State officials estimate that Massachusetts will lose as much as $4.1 billion going forward due to losses of federal funding and changes to federal tax laws. If past budget crises are any indication, that cut of more than 5 percent of the $60 billion state budget will likely lead to trims to human services, education and other areas that Massachusetts residents depend on.
“Federal budget cuts are already devastating Massachusetts families and there is more yet to come,” said Cindy Rowe, executive director of the Jewish Alliance for Social Action, addressing reporters at the State House last Friday.
With the cuts and tax changes, the Raise Up Massachusetts coalition says that state residents are facing the loss of food and home heating aid and skyrocketing health care costs due to federal Medicare cuts.
“Unless we act, these cuts will harm everyone in Massachusetts, without state action, hospitals, community healthcare centers, and nursing homes will be forced to close their doors,” Rowe said. “Children, families, and seniors will go hungry, and postpone needed medical care.”
Rowe joined union members, human service workers, and representatives of community-based organizations in calling on the Legislature to take steps to shore up the budget. The activists, led by Raise Up Massachusetts, have sent a latter to legislators asking them to tap $1.2 billion from the state’s $8.6 billion rainy day fund, pass the so-called Corporate Fair Share legislation that would close tax loopholes for businesses that use offshore tax havens, and decouple the state’s taxes from the Trump administration’s federal tax breaks.
Together, the measures Raise Up Massachusetts are proposing would add more than $2 billion to the state budget, they say.
Loss of federal funding is one of the main purposes for tapping the state’s rainy day fund, according to the law that established it, noted Phineas Baxandall, director of research and policy at the Massachusetts Budget and Policy Center.
“This is our money for protecting people in Massachusetts,” he said during the press conference. “That’s what it’s for.”
Passage of the Republicans’ so-called Big, Beautiful Bill ushered in federal tax changes that, if replicated in the Massachusetts tax code, could cost the state $463 million in lost revenues. That’s why coalition members are urging the Legislature to de-couple the state’s tax code from the federal government’s by opting out of the latter’s changes. If Massachusetts doesn’t take that action, they automatically become part of the state tax code.
“Our entire Massachusetts delegation voted against them,” Baxandall said the changes. “They knew they were bad policy.”
The third ask for the Raise Up Massachusetts coalition, the Corporate Fair Share legislation, would close measures that allow corporations doing business in Massachusetts to dodge taxes by claiming their profits are earned on off-shore tax havens. The legislation would require that half of the money that is shifted to tax havens would be considered taxable. Baxandall notes that the federal government taxes off-shore income in that way.
“Some people will say that somehow this makes us uncompetitive if we do like the federal government or like most New England states do,” he said. “This is something we don’t have to fear. We do have to fear the federal government’s terrible cuts.”
Raise Up Massachusetts members contend that if the Legislature does not act, the effects of the loss of state and federal funding will hit hard, with as many as 350,000 state residents losing health care and food assistance.
Massachusetts Teachers Association Vice President Deb McCarthy said the cuts would disproportionately affect many of her union’s members.
“While many are discussing our students going hungry, as well we should, what is not being discussed publicly is the number of adjunct professors in universities here in Massachusetts who also are being impacted by these cuts,” she said.
“They are living on poverty wages as educators in Massachusetts and simply cannot survive without the assistance of the local food pantries. We need leaders to understand the budgets of moral documents,” McCarthy said.
“I can think of no more moral imperative than using resources to lift up those who are in crisis around us,” she added.
