Mass. officials, economists say OB3, tariffs and immigration policy raise fiscal risks for FY26 budget

Summary

At a legislative economic roundtable, the Department of Revenue and outside economists warned that federal tax changes known as OB3, elevated tariffs and restrictive immigration policy are likely to shave hundreds of millions from Massachusetts tax receipts and increase pressure on health-care and research funding that support the state—s economy.

Secretary Matthew Gorkward, secretary for administration and finance, joined legislative chairs and outside economists at a midyear economic roundtable to lay out the risks facing Massachusetts— budget for fiscal year 2026 and beyond. Officials and panelists cited a combination of a newly enacted federal tax law (referred to at the hearing as OB3), elevated tariff policy, and a slowdown in immigration as the principal drivers of downside revenue risk and growing stress on health-care and research institutions the state relies on.

Commissioner Snyder of the Department of Revenue told the panel that "revenue collections for FY25 totaled approximately $43,700,000,000," and said FY25 collections were 5% above the benchmark overall but noted corporate and sales tax categories came in below benchmark. The commissioner said the administration projects that "OB3 will reduce state tax collections by more than $650,000,000 in FY '26," and that most of the impact is concentrated in a handful of provisions that the Commonwealth currently conforms to.

The warning from DOR came alongside forecasts…

Mass. officials, economists say OB3, tariffs and immigration policy raise fiscal risks for FY26 budget

Summary

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