Advocates press lawmakers to 'decouple' from Trump tax cuts

If passed into law in Massachusetts, the corporate tax cuts included in the Trump administration’s One Big Beautiful Bill Act would carve $463 million in revenue out of the state’s current $60.9 billion budget.

That’s because like nearly half the states, Massachusetts has been automatically adopting changes to the federal tax code if the Legislature takes no action against doing so.

But this year, Gov. Maura Healey is proposing a delay in accepting the Trump administration’s tax cuts until next year while a coalition of progressive activist groups and unions is calling on the Legislature to opt out of the cuts entirely.

During a Feb. 12 hearing, Healey administration officials testified in support of her bill, House 4975, An Act to manage federal tax changes in Massachusetts. Secretary of Administration and Finance Matt Gorzkowicz said that phasing in the corporate tax cuts would help the Commonwealth remain competitive

“By doing it this way, we were also able to deliver a predictable, competitive tax environment in which our residents, economy, and workers can thrive,” he told lawmakers. “We arrived at this recommendation after many conversations with employers and business groups who see value in tax breaks included in the [One Big Beautiful Bill Act] and the positive impact they could have on our economy.”

Union officials who testified urged lawmakers to reject the Healey administration’s incorporation of the Trump administration’s tax cuts.

“Let’s be clear: These corporate tax cuts are unnecessary, they don’t promote competitiveness, they undermine our state budget, which is already under stress,” said Max Page, president of the Massachusetts Teachers Union.

“Let’s also be clear that going along with these Republican tax cuts is really going along with the Trump program of punishing states and weakening investments in the public sector, pitting us against one another in an atmosphere of austerity.”

Among states that automatically adopt changes to the federal tax code, California, Colorado, Delaware, Hawaii, Illinois, Maine, Michigan, Pennsylvania, Rhode Island, Virginia, and the District of Columbia have opted out of the Trump administration’s corporate tax cuts.

Progressive Massachusetts Policy Director Jonathan Cohn argued that Massachusetts should follow their lead.

“When we fight to do big things in the Commonwealth, we so often hear that we don’t have the money,” he said. “That same line is rarely invoked when it comes to corporate handouts. But let me be clear: We don’t have the money to do this right now, given looming federal cuts. Other states across the country have already taken action. Let’s not wait too long to join them.”

Gorzkowicz said the phased-in approach, as an expansion of Pass-through Entity excise taxes expected to generate $100 million, will mean the commonwealth won’t see a net reduction in revenue over the next two years.

“We wanted to make sure that we preserve our competitive advantage, support those industries that are important to our economy, while also insulating and preserving programs and services that might otherwise be impacted from the implementation of these,” he said.

While Gorzkowicz cited tax breaks as a means of keeping Massachusetts competitive, Cohn pushed back on that notion.

“Our competitiveness is always based on our investments in education and transportation and healthcare and housing,” he said. “We don’t bribe the rich to stay here. They come and stay here because they want to live here and send their kids to school here because we invest in education and housing, because we make our health care system affordable and accessible. All of this requires investments. You can’t burn it up in the trash can of tax cuts for big corporations.”

For the union officials present at the hearing, their members’ jobs are potentially on the line. Massachusetts stands to lose $3.4 billion in federal funding due to the Trump administration’s funding cuts. Those cuts could hit hard for workers such as teachers and home healthcare aides.

“Medicaid cuts are triggering a crisis for Massachusetts healthcare workers and patients that is only just getting started,” said Cari Medina, executive vice president of 1199 SEIU. “We’re already seeing consolidation of services at hospitals like Morton and Saint Anne’s, where dozens of medical coders have been laid off, and overcrowding in emergency rooms like Boston Medical Center, where nurses and care teams are struggling to meet the demand.”

Sen. Jamie Eldridge, chair of the Joint Committee on Revenue, asked Gorzkowicz whether he had met with employee organizations such as unions before the Healey administration drafted its bill.

“It isn’t just about what we’re doing to perhaps support large businesses, but [it’s about] the money that goes to support workforce training, infrastructure, social safety net,” he said. “It affects everyone, not just employers.”

Gorzkowicz said that he and other Healey administration officials met with labor groups as well as business groups. While some groups advocated decoupling the state tax code from the federal changes, Gorzkowicz said, others advocated for an immediate incorporation of the Trump administration’s tax cuts.

This article originally ran in the Dorchester Reporter