Less than four months into the administration, federal funding cuts are starting to hit Massachusetts. Already, the Trump administration has announced a series of funding cuts significantly impacting folks across the state. A $12 million program helping Massachusetts schools partner with local farms for cafeteria food has been slashed. The UMass Chan Medical School has instated a hiring freeze and rescinded PhD offers amid NIH funding cuts. 

And it’s not letting up anytime soon. Earlier this month, Trump has cut $106 million from Massachusetts K-12 Education Stabilization funding that supports post-pandemic recovery with funds for mental health resources and professional development, among other things. Masshealth could be next on the chopping block. The anticipated blows to Medicaid funding would slash more than half of the budget for MassHealth, which more than 2 million Massachusetts residents rely on. 

Instead of the robust policy plan one might expect from a Democratic Governor, the Democratic supermajority in the Massachusetts State legislature, Bay Staters are seeing a lackluster response. Both Governor Maura Healey and Beacon Hill leadership have failed to come up with any comprehensive response to Trump’s and Musk’s chainsaw to the federal government. At every level, the Massachusetts government seems paralyzed. Up until April 1st, when Senate President Karen Spilka announced the underwhelming “Response 2025” that lacks specific policy plans to make up for federal funding lapses. Governor Healey, when she’s not bragging about her capitulation to Trump on immigration, is also failing to offer a coordinated response, instead imploring residents to "stop bad things from happening." When asked what the House could do to prepare for Trump’s spending cuts, Speaker Mariano said simply: “you don’t.” 

Are we really this unprepared for cuts to federal funding? Not really. Massachusetts is one of the richest states in the country and one of the wealthiest per-capita places in the world, with a GDP of more than $615 billion. For context, this means Massachusetts has a higher GDP than entire countries, like Sweden and Belgium, despite having a smaller population. Although this is due partly to the many corporations headquartered in Massachusetts, the state’s high per-capita wealth is the result of low income inequality and higher-paying jobs overall. Job opportunities in rapidly growing industries like biotechnology, healthcare and finance make this possible. 

Taken together, lower income inequality and higher-income residents means Massachusetts residents are taxed at a higher rate than residents of many other states. Having fewer residents reliant on programs like Temporary Assistance for Needy Families (TANF), the Supplemental Nutrition Assistance Program (SNAP), and medicaid means we are less financially reliant on federal funding. So theoretically, Massachusetts should be poised to make up for the federal funding gaps. 

A brief history lesson might be helpful to contextualize the current moment. In 2002, with the economy reeling from 9/11 and the rise of the Internet, Massachusetts was facing major budget cuts from the Bush Administration. In response, progressive organizations banded together to demand action from the Massachusetts legislature. It worked; they passed a progressive tax package that taxed capital gains the same as wages that resulted in more than a billion dollars in tax revenue for the state. 

So despite what the immobilization of the current moment might suggest, Massachusetts is not doomed in the face of federal funding cuts. Because of that progressive tax legislation, the state is now sitting on a $8.5 billion Commonwealth Stabilization Fund. The so-called “rainy day fund,” made up of a combination of capital gains taxes, casino taxes, and investment earnings, is  kept for the purpose of supplementing the state budget in the face of federal funding cuts. Although it’s not enough to make up for the annual $16 billion the state receives in federal funding, tapping into it would certainly give Bay Staters some relief as resources are stripped of them.

The Fair Share Amendment, or a 4% surtax on residents with a taxable yearly income over one million dollars, passed by ballot referendum in 2022, would have had a more meaningful impact had Healey not passed large tax cuts in 2023 that largely undid the referendum by offering tax breaks for the wealthy. But this tax alone would not have been enough, even without Healey’s rollbacks. We need taxes on the global, multi billion dollar corporations across the Commonwealth. H.3110 and S.2033, An Act Combatting Offshore Tax Avoidance, aims to hold these corporations accountable by curtailing what is referred to as offshore tax avoidance. This is when companies stash their profits in faraway “tax havens” —places like Bermuda or the Cayman Islands, for example—where there are few requirements about having physical permanent residence in order to file taxes. 

Passing An Act Combating Offshore Tax Avoidance would ensure corporations with operations in Massachusetts pay their fair share of state taxes by changing the state’s approach to Global Intangible Low-Taxed Income, or US profits concealed in tax havens. At the federal level and in other New England states, 50% of GILTI is taxed from a corporation’s taxable income. In Massachusetts, that number is just 5%. According to Raise Up Massachusetts, closing this loophole would increase the state’s tax revenue by hundreds of millions of dollars. More than 84% of Bay Staters support closing this tax loophole. On February 27, H. 3110/S.2033 was referred to the senate committee on revenue. 

With this history in mind and the array of policy options in front of us, Massachusetts is far from doomed in the face of federal funding cuts. We have weathered storms like this before by doing what should have already been done in the first place:holding the rich and powerful accountable.

Blog post by Lily Power, Act on Mass Digital Organizing Intern, Spring 2025