Incorruptible Mass

MassBudget

• Anna Callahan • Season 6 • Episode 10

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We continue our series on our economy by honing in on our very own state's budget priorities with Phineas Baxandall, the policy director at MassBudget. We discuss how DOGE cuts have been especially harmful to sectors that Massachusetts communities rely on, how our state legislature has adapted to respond to the loss in federal funding, and what the General Court can do to weather the storm in a way that's best for people across the commonwealth.

You’re listening to Incorruptible Mass. Our goal is to help people transform state politics: we investigate why it’s so broken, imagine what we could have here in MA if we fixed it, and report on how you can get involved.

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ANNA

Hello and welcome to Incorruptible Mass. Our mission is to help you understand state politics and help you transform state politics. We know that together we can make our beautiful state and the state policy reflect the needs of the vast majority of the residents of where we live.


And today we are going to be talking about the economy. It's part of our deep dive on the economy, and we are going to be doing one today with someone from a special guest from Mass Budget to talk about the Massachusetts economy. We are going to be talking about the effect of the federal changes, especially DOGE changes and these sorts of things on our Massachusetts economy.


We will be talking about what our state legislature and governor are doing and maybe what they should be doing. We will be talking about the media and how they have approached and attacked the fair share, the fair share proposition that passed. We'll be talking about our cities and towns, what they can do. We'll be talking about Eds and Meds because a lot is coming from, you know, the federal changes that are going to affect education and medical businesses. And then we will give you guys an opportunity to plug in to some wonderful events.


So before we do any of that, I'm going to have my illustrious co-hosts introduce themselves, and I will start with Jordan.


JORDAN

My name is Jordan Berg Powers. I use he/him. I have several years working in Massachusetts politics, and I am excited to dust off my econ degrees to have this conversation today.


ANNA

Awesome. And Jonathan?


JONATHAN

Jonathan Cohen, he/him/his. I've been active on a number of electoral and issue-based campaigns in Massachusetts for over a decade now and live in the South End in Boston.


ANNA

I am Anna Callahan, she/her, coming at you from Medford, where I'm a city councilor and I sort of specialize in local electoral stuff, not just in Medford, but also across the country. We have an amazing special guest, and Phineas Baxandall — did I say that correctly? Please correct me if I'm wrong — from Mass Budget, if you would mind introducing yourself and your organization.


PHINEAS

Thanks. Yeah, my name is Phineas Baxandall. I'm the policy director at Mass Budget, also known less commonly as the Massachusetts Budget and Policy Center. And Mass Budget has been around for, we're on our fourth decade of analyzing state policy with a particular eye towards trying to improve how Massachusetts works for low- and middle-income people. And yeah, thank you for inviting me here.


ANNA

Wonderful. We are very excited to have you. So first, man, so many insane changes happening at the federal government. They're trying to axe the education department. They're cutting all sorts of important, important departments up there. And we would love to hear from you what effect that is having on the Massachusetts budget. I know you said that they actually have an office where they look specifically at funding that's coming from the federal government. And if you can give us a little bit of an update and tell us what is happening in terms of our federal funds coming to the state of Massachusetts.


PHINEAS

Yeah, thanks, Anna. So this is something that was created by the administration. Governor Healey created a new kind of position, new office to really look at— it was first created with the idea of, “wow, there's these incredible new opportunities from the Biden administration, and we want to be well-positioned so that we have the matching funds for these federal grants” was the main thing. There's going to be these billions and, know, hundreds of billions of dollars in federal grant opportunities. And they all require the state to be able to say, “we'll pony up what our match is for that amount.” And we want to not be flat-footed.


ANNA

Oh, my gosh. Those were the days.


PHINEAS

Those were the days, right? You know, so they hire.


JONATHAN

I mean, summer children of yore are right.


PHINEAS

Yes, that's right. But the good news, I mean, it's not all tragedy because the same people who are really adept at this are now looking at what's getting cut and providing information about what's getting cut. And so I'll can give you the website for you to put with your materials there. It's Impact of Federal Funding Cuts on Massachusetts is what they call it and what they show is they have really good — the Impact of Federal Funding Cuts on massachusetts.com — yeah, well, now, on Mass.gov, but just kidding. Give you the link for your listeners.


