MASSACHUSETTS HAS LONG been losing residents to other states, but officials at a Joint Ways and Means budget hearing Monday acknowledged the state can do only so much about that as long as it remains one of the most expensive places to live in the country.
“There is almost perfect correlation between expensive states and outmigration, and we are a very expensive state,” testified Eric Paley, Gov. Maura Healey’s secretary of economic development, at the hearing in in Barnstable. Massachusetts ranks second most expensive in the nation.
Outmigration is growing fastest among residents aged 22 to 30, he noted. “These are the people we really want here,” Paley said. “They’re often educated here. They grew up here, and they’re leaving.”
The nearly seven-hour hearing covered part of Healey’s $62.8 billion fiscal year 2027 budget proposal. And as budget hearings typically do, it offered a chance for lawmakers and executive branch officials to opine on the general state of the state as much as weigh specific funding requests.
Paley put forward a split-screen account of Massachusetts’s competitiveness, a favored buzzword of Healey’s administration. Life sciences, biotech, and robotics companies have few realistic alternatives, Paley told lawmakers. “Many of them tell me there is literally no other place they could do what they do,” he said, citing Hasbro and Amazon. Gardner-based Seaman Paper, he said, benefits from being in the Bay State because of the advanced engineering work that goes into creating its wafer-thin paper products.
But for businesses competing on cost, the calculus looks different. Within a decade, energy prices have gone from outside the top 10 to the number one question that site selectors ask about Massachusetts, Paley said. Starting a business comes with its own challenges, he said, as the Commonwealth charges a higher fee to register an LLC than any other state in the country.
Housing also sits at the center of the affordability problem, and Paley called it “challenge number one” for the state’s overall economy.
Sen. Michael Brady, of Brockton, noted “employers frequently cite the housing shortage as a barrier to growth in Massachusetts, and I get calls from young families every day that can’t afford to buy an apartment or a house anywhere in my district.”
Interim Housing Secretary Jennifer Maddox acknowledged the problem will require effort well beyond this budget cycle, which she called a “constrained year” with pressure to shore up resources that the state can no longer rely on the federal government to provide.
The governor’s proposed $1.2 billion housing office budget represents a $49 million increase over current-year levels. For the first time, Maddox noted, the budget includes $1 million for state-level fair housing enforcement, to “fill the gap” as the Trump administration eliminates staff and programs.
Cabinet secretaries testifying at the hearing hit some of the administration’s regular notes on easing housing pressures, namely streamlining environmental regulations and pushing compliance with the MBTA Communities multi-family housing law, which is once again being battled at the state’s highest court.
While people do leave for cheaper states, Paley said, Massachusetts has grown by 125,000 residents over three years because immigration has more than offset domestic departures. But that buffer is eroding. Immigration to Massachusetts fell in 2025, and if the federal crackdown continues, he said, the state’s population could actually start to shrink.
Paley also pointed out that the Trump administration is “backing out on key programs, including federal research funding,” adding pressure at a moment when the state is already working through a difficult fiscal environment.
Cannabis Control Commission chair Shannon O’Brien said the commission is asking for about $13 million more than Healey’s budget offered. She drew a sharp contrast between the legal cannabis industry and another legal vice – gambling.
The cannabis commission is regulating a $1.65 billion market on a $20 million budget, she said, and in fiscal 2025 returned $308 million to the state compared to $98 million from the state’s three casinos.
Cannabis Commissioner Kimberly Roy warned that unregulated hemp products sold at gas stations — with no age verification and no standardized testing — are a growing “public health menace.” Here, too, the federal government was described as an impediment, with scheduling rules for marijuana preventing Massachusetts universities from partnering on cannabis research.
Secretariats focused on the arts and technology argued that expanded budgets would help the state’s economy.
The Mass Cultural Council, which touts the arts as a tourism draw and boon to local economies, asked the committee to hold the governor’s recommendation of $27.35 million, which would be the agency’s largest budget in its history. Program Director Jen Lawless said grant applications have surged 65 percent since fiscal 2021, and the agency was forced to reject 85 percent of eligible individual artist applicants this cycle.
Perhaps inevitably, artificial intelligence entered the mix. “AI technology is here to stay,” Technology Secretary and Chief Information Officer Jason Snyder said, “and the best way to protect and equip our workforce is through active training and responsible use of these tools.”
Snyder framed the state’s rollout of ChatGPT to 40,000 executive branch employees as essential to keeping Massachusetts competitive on government services.
