♪ ADAM: TONIGHT ON "TALKING POLITICS."

GOVERNOR MAURA HEALEY’S TAX CUTS, HOW THEY BACKFIRED?

HEALEY MAKES HUNDREDS OF MILLIONS OF DOLLARS OF BUDGET CUTS AFTER SHE SIGNED OFF ON THE STATE’S FIRST TAX BREAKS.

NOT EVERYONE AGREES WITH THAT ANALYSIS.

SHOULD JANUARY 6 DISQUALIFY DONALD TRUMP FROM RUNNING FOR PRESIDENT?

A GROUP OF ORDERS HOPE TO MAKE MASSACHUSETTS THE LATEST A TO KICK TRUMP OFF THE BALLOT.

A SECTION OF THE 14TH AMENDMENT BANS INSURRECTIONIST FROM HOLDING OFFICE.

I AM JOINED BY SHANNON LISS-RIORDAN AND AUSTIN SARAT.

HE IS A PROFESSOR AND CHAIR OF THE POLITICAL SCIENCE DEPARTMENT AT AMHERST COLLEGE.

THANK YOU FOR BEING HERE.

I ALLUDED TO THE LEGAL RATIONALE FOR THE COURT ACTION YOU ARE BRINGING BUT I WANT TO GET YOU TO DESCRIBE IT IN AS MUCH DETAIL AS POSSIBLE.

WHAT IS THE LEGAL BASIS, AS YOU SEE IT, FOR NOT ALLOWING DONALD TRUMP TO BE ON THE BALLOT HERE IN MASSACHUSETTS?

SHANNON: THERE ARE A NUMBER OF DIFFERENT TYPES OF PROHIBITIONS TO VARIOUS CANDIDATES BEING ELECTED TO OFFICE.

FOR THE PRESIDENCY, THERE IS A REQUIREMENT YOU ARE 35 YEARS OLD.

ONE OF THE OTHER REQUIREMENTS THAT IS SET FORTH IN THE 14TH AMENDMENT TO THE U.S. CONSTITUTION, SECTION 3, ISSUE CANNOT BE AN INSURRECTIONIST.

IF YOU HAVE TAKEN A PRIOR OATH OF OFFICE AND DEFIED THAT OATH, YOU ARE DISQUALIFIED.

WE ARE VERY PROUD TO HAVE BROUGHT THIS CHALLENGE ON BEHALF OF A NUMBER OF VOTERS IN MASSACHUSETTS ACROSS THE POLITICAL SPECTRUM -- REPUBLICANS, INDEPENDENTS, DEMOCRATS.

WE ARE WORKING WITH THE ORGANIZATION FREE SPEECH FOR PEOPLE.

WE ARE FOLLOWING THE SPECIFICS OF THE MASSACHUSETTS STATUTE, GENERAL LAW CHAPTER 55B TO RAISE THIS CHALLENGE WE HAVE FILED WITH THE MASSACHUSETTS ELECTION COMMISSION, WHICH WILL HAVE THE FIRST CRACK AT MAKING THE DECISION HERE IN MASSACHUSETTS.

ADAM: YOU MENTIONED OTHER CHALLENGES THAT ARE SIMILAR AROUND THE COUNTRY.

I WANT TO PULL UP A GRAPHIC THAT WAS PUT TOGETHER BY A NEWS SERVICE.

IN THIS GRAPHIC, WE HAVE STATES THAT HAVE SAID PRESIDENT TRUMP CANNOT BE ON THE BALLOT, THAT IS PENDING APPEAL.

COLORADO IS IN ORANGE.

ALL THE BLUE STATES ARE STATES WERE CHALLENGES HAVE BEEN BROUGHT AND DISMISSED.

SHANNON, I WANT TO ASK YOU, IF LEGAL RATIONALE, CONSTITUTIONALLY SPEAKING, IS AS CLEAR AS YOU PAINT IT TO BE, IF IT IS A BLACK-AND-WHITE ISSUE, WHY ARE SO MANY OF THESE CHALLENGES NOT SUCCEEDING IN OTHER STATES?