And they both show the large amounts of money that by their account, it's almost $23 billion in federal funding which comes to Massachusetts government, not including things like unemployment checks and things like that, of which about half of that — they don't say this — but about half of that comes right into our state budget. Others of it comes through other things.


But they talk about how, yeah, one in four residents rely on SNAP, you know, food stamps, nutritional assistance, that there's 28% of Massachusetts residents are enrolled in Mass Health are the, you know, federal Medicaid program, which reimburses half or more of that money, you know, that there's 11,000 children who attend federal Head Start, funded preschool programs, things of that sort. And then they detail what the cuts have been so far.


And there's not an official way to do this, so they're kind of lagging almost on a crowdsourcing within government and such, but they show there's $366 million of cuts that have already happened, mainly to health and human services, education, and public safety, actually some of the more, anything that you might have thought of as sort of being enlightened, I guess, has been coded as woke and getting cut. So those cuts are detailed and it's a really sobering picture of both what's happening and what the vulnerability is for future cuts.


JONATHAN

And I think that like highlighting the fact that like cuts are not— although there are some particularly scary cuts possibly coming down the road, we have already lost money from the federal government is something that I feel like a number of legislators aren't quite grappling with when they talk about this.


Because they talk about having to take action to address federal funding cuts as a later issue, when because of those cuts, many of them, which — and correct me if I'm wrong — were some of the cuts being made unilaterally from the Trump administration sharing programs through like Elon Musk's DOGE, that we've already lost money. And so that when there's with the possibility of Republicans kind of passing the quote-unquote “One Big Beautiful Bill. By July 4th, that creates like— that's even more damage down the road. But that there's stuff that we already aren't addressing that really that we really should.


PHINEAS

Yeah, I mean, I think for the legislature, they don't know which of these unilateral DOGE-type, you know, executive order-type cuts are going to hold up in court. So some of that stuff, you know, you might not want to start restructuring things and such based on things that you don't know what will hold up legally. But there are, you know, grant programs which have been canceled. So, you know, they're not happening. Yeah. Soon there's a lot of this stuff, you know, there's major impacts, you know, these National Institute of Health grants which have been canceled, you know, maybe that money someday might get, it seems like it's going.


JONATHAN

And it's also the type of thing with that, that I think also doesn't get enough about discussion of federal funding cuts. There are some funding that you can lose and then you can move money around in the inner and try to and weather over until the money that you were promised comes back. And that there are some funding cuts that mean the thing doesn't happen and that it is unlikely to then happen in the future, because then an organization will have either just eliminated positions restructured it just becomes a lost period of time.


PHINEAS

One thing which is really pernicious about some of these programs, it's not so much the grant programs or the things, but the things that people rely on. So we rely on, you know, we know this Medicaid money is going to get reimbursed. We know if we repair this bridge, it's going to get reimbursed. If you don't know that something's going to get reimbursed, you can't start spending it. So it's, it kind of forces this almost preemptory cutting at the local level because, you know, whereas the federal government, if they end up with a deficit, they're like, all right, well, print a little more money. You can't do that at the state level. You have to balance your budget and towns have to balance their budget every single year.


ANNA

So I would love to hear what you think of the way that the legislature is handling the budget, like the things that they're doing right now. And then after that, we can maybe talk about what we think they should be doing. But for now, if you can kind of let us know how you think they are handling things so far.


PHINEAS

Sure, I mean, the main thing is the state budget, which happens every year and is supposed to be passed by the end of the fiscal year, the end of this month, and probably will take a little bit longer. But the legislature is— on the one hand, it's got a lot of this Fair Share money, which I know we'll talk about longer, and so it's being able to use that for some exciting things to plug some deficits and other things, a lot of possibilities.


What I'm very relieved to see is that the legislature has not been doing a kind of preemptory cuts, right? The worst thing that the legislature could do is to say, “the federal government might be cutting this, so let's start cutting back on this housing program or that education program,” and that becomes this kind of almost self-fulfilling prophecy that they're not doing. And thankfully they're not doing. I think it does set up for a hard moment that when, if we do see this month that there is going to be this passage of this giant ugly bill that there are cuts, then we're going to see— I mean, we're almost certainly going to see some kind of cuts, what gets called 9C cuts, because that's the code in the state law, which dictates that in September we're going to see these cuts that the administration, the Haley administration, will be making on programs.


