Author: Paris Hugley

  • Experts analyze consequences of Mass. tax cut ballot question

    A proposed 2026 ballot question to lower the Massachusetts income tax rate from 5% to 4% would cut household tax bills across the state but also blow a multibillion-dollar hole in state finances and force significant budget decisions on Beacon Hill, according to a recent Tufts University analysis.

    The report from the Center for State Policy Analysis estimates the measure would reduce the state income tax collections by 18.9% and total state tax revenue by about 10%, or roughly $5.1 billion a year by 2030. The report claims that revenue loss would more than offset gains surtax voters approved in 2022 on annual income above $1 million. 

    A mail-in ballot drop box is one of three at at Boston City Hall.Early Voters came to Boston City Hall to place votes weeks ahead of the election.
    Gary Higgins / Boston Business Journal

     Phineas Baxandall, director of research and policy analysis at the Massachusetts Budget and Policy Center, said a revenue loss of that size would be unprecedented in Massachusetts and would likely force painful budget decisions across major areas of state spending.

     “We’ve never seen anything like this before,” he said.

     He compared the potential impact to the revenue collapse during the 2008-09 recession, when the state cut local aid, higher education and public health spending.

    For taxpayers, the proposal would mean smaller annual tax bill, but little change in household income. The report found the median households would save about $1,230 a year, with most keeping about 1% of their income. However, the value of those savings would favor top earners with the highest incomes, who would receive cuts roughly 30 times larger than the median household, the report found.

    The proposal would phase in the lower rate over three years, dropping to 4.67% on Jan. 1, 2027, 4.33% in 2028, to finally 4% in 2029. The rollout would create planning challenges for lawmakers already building future budgets without knowing whether voters will approve on such a major tax cut.

     Beacon Hill is already bracing for fallout if the proposal is approved, putting pressure on the state budget and potentially blocking other tax breaks for business to delay the shortfall.

    Baxandall said cuts to education-related spending could damage the state’s long-term economic position.

    “It would be strangling our competitive advantage as the most educated state in the U.S,” he said.

    He said surtax revenue has supported programs that residents rely on.

    “We have free school meals. We have free community college, turned around the deterioration of the MBTA … We became the only state in the nation to retain its subsidies for early childhood education care.” 

    Proponents of the ballot question argue that the cuts will strengthen economic competitiveness, but Baxandall said reducing the commonwealth’s ability to invest in education, commerce and infrastructure would ultimately hurt the state’s business climate. 

    “That’s not a good place to do business,” he said.

    However, supporters of the proposal argue that the tax cut will actually benefit taxpayers. Chris Keohan, the founder of CK Strategies and an organizer of the ballot question, said there is “no reason to believe that cuts will be necessary when this ballot question passes. Those threats are nothing more than fearmongering.”

    He said the numbers cited by opponents account for no economic growth and fail to understand that the money back in taxpayer’s pockets “will immediately go back out into the economy, creating jobs and increasing revenues from meals, hotels, gas and the other taxes that help to fund the state budget.”

    “Countless small businesses are saying that this tax cut will help them hire more employees, deal with rising costs and be the economic driver that moves our state forward,” Keohan added.

    Jim Stergios of the Pioneer Institute, who authored a report in support of the proposal, compared the pushback to backlash over the approved 2000 tax cut ballot which reduced the personal income tax rate from 5.95% to 5%. He stated that in the years the tax rate decreased, revenues were often flat or higher than the previous year.

     After Gov. Marua Healey publicly opposed the ballot measure, Stergios said in a statement that her claim “ignores more than a decade of runaway growth in state spending.”

     Further, he said the cut would help small and mid-sized businesses and increase employment. He argued the commonwealth can afford budget cuts by “reversing the recent surge in hiring and fixing widespread mismanagement in major benefits programs — mistaken payments, overpayments, and fraud.”

     Supporters also point to strong public support for approving the cut, with polls showing about 58% of respondents showing support as of February, according to The Bay State Poll, conducted by the University of New Hampshire Survey Center.

  • Haitian TPS uncertainty puts pressure on Mass health care sector

    Dr. Hans Patrick Domercant has been getting more phone calls than usual.

    As president of the U.S. Haitian Chamber of Commerce, he works to assist and advise local business owners and workers of Haitian background. 

    In early February, a federal judge temporarily blocked the Trump administration’s termination of Temporary Protective Status for Haitian immigrants, which had been set to take effect Feb. 3. The ruling allowed Haitian TPS holders to keep their legal work authorization and protection from deportation while the case moves forward. 