SHANNON: YES, WE THINK THE LEGAL ISSUE UNDER THE CONSTITUTION IS CLEAR.

CHALLENGES THAT HAVE NOT SUCCEEDED IN OTHER STATES HAVE BEEN ON PROCEDURAL GROUNDS.

THERE IS A LONGSHOT REPUBLICAN CONTENDER THAT HAS BEEN FILING A NUMBER OF CHALLENGES AROUND THE COUNTRY.

HIS CHALLENGES HAVE BEEN KNOCKED OUT BASED ON STANDING.

HE DOES NOT HAVE STANDING TO BRING SUCH A CLAIM.

THERE ARE OTHER PROCEDURAL ISSUES THAT HAVE BEEN USED TO REJECT THE CHALLENGE.

FOR EXAMPLE, IN CERTAIN STATES, IT CAN ONLY BE MADE BEFORE THE GENERAL ELECTION, RATHER THAN THE PRIMARY.

THAT IS NOT THE CASE IN MASSACHUSETTS.

THE TWO STATES WEATHER HAVE BEEN A SENSITIVE FINAL FINDING ARE COLORADO AND MAINE, WHICH CORRECTLY HELD THAT THE 14TH AMENDMENT APPLIES AND THAT TRUMP IS DISQUALIFIED.

ADAM: AUSTIN SARAT, DO YOU BELIEVE THE IMPLICATIONS OF THE 14TH AMENDMENT FOR PRESIDENT TRUMP AND BALLOTS ACCESS OR A STRAIGHT FORWARD AS SHANNON LISS-RIORDAN THINKS THEY ARE?

AUSTIN: I DO WHAT I WANT TO ADD A LITTLE BIT OF NUANCE TO WHAT SHANNON JUST SAID.

I FIND HER ARGUMENT PERSUASIVE AND POWERFUL.

LEGAL ISSUES OF THE KIND THAT WE ARE DEALING WITH ARE SELDOM SIMPLY BLACK-AND-WHITE.

AFTER ALL, IN COLORADO, THE DECISION WAS MADE BY SEVEN MEMBERS OF THE SUPREME COURT AND IT WAS DECIDED, 4-3.

IN MAINE, THE SECRETARY OF STATE SAID OFF THE BALLOT WITH DONALD TRUMP.

IN CALIFORNIA, THE SECRETARY OF STATE LOOKING AT THE SAME SET OF FACTS SAID NO, HE WILL REMAIN ON THE CALIFORNIA BALLOT.

I THINK THIS IS AN INTERESTING AND COMPLICATED LEGAL QUESTION.

I BELIEVE THE DONALD TRUMP SHOULD BE DISQUALIFIED UNDER THE 14TH AMENDMENT BUT WE KNOW THERE ARE A LOT OF WRINKLES TO IT.

EVEN THE WAY SHANNON DESCRIBED IT, SHE SAID "IS AN INSURRECTIONIST."

THE LANGUAGE OF THE 14TH AMENDMENT SAID "ENGAGES IN INSURRECTION."

WE WILL SEE ARGUMENTS ABOUT WHETHER HE ENGAGED IN INSURRECTION.

THERE ARE COMPLEXITIES AROUND WHETHER OR NOT THE 14TH AMENDMENT APPLIES TO OFFICE OF THE PRESIDENT OF THE UNITED STATES.

I HAPPEN TO THINK IT DOES BUT THERE IS A MIXED HISTORY IF YOU GO BACK AND LOOK AT THE ORIGIN OF THE 14TH AMENDMENT ABOUT WHETHER THEY INTENDED IT TO APPLY TO THE PRESIDENT OF THE UNITED STATES.

ADAM: IT HAS ITS ORIGINS IN THE POST-CIVIL WAR.

PERIOD.

AUSTIN: THEY WERE MOST CONCERNED NOT ABOUT THE PRESIDENT OF THE UNITED STATES BUT PEOPLE IN THE SOUTH WHO HAD ENGAGED IN REBELLION AGAINST THE UNITED STATES BEING ABLE TO RUN FOR AND HOLD OFFICE.