But I'm glad that there's not a preemptory cutting for that, because then it just kind of bakes it in. You don't get to see what it is. It would be worse to do that. What I wish they were doing, and what I think would be, you know, the most desirable thing is to say, “okay, we know the federal government is going to cause some pain here. We know the, you know, traditional kind of state-federal partnership is we take care of the people in the Commonwealth of Massachusetts in partnership with the feds. The feds are not going to be pulling their weight here. They're going to be kicking us in the teeth some instead of supporting us. So we've got to help more. And to do that, we've got to raise some more revenue. We've got to kind of up the effort, not preemptively scale it back, but actually prepare to kind of give more support.”


And that's something we're not seeing. I would love to see that, but that's not what we're seeing. The Healey administration had some minor proposals for additional revenue, which then the legislature didn't include, but we haven't seen that.


ANNA

But I'm so surprised that our state legislature is not proactively being progressive and taking care of its residents. And gosh, I'm shocked.


JONATHAN

Phineas, your point there, what are some proposals to raise additional revenue that you would love to see the legislature take up?


PHINEAS

I mean, something which I know, Jonathan, you've been organizing around is there is this measure — it's got this wonderful acronym, Global Intangible Low Tax Income — which designates when the federal government says, “oh, come on, you can't be really indicating that so much of your taxes are owed in the Cayman Islands where all you have is a mailbox. Really, we're going to call part of that income that you're saying are Cayman Island profits, are taxable profits for the US.”


And then, States, the default was for states to just follow how much of that income was going to be is taxable in the states. And Massachusetts only taxes 5% of that income, whereas the federal government taxes 50% of it. So a really easy thing to do would be to just change it back to what it would have been by default is to that 50. And that would be, we don't know exactly, but, you know, the best estimates we've seen are, you know, certainly in the hundreds of millions of dollars for that.


That, you know, there's, there's things that could be done by increasing rates of things like capital gains or corporate taxes. There's, there's things that may seem little and that they're only tens of millions of dollars, but they seem really obvious. Like we have a special exemption for aircraft sales taxes. You know, if, if you're buying an aircraft, you don't have to pay sales tax the way someone does on their bike. Yeah, that, that's just something which, don't.


JONATHAN

We all, don't we all buy aircraft?


ANNA

All of our aircraft. Yeah, I really make, I save money on that one.


JONATHAN

We were hard, we're targeting the hard-working middle-class Massachusetts residents who own multiple private jets.


JORDAN

I mean, but if we don't keep them that free taxes, maybe they'll leave the stage out of it. And then what?


ANNA

Oh, how terrible. Obviously the worst. So there are lots of things we wish our state legislature would do. They could raise a little revenue knowing that things, bad things might be happening. You did mention Fair Share, and I would love for anyone here to just remind our users or listeners a little bit about Fair Share and about how long it took for us to pass it and about how carpoolly the legislature treated it after it passed. And let's get a little bit of a review here.


JORDAN

Yeah, Phineas, why don't you talk a little bit about how it's propped up our state budget, and then I can talk a little bit about my frustration about okay.


PHINEAS

I mean, it, it's really hard to imagine the, the kind of “up the creek without a paddle” situation we would be in if we hadn't passed the sale of voters passed in, in November of 2022, a ballot initiative which said that just like at the federal level, people who earn more would have a higher tax rate, but it did it in a very particular way where it said only the kind of richest 1% of income earners, those earning that it was over a million dollars, it gets inflation adjusted so that now it's almost 1.1 million where the threshold starts. But starting in your second million or you're starting after 1.1 million, you're paying an extra 4% income tax on that money.


ANNA

And people called it the Millionaires Tax. So if you heard of the Millionaires Tax, it's also called the Fair Share. So these are all the same thing.


PHINEAS

Yep. Sometimes it gets very sterilly called the Surtax, which I think resonates for nobody and recalls nothing. But, but, so it's something that we should be talking about a whole lot more because it has become the, the life raft for, for us when it passed. and when it was coming up for a vote, the opponents said, “oh, this is going to, it's not going to create the money we think it's going to because everyone's going to leave the state who would pay it, or at least they'll find some way to make it seem like they're leaving the state and it's going to cause all these other problems.” And the official, the official estimates then, which, the outgoing Baker administration had, had done was that it was only going to raise a billion dollars, which was half of what only a billion.


