‘No margin for error’: State economic check-in spotlights tricky balancing actNew from CommonWealth Beacon SOLAR: Facing hurdles as her administration works to achieve clean energy goals, Gov. Maura Healey convened a summit with solar industry officials, who urged her to embrace the power of the sun with haste. Jordan Wolman reports. ‘No margin for error’: State economic check-in spotlights tricky balancing act October 1, 2025 By Chris Lisinski Difficult decisions abound as Massachusetts barrels toward a roughly $650 million decline in tax revenues and a host…
New from CommonWealth Beacon
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SOLAR: Facing hurdles as her administration works to achieve clean energy goals, Gov. Maura Healey convened a summit with solar industry officials, who urged her to embrace the power of the sun with haste. Jordan Wolman reports.
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Difficult decisions abound as Massachusetts barrels toward a roughly $650 million decline in tax revenues and a host of other federal funding impacts nine months into Trump 2.0.
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State budget-writers have been wringing their hands for months about the anticipated impact of the sweeping federal law enacted on July 4, and on Tuesday, they took the unusual step of hosting a mid-year checkup.
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The prognosis they heard — that a slowdown is likely but Massachusetts might avoid a full recession — could force action in the next few months to rein in spending on local projects, recalibrate revenue forecasts, or adjust the state’s tax code.
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“There’s really no margin for error,” Administration and Finance Secretary Matthew Gorzkowicz said at the State House hearing he held alongside the Legislature’s two Ways and Means Committee chairs.
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Revenue Commissioner Geoffrey Snyder told officials his office expects the new federal law will shrink state tax collections this fiscal year by more than $650 million.
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The fiscal year 2026 state budget Gov. Maura Healey signed in July does not account for that estimated hit, which Snyder newly revealed during Tuesday’s hearing, and officials will need to adjust their approach several months into the cycle.
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“Obviously, $650 million at any point in time is significant and daunting, to say the least, for us as budget-writers,” said House Ways and Means Committee chair Aaron Michlewitz.
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That’s not the only upheaval on the way. The sweeping federal bill could also shrink federal funding for health care here by $532 million in federal fiscal year 2026, according to an analysis from the Massachusetts Taxpayers Foundation. If Congress decides not to extend pandemic-era tax credits that help Americans pay for health insurance, the Massachusetts Health Connector marketplace would need an extra $255 million from Beacon Hill to keep its most subsidized option available at current rates.
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Massachusetts Taxpayers Foundation president Doug Howgate said the billions of dollars in reduced federal health care spending on Massachusetts is a “challenge that’s going to cascade through the rest of the budget.”
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“These are ticking time bombs, and we know when they’re going to go off,” he said.
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HEALEY ON SHUTDOWN: The day before a federal government shutdown began, Gov. Maura Healey blamed
Republicans while also saying that she does not think Senate Minority Leader Chuck Schumer is “the best messenger.” (GBH News)
PUBLIC MEDIA: GBH launched a new “Fund the Future” campaign seeking to raise $225 million in the next three years to offset federal funding losses hitting public media. (The Boston Globe – paywall)
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BIOTECH: At least 1,800 Massachusetts biotechnology workers were laid off in the third quarter of 2025, continuing a period of growing strain for the cornerstone industry. (Boston Business Journal – paywall)
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