ADAM: I THINK I AM REMEMBERING THIS CORRECTLY.

I DO NOT THINK THE PRESIDENCY IS MENTIONED EXPLICITLY.

AUSTIN: ALTHOUGH IT IS VERY HARD TO CONCEDE THAT WHEN THEY USE THE PHRASE "OFFICER OF THE UNITED STATES" THAT THAT WOULD NOT APPLY TO THE PRESIDENT.

ADAM: SHANNON, WHEN I SPOKE TO SECRETARY OF STATE BILL GALVIN ABOUT THIS A COUPLE WEEKS AGO BEFORE YOU FILED YOUR CHALLENGE, HE TOLD ME -- WE SHOULD MENTION HE IS THE STATE’S TOP ELECTIONS OFFICER -- HE SAID ESSENTIALLY THAT GIVEN THE WAY MASSACHUSETTS WORKS, HE DOES NOT HAVE THE LATITUDE -- THE STATE DOES NOT HAVE THE LATITUDE -- TO CONSIDER ELIGIBILITY AS IT IS WEIGHING WHO TO PUT ON THE BALLOT.

WE CAN PLAY A SOUNDBITE OF HIM MAKING THE ARGUMENT IN A SLIGHTLY DIFFERENT CONTEXT.

>> IT IS ONLY THE U.S. SUPREME COURT THAT CAN RULE ON THE ISSUE OF ELIGIBILITY.

THERE HAS BEEN A LOT OF CONFUSION ABOUT THE BALLOTS ACCESS ISSUE AND THE ISSUE OF ELIGIBILITY.

IF THE DEMOCRATIC PARTY HAD CHOSEN TO HAVE EITHER BARACK OBAMA OR BILL CLINTON AMONGST THEIR CANDIDATES, I WOULD PUT THEM ON THE BALLOT BECAUSE I WOULD BE REQUIRED TO.

ADAM: HOW DO YOU RESPOND TO THAT OBJECTION?

SHANNON: IT FRANKLY DOES NOT MAKE A LOT OF SENSE.

THE ROLE OF THE SECRETARY OF STATE IS TO MAKE SURE THE CANDIDATES ON THE BALLOT ARE ELIGIBLE TO SERVE IN THE OFFICE.

IT MAKES NO SENSE TO HAVE SOMEONE ON THE BALLOT WHO COULD NOT TAKE OFFICE IF THEY WERE ELECTED.

THERE ARE PLENTY OF DEMOCRATS WHO WOULD LOVE TO SEE BARACK OBAMA RUN AGAIN.

HE IS NOT ELIGIBLE BECAUSE HE HAS ALREADY SERVED TWO TERMS.

IT MAKES NO SENSE TO SAY, "WELL, WE WILL PUT HIM ON THE BALLOT AND THEN SEE WHAT HAPPENS IF HE IS NOT ELIGIBLE."

WHAT DOES THAT MEAN?

NEXT JANUARY 6 WE WILL HAVE ELECTED SOMEONE INELIGIBLE?

WHAT DO WE DO, HOLD ANOTHER ELECTION?

I DISAGREE WITH SECRETARY GALVIN THAT THIS IS A QUESTION ABOUT WHO CAN SERVE RATHER THAN WHO CAN BE ON THE BALLOT.

ALSO, IT IS THE DUTY OF THE DESIGNATED STATE OFFICIALS UNDER STATE LAW TO IMPLEMENT OUR STATE ELECTION LAWS, BUT THEY HAVE TO BE IN ACCORDANCE WITH THE HIGHEST LAW OF OUR LAND, WHICH IS THE U.S. CONSTITUTION.

THE U.S. CONSTITUTION TAKES PRECEDENT OVER STATE LAW.

IF SOMEONE IS DISQUALIFIED FROM THE OFFICE BY THE FEDERAL CONSTITUTION, IT IS STATE OFFICIALS RESPONSIBLE FOR ENSURING PROPER BALLOT ACCESS ARE BEHOLDEN TO THE HIGHER LAW.

