received, money for the same earmark. 'Any money is good money. But I feel like I can work outside of these earmarks and still bring more to my district,' said Thurber, a first-term Somerset lawmaker who had $20,000 in earmarks cut from the final deal. He said he voted against the budget out of principle — 'a [nearly] 6 percent increase is unsustainable' — and is willing to sacrifice some earmarks to use his vote to address wider issues. In Somerset, he said, 'I have 20,000 residents. Is their voice worth a dollar or two dollars [per resident]? I don't believe it is.' State Representative John Gaskey is one of a handful of GOP lawmakers who voted against their chambers' budget and later had their earmarks slashed from the final spending plan. Erin Clark/Globe Staff Gaskey, a first-term representative from Carver, said he wasn't surprised to see negotiators cut the $25,000 earmark he sought to help repurpose a Carver school's roof. 'I felt it was laughable that everybody was like, 'We need a lower budget.' And the entire Legislature jumped in and pushed the budget even higher,' said Gaskey, who initially sought $200,000 for the roof project, as well as money for other local departments. 'I admit I put mine in as well — but I didn't have an expectation of getting them.' Together, legislative leaders cut more than $1.1 million in earmarks for those GOP lawmakers. That's in addition to a separate $500,000 increase Senate minority leader Bruce Tarr sought, but budget negotiators cut, for regional emergency medical services. 'The local earmarks represent communities getting their relative share of state spending. And I don't think that should be dependent on how a particular legislator votes,' Tarr said of his fellow Republicans' cuts. Tarr, a Gloucester Republican, voted for the budget and otherwise got $1.45 million in other earmarks. Advertisement The Globe analysis found that legislative leaders also cut nearly $5.5 million in Democrat-filed earmarks that had passed in the initial House and Senate plans. However, for the vast majority of those cuts — $4.6 million worth — budget negotiators simply eliminated earmarks that were duplicated elsewhere, including in another lawmaker's request. In most cases, negotiators opted for the earmark that gave more money to the project, and cut the one with the smaller price tag, according to the Globe's analysis. For example, state Representative Jay Livingstone's $50,000 earmark to make improvements to the Museum of Science's Those budget maneuvers left $875,000 in Democratic earmarks that appeared to be cut entirely, according to the Globe analysis. But even some of that money appears primed to resurface. Representative Patricia Duffy, a Holyoke Democrat, said a 'senior staff' member in the House's budget committee told her that her request to fund a job training program at Holyoke Community College was taken out by mistake and would be restored in a future spending bill. Michlewitz's office confirmed the earmark 'should not have been removed.' Representative John Lawn didn't receive the $200,000 boost he requested for a helpline for residents enrolling in health insurance coverage. The Watertown Democrat said the helpline is critical amid federal cuts to Medicaid and that he plans to try and 'get some of that funding back.' 'It's not over,' Lawn said, adding that he believes budget negotiators 'are just being very conservative.' Advertisement As they have done Michlewitz, widely regarded as House Speaker Ron Mariano's likely successor, added nearly $2.2 million in total earmark funding for his priorities, topping what all 25 House Republicans received in local earmarks in the final budget combined. It included $50,000 for indoor bocce courts in Michlewitz's North End neighborhood and $400,000 for the North End Waterfront health center. Mariano, meanwhile, secured just under $1 million in earmarks, with $500,000 going to the Nearly every member of the Legislature sought — and scored — some type of funding, too. Tarr, the Senate's top Republican, scored a varied haul of earmarks that would both help protect right whales and pay for a new autonomous robotic lawn mower for Topsfield, where officials are 'This is another piece of the pie to get the most out of the [town's] fields,' said Topsfield town administrator Kevin Harutunian, who said the town requested the earmark. 'One of our goals is to look for innovative ways to deliver the best possible services.' Advertisement The Healey administration said it could decide to release the earmark money in October, when her budget czar has to certify whether state revenues can cover expenses. The Massachusetts Taxpayers Foundation, the business-backed budget watchdog, called the decision to 'Government needs to absolutely prioritize the core things that government does,' said Doug Howgate, the foundation's president. In tough times, he said, 'it is appropriate to focus on [funding] major programs . . . and focus a lot less on very specific earmarks.' Samantha J. Gross can be reached at
Yahoo
01-06-2025
- Business
- Yahoo
Beacon Hill's budget-balancing act just got trickier: An expert explains
