Transcript Highlights:

• the rates and the needs, the supply. the rates and the needs, the supply.
• rate of return, correct?
• The other half is in rates and is funded directly through the rates they charge.
• </c> rate.
• The other half uh is is in rates rate.

Committee: Senate Energy and Natural Resources

Keywords: 1191, senate, all

Transcript Highlights:

• I think it's one of the amendments because the rate, the co payment is part of the rate, and so there
• was a request to take out including co payments in the rate.
• Chair, Representative Dow, we pay the same rate.
• Rate that has to go to salary.
• We do have an enhanced rate, and if providers opt into that enhanced rate, they have to pay their entry-level

Bills: SB132 , SB241

Committee: House House Appropriations & Finance

Keywords: SB132, DOIT, Department of Information Technology, software replacement, equipment replacement, technology funding, revolving fund, capital equipment, enterprise services, state IT budgeting, software budgeting, amortization, depreciation, State Treasurer, Department of Finance and Administration, New Mexico, information technology, IT infrastructure, fund accounting, legislative appropriation

Transcript Highlights:

• As you're mentioning, it suspended UAL contribution rates for four years.
• It will have major impacts upon rates and upon funding.
• It will have major impacts upon rates and upon funding.
• And so that's going to impact the rates on Plan 1 as well, right?
• We also should look at the impact of mortality rates and try to figure out.

Committee: Joint Select Committee on Pension Policy

Summary: The Select Committee on Pension Policy executive committee met to approve the November minutes, which were adopted by voice vote. The committee then received an update from the Attorney General’s Office on two ongoing cases, Fowler and Joel Lynn, with briefing and oral argument timelines still pending. Michael Harbour of the Office of the State Actuary provided an actuarial update focused on ESSB 5357, explaining that the bill raised the assumed investment return from 7% to 7.25%, suspended UAL contribution rates for four years, and changed amortization for past benefit improvements; members asked for clarification on how those changes would affect long-term funding and contribution rates, especially for Plan 1 systems. A substantial portion of the meeting was devoted to committee discussion of interim priorities and the need for more analysis of recent pension legislation. Members emphasized the importance of understanding the fiscal impacts of ESSB 5357 and related pension changes before the September economic experience study, and several asked staff to provide a more preliminary walkthrough of the bill’s effects. The committee also discussed the LEOFF 1 study and broader questions about overfunding, including when a plan should be considered overfunded and whether overfunding should be addressed through merger or closure proposals. One member suggested reviewing the operating budget’s excess compensation proviso during the interim as well. Staff reviewed the draft 2025 interim work plan, proposing June topics including election of officers, a presentation on SB 5357 and its actuarial implications, and an initial LEOFF 1 study kickoff based on SB 5085 and HB 2034. The committee also placed excess compensation and demographic experience study items in a parking lot for possible later scheduling. The June agenda was adopted by roll call vote, with three ayes and three members absent or excused, and the meeting adjourned after no further business.

Transcript Highlights:

• B&O tax rate reduction of 82% due to the preferences.
• We had, of course, the Fed reduced rates in October.
• Also, We had, of course, the Fed reduced rates in October.
• rates to try to get inflation under control.
• rates to try to get inflation under control.

Committee: House Finance

Keywords: 904, all

Transcript Highlights:

• Question: why do we have such a high error rate?
• The current error rate at this point is about 11%.
• So the penalty rate will ultimately be dependent on our error rate in the federal fiscal year we are
• I just wanted to note, because we've been focused on the error rate, that the average error rate in the
• And the average disenrollment rate for this cohort...