ANNA

I wouldn't mind having only.


PHINEAS

A billion is such a difference maker. But that was, you know, we had been saying it's going to be at least 2 billion. And they said, okay, let's estimate that it's 1 billion. Said, all right, estimate that it's, it's 1 billion. But it's, it's, you know, it's now about 2.4 billion in the most recent fiscal year. And then because we underestimated, it's sort of a one-time thing, and I don't think people appreciate this, because we underestimated in the previous years, we have a little bit of an overhang of that extra Fair Share money. So now in this particular budget is going to is like a bumper crop of fair share money. The timing is, is good, frankly, with what other troubles there may be for the economy and there may be in trying to cushion federal cuts.


And so, for instance, the, the, the MBTA, the T, is projecting a, you know, 700 million dollar deficit otherwise for this, this year. And, you know, they've been putting all this money into repairing, getting service better, investing in it. And, but they've got a 700 million dollar deficit. And then the House and the governor proposed budgets that would fully cover those deficit. The Senate's was a, was, it was less. It'll end up getting negotiated. But we would be in a totally different universe. Like Chicago had a millionaires tax on its ballot that it lost. And Chicago right now is announcing 40% cuts in transit service.


ANNA

Oh my God.


PHINEAS

We lost that. So we can kind of see the alternative universe of what we're in and from what Chicago’s in. And it's, you know, Chicago is an engine for that region's whole economy there.


ANNA

Jordan, Jordan, jump in. I know what you want to talk about.


JORDAN

Because I was railing about this before the, you know, we keep saying we have to have it before the curtain, before the thing starts. Yeah, just like, just a reminder for people who are listening that, you know, there was a skies-falling attitude to how the millionaires tax got covered from everyone from, you know, positioning Evan Horro, which is horrible. So, quote-unquote, like “fake reports” that he puts out that talked about like how all these millionaires were going to leave and it was maybe going to maybe going to net a few positive money, but it was— it was likely going to be relatively even to the way that they treat people like ourselves, who are really talking about fiscal management.


I mean, really, we're, I mean, a small surcharge on people who will barely notice it to help cover some of the basic things that help the engine of our economy run is, is what a legislature and a responsible sort of media apparatus would be talking about doing, right? Because it's a small surtax to do some basic things. But instead it got covered like we were bonkers leftists who were just like one shot away from talking about a communist revolution.


And then we were juxtaposed with people who are absolute bonkers, people who believe in no taxation, who have never supported a taxation, who oppose every type of taxation, as if they're as if a 4% surcharge on a million and first dollars is the same as people who oppose all taxation. Right. And that is what happened in the media system is that they treat those two ideas as equal and that the idea that there's a middle that we have to get to between those two. the middle is the fair share, if not a little bit to the right. Right, that's the conservative fiscal position.


When you see when you saw what was before us, even before all the chaos with the Trump budget, what we saw is Obama cut state and federal state funding, you know, other successive things like we have seen a falling away of the federal government support for the basic services of our local cities and towns. We have seen except for Biden, who thankfully put more money in, we have seen across a bipartisan push away from that sort of more and more austerity budgets.


And the fiscal thing to do was to shore up what was already an unstable system in Massachusetts. It's still relatively unstable, but it's more stable because of Fair Share. The responsible thing to do was to have a responsible taxation to try to address it so that we can ensure that our T still functions, that our schools still get updated, that they still could have the possibility of providing a world-class, number-one education, right? That's only possible if there's money and you need to tax people to get that money.


And I'm tired of the way in which we get juxtaposed with people who just are just like bonkers. They're just bonkers. They're not tethered to reality and they're not required to, they're not required to be, they're never asked, you know, no one has since the Fair Share Amendment passed asked the Chamber to apologize for opposing it. They've never said, “how would you fix this problem?” They've never said, “don't, the Chamber is happy to get a tax credit that we can't afford for money that gets backfilled by the things.” They never get asked to account for all the hard work that those of us who are responsible, who are actually very moderate, who are thinking very fiscally responsibly about the world to like to us about about the hard work, ten years, constant opposition, billions of dollars to stop it from happening.