    For now, the status remains in legal limbo as the administration pursues an appeal to the Supreme Court.

    “People are thankful that the recent court decision provided a pause,” Domercant said, “But no one feels fully secure. The conversations I’m having are very real and very personal — people asking, ‘Am I going to be able to keep working?’ ‘Is my family going to be OK?’”

    The Trump administration has pursued an aggressive effort to scale back TPS protections for several countries as part of a broader push to narrow humanitarian immigration programs. Since taking office, the administration has moved to terminate TPS designations for countries including Haiti, Honduras, Nicaragua, Afghanistan, Cameroon and Nepal, arguing that conditions in those nations have improved enough to no longer justify the protections. 

    TPS, allows migrants from countries experiencing armed conflict, environmental disaster or other extraordinary conditions to live and work legally in the United States. Haiti was designated for TPS after the devastating 2010 earthquake that killed an estimated 300,000 people and displaced millions more.

    Massachusetts is among the states with the largest Haitian immigrant populations, according to the Migration Policy Institute. The community makes up a significant share of the workforce in Greater Boston and across the commonwealth, particularly in the health care sector, where many work in nursing homes, home health care agencies and long-term care facilities.

    “They are essential,” Domercant said. “These are people who have been here for years. They’ve built lives. They’ve built careers. They’re not temporary in the way the word sounds.”

    Doug Howgate, president of the Massachusetts Taxpayers Foundation, said the potential loss of TPS workers would add pressure to a state economy already struggling with labor shortages. Massachusetts has faced slow workforce growth and domestic outmigration for years, he said, making international immigration an increasingly important source of labor and economic stability.

    “Our labor force has grown since the pandemic, and some of the biggest increases in our labor force in two decades are entirely driven by international immigration,” Howgate said. “International immigration has been what has enabled Massachusetts to have a growing population and to have a growing economy.”

    Howgate said the dynamic is especially important in health care. Any change that reduces the number of available workers could worsen staffing shortages in hospitals, long-term care facilities and home health settings.

    If employers are competing for fewer workers, Howgate said, labor costs could rise, adding strain to providers already operating under pressure while trying to maintain patient care.

    “There’s going to be dollars chasing fewer people, which means it could potentially drive up some personnel costs as well.”

    More broadly, Howgate said uncertainty around immigration status can slow economic growth by making it harder for businesses to plan and expand.

    For many Haitian immigrants in Massachusetts, TPS has functioned as more than a temporary administrative status. It has been the legal framework that has allowed them to buy homes and start businesses. The possibility of losing that framework — even if not immediate — creates what Domercant describes as “emotional and economic whiplash.”

    He worries that prolonged uncertainty could stall economic mobility and community investment.

    While the federal court decision has temporarily preserved protections, immigration advocates say the uncertainty itself is already having consequences.

    Elizabeth Sweet, executive director of the Massachusetts Immigrant and Refugee Advocacy Coalition, said Haitian TPS holders remain legally authorized to live and work in the United States while the case proceeds. But she said confusion, and in some cases misinformation, have already created instability in workplaces across the state.

    “At the moment, individuals with Haitian TPS have a continuing legal status and a continuing work authorization,” Sweet said. 

    Sweet said her organization has received reports of workers being let go prematurely because employers believed TPS protections were ending immediately.

    “That’s not a valid reason to lay someone off,” she said. 

    Three Haitian TPS holders were laid off by Tribute Home Care, based on their status expiring later that week. Even through the federal ruling extended work authorization, GBH reported. 

    Several Haitian-born residents contacted for this story declined interview requests, saying they feared being identified while their status remains uncertain. 

    Their reluctance to speak publicly reflects the anxiety and instability that advocates and community leaders say have intensified in recent weeks. Even with the court’s temporary block in place, some workers remain wary that public exposure could carry professional or personal consequences.

    For health care providers already navigating chronic staffing shortages, even small disruptions can ripple quickly through patient care systems.

    Since the COVID-19 pandemic, recruitment pipelines have thinned while burnout has increased. Losing experienced staff would likely compound those pressures.

    Sweet argued that the underlying conditions that justified the status remain.

    “The conditions in Haiti are truly the type of conditions that temporary protected status was meant to address,” she said. 

    While state officials in Massachusetts have issued guidance to employers about navigating immigration-related uncertainty, immigration status itself is determined at the federal level.