Summary: The Senate Budget and Fiscal Review Subcommittee held an oversight hearing on the impacts of H.R. 1 on California’s safety net, focusing on Medi-Cal and CalFresh. The chair and vice chair framed the issue as a major federal disruption that would reduce benefits and shift costs to the state, counties, hospitals, and other local systems. The first panel included the Legislative Analyst’s Office, the Department of Finance, the UC Berkeley Labor Center, and the Food Research and Action Center, each describing projected enrollment losses, higher state and county costs, and implementation challenges. The LAO outlined H.R. 1’s main changes: new and expanded work requirements, more frequent eligibility redeterminations, restrictions on certain non-citizen eligibility, and financing changes affecting provider taxes and federal matching rates. The LAO estimated that 1 to 2 million people could be disenrolled from Medi-Cal and more than 600,000 could lose CalFresh, with additional costs from reduced federal support and possible state and county administrative burdens. The Department of Finance said the Governor’s budget includes about $1.4 billion General Fund in 2026-27 to respond to H.R. 1, with larger out-year reductions in federal funds and projected Medi-Cal caseload losses of up to 2 million by 2029-30. The UC Berkeley Labor Center projected up to 3 million Californians could lose full-scope Medi-Cal by 2028 when H.R. 1 is combined with state budget changes, while noting the state could choose policies that would reduce some of those losses. The Food Research and Action Center warned that CalFresh cuts and time limits would increase hunger, worsen health outcomes, and strain local economies and emergency systems. Members questioned the witnesses about procedural disenrollments, regional variation, the overall growth in Medi-Cal spending, the future of the MCO tax, the CalFresh error rate, and the downstream effects on hospitals and county indigent care. Several senators argued that the federal law was driven by tax cuts for high-income earners and would disproportionately harm low-income Californians, immigrants, and communities of color. Administration witnesses said some impacts are still being analyzed, that counties and departments are working on implementation, and that the Legislature may need to use statute, reporting, and oversight tools as federal guidance develops. No votes or formal actions were taken during this portion of the hearing.

Transcript Highlights:

• for race and ethnicity and high imputation rates.
• So there is a definite relationship between the self-response rates of counties and their vacancy rates
• , except for Suffolk County, which has much less of a vacancy rate—a vacancy rate of only 7.1%—but a
• lower self-response rate of 56.8%.
• response rate layer.

Committee: Senate Senate Committee on the Census

Keywords: 995, all

Summary: The Senate Committee on the Census met on December 8 at 9:32 a.m. to examine the dynamics that drive census undercounts and overcounts, with testimony first from Joseph Salvo and then from Susan Strait of the UMass Donahue Institute. Salvo explained the Census Bureau’s two main evaluation tools: demographic analysis, which uses vital records, migration estimates, and Medicare data to produce a national benchmark, and the post-enumeration survey (PES), which compares a separate sample-based count to the census. He said the 2020 census showed a small national net undercount, but larger age- and race-based disparities, including the highest undercount among children ages 0 to 4, higher undercounts for men, substantial undercounts for Black, Hispanic, and American Indian/Alaska Native populations, and overcounts among some older and college-age groups. He also described how self-response, non-response follow-up, administrative records, proxy responses, and imputation affected data quality, arguing that proxies and imputation were especially weak and that outreach remains critical for 2030. Committee members asked Salvo to clarify the methods and error bands, the role of international migration estimates, and how the PES differs from the census address list and LUCA. He explained that PES is based on a separate sample of blocks and can add units within sampled blocks, but it does not measure units missed entirely from the original address list; LUCA matters because it improves that list before enumeration. He also discussed age heaping, duplicate responses among older adults, and why group quarters and COVID-related disruptions complicated the 2020 count. Senator Driscoll briefly interrupted to describe Randolph’s successful appeal of its 2020 count after an undercount in disability care homes, and Salvo noted that the post-census group quarters review helped correct some missed facilities. Susan Strait then focused on Massachusetts-specific results. She said Massachusetts’ 2020 count was strong overall, with population growth above the national average and a PES-based finding that the state was overcounted by 2.24 percent, though she emphasized that this did not mean all areas were accurately counted. Using demographic analysis, she said Massachusetts had an estimated 4.15 percent undercount of children ages 0 to 4, with the largest county-level undercounts in Hampden, Suffolk, and Essex, and she linked higher child undercounts to lower educational attainment and female-headed households. Strait also reviewed operational metrics showing that Massachusetts had relatively strong internet self-response, but that non-response follow-up relied heavily on household interviews, administrative records, proxies, and imputation in different counties. She highlighted higher proxy use in college-heavy counties such as Hampshire and Suffolk, and said counties with more minority residents were more likely to have population-count-only cases and other indicators of harder-to-count populations. The hearing ended with discussion of how these findings could inform outreach and census planning for 2030.