It has not caused the world to fail. Millionaires have not left the state. It has not collapsed. We don't— we are not just poor people all desperate without billionaires to fund. Right. People want to live in a state, including millionaires, that functions well. That's easy to get around, where their kids have good schools, where it's relatively safe. All of that costs money. We're asking people to pitch in. It was a relatively thing.


And it's just it's just a really frustrating— it's really frustrating the way it gets talked about and the way it's still getting talked about. And this is without the fact that the that the legislature just carted off half the money that we could be bringing in with tax cuts to dead billionaires. Like, I just like, you know, like it just we could think about how much better we'd even be without that tax cut. So yes, sorry, rant over, but it's just always so frustrating. Phineas, go ahead.


PHINEAS

No, well, I want to always respond to two things here. First, just to take partial sort of exception. I wouldn't call the Center for State Policy Analysis work “fake reports.” We have big disagreements with some of their analysis or so that—.


JORDAN

Just I will say, I will so you don't have to: you can, you can’t say that they put out “fake report,” but I will say for the record that they linked to, they have that that they linked to a press release in a press so the art so Commonwealth Magazine said that they released a report. The report was a press release. It in fact had no actual reporting. And then the website went to quotes from Evan about a report that maybe existed or research that may have been had, but actually had no factual data behind it.


And there's a ton of stuff that gets released on that website that does not have factual backing. It is mostly just opinions and it's called a report, but a report actually needs to have research. It needs to have facts behind it. So it's you, I'm sorry I took us down this path.


PHINEAS

I just wanted to say, I—


JORDAN

I’m not saying that out of turn. Like, like I'm just like, I hate the work that they do. I'm saying, like, factually speaking, they are treating people who have research and, and actual numbers the same as people with opinions. And that frustrates me.


PHINEAS

Yeah, I, yeah, I, I don't wanna—


ANNA

You're hearing it first here, guys.


PHINEAS

As a, as a research organization, when I when I see folks who do serious research, maybe there's instances you're talking about where, so this case being sort of dismissed as fake, I just sort of feel like a sense that I need to come to their offense. I didn't really wanted to say, I'm sorry, Joe. Okay.


What I really wanted to say is that, that there's just another example of this sort of progressive-but-responsible governance, sort of the years and years ago with capital gains, trying to get capital gains income taxed at the same way, at the same level as people who are earning, kind of actively earning their—


ANNA

Green level, it should be more.


PHINEAS

Yes, but there was, you know, the pretense was that, you know, oh, we have to incentivize this investment. So to bring, bring this, the one of the things that happened from that was the creation of the system we have now for creating a rainy day fund and putting away the capital gains money automatically in that. And as a result of that, Massachusetts has, you know, getting on towards a $9 billion rainy day fund, which is when you look at the biggest rainy day funds in the US, you see places like, you know, Texas, California, you know, and then not far down the list, you see Massachusetts.


So we, how we can think these earlier efforts to have progressive revenue, which may have been dismissed as being marginal, crazy thinking or something at the time, but it actually had created the conditions for us to have the prudential financial stewardship, which puts us in a much better situation, gives us better bond ratings, etc., than if we hadn't done that. Sorry, that's my other plug.


ANNA

No, no, no.


JONATHAN

And I can take it on one thing that, Jordan, one thing that your rant reminded me of is kind of the annoyance in which that when it comes to the fact that, like with, let's say the, I'll use the big ugly bill that the Republicans are working through Congress, that is like blowing a massive hole in the debt and deficit. The folks who pretend to care about the debt and deficit will always have more ire about spending that helps people than they will about blowing money on tax cuts to rich people. Even if some of them will still criticize when Republicans blow holes in the budget to give tax cuts to rich people, it will never inspire that same passion and that same ire from them.


And that the way in which the media, the next time that that very Republican who will have voted to create a massive hole in the federal budget and grow the debt, now become now, like, puts their deficit-hawk hat back on and talks about how Democrats’ wild spending is threatening the fiscal, like, security of the country are allowed, are allowed to have their speaking engagements in the future. Ah, because there's that just, like— which is always just so grating to see that, like, the blatant hypocrisy that is never that, that our media system is not built in to dissentivize.


