Mass. lawmakers warn growing health care costs, ‘unhelpful’ federal government threaten state budget

Massachusetts lawmakers tasked with crafting the state’s yearly budget warned that growing health care costs and a “very unhelpful” federal government are creating challenging spending decisions and threatening the local economy.

Top budget writers on Beacon Hill started publicly combing through Gov. Maura Healey’s $63 billion fiscal year 2027 budget proposal.

State Rep. Aaron Michlewitz, a North End Democrat who chairs the House Ways and Means Committee, said the state is facing “numerous” spending pressures in the education and health care sectors.

He said those difficulties are “combined with the commonwealth lacking a federal partner in Washington.”

“It feels as if the federal government is actually the pandemic we have to confront. With trade turbulence, social service cuts, federal grants being randomly revoked and daily threats of chaos, we really never know what the next day will bring coming from Washington,” Michlewitz said.

House and Senate lawmakers will rewrite the budget proposal Healey released throughout the spring and early summer before shipping an updated version back to her in late June or early July.

Michlewitz said recent revenue data shows the Massachusetts economy is resilient despite economic headwinds.

“It shows that while some folks are almost wishing us into some type of recession for political gain, the leadership in this State House will continue to navigate our fiscal stewardship with persistence, diligence and with the actual facts,” Michlewitz said.

Healey said the past three years have been marked by “significant fiscal challenges.”

“Federal pandemic funding went away altogether. The cost of everything nationwide has gone up. Donald Trump cut funding and caused chaos,” she said. “In the past year, Donald Trump has essentially taken a hatchet to state budgets across the country.”

Massachusetts could lose out on $3.7 billion in funding between fiscal years 2025 and 2028 because of Trump’s executive actions and decisions made by Republicans in control of Congress, according to the Healey administration.

Healey said federal funding cuts in Massachusetts could have driven up state spending by a “double-digit increase.” Her budget proposal only drives up state spending by 3.8% compared to the spending plan she signed last summer.

“I just want to underscore that we took a look at everything that had happened, the carnage of the last year, and the starting point was an expectation that we were going to have to increase state spending by double digits, but I wasn't going to let that happen,” Healey said.

State Sen. Michael Rodrigues, a Westport Democrat who chairs the Senate Ways and Means Committee, said health care costs in the post-COVID-19 pandemic era are growing fast and “outpacing revenue growth, which, if left unchecked, will create a fiscal storm that could undermine our capacity to deliver services that our residents rely on.”

“Our residents are feeling the immense pinch of high costs in child care, health care, housing, electricity and food as they work to support themselves and their families,” Rodrigues said.