Transcript Highlights:

• So we're not paying twice through taxes and rates for the same project.
• borrowing rate from the Department of Energy, which is probably about 3%.
• If the PUC has approved rates based upon costs that subsequently are reduced, then the rates have to
• the utility gets a grant to pay for that, then those rates have to be...
• AB 1813 would also create a cost shift from one small subset of rate pairs to all other rate pairs, and

Summary: The committee heard several energy-related bills, with AB 1715 drawing the most discussion. That bill would require the CPUC to create a searchable database of utility advice letters, protests, responses, and resolutions going back to 2020, and to require utilities to report state, federal, and other public financing so ratepayer savings from loans, grants, and similar funding can be tracked and passed through. The author and TURN said the bill is aimed at transparency, affordability, and preventing double recovery; committee amendments removed some language, and labor said the amendments would remove its opposition. Senators pressed on how “financial benefits” would be defined and whether the bill would require refunds to ratepayers, and the author said the CPUC would determine the details. The bill was later moved out of committee on a do-pass-as-amended vote to Appropriations. AB 1301, a CPUC/Public Utilities Code cleanup bill, was presented as a housekeeping measure to remove obsolete references, align deadlines, eliminate duplicative requirements, and extend the Energy Conservation Assistance Act sunset. The Public Advocates Office and Golden State Power Cooperatives supported it, and the committee advanced it do-pass as amended to Appropriations. AB 2463, which would require the CPUC to disclose the models and analysis used to set utility authorized return on equity, was described as a transparency measure for a process that is currently a “black box.” EDF and the Utility Wildfire Survivor Coalition supported the bill, while members noted the importance of understanding how utility profits are set; it also passed to Appropriations. AB 1813, on community solar and storage, generated substantial debate. The author said the bill is intended to fix a CPUC program that he argued is unworkable and inconsistent with the Legislature’s earlier direction, while supporters including San Diego Community Power, TURN, and many clean energy, labor, and local-government groups said it would make community solar viable for renters and others who cannot install rooftop solar. Opponents, including the Public Advocates Office, Southern California Edison, SDG&E, and PG&E, argued it would raise rates, create cost shifts to non-participating customers, and conflict with a recently adopted CPUC decision. The bill was moved out on a do-pass-as-amended vote to Appropriations, with some senators indicating support but also concern about affordability and pending amendments. AB 2111, which would require the CPUC to plan transmission using multiple demand and resource scenarios instead of a single forecast, was supported as a way to reduce bottlenecks, improve reliability, and avoid costly under-planning as electrification grows. Supporters said better scenario planning would help avoid transmission constraints that block new generation, while the committee raised questions about cost impacts and the role of current CPUC planning processes. The bill passed to Appropriations. The committee also took up AB 2266, which would consolidate related CPUC compliance reporting, require consistent reliability valuation across programs, and direct an evaluation if CAISO uses backstop procurement; supporters said it would reduce confusion and improve consistency, while opponents warned against forcing one valuation method across different resource types. AB 2266 was also moved to Appropriations. Finally, AB 2175 was taken up on consent and advanced without discussion.

Transcript Highlights:

• That's largely because we have higher interest rates if they do have a variable rate mortgage.
• </c> really high burn rate.
• If that rate goes really high burn rate.
• </c> middle incomes and want market rate middle incomes and want market rate rental<00:19:59.280><c>
• The fire death rate in available.