As Massachusetts lawmakers wade into negotiations to iron out a fiscal 2026 budget agreement, budget season in Washington, D.C. creates a massively uncertain economic landscape. Analyzing that data, understanding proposals and putting recommendations out for a path ahead is the focus of Doug Howgate and his team at the Massachusetts Taxpayers Foundation. As president of the business-backed public policy research organization, Howgate provides key input that helps guide the state's fiscal and economic future. The group recently released its annual House and Senate budget analyses, along with other reports pertaining to the changing federal outlook and its potential impact on resources and spending in Massachusetts. 'So many of these challenging things are going to be made in connection to resource decisions,' Howgate said in an interview at his downtown Boston office. 'How do we make sure that those conversations are coordinated across the branches of government in a way that makes sense for how we determine how to use our scarce resources?' In a recent conversation with State House News Service, Howgate talked about what's ahead for House-Senate budget negotiations and how lawmakers might adjust to the shifting fiscal realities of the Trump administration. This interview has been edited and condensed for clarity and length. Q: Have you been surprised by anything in particular this budget season? A: I don't think anything within the governor's budget, House budget or Senate budget has been overly surprising. I think what's been surprising is the context in which those budgets are being developed. We knew from the election in November that there were going to be changes, but with any of those things, it's hard to assess exactly what's going to happen. I think the uncertainty related to federal policy, related to things like Medicaid or taxes, that was probably something we knew we were going to have to be tracking. Especially in April, with things like the initial tariff announcements, there began to be more of a feeling that things economically may be more volatile or uncertain than we expected. Q: You believe the best budget approach for the Legislature is to follow its usual budget timeline, then reassess before sending a final product to the governor. Why? A: It didn't make sense to make adjustments in April, and then to make another adjustment in May, and then to reassess in June. When you think about the factors in play, one of those big factors is state revenue collections. We know now what April collections are, and especially in terms of what they mean for the budget and for surtax revenue, for capital gains revenue — it gives you more of a sense of some of those moving parts at the state level. A lot of the uncertainty continues to be federal policy related to things like Medicaid, or other places where federal spending directly impacts state spending. We still don't know everything, but I believe firmly that we're in a better position to assess risks and potential outcomes now than we were two months ago. It's really that balance of putting in place a strong fiscal plan on the governor's desk, but also not trying to react to every change in the moment and increasing some of the chaos if you make several adjustments throughout that process. Q: How do fluctuations and uncertainties in the stock market and capital gains revenue play a role here, and how can lawmakers best respond? A: What the economy looks like at one point in time, and then what it looks like 12 months from now — they look like two different things. The benefit of the uncertainty with the Trump administration is we're probably more attuned to that reality now than we normally are. We do have in place mechanisms to try to mitigate some [revenue source volatility]. At the same time, if the economy goes haywire, that will have a huge and direct impact on the state budget. April revenues were quite strong in Massachusetts. So much of that activity — surtax collections, capital gains — is reflective of where the stock market was over the last 12 months, not where it's going. We need to disentangle that. Another important thing for budget makers to note is that a sustained economic downturn is the biggest fiscal risk the state budget faces in any given year. Given that we've probably seen greater uncertainty now than we've seen in the last several years, we need to make sure we're putting in place a spending plan that creates options for the state to respond to an economic downturn, not just the implications of various federal policy changes. A: Over the past decade or so, adjusting revenues based on new information became something that was not uncommon. Before the pandemic, you had a couple of years where revenues really disappointed compared to initial projections, so in June, it was required that the overall revenue threshold was reduced. During the pandemic, we saw the House, Senate and administration work pretty well together to adjust both their revenue baselines to make sure they were accommodating for this huge unknown. And then you had the flip side in FY22 and even FY23, where we had this unexpected surge in tax collections and it became apparent that the revenue numbers built were just not operative anymore. We have a bit of muscle memory there, using analysis from the administration and groups like ours to make thoughtful adjustments. You also have seen, in the past, exercises where the governor's veto authority comes more into play, and I'm sure that's something that the Healey-Driscoll administration will be monitoring. My guess is that the focus will be to coordinate action in June to make sure that all three branches are working together to craft a budget with a sensible revenue forecast. A: Generally, from a fiscal and a resource standpoint, they take a pretty similar