Good morning,

Happy No Kings day! 

It’s a good day for taking action to defend our democracy at a state and federal level. And a good day to remind our state leaders: for every action that the federal government takes against our state, we should be responding with action in-state to protect our citizens and defend our values. 

Speaking of taking action, thank you to those who joined us for our State House 201 workshop last week and Stipend Reform training this week! Our 201 workshop focused on building our skills as citizen watchdogs to follow the work of our state representatives and hold them accountable. The Stipend Reform workshop covered the ballot initiative to end loyalty pay in the state house. If you weren’t able to make it, be sure to check out the recordings, and keep an eye out for a future workshop– we will definitely host these again. 

This week and last, it seemed like “revenue” was the word on everyone’s lips. With the federal government shut down, more federal funding cuts expected, and winter bills looming around the corner, everyone’s wondering where their next check is coming from– including our leaders on Beacon Hill. Today's Scoop will focus on the fiscal challenges facing our state, and the tools our state leaders could (could!) use to respond. 

Let's get to it!

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State House Scoop

State budget faces onslaught of pressures from Trump administration

Remember the Fiscal Year 2026 budget, passed by the state legislature in July? This budget had a final price tag of $60.9 billion. As with all state budgets, this number is based on what the state expected to take in in Fiscal Year 2026, based on a combination of anticipated state tax revenue and federal reimbursements. A few weeks ago, state budget leaders met for a rare mid-year budget session, to discuss changes to expected revenue projections due to shifts in federal policy. 

There are a number of pressures on state resources in Massachusetts due to the actions of the Trump administration. 

For one, the federal government is currently shut down as the Republican-controlled Congress struggles to reach an agreement on funding priorities. During federal government shutdowns, states typically continue to provide key federally-funded services such as food stamps and free-and-reduced school lunches. When the federal government reopens, states have traditionally been reimbursed for costs they incurred for these programs. However, the Trump administration’s pattern of blocking Congressionally-approved funding and targeting Democratic states has sparked concern that those reimbursements may not materialize this time. 

Indeed, the impacts of the shutdown have already been felt most keenly in blue states like Massachusetts, as the Trump administration takes advantage of the shutdown to make further cuts to federal projects. Last week, Trump’s Department of Energy announced the cancellation of $7.6 billion in grants to 16 states, including $466 million cut from energy projects in Massachusetts. Remarkably, all 16 impacted states were won by Democrat Kamala Harris in 2024. If the shutdown continues, more cuts can be expected. 

At the same time, the state must prepare for additional expenses associated with the impacts of the so-called “Big Beautiful Bill” (BBB) passed by Congress this summer, which made steep cuts to Medicaid and SNAP benefits in order to finance massive tax cuts for the wealthy. You can read our Scoop from July for a review. 

This week, the Massachusetts House passed a $2.5 billion supplemental budget to close out Fiscal Year 2025. (Reminder, a “supplemental budget” provides for additional spending outside of that approved by the gigantic annual budget. This one tacked on spending to last year's budget.) The majority of this spending went to cover MassHealth expenses. Already, two provisions went towards preparing the state for the impacts of the BBB: $10 million (paywall) for a “public awareness campaign to inform vulnerable populations about the new Medicaid work requirements” and $5 million to ensure a “continuity of access” to reproductive health services. The latter is targeted at a provision of the BBB currently challenged in court, which would prevent organizations that provide abortions from accessing Medicaid funds, even for unrelated reproductive healthcare. 

It also goes without saying that as more people become uninsured or are disqualified from receiving SNAP benefits, they will turn to state resources for help. People don’t stop being hungry or requiring medical care when Republicans in Congress decide they no longer deserve it. These changes will be costly for the state, as more of the burden of care is shifted to state and local governments. 

The BBB is also expected to impact the state’s tax intake, due to the changes to tax policy that favor the wealthy and corporations. If state leaders allow these changes to be automatically adopted to the state’s tax code, they are expected to lower state revenues by $664 million just this year. Our friends at Mass Budget and other allies are urging the state to opt-out of these federal changes, an action known as "decoupling" that the state has taken before. In budget talks, state leaders indicated that they are open to this strategy but did not give details. 