Keywords: Meeting Start 00:00:15 Roll Call 00:00:45 Discussion of Pro-Growth Housing Policies 00:02:33 Adjournment 01:17:15, 958, all

Summary: The Housing Task Force 2.0 reconvened with several new members and heard a presentation from Kentucky Housing Corporation Executive Director Winston Miller and Deputy Executive Director Wendy Smith. They framed the task force’s work as a practical effort to address Kentucky’s housing shortage, update members on the current housing landscape, summarize existing state and federal resources, and suggest areas for the task force to focus on over the coming year. KHC said its 2024 housing supply gap analysis found Kentucky is short about 206,000 housing units, split roughly evenly between rental and homeownership, and projected the gap could grow to 287,000 units by 2029 if current trends continue. They emphasized that every county in Kentucky needs more housing, that the 2008 housing crisis and loss of construction capacity remain major causes of the shortage, and that current pressures include high interest rates, rising insurance and tax costs, construction cost inflation, and housing prices and rents growing faster than incomes. KHC also said homelessness has risen in Kentucky, with point-in-time counts showing double-digit increases in recent years. The presenters reviewed existing resources, including federal programs, the Kentucky Affordable Housing Trust Fund, the rural housing trust fund, KHC mortgage and down payment assistance programs, and the state mortgage interest deduction. They said these resources are important but insufficient to close the gap, and noted that a proposed federal FY2026 budget would cut HUD programs by 44%, potentially removing about $286 million from Kentucky housing resources, though no action has been taken yet. They urged the task force to consider stronger, more flexible tools such as a revolving loan fund, a state affordable housing tax credit, and economic development and employer-assisted housing incentives, and pointed to Indiana’s housing infrastructure and regional development funds as examples. No votes or formal actions were taken in the portion provided.

Transcript Highlights:

• Those were not rate increases. years. Those were not rate increases.
• are in fact paid as the normal PCA rate instead of the enhanced rate.
• rate.
• rate.
• Um, for this<02:13:56.000><c> rate</c><02:13:56.320><c> exception,</c> this rate exception, this rate

Committee: Senate Human Services

Keywords: 1187, senate, all

Transcript Highlights:

• required to have at least $15 million in capital surplus, but we do not review policy language or rate
• But, ...changes in rates across three different age groups.
• I appreciate very much that the declines in conviction rates dropped across racial categories.
• I appreciate very much that the declines in conviction rates dropped across racial categories.
• So the disproportionality still exists, but the absolute rates are so low.

Summary: The committee heard a work session on earthquake insurance, beginning with background from the Office of the Insurance Commissioner. OIC staff explained that earthquake and earth movement are generally excluded from standard property policies, that earthquake coverage is usually purchased through endorsements or standalone policies with high deductibles and relatively high premiums, and that surplus lines are a limited backstop market not covered by the state guarantee fund. They also described parametric insurance and captive insurance as more specialized products generally suited to commercial or governmental buyers rather than ordinary consumers. A second panel of insurance and banking experts focused on commercial earthquake exposure, especially for older buildings, collateralized loans, and potential knock-on effects to banks and consumers if a major quake caused widespread damage. Members asked about consumer impacts, mitigation incentives, inventories of vulnerable buildings, and whether legislation such as prior work on unreinforced masonry could help reduce risk. The Washington Bankers Association said earthquake insurance is expensive and that affordability is a major concern, while also noting banks participate in disaster-recovery planning and would be affected by major regional losses. No votes or formal actions were taken. The committee then received a presentation from the Washington State Institute for Public Policy on its cannabis and Initiative 502 research. WSIPP staff described the agency as a nonpartisan research institute that conducts legislative-directed studies and explained that its long-term I-502 assignment includes periodic reports leading to a final benefit-cost evaluation in 2032. Staff summarized findings from a 2023 report showing that cannabis possession convictions fell sharply after legalization, though some racial disproportionalities persisted, and that closer retail access was associated with higher reported adult cannabis use, more fatal traffic crashes involving drivers from nearby areas, and higher rates of cannabis use disorder diagnoses among Medicaid enrollees. A 2023 youth-focused report found that students attending schools near retailers were more likely to report cannabis use, had more unexcused absences, and were less likely to graduate on time. In the newest 2025 Medicaid study, staff said retail access was associated with higher probabilities of cannabis use disorder diagnoses, related hospitalizations, inpatient treatment, and co-occurring mental health diagnoses, with event-study analysis suggesting the increases appeared after retailers opened rather than before. Members asked about racial disproportionality, the meaning of cannabis use disorder diagnoses, THC and impairment, whether the findings reflected medical versus recreational use, and how the results should be interpreted in light of broader trends and data limitations. No formal committee action was taken.