approach. You're talking about two budgets that both spend about $500 to $570 [million] less than the governor's budget proposal and that didn't adopt a number of the revenue-raising proposals that the governor put forward. Obviously there are differences. One thing that jumps out is you've got two different approaches on the governor's transportation finance proposal. The House largely adheres to what the governor proposed. The Senate differs in things like multi-year support for the MBTA. It moves more money into other areas of the transportation sector. What will be interesting when we see these two things reconciled is, because of this overarching context of needing to reassess revenue assumptions based on what's happened since January, you could see them start from that standpoint of, 'Okay, what do we think we have to work with for resources?' And then, 'How do our different spending proposals plug into that new reality?' Q: There are concerns about the about the 6% spending bump over the FY25 annual budget, especially in an uncertain context. Is that worth concern? A: Getting overarching spending growth in line with long-term revenue growth has got to be a high priority for everyone. That's something that really, starting with the pandemic, we've had some challenges with — increasing demands on the system, significant revenue growth for a time period, and building in cost pressures that are hard to steer the ship on from one day to the next. Managing long-term spending obligations is going to be challenging. These are programs that impact millions of Massachusetts residents. One of the things we see in this budget are proposals to look at the personal care attendant program within MassHealth to say, how do we make some longer-term reforms in the program that are going to bend the cost curve there going forward? I think we need to be honest with ourselves, that making a change from day-to-day is not always easy, is not always appropriate. But how do we make sure, as we're putting together the fiscal 2026 budget, we're also doing it with a view towards managing costs in 2027 and beyond? That's even more important, I think, when we look at all the federal uncertainty. Q: The House budget puts a pause on decisions surrounding vocational school admissions policies. The Board of Education already approved a path forward. What could this say about the Legislature's role in shaping that conversation? A: I think the Board of Elementary and Secondary Education certainly has a role in setting regs, though the effectiveness of those regs is only going to be as successful as their ability to also build consensus within the Legislature and the rest of the administration. Any one of those entities can really undo work or press pause on moving forward. I think it speaks to two things. One, we do need to take a new look at how we make sure that our process for equitably ensuring access to vocational schools works in the current world. And [two], we need to do it in a way where the administration and the Legislature, and all the stakeholders, feel like they've had an opportunity to make their voices heard. We just need to make sure, at the end of that process, that the ability of students in Massachusetts who can use that vocational opportunity to achieve economic opportunity and build a career that is right for them, not get lost in the shuffle. A process that has that consensus across the board — the Legislature is probably going to have to be a part of it, no matter what. Q: What are your thoughts on the Senate's move to lower prescription drug costs in its budget? A: The Senate's been remarkably consistent in terms of advancing pretty aggressive proposals [related to] drug cost limitation and things like that. We had major compromise drug cost legislation signed into law at the end of [2024]. What's happening with the implementation of that bill? Are we moving forward with this stuff that is in law, that we had broad consensus on, and making sure we're doing that as impactful a way as possible? That should take priority over starting new reforms before the initial reforms have gone into effect. We are [also] seeing a number of health care and drug and life sciences issues coming into play at the same time, whether it's in terms of ongoing strains on the health care system, cost pressures for premium payers, cost pressures for the state — at the same time, financial pressures on providers and uncertainty with federal Medicaid, and the critical role that the health care sector and the life sciences sector play for Massachusetts residents and a broader economy. One larger concern I would have is, how do we make sure we're not adding too much to that unknown policy mix that we have to adapt to and react to? Q: You've referenced proposed cuts to Medicaid multiple times. What's on your mind there? A: This is one of the reasons why we felt like it was so important to not make premature adjustments to the spending framework back in April and May. While we don't know exactly where the federal budget is going to go, we've got more clarity in at least where the [U.S.] House wants to go. Those proposals would significantly negatively impact the state's Medicaid population and the Medicaid program in the budget. That said, they are not as immediate or as significant as some of the proposals we originally saw. To me, this is a bit of a commercial for, 'We want to be proactive and we want to be decisive, but we also want to make sure we have