Finally, there is also the anticipated impact of a slowdown of Massachusetts’ economy on the state’s tax collections. Many federal cuts and related job losses since January have been in key sectors of Massachusetts’ state economy: the so-called “eds and meds.” Researchers and healthcare providers that have formed some of the backbone of our state economy describe existing in a state of “quasi-paralysis,” anticipating further cuts to grants and spending. As spending in these industries slows amid uncertainty, our state tax intake will also shrink. 

Let’s recap: 

  • Government shutdown could force state spending up 
  • Loss of federal grants could force state spending up 
  • Preparing for the BBB is forcing state spending up and will continue to 
  • Unless state leaders intervene, new tax rules from the BBB will push state income down 
  • Slowdowns in key industries will push state income down 

Things look bad. Will our state leaders respond? 

If this seems like a tough squeeze, here’s how Senate President Karen Spilka put it last week: “Trump and the Congressional Republicans are working against us in the Legislature and the residents of Massachusetts.” Spilka also warned MA residents that the state is “not going to have enough to cover everything.” Yet, in the same interview, Spilka refused to discuss the possibility of new taxes to cover shortfalls, stating “I’m not talking about new taxes right now.” 

Well, I’d be excused for saying that doesn’t quite reassure me! This seems to continue a pattern of state leaders condemning the Trump administration and spelling dire consequences for Massachusetts, but offering little in the way of action. Here’s how Michael Norton of State House News Service put it: “The Democrats who run the Legislature have been steadily criticizing the across-the-board shifts in federal policies since Trump took office, but have had less to say about how the state plans to respond to forecasts that the ranks of the uninsured here are about to surge and that families will lose access to food benefits.” 

State legislators wouldn’t have to look very far for revenue-raising options. Earlier this month, supporters packed a hearing of the Joint Revenue Committee to urge legislators to vote in favor of a bill being touted as “Corporate Fair Share” (H.3110/S.2033). This bill would target multinational corporations that avoid paying American taxes by shifting profits to offshore tax havens. It is already co-sponsored by more than half of the House and Senate, ensuring its success if its committee reports it favorably and leadership agrees to bring it for a vote. 

Currently, the federal government and a dozen states– including New Hampshire, Rhode Island, Maine, and Vermont– require companies to report at least 50% of these earnings in national and state corporate tax calculations. Massachusetts’ tax code is currently much more lenient in only requiring 5% reporting from these corporations. This move itself required "decoupling" and was passed via an outside section on a random supplemental budget in 2018. Go figure! 

Supporters of “Corporate Fair Share” contend that Massachusetts is leaving money on the table by failing to tax companies at the same rate as the federal government. Which begs the question: at a time of such dramatic pressure on state resources, can we afford to leave money on the table? 

Holding steady, for now 

The response from Beacon Hill still stands at business as usual. And some good news: the broad conclusion from recent budget talks is that Massachusetts can expect to see a slowdown, but may avoid a recession. State lawmakers baked in $860 million of un-allocated spending into the Fiscal Year 2026 budget passed in July to provide a cushion for uncertainty. After a deadline this week that marked the first quarter of FY 2026 under that budget, MA's Finance Secretary announced that tax intake so far has been close enough to projections to prevent budget cuts for now. For worst case scenarios, the state has a “rainy day fund” of roughly $8.6 billion. 

In a testament to their confidence in state budget stability, House lawmakers last week moved to add $70 million in expenses back into the Fiscal Year 2026 budget, overriding several line-item vetoes by Governor Healey. It takes a ⅔ vote of the legislature to override a governor’s veto, something that our Democratic supermajority legislature can accomplish fairly easily. This override restores roughly half of the $130 million vetoed by the governor in August. The Senate is expected to take up and pass these overrides next week.  

Still, despite current confidence, it is clear that the state will face mounting fiscal pressures in the next few years. President Trump’s interest in punishing blue states is unlikely to stop with the end of the shutdown. With a possible 300,000 Bay Staters predicted to lose their insurance from the BBB, among other impacts, the state should be thinking outside the box for ways to respond. That means keeping all tools on the table, including opting out of federal tax changes and closing corporate tax loopholes.