Transcript Highlights:

• So how does this impact their no new revenue rate?
• Then, the following year, they can adjust their rates.
• Impact, I guess, on the no-new-revenue rate and things like that.
• Right now, I'm proud to say that our tax rate in Bell County is the lowest tax rate, so we do function
• a growth rate of 26%.

Bills: HB511 , HB972 , HB 1035 , HB2481 , HB2723 , HB2742 , HB2894 , HB2962 , HB3077 , HB3093 , HB3307 , HB3684 , HJR67 , HJR72

Committee: House Ways & Means

Keywords: ad valorem taxation, caregiver exemption, Medicaid, long-term services, tax relief, assisted living, housing support, property tax exemption, caregiver support, residence homestead, tax exemption, unpaid caregiver, state tax code, property tax, caregiver, waiting list, intellectual disability, developmental disability, ad valorem tax, family support

Transcript Highlights:

• does not exceed the Tier 1 rate.
• However, we recommend going further and fully fixing the Tier 2 rate at $1,579, the rate it has been
• And based on just the Tier 1 rate, we think that the current rate is sufficient, but we're happy to have
• At the beginning of the school year, there's a rate, then they know what the rate would be, and then
• I would defer to CSU specifically about what is in their marginal cost rate, but the rate that we take

Keywords: 988, house, all

Transcript Highlights:

• ><c> is</c><00:49:12.559><c> about</c> currently our error rate is about currently our error rate is
• You could use the error rate as of 9/30/25 or the error rate as of 9/30/26.
• </c> federal statute locks in the error rate federal statute locks in the error rate for<00:53:02.400
• c> rate as of 93025 rate as of 93025 or<00:53:17.280><c> the</c><00:53:17.520><c> error</c><00:53:17.760
• </c> or the error rate as of 93026. or the error rate as of 93026.

Committee: Joint Public Health and Welfare

Keywords: Public Health and Welfare - Room 216, 21 January, 2026; 3:30 PM, 925, all

Transcript Highlights:

• Our bond rating is going to go down, which is going to cause our interest rates to go up.
• The maximum millage rate calculation, or the maximum millage rate, determines what millage rate can be
• The bill aligns the maximum millage rate with the rolled-back rate.
• to the rollback rate.
• So you start with the baseline of a rollback rate as opposed to a majority rate.

Committee: Senate Appropriations

Keywords: 999, senate, all

Transcript Highlights:

• </c><00:21:23.280><c> of</c> investment achieved a 10.9% rate of investment achieved a 10.9% rate of
• <c> go</c><00:36:16.480><c> down</c> contribution rate will go down contribution rate will go down over
• Um, their required contribution rates.
• Paul public contribution rates from St.
• And so the value of contribution rates.

Keywords: 1187, senate, all

Transcript Highlights:

• That the term preferential rate refers to the rate that would benefit consumers of electricity.
• ERS said the rate identified by Budget and Finance is the current higher rate that should apply.
• </c> uh higher rate uh you noted that rate uh higher rate uh you noted that rate could<00:20:50.440><
• but the rate legislation and rates but the rate that's<00:21:13.720><c> uh</c><00:21:13.919><c> identified
• </c> current rate the current higher rate current rate the current higher rate that<00:21:18.159><c>

Committee: House Labor

Keywords: 910, house, all

Transcript Highlights:

• We have A through F ratings that show 74% of HISD schools are now A and B rated.
• F-rated schools. It's an extraordinary measure of progress.
• And so they use that to identify the DNF-rated campuses.
• If it gets another F rating, a two-year... So a one-year F rating?
• Anytime a school gets an F rating, that's right.

Bills: SB8 , SB 8

Committees: Senate Education , Senate Education K-16

Keywords: education, accountability, public school assessment, state law, transparency, intervention, performance ratings, sex designation, restroom access, civil penalties, private civil right of action, women's privacy, 1185, senate, all

Transcript Highlights:

• This would align payments with each center's Medicaid prospective payment system rate.
• Having a commercial rate floor that matches our PPS rate would result in $4.3 million annually to CHP
• Finally, a commercial rate floor matching our PPS rate would immediately place CHP Berkshires in a stronger
• per-visit rates.
• Without fair and comparable reimbursement rates, they simply cannot survive.