as much information as we can have before we make a decision.' The Medicaid proposals, as they're formulated right now, won't have an FY26 impact on the state budget or the state program. A lot of the big adjustments we see are in FY27 through FY29, which doesn't mean they're not very important -- they are, but that timeline really matters. As we think about the proposals in there, whether it's work requirements or other things like that, it's important to also differentiate between what's going to reduce the amount of federal resources available to the state budget associated with spending requirements, and what is likely to reduce enrollment in the state's Medicaid program, which will have a big knock-on effect on the health care sector and things like our health safety net. The budget impact in the near term is less clear cut than, say, just a reduction in the federal Medicaid reimbursement. That's why knowing what they're actually proposing and the timeline is so critically important. Q: Has there ever been a situation, in your memory, where the state has had to accommodate a similarly massive gap? A: Over the last 15 years, the thing that probably gives us the best kind of experience for this is actually sustained economic downturns during the Great Recession, where we saw billions of [dollars of] loss in state tax revenue, and at that time, a lot of discussion and action on Medicaid service reductions and things like that. That's where we've seen a lot of the debates on Medicaid policy that maybe policymakers could draw upon. To me, there's a more important lesson there, which is what is included in the bill working its way through Congress right now is important, but what is equally and potentially even more important for the Medicaid program, let alone for the state budget, is: are we prepared to withstand a potential economic downturn as well? Because that can force decisions within a program like Medicaid just as fast or faster than Medicaid policy proposals being discussed in D.C. Q: What do you view as the potential fiscal and economic costs of Trump administration research funding and immigration policies in Massachusetts? A: You can't quantify to the dollar what the impact of a specific kind of policy direction is, necessarily. When we talk about the impacts of the Trump administration, one of the things we talk about is the impact of what we would call 'process uncertainty' — of not actually knowing what the policy is, how it's going to change, what you need to react to. That creates paralysis in the system, makes people reluctant to act, impacts decisions from higher ed institutions about admittance or about how they're going to spend their money. It certainly impacts state or nonprofit or private sector actors, as well. Irrespective of where those policies land, the uncertainty that it comes with has a huge cost. At the same time, you think about the work that we [and others] have done about Massachusetts competitiveness, our challenges sustaining a growing labor force. One of the biggest ways we've been able to address that in recent years has been through immigration. Any time you're talking about policies that are going to dampen immigration going forward, that has a profound impact on Massachusetts's ability to grow its economy and its labor force. Read the original article on MassLive.
Yahoo
30-05-2025
- Business
- Yahoo
The piece of the Mass. budget that passes all understanding
If there's one thing that's true about politics, it's that voters rarely care about how legislation gets done as long as it gets done in a relatively timely fashion, doesn't cost the Earth and manages to make their little corner of creation a tiny bit better. That's particularly true during budget season on Beacon Hill, which has now officially entered that precarious stage where, if things are going to go wrong, they are going to go wrong in the most gloriously spectacular way possible. Here's why: The competing $61 billion-ish budget plans approved by the majority-Democrat state House and state Senate, respectively, along with the $62 billion iteration offered by Democratic Gov. Maura Healey, all increase state spending from the year before. The $61.5 billion budget the Senate approved last week, for instance, comes in $70.3 million less than the budget approved by the House, and $568.1 million less than the spending plan that Healey sent to lawmakers earlier this year. Senate lawmakers nonetheless ladled on $81.1 million in new spending before they took their vote, according to an analysis by the Massachusetts Taxpayers Foundation. Senate lawmakers also set up difficult policy fights with the House on liquor license and vocational school reform and health care matters, Axios Boston noted. Thus, there is a high likelihood that things could go screaming off the rails. Then there's this. The Senate plunged forward with its version of the fiscal blueprint for the new fiscal year that starts July 1 by assuming that the $16 billion in federal funding that provides the undercarriage for their budget plan is still going to be there for them. Ditto for the House and Healey. That's despite some deeply ominous sabre-rattling from Washington. Though Senate Ways and Means Committee Chairperson Michael Rodriques, D-1st Bristol/Plymouth, has warned 'all bets are off' if Congress moves ahead, as expected, with deep cuts to Medicaid. At first glance, this is kind of like splashing out for that lease on the Rolls-Royce, expecting you'll have the cash to cover it, and then hoping for the best if you don't. The pro-business Massachusetts Fiscal Alliance was decidedly not amused by that tactic, also noting that senators added tens of millions of new spending, even as they sounded the alarm about 'uncertainty' from Washington, D.C. And spending will likely grow even more once the House and Senate cut a deal on the final budget sometime later next month or early July, the think-tank observed. 