ANNA

And so I'm going to jump in about the media because, you know, clearly with Fair Share and with stuff that happens here in Massachusetts, we do not have enough media outlets that are approaching this with, you know, the right level, excuse me, of balance— not balance between, like, reasonable people and unreasonable people just because they happen to be on opposite sides, but like balance between reasonable opinions. And also, you really won't hear a lot of the just pure factual information that Phineas is bringing to us about what exactly what cuts are coming through from the federal government to our state and how it's affecting us and what the budget is like and all of these things as well as the, of course, we always have dreams of what we could do better.


And if you want to hear more of that stuff, I encourage everyone listening to forward this to your friends. And also, there's always a link to donate to the show. You can donate a cup of coffee, you can donate a hundred bucks. You can give us as much as you want, and it really, none of us get paid. It purely goes toward making sure that our graphics are there, that our videos are edited, that our social media accounts maintain their vibrancy, and we have some lovely young people who are doing that work for us. And so if you can, that would be amazing.


And we only have a couple more things to cover before we go for today. I want to make sure we talk a little bit about cities and towns. We want the state to fill those gaps where the federal government is now falling through and letting us down. We've talked a little bit about the state. How can cities and towns fill this kind of gap? I know I'm going to speak for my city of Medford that, I believe we are still the lowest funded per capita city in all of Massachusetts, lower than the vast majority of towns as well, and we are a shoestring budget. So I don't know what we can do. So taking ideas, but they're also much wealthier cities, Cambridge and other places like that. And would love to hear from you, Phineas, or anybody else, what kinds of things cities and towns can do to help in these trying times.


PHINEAS

Well, I mean, we all, I guess— I know you've talked about this on your show before that unfortunately, cities and towns are limited in what they're allowed to do because of our so-called sort of Home Rule system. Yeah. And so there are things which I think the state could allow cities and towns to do, such as, you know, there's 19 cities and towns, I believe, that have formally asked to have a real estate transfer fee on the most expensive homes to be able to fund affordable housing in in their cities and towns. So that's the type of thing that requires a state kind of nod for it to happen. But I think, you know, you folks, we work more in the state. You know, I know, Jordan, you've done a whole bunch of stuff on cities and towns. I don't know what you're talking about, folks, or what's going on in Worcester.


JORDAN

No, I mean, you think you nailed it. I would encourage people listening, if you are in a city or town, just to think about: yes, it requires state oversight to allow these things, but that's actually the time to then try things. I think the other thing is a lot of towns, a lot of times cities and towns don't want to do things because they know the constraints and they know the process of trying to get through the legislature. But if it wasn't just Boston, if it was Worcester, if it was Medford, if it was more cities and towns asking for more ways to find revenue in these tough climates, it actually would put pressure on the legislature to try to do something and to loosen up the reins.


It's actually a good time if you have a city council or if you have a person to think about what are some ways that you can bring in some progressive taxation or some or things that make sense for your particular city and town that voters would agree with, including a transfer tax, which is overwhelmingly popular no matter where you are in the state. Like there's no reason every one of the cities and towns doesn't pass one. And then the legislature will either have to pass it from the state legislature or, you know, like allow some of these cities and towns to do what they've been democratically elected to do. But yeah, no, I think, I mean, you've nailed it. I think we've all talked about it a bunch.


PHINEAS

I mean, you're doing things in Medford. What, what, what, what— how are you folks doing it?


ANNA

Well, we just, we passed our first Prop 2 ½ override. We never had one on the ballot before. We just passed one. So that was a lot of work, a lot of research, a lot of everything. It's why I know that we're the lowest funded. Like we're less funded per capita than like 90% of all cities and towns are the lowest funded city. So that kind of research and understanding to help the voters to, to really have a good comprehension of, like, why we were asking for them to, to approve of a Prop 2 ½ override.


And, but, you know, the question of funding your city properly is a, is a very difficult one in Massachusetts, and we really are hampered by the state. So, you know, that's a reality hampered in many, many ways. We can't do all sorts of other things. Minimum wage laws, we can't pass those. We can't do all sorts of landlord tenant things. I mean, that's just the way Massachusetts is.