ADAM: AUSTIN SARAT, YOU WROTE A PIECE RECENTLY FOR "SALON" IN WHICH YOU ARGUE THE SUPREME COURT OUGHT TO RECKON WITH -- THEY WILL TAKE IT UP IN EARLY FEBRUARY -- THAT THEY NEED TO RULE -- I WAS GOING TO USE THE TERM AGGRESSIVELY, THEY NEED TO ENGAGE DIRECTLY WITH THE SUBSTANCE OF THE QUESTION AT HAND AS OPPOSED TO ISSUING A RULING THAT DOES NOT REALLY GET TO THE MEAT OF THE MATTER.

HOW CONCERNED ARE YOU THAT THEY WILL DO THE LATTER -- THAT THEY WILL FIND A WAY TO NOT ENTIRELY SAY WHETHER THE PRESIDENT -- FORGIVE ME -- THE FORMER PRESIDENT IS OR IS NOT ELIGIBLE?

AUSTIN: I AM VERY CONCERNED.

IF I WAS ON THE UNITED STATES SUPREME COURT AND WORRIED ABOUT THE LEGITIMACY OF THE INSTITUTION OF THE UNITED STATES SUPREME COURT, I WOULD BE LOOKING FOR A PROCEDURAL OFFRAMP.

I WOULD BE LOOKING TO SAY SOMETHING THAT ABORTED THE MAJOR ISSUES.

CONGRESS NEEDS TO MAKE A DETERMINATION, OR THE PRESIDENT IS NOT COVERED UNDER THE LANGUAGE OF "OFFICER OF THE UNITED STATES," BUT I THINK THAT WOULD BE A DREADFUL MISTAKE FOR THEM TO DO SO.

I HAVE A CLEAR VIEW WHAT I THINK THE RIGHT ANSWER IS IN THE CASE.

I THINK DONALD TRUMP SHOULD BE DISQUALIFIED UNDER SECTION 3 OF THE 14TH AMENDMENT.

I THINK IT IS IMPORTANT FOR THE COURT TO TELL US ONE WAY OR ANOTHER TO RESOLVE THE QUESTION -- IS DONALD TRUMP SOMEONE WHO ENGAGED IN INSURRECTION?

IS HE QUALIFIED UNDER THE 14TH AMENDMENT TO SERVE AS PRESIDENT OF THE UNITED STATES?

WITHOUT THAT, THE ELECTION WILL BE SHADOWED WITH DOUBTS ABOUT WHETHER OR NOT ONE OF THE TWO MAJOR PARTY CANDIDATES IS REALLY ELIGIBLE TO SERVE.

LET ME JUST SAY -- I WONDER WHETHER SHANNON THINKS THIS IS TRUE -- THE SUPREME COURT IS IN A NO-WIN SITUATION.

IF THEY RULE AGAINST DONALD TRUMP, THERE WILL BE MASSIVE DEMONSTRATIONS AND DONALD TRUMP WILL MAKE WAR ON THEM.

IF THEY RULE IN FAVOR OF THIS -- THEY WILL NOT EARN ANY POINTS WITH PROGRESSIVES WHO WILL SAY WE DO NOT CARE ABOUT AFFIRMATIVE ACTION DECISION.

THE SUPREME COURT IS IN A REAL BIND, ONE WAY OR ANOTHER.

IF IT MAKES THE KIND OF RULING I BELIEVE NOT TO MAKE.

ADAM: SINCE YOU BROACHED THE QUESTION WHETHER SHANNON AGREES WITH THAT ANALYSIS, LET’S GET YOUR TAKE ON THIS.

DO YOU SEE THIS AS A NO-WIN PROPOSITION FOR THE COURT, IN PARTICULAR?

SHANNON: AS A LAWYER, I AM A FIRM BELIEVER IN THE RULE OF LAW AND I WOULD LIKE TO THINK THE SUPREME COURT WILL ACTUALLY LOOK AT THE LEGAL ISSUE.