'There's simply no credibility left for lawmakers who talk about fiscal uncertainty while voting for the largest budget in state history,' Paul D. Craney, the group's spokesperson, said in a statement. If lawmakers were 'serious about economic uncertainty, they would have tightened the belt, not let it out,' Craney continued. He's not wrong. Just this week, Healey and Democratic U.S. Sens. Elizabeth Warren and Ed Markey were in Revere sounding the alarm about looming GOP cuts to Medicaid on Capitol Hill. Read More: A 'historic battle': Mass pols protest Medicaid cuts in 'Big Beautiful Bill' | John L. Micek Michael Curry, the president & CEO of the Massachusetts League of Community Health Centers, has warned that MassHealth, as Medicaid is known in the Bay State, bluntly said the program would be 'unsustainable without the federal partnership, the federal funds.' That's about as clear a warning shot as lawmakers are going to get. MassHealth is among the biggest fixed costs in the state budget. And federal cuts will mean higher costs and a strain on the state's health care system, Curry told Commonwealth Beacon last week. Still, the Legislature — as a public institution — has a flexibility that private employers and families balancing their checkbooks don't have, Jerold Duquette, a Central Connecticut State University political science professor who tracks Bay State politics, said. And that's the ability to pass supplemental budgets and access the state's multi-billion dollar Rainy Day Fund — even if top budget writers have said the latter option is currently off the table. So while planning a budget where a large chunk of funding may disappear seems irrational, 'what they are doing is rational,' Duquette said 'The reason we think it's irrational is because they're politicians,' Duquette said. 'Why would you make the assumption that you're going to lose an effort to keep the money? This is not kicking the can. It's the exactly rational thing to do.' Lawmakers have until midnight on June 30 to get a deal on a new budget. They haven't hit that deadline in years, though Rodriques repeatedly has told reporters that he's optimistic that they will this year. It requires the same kind of suspension of disbelief that Duquette's analysis demands. But if Beacon Hill is anything, it's stubbornly rational in its irrationality. So who knows? A 'historic battle': Mass pols protest Medicaid cuts in 'Big Beautiful Bill' | John L. Micek Mass. Rep. Trahan's 'Les Miz' moment on Trump's 'Big Beautiful Bill' | Bay State Briefing Mass. budget debate points to a subtle but seismic shift on Beacon Hill | John L. Micek Read the original article on MassLive.
Boston Globe
21-05-2025
- Business
- Boston Globe
Massachusetts has already collected $2.6b in ‘millionaires tax' cash, surging past state projections
Most of the additional money raised would go to a reserve account, from which state policymakers can pluck money for one-time investments into projects or programs. Advertisement The amount of millionaires tax revenue collected this year was already expected to be significant, particularly after total But cash from the surtax is are already topping what Healey administration officials roughly expected to collect for the entire fiscal year. The surge underscores both the surtax's potential as a major revenue driver and the ongoing difficulty state officials face in predicting exactly what it will deliver. Last year, state officials initially said the surtax generated Advertisement The state's Department of Revenue won't certify the official amount raised from the surtax for this fiscal year for several months. Voters approved the millionaires tax in 2022 to levy an additional 4 percent tax on annual earnings over $1 million. At the time, the Massachusetts Budget and Policy Center, a left-leaning think tank, projected it could The cash it's produced has regularly blown past even that. The tax generated $1.5 billion between February and April of this year alone, according to state officials. That surtax is 'highly responsive' to how the stock market and economy is performing, said Doug Howgate, president of Massachusetts Taxpayers Foundation, a business-backed budget watchdog. That makes it a 'moving target' for state officials, and a difficult one to predict as the country slides into an uncertain fiscal future. The national economy 'The concern next year,' Howgate said, 'is that we're not using this [surtax money] for sustained recurring resources. . . .It certainly looks like we're in a different stock market world now than we were 12 months ago.' Advertisement A huge millionaires tax surplus also doesn't automatically mean the state is enjoying a healthy fiscal picture. State officials have treated money from the surtax separately from other types of tax collections because under the state Constitution, the surtax revenue can only be spent on education and transportation. And despite ending last year with extra surtax money, officials still had to close Matt Stout can be reached at
