Advocacy in Action – Government Affairs Update

Since our last edition of the newsletter, the Chamber has closely monitored significant policy developments at federal, state, and local levels while maintaining strategic engagement on issues crucial to our business community and region’s economic growth.

Federal Affairs

Trade Policy: President Donald Trump began his term as the 47th President in mid-January with several significant trade policy announcements. These included proposed new tariffs against Canada, China, and Mexico scheduled for February 1, though the Canadian and Mexican tariffs were subsequently placed on hold for one month. The President also announced plans for a 25% import tax on steel and aluminum, along with potential reciprocal tariffs on countries that implement retaliatory measures.

In response to these developments, the Chamber has actively engaged with our members to understand how these tariffs could impact their operations. The situation remains fluid, and while no new tariffs have been implemented at the time of this writing, we continue to monitor developments closely through our partnerships with the U.S. Chamber of Commerce and our congressional delegation.

Tax Policy Updates: A critical focus of our federal monitoring efforts is the upcoming expiration of key provisions within the 2017 Tax Cuts and Jobs Act. Of particular concern is the issue of immediate R&D expensing. Our members have emphasized this as one of the most problematic changes that Congress needs to address. Additionally, we are concerned about the sunset of the 20% Qualified Business Income (QBI) deduction, which currently allows pass-through businesses (LLCs, S-corps, sole proprietorships) to deduct up to 20% of their business income, providing significant support to many small businesses. To address these concerns, the Chamber has joined a nationwide coalition led by the U.S. Chamber of Commerce advocating for the permanence of these tax reforms. This coordinated effort aims to provide businesses with long-term certainty, encourage continued investment, and support sustained economic growth.

State and Local Affairs

State Budget DevelopmentsFollowing her State of the Commonwealth address, Governor Maura Healey filed her proposed third annual state budget for fiscal year 2026. The Governor’s proposed budget includes over $62 billion in total spending between the budget and a $1.95 billion supplemental spending plan funded by the Fair Share Amendment (a 4% surtax on annual income over $1 million dedicated to transportation and education investments). This represents a 7.4% percent increase over the FY25 budget.

While the proposed budget doesn’t broadly raise taxes, it does include a variety of policy sections with a focus on tax and revenue generators, health care initiatives, and broader policy topics. Among other things, the policy provisions propose applying existing taxes or fees to synthetic nicotine products, candy, complimentary hotel room nights, and prescription drugs, while decreasing how much residents are able to write off as charitable deductions on their tax returns, recommending the state cap the deduction at $10,000 for a couple and $5,000 for an individual. The Governor also plans to refile the Municipal Empowerment Act that would allow individual municipalities to raise local taxes on meals, lodging and vehicle registrations. The budget proposal now advances to the Massachusetts House and Senate, where each chamber will separately review, modify and vote on their versions before negotiating a unified budget to send back to the Governor.

Education and Local Aid: The Governor’s proposed budget would fund another year of K-12 school aid increases under the Student Opportunity Act using funds from the surtax. It also looks to continue funding free community college and expanding the Health Connector’s eligibility for the ConnectorCare pilot program. The budget, if approved, would increase unrestricted aid to cities and towns by 2.2% while using Fair Share revenues to fund MBTA investments and Chapter 90 funding to $300 million per year for the next five years.

Housing Initiatives: In February, the Chamber attended the inaugural Devens Housing Production Working Group public session. This working group brings together representatives from the Massachusetts Executive Office of Economic Development (EOED), Massachusetts Executive Office of Housing and Livable Communities (EOHLC), MassDevelopment, the Devens Enterprise Commission, the Devens Committee, our region’s legislative delegation, and Select Board members from the towns of Ayer, Harvard and Shirley to tackle our region’s pressing housing needs with a focus on Devens Innovation and Technology Center area including Vicksburg Square.

This working group comes on the heels of the administration’s announcement of the state’s first ever comprehensive housing plan which indicates that the state needs to increase its year-round housing supply by at least 222,000 units from 2025 to 2035 to stay competitive and lower costs.

Energy Cost Relief Efforts: In addition to housing costs, state lawmakers and the Governor are looking at the need for relief when it comes to energy costs. A group of 80 lawmakers sent a letter to the Department of Public Utilities (DPU) urging regulators to review recently-approved rate increases. That letter was followed up by a letter from the Governor demanding DPU and utility companies provide urgent relief.

Looking Ahead

The Chamber will continue to actively monitor critical policy developments and engage with policymakers when necessary to protect our members’ interests. In March, we will hold our annual legislative briefing with our delegation, where we will advocate for our 2025 legislative priorities. Our comprehensive advocacy agenda focuses on strengthening small business support, enhancing tourism development, and advancing education and workforce initiatives that are vital to our region’s economic growth.

For questions or concerns regarding the Chamber’s public policy efforts, please feel free to contact Travis Condon, the Chamber’s public affairs manager, at 978.353.7600, ext. 224; or via email at .

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