New Taxes, Higher Spending, and No Relief for Fleeing Residents

As lawmakers gathered at the State House to hear Governor Maura Healey’s testimony on her proposed FY2026 budget, the Massachusetts Fiscal Alliance today blasted her proposal for prioritizing tax hikes and reckless spending over meaningful reforms to make the Commonwealth more economically competitive and livable. The Governor’s $58 billion budget increases spending by over seven percent and paves the way for a wide array of new taxes on candy, synthetic nicotine, prescription drugs, and local option tax increases on meals and automobiles. The Governor’s budget also caps deductions for taxpayers when they make charitable contributions.

“With Massachusetts already losing residents to lower-tax states like New Hampshire and Florida, Governor Healey’s answer is to make living here even more expensive. Her budget turns to increasing taxes instead of looking for meaningful cuts and spends billions without accountability. Her proposal does nothing to address the affordability crisis Massachusetts residents are facing and ignores how her steps to perpetuate costly energy policies are exacerbating the problem. This budget is unfortunately calling for a massive spending increase at a time when we should be looking at how we can make meaningful cuts,” said Paul Diego Craney, spokesman for the Massachusetts Fiscal Alliance.

“This is a tax-and-spend budget through and through. Governor Healey is quietly raising taxes while pretending to offer relief. Allowing municipalities to hike their meals tax and TRIPLE their auto excise taxes will hit working families hard, while her prescription drug tax will make healthcare more expensive for patients,” noted Craney.

Despite the state already collecting record-high tax revenues in recent years, the Governor has refused to offer any meaningful broad-based tax relief. The Governor brags about tax cuts, but they were in 2023, not last year and none are included in this budget. Instead, she perpetuates bloated spending from the influx we received in pandemic relief and continues to push economic and energy policies that drive families and businesses out of Massachusetts.

“When residents received last month’s energy bills, they were rightly outraged at the massive increase in costs. Governor Healey’s response was to say she would get to the bottom of it, conveniently ignoring the fact that the policies she was pushing were at fault for the spikes. Her budget continues to play this shell game with ratepayer money, as she shifts money earmarked by statute for MassSave, a program whose ballooning costs is one of the major drivers of peoples increased utility bills, to other unspecified programs,” noted Craney.

During today’s hearing, State Senator Ryan Fattman (R-Sutton) asked about this shift, and the Healey team could not provide details. The Healey plan, located in outside section 13 of the budget, would allow the Department of Energy Resources (DOER) to use resources once designated for MassSave for other programs. Senator Fattman asked who would backfill the lost money for MassSave and cautioned it should not be the ratepayers. The Senator asked what other programs the money would be opened to, and the Healey officials were caught flat footed. Currently DOER places a .3% assessment on gas and electric utility companies that is earmarked to fund MassSave.

“If the Governor were serious about making Massachusetts more competitive, she would be cutting our bloated budget, taxes, and reversing the renewable energy mandates that are driving people and businesses away from the state. Instead, she’s creating new ways to take more money from taxpayers,” said Craney.

“This budget is an insult to the hardworking residents who are already struggling to afford to live here,” closed Craney.