MassFiscal Responds to Governor Healey’s Proposed Budget: A Giant Leap in the Wrong Direction

The Massachusetts Fiscal Alliance today expressed serious concerns over Governor Maura Healey’s proposed FY2026 budget, which includes several controversial measures that increase taxes and expand government overreach. 

While touted as a modest increase, the proposed 7.4 percent spending hike over last year’s FY2025 budget signals a troubling trend of unsustainable growth in state spending at a time when the state can ill afford it.

Governor Healey’s administration has framed the budget as a 2.6 percent increase when factoring in supplemental spending, claiming it remains below inflation. However, this accounting maneuver obscures the true extent of the spending increase and raises questions about fiscal discipline at a time when the state is already facing fiscal woes, with residents and small businesses grappling with rising costs of living and economic headwinds which are driving them out of state in record numbers.

The Governor’s budget proposes to refile a plan allowing municipalities to raise taxes on meals and hotels through local option taxes, an idea soundly rejected last year. These taxes disproportionately impact small businesses, tourism, and hardworking families, sending the wrong message when Massachusetts should be focused on restoring competitiveness to a state economy that is being outflanked by competitors at every turn.

The Governor is also proposing a $164 million tax hike by setting up a cap on the charitable deductions law approved by the voters in 2000. The plan calls for a $10,000 cap for joint filers and a $5,000 cap for individuals. The Healey administration expects to bring in about $164M as a result of this cap, which is a reverse tax hike.

Additionally, the budget includes a new plan to deploy camera enforcement of traffic violations. This expansion of government surveillance raises significant privacy concerns for residents while creating a regressive system that often disproportionately impacts those least able to pay.

The Governor also seeks to expand tobacco taxes to synthetic nicotine products and extend the sales tax to candy. These measures increase the cost of everyday items for families and working people alike and set a dangerous precedent of targeting specific consumer goods for additional taxation. The tax hike on candy will cost taxpayers $25 million and the tax hike on synthetic nicotine products will cost taxpayers $2 million dollars.

“She’s literally taking candy from a baby. Massachusetts residents already face some of the highest taxes in the nation, and this proposal exacerbates that burden. Taxpayers will have to spend $25 million more dollars on candy to just pay for this tax,” noted Paul Diego Craney, a spokesman for the Massachusetts Fiscal Alliance.

“This budget doubles down on the state’s addiction to higher taxes and spending at a time when residents are already feeling squeezed and leaving for more tax friendly states. The Governor is taking a giant leap in the wrong direction. The Governor has become so desperate for higher taxes, that she’s even proposing caps on tax deductions for Massachusetts charities. This tax relief law was approved by the voters in 2000. If that isn’t cruel, I don’t know what is,” commented Craney.

“Where is the Governor’s cap on state spending? The Governor may think she’s being sneaky by capping tax deductions and not describing it as a new tax hike to the public, but that is how taxpayers will feel it, and it’s a tax hike with a $164 million price tag,” continued Craney.

“Proposals like local option taxes, traffic camera enforcement, and new taxes on candy and synthetic nicotine only make living and working here more burdensome. Governor Healey is certainly going against the tide, proposing a massive spending increase while states around the country are looking to find and cut wasteful spending and make government more efficient. Instead of finding ways to make Massachusetts more affordable, the governor’s proposals threaten to deepen the strain on families and businesses. What in this budget is going to make us more competitive? What in this budget is going to help stop the massive outflow of people and wealth from our state? Nothing,” noted Craney.

“New Hampshire Governor Kelly Ayotte is making Massachusetts a punching bag, wait till Governor Ayotte hears about these new taxes and tax hike ideas. Ayotte will broadcast it to every taxpayer imaginable, to lure more people to New Hampshire. Governor Healey doesn’t seem to grasp the damage she does to the state’s already crumbling reputation when she desperately proposes more taxes or tax hikes,” concluded Craney.  

The Massachusetts Fiscal Alliance urges lawmakers to reject these tax-and-spend policies and focus on common-sense policies that promote economic growth and fiscal responsibility through tax cuts and spending reductions. With residents and businesses leaving the state for lower-cost alternatives, or no tax states like New Hampshire and Florida, it is critical to reverse this trend.


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