I think I want to go ahead since we're coming up on time already. Let's just talk quickly about Eds and Meds, right? I mean, we are a state where education and medical businesses are really the industries, the innovative industries and the industries in our state where we are ahead of other states. And yet there's a lot of problems coming from the federal government with NIH being cut, funding being cut from NIH and the whole education department being in trouble. So I'd love to hear what you think of that kind of coming down from the federal government and how it's going to affect our economy.


PHINEAS

You said it out right there. You're very much— Massachusetts’s economy, more than perhaps any other state in America is, has higher education as a kind of both direct kind of spending engine of the people who are hired— you know, whether it's food service or professors serve you know, physical plant, as well as being a reason why businesses locate here and why there's the kind of agglomeration of knowledge, which makes it a place where people want to come and, and, and be.


So we're, our economy is, is very kind of dependent on higher education, that being a, a very vibrant thing. And similarly, it's, you know, meds and more generally you know, kind of science, you know, and the National Institute of Health and its grants being a big part of that. And both of those things are getting not just kind of potentially defunded, but kind of predatorially, you know, kicked in the teeth from the, the federal government.


And so we, you know, I don't know what's going to happen, but there's a lot of of kind of, on the one hand, Massachusetts has these things like we built up this with good rainy day fund and we have, you know, better policies in a lot of ways than a lot of other states. But we also have these other, in some ways, larger vulnerabilities because of, of our reliance and sectors that are being targeted with defunding from the federal government.


ANNA

Yep.


JORDAN

Yeah. I just want to, I just want to say really quickly about that, then, like you know, it's, we, we sort of, they become numbers for people. They don't really, they aren't real people. When you say 50,000, how do you imagine 50,000 individuals? It's, we just, we just really can't understand it. But I just want to, like, just for people to really understand what it's gonna mean for our economies.


In Western Massachusetts, Mass Mutual is the largest employer, but the second is UMass Amherst, right? Which depends on the federal government for Pell Grants, for NIH grants, for all sorts of other grants, and the state, which could be doing more to and has cut funding for higher education. Next up is Baystate Medical, which again is heavily dependent on Medicare, Medicaid funding to go. So your second and third employers in Western Massachusetts, your number one employer in Worcester is UMass Memorial Health Center. Again, really incredibly needed for health insurance.


So Clark University has announced a 30% cut to all of its employees. You're seeing a bunch of universities have already closed because of the pressure, the downward pressure from the disinvestment in higher education, which we've covered, I think Fannie, essentially you were on to talk about that as well. So those pressures already are happening in our communities. And what that means is that professor, they're not just finding another job next week that pays them that same wage. You can't just find another person. Every like— people can't just find another job that pays as well as a doctor or, or some sort of, or medical or a, or a professor or a research scientist, right, science researcher.


These are high paying, these are relatively well paid jobs that are not easily replaced, that have gone away already from the sort of NIH cuts and cuts that are unlikely coming back. And that's without the like— in fact, we don't know what's going to happen with the big budget. And so we were seeing universities, Harvard obviously fired a lot of people, although it's doing its best to fight Trump in court. I think it could be doing more to take some of the money it has sitting. And it's, we joke, Harvard University is a private equity firm with a small education on the side. It could be doing more, but still, there's a lot of people that got fired. and so those people are gonna have their unemployment insurance run out and then what?


PHINEAS

Right?


JORDAN

That is real. That means that they're not spending money at that local shop or a restaurant or they're not, they're right now thinking about their budgets and they're not gonna spend what they thought they might wanna spend if they had a regular pay because they're worried about “how will I pay my bills in six months or three months?” And so this, this is all gonna have downward pressure on our economy.


So as an economy that's really dependent on these types of federal dollars flowing in — and when we say federal dollars flowing in, we mean money in the pockets of your neighbors who won't have money, your neighbors won't have money — and then what to the local economies?


And so it is a real thing to make sure that the legislature is both thinking proactively about it, thinking expansively about what opportunities we can have to fill gaps, and also thinking about, and then thinking about how are we gonna sort of secure ourselves as best as possible as the reverberate because, you know, they just, they get announced, but the reverberations for all these bad decisions will actually start to really be felt in the later parts of this year and into next year.


ANNA

Absolutely. Any final comments? I know, Jonathan, we're a few minutes over. Final comments, and then I'm going to have Phineas go through what people can do. And I know you have some of the great events that people can join.


