Uncertainty is rocking the nation, from financial markets to governments. Massachusetts has felt the pressure, but it's been mostly free of the budget crises and fiscal headaches plaguing other states.
The commonwealth's solid finances may give it a boost in its upcoming $1 billion general obligation bond sale.
Massachusetts Deputy Treasurer for Debt Management Sue Perez said the commonwealth's deal team expects more of the historically strong results it experiences from its competitive sales.
"We usually get about eight to 10 bidders on each series. So we hope that continues," Perez said. "We deliberately put it in smaller sizes so that we can appeal to the different banks that want to participate."
The $1.08 billion deal will be sold in four series, with the sale date set for April 22.
The first three series are new money: Series A is $185 million, with maturities between 2034 and 2038; Series B is $255 million, maturing from 2040 to 2048; and Series C is $360 million, which will mature between 2050 and 2056. There is also a $284.7 million refunding series, which will mature between 2027 and 2033.
Mintz is the counsel for the deal and OmniCap is the financial advisor.
The market's recent volatility has caused some issuers to
Massachusetts always gives itself the option to pull a refunding component based on market conditions, Perez said, but it also doesn't try to time the market.
"We tend to pick refunding candidates that were not on the cusp," Perez said, meaning the potential savings from the refunding candidates are not close to the threshold the treasury seeks.
The commonwealth's ratings were affirmed ahead of the deal: Aa1 by Moody's Ratings and AA-plus by S&P Global Ratings and Fitch Ratings. Outlooks are stable.
Fitch analyst Karen Krop said Massachusetts has "very strong credit quality."
The commonwealth has, "for New England, a relatively rapidly growing economy," Krop said. Its debt burden is a bit higher than the median, but still considered moderate, she added, and Fitch considers the commonwealth's lawmakers to be conservative budgeters with ongoing fiscal monitoring.
Massachusetts Gov. Maura Healey touted the commonwealth's strengths in a call with investors at the beginning of the month.
"We're investing in housing to lower costs. We're bringing more energy online from every available source to grow our economy and lower our bills," Healey said. "And we're investing capital in our roads, bridges and public transit to make it cleaner, safer and more reliable."
In January, Healey proposed a $60.1 billion budget, a modest increase over last year's spending plan. Healey's plan spends money on cost-of-living reductions, education, transportation and social services, but it doesn't feature many big changes to the commonwealth's spending, Krop said.
"Thanks to our strong partnership with the legislature, we are on the verge of seeing legislation passed that will invest billions in capital in our public higher education campuses," Healey said in the investor call, "and we've seen progress on our drive initiative, which will put hundreds of millions of dollars towards research and discovery, the foundation of our economic strength."
Under Healey's proposal,
While some states are
The commonwealth's revenue for fiscal 2026 exceeded its projections, Krop said, positioning it well for budget season. Massachusetts also has a surtax on income over $1 million, which has performed very well since its implementation in 2023, Krop said.
Massachusetts' revenue is somewhat dependent on personal income tax revenue, which is a relatively volatile revenue source, Krop said. The commonwealth smooths out the volatility by allocating a piece of capital gains to its rainy day fund. Healey's proposal would "tweak" how that policy works, Krop said, which could slightly increase the volatility.
The legislature is also advancing a bill introduced by Healey that would authorize $1.4 billion of new
Massachusetts conforms its tax code to the federal tax code, Krop noted. The changes in the One Big Beautiful Bill Act would
The biggest current challenge to Massachusetts is from the federal government, Krop said, but the impact of federal policy on Massachusetts isn't worse than any other state.
The commonwealth has identified $3.7 billion of federal cuts to its projects and programs over the next three fiscal years, according to its disclosure document. The commonwealth has successfully challenged around $320 million of the cuts. Approximately $3.5 billion of the estimated cuts are related to Medicaid eligibility requirements and decreased federal funding for the Supplemental Nutritional Assistance Program, or SNAP, which provides food benefits to low-income families.
"While a limited amount of the identified reductions in federal funding are expected to directly impact the commonwealth's operating budget, the majority of these changes in federal funding affect programs that are paid through federally funded accounts, or direct federal funding to Massachusetts cities and towns, residents, and businesses," the commonwealth wrote in the disclosure document.
Perez said the uncertainty emanating from the federal government has caused the commonwealth more headaches than any particular policy.
"If you know what's happening, you can react to it. It's been more that you don't know, always, what's happening," Perez said.
Massachusetts plans to issue $2.35 billion more of GOs this year, according to its investor presentation, with deals in June or July, August, and December. In September and October, the commonwealth plans to issue grant anticipation notes and bonds for the commonwealth transportation fund, at amounts to be determined.