THERE ARE A NUMBER OF GOOD TEXTUAL LISTS ON THE SUPREME COURT AND IF THEY ABIDE BY THEIR BACKGROUNDS AND LEANINGS, THEY SHOULD APPLY THE CONSTITUTIONAL AMENDMENT AS WRITTEN AND AS IT WAS INTENDED TO DISQUALIFY HIM.

I AM NOT SO CONCERNED ABOUT THEIR POLITICAL CALCULUS.

I WILL SEND THE COURT IS OBVIOUSLY IN A LOT OF JEOPARDY RIGHT NOW.

THERE HAVE BEEN REAL ATTACKS ON ITS INTEGRITY, SERIOUS CONCERNS HAVE BEEN RAISED ABOUT THE COURT’S INTEGRITY.

I THINK THIS WOULD BE A WELCOMED OPPORTUNITY FOR THE COURT TO DO THE RIGHT THING AND APPLY THE LAW AS WRITTEN AND BE THE PROPER NEUTRAL UMPIRES THEY SHOULD BE AND CALL IT LIKE THEY SEE IT.

I THINK THAT IS ALL WE CAN HOPE FOR.

WE WERE PLEASED TO SEE THE SUPREME COURT AGREED TO TAKE THIS CASE.

I AGREE WITH THE PROFESSOR THAT THIS IS AN EXTREMELY IMPORTANT CASE.

I WOULD LIKE TO SEE THE SUPREME COURT ADDRESSED THE ISSUE HEAD ON.

WE ARE CONTINUING WITH OUR CHALLENGE HERE IN MASSACHUSETTS BECAUSE UNDER THE LAW THERE IS A PARTICULAR TIMING FRAMEWORK WE HAVE TO ABIDE BY.

THE COMMISSION CANNOT START CONSIDERING THE CHALLENGE OR HOLD A HEARING UNTIL JANUARY 22, BUT THEY MUST DECIDE ON OUR OBJECTION BY 5:00 P.M., JANUARY 29.

THAT IS BEFORE THE SUPREME COURT WILL BE HEARING ARGUMENTS.

WE NEED TO PUSH FORWARD.

WE DO NOT KNOW WHAT THE SUPREME COURT WILL DO.

WE HOPE THEY WILL ADDRESS THE ISSUE HEAD ON AND THIS IS THE ONLY WAY WE COULD GET, IF WE WERE SUCCESSFUL, DID A RULING THAT WOULD APPLY ACROSS THE COUNTRY THAT WOULD KEEP TRUMP OFF THE BALLOT, PERIOD, IN THE UPCOMING ELECTION.

AS THE PROFESSOR SAID, THEY COULD VERY WELL DECIDE ON NARROW PROCEDURAL GROUND THAT SOMETHING THAT HAPPENED IN THE COLORADO CASE -- THE BIGGER ISSUE.

THE FACT THEY TOOK THE CASE GIVES US SOME HOPE THAT THEY DID IT QUICKLY AND RECOGNIZED IT IS AN IMPORTANT ISSUE OF THE NEED TO GET TO THE MERITS QUICKLY.

ADAM: I WOULD LIKE TO GET TO BOTH OF YOU QUICKLY TO WEIGH IN ON ONE OF THE OBJECTIONS BROUGHT UP REPEATEDLY IN RESPONSE TO THESE CHALLENGES.

BASICALLY THE IDEA THAT IT IS NOT A QUESTION FOR THE COURTS TO DECIDE, IT IS A QUESTION FOR VOTERS TO DECIDE.

THE MASSACHUSETTS REPUBLICAN PARTY IS AMONG THE VOICES MAKING THIS ARGUMENT.

THEY TWEETED THE MASS REPUBLICAN PARTY OPPOSES THE LATEST EFFORT TO REMOVE DONALD TRUMP FROM THE BALLOT IN MASSACHUSETTS THROUGH ADMINISTRATIVE FIAT.

WE BELIEVE THE DISQUALIFICATION OF A PRESIDENTIAL CANDIDATE THROUGH LEGAL MANEUVERING SETS A DARREN CRISS PRESIDENT AND BELIEVE VOTER SHOULD BE THE ULTIMATE ARBITER FOR SUITABILITY FOR OFFICE.

