State budget chiefs ready for ‘slow growth’ as budget planning kicks off

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If people watching Beacon Hill’s annual consensus revenue hearing had been playing a drinking game that involved the phrase “slow growth,” they would’ve been utterly soused less than an hour in.

The Tuesday invite-only gathering of budget chiefs and analysts, tasked with looking ahead to next year, was overall a dry and number-heavy affair, lasting just over two hours as analysts provided forecasts, guidance and educated guesses to the budget-writers under Gov. Maura Healey, House Speaker Ron Mariano and Senate President Karen Spilka.

The topline was perhaps best expressed by one of the Beacon Hill reporters sitting in the back row of Gardner Auditorium. “None of this sounds good,” he muttered.

Geoffrey Snyder, the state’s revenue commissioner, testified that he expects “slow but steady growth,” with a “sluggish” job market. Snyder also estimated $664 million in lost revenue due to federal tax law changes included in the “One Big Beautiful Bill Act” – OB3 in budget-writing parlance.

The Mass. Taxpayers Foundation’s Doug Howgate pointed to changes to the state’s Medicaid program, coming on top of a possible loss of federal funds, and the continued slow rate of private employment growth as a concern.

Immigration has also buoyed the state’s economy over the years, particularly the retail and service sectors. It’s now being threatened by the Trump administration’s attacks through ICE and other federal agencies. “It’s hard to imagine over the next couple of years we’re going to be able to count on immigration growth as an engine for our economy,” Howgate said.

Howgate expressed some optimism, and noted the economic resiliency seen in the past year: Since the Trump administration took office, tariffs were announced, some were walked back and there was a federal government shutdown thrown in as well. “We keep waiting for the other shoe to drop,” he said.

Tufts University’s Evan Horowitz had the highest projections, saying state tax revenues for next fiscal year will total $47.1 billion, an “all-in number” that takes into account the millionaires tax and OB3 tax policy changes. Growth is expected to be slow, without a contraction, he said.

Horowitz also brought up some possible 2026 ballot questions that are “unusually consequential” for the future of the state budget and economy. One, backed by business groups, would roll the state income tax to 4%, down from 5%. Another, supported by unions and left-leaning groups, would institute statewide rent control, a system that could “shake the real estate market and upend local tax systems,” he said.

Horowitz agreed with Department of Revenue projections that the income tax rollback could cost the state roughly $4.2 to $4.8 billion.

The Legislature’s top budget-writers were quick to voice their displeasure with the ballot questions, while indicating they’re open to conversations with proponents before they land on the ballot. “I just think it's an irresponsible step to be taking at this point in time, in the midst of all this other craziness that we're dealing with, whether it's from Washington or otherwise,” Rep. Aaron Michlewitz said of the income tax rollback.

All that adds to a mix that results in a “less-than-predictable fiscal environment,” Sen. Michael Rodrigues said. An understatement, for sure, and perhaps a reasonable match for our less-than-predictable political environment.

Are you among the ballot question advocates hoping to strike a bargain with state lawmakers and avoid an expensive ballot fight? Drop me a line: [email protected].

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Gov. Healey is considering removing obesity medication coverage from the state employee health plan in her upcoming budget. Cutting treatment would jeopardize progress for thousands and harm workforce health. Urge the Governor to protect access to GLP-1s and treat obesity like any other chronic disease. Use our quick tool to send your message today.

9:30 | Attorney General Andrea Campbell participates in Q&A on nonprofit advocacy group Strategies for Children’s “The 9:30 Call.” | Virtual

10:00 | Gov. Maura Healey, Labor Secretary Lauren Jones and Undersecretary of Business Strategies Zenobia Moochhala participate in the groundbreaking for Alnylam’s manufacturing facility headquarters. | 20 Commerce Way, Norton

12:00 | Gov. Maura Healey joins Lt. Gov. Kim Driscoll, Senate President Karen Spilka, House Speaker Ron Mariano and Rep. Simon Cataldo to deliver remarks on the findings of the Special Commission on Combating Antisemitism. The commission released its final report on Dec. 1. | Senate Reading Room, State House, Boston

4:30 | Gov. Maura Healey, Lt. Gov. Kim Driscoll, and state and local officials participate in the State House Menorah lighting. | Grand Staircase, State House, Boston

GOD’S BACKYARD: Under a bill proposed by Sen. Brendan Crighton and Rep. Andy Vargas, faith-based organizations could build multi-family by right on parcels they own. One analysis says such organizations control 4,800 parcels that total more than 20,000 acres in Massachusetts. – CommonWealth Beacon

TAX SHIFT FIGHT: The battle over Boston’s proposed property tax shift, and the opposition from Senate President Karen Spilka, hasn’t turned personal, “certainly not on my part,” Mayor Michelle Wu said on GBH News. "There's a difference in opinion here, and there's a difference in district. There's a difference in pace and urgency to address the needs of the city of Boston." – State House News Service

AARP is fighting to stop criminals from stealing over $246 million a year through cryptocurrency kiosks. Fraudulent activity targeting older Americans is on the rise. We support Senate Bill No. 707 and House Bill No. 1247, which will crack down on those who use crypto ATMs for fraudulent activity. Licensing crypto ATM operators in Massachusetts would give state officials stronger oversight and flag operators who break the rules.  Learn more at aarp.org/ma.

OTHER MARKEY CHALLENGER: Alex Rikleen, a teacher and sportswriter who is running against U.S. Sen. Ed Markey, says he launched his campaign out of frustration that Democrats fell short in efforts to block President Trump’s nomination of Kash Patel to the FBI. – Boston.com

REINER REMARKS: Several Massachusetts Republicans condemned President Trump’s unhinged post on social media about the death of director and Democratic activist Rob Reiner. – GBH News

HEALEY’S MAINE ENDORSEMENT: Gov. Maura Healey has endorsed Maine’s Janet Mills, a fellow governor who is running for U.S. Senate and hoping to take on Republican incumbent Susan Collins. Mills is in a Democratic primary with Graham Platner, a progressive candidate. – Boston Globe

QUINCY TAXES: Residential property taxes in Quincy, the state’s seventh largest city, are going up by roughly $552, a 7.6% increase and double what the average increase was per year since 2018. – Patriot Ledger

CALL FOR DCF INVESTIGATION: A retired Juvenile Court judge is calling for a federal investigation into the state Department of Children and Families after the death of a Worcester girl. – Boston 25

AUTOPAY ACCIDENT: A man, after selling a Coolidge Corner area condo, accidentally left on “autopay” for his property taxes. But he is now taking the town of Brookline to small claims court after he’s been unable to get some of the money back. – Brookline.News

ICE DETAINEES: Plymouth County Sheriff Joseph McDonald said the county’s correctional facility, the only ICE detention facility in Mass., has about 512 men held there and they are better off there than outside the Bay State. – Plymouth Independent

NEW BEDFORD BOLTER: Leo Choquette, a New Bedford city councilor, has left the Democrats for the Republican Party, saying he’s gone from being a conservative Democrat to a liberal Republican. – Boston Herald

BOSTON BUILDING: Another Boston building was sold with a big discount. An auction of 99 Bedford St., near South Station, sold for $19 million after selling for $51 million in 2019. – Boston Business Journal

KRATOM IN SPRINGFIELD: The Springfield City Council is going back to the drawing board on an ordinance that would regulate kratom, which is available in smoke shops and convenience stores. The proposal requires a third-party lab to test kratom sold within city limits, despite no such lab existing, and rendering the measure unenforceable. – MassLive

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