Senate Ways and Means Chair Mike Rodrigues speaks during an Associated Industries of Massachusetts forum on Thursday, Feb. 27, 2025. Photo by Alison Kuznitz | State House News Service
The Senate budget chief knocked the possibility of dipping into the state’s more than $8 billion rainy day fund Thursday to address financial woes, but also warned that federal policymaking and looming cuts could cripple Massachusetts’s economic wellbeing.
“Our state’s economic and fiscal health is very much at risk of being upended,” Senate Ways and Means Chair Michael Rodrigues said during public “Commonwealth Conversations” remarks hosted by Associated Industries of Massachusetts at Peabody Nixon’s law offices in downtown Boston.
While shifting priorities and the withdrawal of federal funding supports in Washington could have widespread effects on people, jobs and budgets here, Beacon Hill appears to be waiting for more detailed indicators from Washington on the extent of the upheaval.
The Westport Democrat urged business and labor communities to find common ground with the state to safeguard the economy “in the face of intensifying economic headwinds and geopolitical turbulence.”
“The federal-state partnership is very much in jeopardy, posing an existential threat to our state. In fact, the recent proposal to cut NIH funds represents an assault on Massachusetts’s economy, since the commonwealth is the largest recipient of NIH funds per capita. This action not only stifles innovation, but it would jeopardize medical research, blunt future scientific discoveries, and lead to the eventual loss of jobs in the ‘eds-and-meds’ sector of our economy, whose overarching mission is to compete, is to improve health outcomes and save lives,” he said.
Even with Attorney General Andrea Campbell’s lawsuit against the abrupt cuts, which led to a judge issuing a temporary restraining order against the National Institutes of Health funding cuts, Gov. Maura Healey told reporters at a Greater Boston Chamber of Commerce speech Wednesday the money is still not flowing to Massachusetts.
U.S. House Republicans approved a budget blueprint Tuesday that could result in $880 billion cuts to Medicaid, a plan that Healey says could cause 2 million Bay Staters to lose their health insurance coverage. To Rodrigues, that blueprint – which still must be ironed out in committees and in negotiations with the Senate — signals “clearly that this vital source of revenue support is very much at risk of being cut significantly.”
“This action alone would be destabilizing for states like ours that rely on this assistance to support our Medicaid populations, those folks who are most vulnerable, disabled and medically complex,” Rodrigues said. “It would also be devastating for our fiscally constrained hospitals and community health centers who are doing what they can do to deliver critical services populations need.”
Rodrigues noted MassHealth is the largest line item in the state budget at nearly $20 billion. Medicaid cuts would affect nearly all families in Massachusetts, including those with loved ones in nursing homes or long-term care facilities, he said.
“I’m just going to live day by day – that sooner or later, it will implode,” Rodrigues said. “We get federal reimbursement of about 50 percent, not quite, but about 50 percent. Any adjustment to that is a killer to us.”
Rodrigues shot down the prospects of using the bulging reserve account, as he fielded questions from Stephanie Swanson, a former Beacon Hill staffer and AIM’s executive vice president of government affairs.
“There’s no talk of using the rainy day fund,” Rodrigues told Swanson, who asked if the account could be used to fill potential gaps from NIH or other federal funding. “It’s going to be hard-pressed when we are experiencing revenue growth.”
Budget writers have predicted a 2.2% increase in state tax revenue, and Rodrigues said the “appropriate time” to use the rainy day fund is when revenues are declining. Rodrigues pointed out the state’s bond rating increased in 2023 for the first time in almost a decade, as he credited the Legislature’s “fiscal discipline.”