Committee: Joint Joint Committee on Financial Services

Keywords: 995, all

Summary: The committee held a public hearing with testimony on several health care bills, with most of the discussion focused on primary care access, community health center reimbursement, midwifery and birth centers, telehealth, hospital-at-home, direct primary care, and trans-inclusive health care access. Chair Feeney and Chair Murphy opened by noting the large number of signups and asking testifiers to keep remarks brief because of time constraints. Legislators and witnesses repeatedly emphasized that Massachusetts’ primary care system is under strain and that federal policy changes and reimbursement gaps are worsening financial pressure on providers. On community health centers, Representative Blay, Senator Lovely, Michael Curry, Bethany Keeley, Jag Deep Trevetti, Sean Cahill, and Christina Severin all supported H. 1096/S. 711, which would require commercial insurers to pay federally qualified health centers at least the MassHealth prospective payment system rate. They argued that commercial plans currently reimburse health centers below Medicaid rates, threatening sustainability, staffing, and access, especially as federal cuts and coverage losses could increase uncompensated care. Testifiers said the bill would stabilize health centers, protect primary care access, and not cost the state money. A second major topic was H. 1117/S. 784 on sustaining birth centers and the midwifery workforce. Senator Lovely, Senator Miranda, Emily Anesta, Rebecca Orden, Catherine Rushworth, Nishira Burrill, Joel Sutherland, Rachel Blessington, Joelle Ward, and others described the 2024 maternal health omnibus as an important first step, but said birth centers and midwives still face low reimbursement, workforce shortages, and financial instability. They urged reimbursement parity, a workforce development fund, and support for freestanding birth centers, citing improved outcomes, lower C-section rates, better patient experience, and racial equity in maternal health. Several speakers shared personal birth stories and said the bill would help preserve and expand birth options in communities like Roxbury, Worcester, and the North Shore. The committee also heard support for H. 1343 on direct primary care from Dr. Garofalo, Dr. Altman, Dr. Nair, Stephanie Cameron, Dr. Haley Moke-Blessed, and others, who said current insurance rules force patients to use a separate in-network primary care doctor for referrals and sometimes prevent physicians from dispensing medications. They argued the bill would reduce delays, administrative burden, and costs while improving continuity of care. In addition, Dr. Miklides and Sue Stempeck supported H. 1141 on hospital-at-home parity, saying the model has strong outcomes and should be reimbursed at the same rate as brick-and-mortar hospital care. Heather Myers and Katrina Cook testified on telehealth and digital health equity, urging broader coverage for asynchronous care, remote monitoring, interpreter services, and digital literacy supports. SEIU Local 509 supported H. 1188/S. 681 on trans-inclusive health care access, saying it would remove arbitrary insurance barriers to gender-affirming care. No votes or committee actions were taken during the hearing.

Transcript Highlights:

• I'll continue to the rates.
• I'll continue to the rates.
• units, and even their rate structures differ from flat rates to descending rates.
• our rate raises over 10 years.
• Bismarck is the lowest rate.