JONATHAN

I feel like my main thing on this one is I always like reminding people that Massachusetts has like a comparable GDP to the country of Sweden. so when it comes to like, we have the ability to raise the resources to provide for the needs of people in Massachusetts, and that's something that we should be aware of.


That like one, the federal government should be like, the government should be doing many things that it isn't and it's not going to do in the future, but to weather that Massachusetts— like state government will need to be doing more, and that requires some of a mind shift, like kind of a kind of a shift in mindset from a number of state legislators who are always— who don't like having to make difficult decisions. And the difficult decisions to make should not be cutting, but thinking about how to raise. That's not, that's not a good difficult thing to make. I think we need to add a program that people depend on, especially when that's what's happening at the federal level.


ANNA

Exactly.


JORDAN

I just want to say really quickly, I'm a former board member of Mass Budget. Phineas does amazing work. Please follow Phineas on every social on Blue Sky on wherever you are, despite our disagreement, which I think is things— It's because I actually think, I think I go, “I love research,” like put me in front of a deep report and I'm super happy. We may disagree about how, like, how to interpret or how to think about or what to do with the information that's available in front of us. But there are very few people— in fact, there is no one I trust more with the actual information, with the numbers that are available than Phineas.


And I think that, I think that that's, if you, if you want to hear my frustration, my voice, it's that I actually think it's really important that we do good research and then we make decisions based on our values based on it. But the foundation has to be factual, good research. And the thing that MassBudget excels at is foundationally about really well-thought-out research. They are not putting out things that are opinions based on what their opinion is and then trying to make data work. They're putting together really factual reports. When you get into the weeds of a mass budget report, you are talking about I's dotted, T's crossed. It is foundationally superb research that is the foundation of Mass Budget. And that's the thing that I really value.


And that's my frustration is that that gets equated with other things. And it's not, and not all research is the same. Good research is foundational in the way that like anybody could interpret it, anybody could understand it, and the and one plus one would equal two and you would have no trouble defending it because it's clear and it's and it's really well thought out. And sometimes we do our best with the information we have. We don't always have all the information, but that's something that's really foundational.


So please do support Mass Budget. Like I cannot stress enough how good the research is and how foundational it is. Just how precious Phineas is to the data. Like that the data runs the conversation. We don't run the data. And that's a really important distinction that I just think does not get valued enough in this world. And I just want us all to appreciate it because I deeply appreciate it. Sorry, that's my rant for Phineas.


JONATHAN

Awesome. Shout out again to the great work of Mass Budget, which is such an invaluable resource when it comes to understanding the policy, like kind of the economic implications of policy at the state level.


ANNA

Well, Phineas, once you stop blushing, we'd love to hear from you. What events do you guys have?


PHINEAS

It means so much to hear this from folks who are so engaged day-to-day with the important work. I wanted to just put a plug for two different events that we're doing that people can take part in, participate in. One of them is we're continuing a series called Policy Talks on September 16th. You can find it under events on our website.


We're going to be talking about two kinds of public money that we have not been following. We feel we're amiss at Mass Budget to not have been following what's really going on with the cannabis money. Where is it coming from? Where is it going? Similar thing with all of the different streams of gambling money, whether it's sports betting casinos, lottery, things of that sort. We're doing that and then we're doing lots on our web page. You can find a Focus 2025, a full day concert conference. It'll be as fun as a concert.


JONATHAN

Yes, Massachusetts concert.


PHINEAS

Yeah.


JONATHAN

What instrument are you playing or are you singing?


PHINEAS

It'll be all day out in Devens. We want it to be in the center of Massachusetts. And we hope as many people as can make it are there. It's going to be a lot of great conversation about a lot of different juicy policy topics. And thank you, thank you all for all three of you for having me here, being part of another one of your great conversations. Thank you so much. We love your work.


ANNA

We love having you on. Yeah, thank you so much. Thanks to everybody listening, and we will see you all again next week.


Hey there. Thanks so much for watching us on YouTube. Please like and subscribe. And it would be amazing if you would also subscribe to us on your favorite podcast player. Just look for Incorruptible Massachusetts, wherever you listen to podcasts. Thanks so much.