State Strengths Accentuated, Areas Vulnerable Under Trump Identified
BOSTON, NOV. 14, 2024…..Top state officials made their pitches Thursday to a gathering of government bond buyers, touting Massachusetts as a good investment and one that, as Gov. Maura Healey put it, offers “a value proposition that’s unmatched anywhere else in the country.”
The annual investor conference comes on the heels of legislative authorization for billions of dollars in borrowing as Massachusetts tries to address its serious housing shortage, gird itself against the effects of a changing climate, and pump new money into crucial industries and jumpstart others. A calendar of planned bond issuances for 2025 presented at Thursday’s conference shows that state government entities could look to sell as much as $3.925 billion in bonds by the end of September 2025.
“We’ve got economic engines in regions around our state. We’re not the biggest state in the country, OK, but we punch above our weight. And the thing that we’ve done as a team, as an administration, is have a real focus on, how do we grow the economy in all regions of the state? And that means spreading advanced manufacturing across the state, that means making huge investments in higher ed and in workforce training in our great colleges across the state, doing the work in community colleges across the state,” Healey said during her roughly 15-minute remarks Thursday morning.
Treasurer Deborah Goldberg, whose office hosted Thursday’s conference at the Boston Convention and Exhibition Center, told investors that their purchase of state debt “helps drive growth across the state, benefiting all who live and work here” and ticked through a litany of recent surveys and rankings that gave Massachusetts high marks.
“By investing in Massachusetts bonds, you contribute to the critical capital projects that make the commonwealth more competitive, affordable and equitable for everyone who chooses to live here. Investing in our communities makes Massachusetts more resilient in the face of uncertainty, and more attractive to talent and innovation. This investment benefits us all,” she said, according to a copy of her remarks as prepared for delivery.
The treasurer added, “But all of this is not without its challenges. Addressing rising housing costs, providing safe and reliable public transit, growing emerging industries, and attracting talent and investment are all priorities for the Commonwealth.”
Economic Development Secretary Yvonne Hao was on hand to tell investors about the state’s efforts to attract, retain and expand businesses in Massachusetts — just a few hours before state lawmakers were expected to send the governor a $4 billion economic development bond bill that the administration has been waiting months for.
And Housing and Livable Communities Secretary Ed Augustus gave a presentation on the state’s approach to what Healey has called its number-one issue: housing accessibility and affordability.
“We are not just standing by and admiring the problem. We realize here in Massachusetts that we don’t need to do something to address the housing challenges we face, we need to do everything,” Augustus said, according to his prepared remarks.
The secretary detailed the Healey administration’s creation of the office he now leads and the passage this summer of a housing bond bill that the administration expects will spur the production of about 45,000 new units of housing and the preservation of 27,000 more. And he brought up the so-called Massachusetts Miracle — the period in the 1980s when the Bay State shook off economic doldrums and posted solid growth — when he encouraged investors to not count Massachusetts out.
“Today, we face and equally existential challenge. But we’re Massachusetts. We have a way of turning challenges into opportunities. When it comes to the future, Massachusetts is always a good bet,” Augustus told the prospective investors.
Michael Goodman, the former head of the UMass Dartmouth Public Policy Center who is now the school’s executive director of economic development and community partnerships, gave a presentation to the conference highlighting the current state of the state economy.
Goodman’s presentation said the Massachusetts economy “remains resilient and in solid shape.” He said state and national labor markets have “softened but remain strong,” and that job losers and people reentering the job market are leading the rise in unemployment. He pointed to recent growth in the overall size of the national labor force as an “encouraging and much needed” positive sign.
The demographic headwinds expected to increasingly challenge the state economy are a frequent topic of Goodman’s presentations, but on Thursday he also highlighted ways that the “federal election outcome weighs heavily over state economic prospects.”
He cited a Moody’s Analytics report from August that projected that a Donald Trump victory and Republican control of both branches of Congress would “result in higher inflation and interest rates and weaker economic growth” and that “recession becomes a serious threat once again” if the president-elect’s campaign proposals are all enacted.
“The typical American household’s real after-tax income is approximately $2,000, or 1.4%, lower by the end of Trump’s term in this scenario than in the baseline. The value of their stock holdings and homes is also somewhat diminished by the higher interest rates,” the report, written by a group that included Chief Economist Mark Zandi, said. It added, “The fallout of Trump’s economic policies in this scenario reverberates around the global economy. Growth is diminished across the world as tariff hikes and a weaker U.S. economy weigh heavily on global trade.”
Goodman highlighted a handful of areas in which the incoming Trump administration’s policies could affect the Massachusetts economy. He said expected changes in federal immigration policy “will have serious economic consequences,” expected changes in federal educational policy “will hit some of our leading institutions hard,” expected changes in federal tax policy “will both giveth and taketh away,” and expected changes in energy and climate policy “will significantly constrain the pace of renewable energy development.”
But Goodman also told investors that Massachusetts, with its roughly $9 billion Stabilization Fund, “is in a very solid fiscal position and well prepared in the event of an economic reversal of fortune.”