Committee: Joint Water Topics Overview Committee

Summary: The Water Topics Overview Committee met with a quorum and heard updates from Department of Water Resources Director Reese Haas and Lieutenant Governor/State Water Commission Chair Michelle Strinden on statewide water funding, major projects, and two legislative studies requested in House Bill 1020. Haas reviewed the status of the Northwest Area Water Supply and Southwest Pipeline projects, noting NAWS construction is expected to move water by fall and Southwest’s Hebron-Rugby expansion phase one is in final design with bids expected next month. He also summarized the department’s budget outlook, including Resources Trust Fund and Water Project Stabilization Fund balances, the effect of oil price volatility and stripper well exemptions on revenues, and the status of project buckets, carryover, lines of credit, regionalization, bid trends, and administrative/process updates. Committee members asked about project prioritization, municipal funding demand, maintenance expectations, replacement versus deferred maintenance, and whether the 2025 session may have underfunded municipal water supply needs. Haas said the commission uses the same high/medium/low prioritization process across all buckets, reviews maintenance plans as part of policy, and is seeing strong demand in the municipal bucket. He also explained that the department’s 14-year projection is based on the next seven legislative sessions and that the state faces a projected $1.3 billion shortfall over that period if all planned projects are funded under current assumptions. Deloitte then presented draft findings from the cost-share policy study and the governance/finance study. For cost share, Deloitte said the model shows a roughly $1.3 billion shortfall over 14 years and about $1.8 billion through 2031 under current policy, and offered seven options including tighter eligibility for replacement projects, state funding caps for the Mouse River and Red River Valley projects, a priority-based cost-share scale, timing shifts, use of existing lines of credit, and delayed reimbursement timing. For governance, Deloitte outlined draft options for Southwest, NAWS, and Red River ranging from maintaining current structures with stronger planning to transferring ownership or adding formal oversight, and recommended broader use of performance metrics, long-term financial planning, and clearer decision trees. No votes or formal actions were taken; the commission discussed the scenarios and the studies will return in revised form later in the spring.

Transcript Highlights:

• Assuming a conservative rate of return of 3%.
• It's only available at the 5% rate.
• into older age cohorts with lower labor force participation rates. force participation rate, plus the
• Cohorts with lower labor force participation rates.
• Overall, this suggests a trend rate of 1.73% per year.

Committee: Joint Joint Committee on Ways and Means

Keywords: 995, all

Summary: The Senate and House Ways and Means chairs opened the FY 2027 consensus revenue hearing by emphasizing the need for a balanced, fiscally responsible budget amid federal funding cuts, health care cost pressures, and uncertainty around the federal tax law changes referred to as OB3. They also noted the state’s current revenue performance is slightly above benchmark and paid tribute to the late Representative Anne Margaret Ferranti. Secretary of Administration and Finance Matthew Gorkowitz echoed the call for caution, saying Massachusetts has protected core services while building reserves and that the FY27 budget process begins with a careful revenue estimate. Department of Revenue Commissioner Jeff Snyder, along with DOR staff, presented FY26 and FY27 tax forecasts and identified major drivers and risks: OB3’s negative impact on state revenue, surtax collections, labor market conditions, capital gains, and corporate/business excise taxes. DOR estimated OB3 would reduce FY26 revenue by about $664 million and FY27 by about $282 million, while surtax and capital gains were expected to remain strong in FY26 but soften in FY27. Members questioned the outlook for surtax, capital gains, and the potential fiscal effect of a ballot question reducing the income tax rate from 5% to 4%; DOR said that proposal could cost roughly $4.2 billion to $4.8 billion annually, with a smaller but still significant impact in FY27 because of phase-in timing. Treasurer Deb Goldberg testified next on the stabilization fund, lottery, PRIM, unclaimed property, and the Alcoholic Beverages Control Commission. She reported the rainy day fund at about $8.1 billion, said the lottery was on track for $1.5 billion in FY26 net profit and projected $1.25 billion in FY27, and highlighted that iLottery is expected to launch in summer 2026 with revenue beginning in FY27 and dedicated to child care initiatives. She also described strong PRIM performance and record unclaimed property returns, while members asked about the child care use of iLottery revenue, multilingual outreach, and the economic impact of expanded liquor licensing. Mass Taxpayers Foundation President Doug Howgate and Tufts’ Evan Horowitz then offered differing revenue outlooks and policy warnings. Howgate projected modest growth, cautioned against overusing reserves for ongoing obligations, and urged caution on federal tax conformity changes and health care spending pressures. Horowitz projected higher FY26 and FY27 revenues than other witnesses, warned that the surtax and capital gains make the tax system more volatile, and said a 4% income tax ballot question could reduce FY27 revenues by roughly $800 million to $1 billion. He also flagged the rent control ballot question as a potential risk to municipal finance and suggested the state consider giving a permanent home to the independent revenue model used by Alan Clayton-Matthews.