And, as Bay Staters across the Commonwealth gather today on town commons and rotaries to stand up against the Trump administration, let’s hope Beacon Hill hears the message too. Inaction and empty promises will not meet this moment. We need action!

TELL YOUR LEGISLATOR: SUPPORT CORPORATE FAIR SHARE>>

Worth reading: more stories from this week

Some other stories from recent weeks: 

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Syd's Sprinkles

Syd’s Sprinkles: Massachusetts’ Bid for Rural Hospital Funding

Currently, the Massachusetts Executive Office of Health and Human Services is in the beginning stages of applying for Rural Health Transformation Program funding, which was launched last month by the Centers for Medicare & Medicaid Services (CMS).  

This program, which was created via the “One Big Beautiful Bill Act”, aims to allocate about $50 billion in funding among rural areas to improve access to healthcare over a 5 year period. 

Ironic, right? 

The same bill that is going to do so much damage across the country and in our state, especially in terms of access to Medicare and Medicaid, is also creating a program that is meant to improve access to healthcare in the very hospitals that rely on Medicare and Medicaid to operate and keep their doors open. 

What’s the catch? Well, there are a few issues worth noting in terms of this new rural health program. 

To begin, the bill comes as an attempt by Congress to supplement almost $70 billion in Medicare and Medicaid cuts that the “big, beautiful” bill has authorized. 

Additionally, as written on CMS’s website, the funding will only “be distributed in the form of a cooperative agreement.” 

So what does this even mean? 

Honestly, I had no clue. But the good news is that I did some research to find that out. 

According to a CMS document, “A cooperative agreement is an alternative assistance instrument to be used in lieu of a grant whenever substantial Federal involvement with the recipient during performance is anticipated. The difference between grants and cooperative agreements is the degree of Federal programmatic involvement rather than the type of administrative requirements imposed.” 

In other words, a cooperative agreement is different from a grant in that there is much more federal involvement and therefore more restriction in application. 

The next question that should then be answered is what increased federal involvement under the current administration would look like and what the impacts might be. 

It is currently I unfortunately cannot answer that question as easily, given that this program has not yet been implemented. 

I would infer that more federal oversight over rural hospitals, especially in situations pertaining to Medicare and Medicaid, could lead to negative consequences under the current administration. 

Massachusetts’ most vulnerable hospitals could potentially be saved from closure, but there might also be an added concern that federal oversight could stifle the quality of care that is given if certain practices are not in alignment with the protocols pushed by the federal government. 

Over the past few years, Medicare and Medicaid in Massachusetts has already been slated for decreases in enrollment due to enrollment purges carried out by the state (which you can read more about in my blog post here). 

There are also concerns among Gateway Cities when it comes to the “One Bill Beautiful Bill” Act’s cuts to Medicare and Medicaid. These cities make up 13 of the 15 “priority communities” that Masshealth has deemed as at risk of loss of coverage. Given that the Rural Health Transformation Program funding would not apply to these cities at risk, how are the cuts to budgets and loss of coverage in these communities going to be remediated?

Unfortunately, we will not see the impacts of these cuts to Medicare and Medicaid and the implementation of funding from the Rural Health Transformation Program on Massachusetts until the state has its application approved. 

Until then, this program could be something to pay attention to when it comes to issues of federal oversight.

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Missed a Scoop or two? You can find a full archive of all past Saturday Scoops on our blog.

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Take Action

Protect Our Care Town Halls - Raise Up Mass

Raise Up Mass is hosting a series of Town Halls around the state in coming weeks, to discuss federal funding cuts to key services like healthcare and how our state leaders should respond. Check when they'll be coming to your area and make sure your voice is heard on this subject!

JOIN A 'PROTECT OUR CARE' TOWN HALL IN YOUR DISTRICT>>

Take action to get stipend reform on the ballot!

We are a month out from our deadline to get 75,000 signatures! Help us get across the finish line by pitching in in your own community. 

PITCH IN TO GET STIPEND REFORM ON THE BALLOT>>

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Thanks for reading, have a marvelous weekend!

In solidarity,

Scotia

Scotia Hille (she/her)

Executive Director, Act on Mass