Read Online  New tax provisions brings a $650M state budget hit with the shutdown adding to the woes  Sam Drysdale     |
Just three months into the new fiscal year, lawmakers learned about a new wrinkle caused by the One Big Beautiful Bill: federal tax law changes within the new law that could remove $650 million in state tax revenue supports that are holding up the $61 billion annual budget. The sweeping federal legislation, signed the same day as the state budget, could siphon hundreds of millions from Beacon Hill’s coffers, a development disclosed at an economic roundtable. The news is forcing lawmakers to rethink core assumptions and scramble for possible fiscal workarounds. Add a full-blown federal government shutdown to the mix, and the state’s economic footing looks shakier by the day. The shutdown became official on Wednesday. Federal offices closed. Economic data streams went dark. Gov. Maura Healey didn’t mince words: “It’s terrible for our country.” She blasted Congressional Republicans for “driving us over a cliff.” Roughly 45,000 federal workers who live in Massachusetts could be facing furloughs, and state officials began preliminary planning last week to keep key programs afloat while federal dollars are paused. The U.S. Department of Labor also confirmed that Friday’s national jobs report would be shelved, sidelining data that influences economic, government and business decisions. On Tuesday, Revenue Commissioner Geoffrey Snyder dropped the news about the $650 million exposure that occurs because the state is “coupled” with many federal tax provisions, creating ripple effects. “This is one of the more challenging times that we’ve faced from a fiscal perspective,” said House Ways and Means Chair Aaron Michlewitz, noting that while several options are on the table, few are ideal. Budget leaders are now weighing, at a minimum, whether to dip into reserves, revise revenue forecasts mid-year (a decision due by Oct. 15), or decouple state tax law from specific parts of the federal code. Administration and Finance Secretary Matt Gorzkowicz was blunt: “There’s a lot of uncertainty, and there’s a lot of things we have to consider in managing that.” Pressed on whether midyear budget cuts might be necessary, Gorzkowicz said simply: “I don’t know.” The state does $860 million in unallocated funds built into the budget, perhaps with some foresight of what was coming but possibly also due to the common legislative tendency to pass supplemental budgets. Sen. Michael Rodrigues, however, signaled restraint around the state’s over-$8 billion reserve fund: “We have other tools available. I’d be hard-pressed to suggest dipping into the Stabilization Fund right now.” |
Osler ”Pete” Peterson
Medfield Select Board member
I started this blog to share the interesting and useful information that I saw while doing my job as a Medfield select board member. I thought that my fellow Medfield residents would also find that information interesting and useful as well. This blog is my effort to assist in creating a system to push the information out from the Town House to residents. Let me know if you have any thoughts on how it can be done better.
For information on my other job as an attorney (personal injury, civil litigation, estate planning and administration, and real estate), please feel free to contact me at 617-969-1500 or Osler.Peterson@OslerPeterson.com.
Recent Comments
Lester Cohen on Town’s Buildings Require… Select Board member… on Black Out at Budget Works… Lester Cohen on Black Out at Budget Works… The Sullivans on Thank you Linda Thompson! cherryblossomcasuall… on Roundabouts both safer & b…
Medfield02052's Blog 
The Big Beautiful Bill is beyond Ugly and hateful!
LikeLike