    In the meantime, prolonged instability carries broader economic implications. Small business lending decisions, expansion plans and hiring strategies often depend on predictability. If thousands of workers face potential loss of work authorization, employers may hesitate to invest.

    Domercant said that hesitancy is already creeping into conversations.

    “When people feel secure, they build,” Domercant said. “They buy homes. They start businesses. They pursue education. That benefits everyone — not just the Haitian community, but the entire state.”

    This uncertainty places workers in a difficult position even before any formal change takes effect. Some may hesitate to pursue jobs, apply for promotions or make major financial commitments while their status remains under review. 

    Others may find themselves having to repeatedly explain their legal status to employers unfamiliar with TPS protections and court rulings. That confusion can deepen anxiety for workers who are still legally authorized to remain employed.

    “It’s not just about jobs,” Domercant said. “It’s about the ability to plan a life.”

    If TPS were ultimately terminated and work authorization revoked, the impact would be felt beyond the Haitian community.

    Health care facilities would scramble to fill gaps, small businesses owned by TPS holders might close or scale back operations, affecting landlords, suppliers and local tax bases.

    The potential effects on the health care sector also reflect broader risks for other industries in Massachusetts that rely on TPS workers. While the consequences may be especially visible in health care, the disruption would not stop there. 

    Employers across multiple sectors depend on TPS holders to fill essential roles, and any loss of work authorization could shrink the labor pool at a time when many businesses are already facing hiring challenges, according to Bloomberg Law.

    For now, the court’s temporary block has bought time. 

  • Massachusetts, Nova Scotia wind pact faces cost, permitting and transmission hurdles

    A memorandum of understanding between Massachusetts and Nova Scotia signed this month commits both governments to work together on offshore wind development and regional power sharing — but obstacles remain.

    The agreement — announced after Gov. Maura Healey unveiled her 2027 fiscal budget proposal — is an important first step to signal a coming stability to clean energy investors. However, experts say the deal, while important and symbolic, does little to change the state’s energy challenged outlook.

    The three-year MOU does not commit either government to purchase power and does not sanction the construction of any new transmission lines. Instead, it lays the foundation for collaboration as Nova Scotia builds its offshore wind industry and Massachusetts policymakers look to find solutions for long-term supply.

    Hannes Pfeifenberger of The Brattle Group, a consulting firm specialized in energy and finance, said one big obstacle is simply the cost. 

    “Part of the challenge is that with inflation and higher financing costs, the cost of offshore wind has increased significantly over the last five years,” he said.

    Another factor is time.

    Offshore-wind generation and transmission projects typically take a decade from planning to operation. Even under the best conditions, the benefits of the agreement would not be felt for years.

    “Building a large transmission, getting it planned, getting it permitted, finding people willing to pay for it, that’s probably closer to a 10-year process,” Pfeifenberger said.

    Supply-chain disruptions have added to the financial strain. Several U.S. offshore wind projects have been delayed or canceled because developers could not secure turbines within economically viable timelines.

    However, the ones that have been built — such as Vineyard Wind 1 — are running smoothly and proved their worth during cold snaps. The New England wind project only just resumed construction after a suspension issued from the U.S. Departments of the Interior’s Bureau of Ocean Energy Management was lifted by a federal judge in January. 

    At the same time, the state remains heavily reliant on natural gas for electricity generation, leaving ratepayers exposed to volatile fuel markets. Natural gas prices in New England can be significantly higher than in other regions due to pipeline constraints and seasonal demand spikes.

    Permitting uncertainty presents another major obstacle.

    Mark LeBel of the Regulatory Assistance Project said federal permitting instability has introduced risk into projects that already operate on small margins. “When the federal government plays games with permits, it ruins the certainty and financing model for all these things,” he said. 

    Questions surrounding who pays for transmission, how projects are approved, and how costs are allocated remain unresolved, he added.

    Meanwhile, electricity demand is expected to grow.

    ISO New England projects consumer demand for electricity will increase by roughly 11% over the next decade.

    Massachusetts needs additional energy resources to meet growing demand and long-term climate goals. Offshore wind is one pathway, but as of right now, the infrastructure, financing mechanisms and regulatory assurance required to carry out large-scale projects are not yet aligned with policy ambitions. 

    In that sense, the Nova Scotia agreement serves as a positive signal, but intent is not the same as delivering power.

    Until there is action in stabilizing permitting and financing costs moderate and transmission plans advance, the state’s energy system will remain largely dependent on existing resources.