SHANNON BRIEFLY AND THEN OFTEN BRIEFLY, WHAT IS YOUR RESPONSE?

SHANNON: MY RESPONSE IS THIS IS A LEGAL ISSUE, NOT A POLITICAL ISSUE.

JUST LIKE SOMEONE WHO IS 34 YEARS OLD IS NOT ELIGIBLE TO SERVE AS PRESIDENT.

THIS IS A LEGAL ISSUE AND WE HAVE COURTS TO DECIDE LEGAL ISSUES.

IT WOULD NOT MAKE SENSE TO SAY LET’S SEE IF VOTERS WANT TO PUT THIS 34-YEAR-OLD ON THE BALLOTS.

IT IS NOT ILLEGAL QUALIFICATION.

ADAM: AUSTIN SARAT, YOU HAVE THE LAST WORD.

AUSTIN: I’M A COLLEGE PROFESSOR, I LOVE HAVING THE LAST WORD.

I FULLY AGREE AND WHAT I WOULD SAY IS SIMPLY -- WHAT THE REPUBLICAN PARTY WANTS TO BELIEVE HIS DEMOCRACY IS A FREE-FOR-ALL.

IT IS NOT.

IT IS OUR POLITICAL SYSTEM SET UP WITH CERTAIN RULES AND NORMS AND FOR DEMOCRACY TO WORK, WE HAVE TO BE COMMITTED TO RESPECTING THOSE RULES AND NORMS.

ADAM: SHANNON LISS-RIORDAN, AUSTIN SARAT, THANK YOU BOTH FOR TALKING ABOUT THIS COMPLICATED AND IMPORTANT ISSUE.

AUSTIN: THANK YOU.

SHANNON: THANK YOU FOR HAVING ME.

ADAM: FIRST IN THE TAX CUTS AND THEN CAME THE BUDGET CRUNCH.

GOVERNOR MAURA HEALEY IS TO CUT STATE SPENDING TO MAKE UP FOR IT.

A FEW MONTHS AFTER SHE SIGNED THE FIRST BIG TAX BREAK PACKAGE MASSACHUSETTS TESTING INTO DECADES, REVENUE IS COMING UP SHORT.

MASSACHUSETTS IS IN THE RED BY AS MUCH AS $1 BILLION.

THE GOVERNOR PROPOSED $375 MILLION IN CUTS.

CRITICS ARE SAYING THERE ARE QUESTIONS ABOUT OTHER CHOICES BEING MADE ON BEACON HILL.

JOINING ME TO WEIGH IN ON BOTH ROUNDS OF CUTS AND IMPLICATIONS ARE DOUG HOWGATE AND JONATHAN COHN.

THANK YOU BOTH FOR BEING HERE.

DOUG, FOR PEOPLE WHO MIGHT NOT BE FAMILIAR WITH THE STATE BUDGET PROCESS, WHY IS THE GOVERNOR MAKING THESE CUTS MIDYEAR AND WHAT IN PARTICULAR -- DOUG: GREAT QUESTION.

WHEN THE BUDGET IS SIGNED INTO LAW AT THE START OF THE YEAR, FROM THAT POINT ON IN THE FISCAL YEAR, IT IS UP TO THE ADMINISTRATION TO CERTIFY THROUGHOUT THE PROCESS THAT WE STILL HAVE THE REVENUE TO SUPPORT THE SPENDING WE HAVE COMMITTED TO.

STARTING IN OCTOBER BUT OFTEN IN JANUARY, YOU WILL SEE THE ADMINISTRATION SAY WE HAVE LOOKED AT THE REVENUES WE HAVE COLLECTED OR THE SPENDING OBLIGATIONS AND WE NEED TO ADJUST OUR REVENUE PROJECTIONS UPWARD AS WAS THE CASE RECENTLY, OR DOWNWARDS.

IN THIS CASE GOVERNOR HEALEY HAS ADJUSTED EXPECTATIONS BY $1 BILLION.

UNDER LAW, SHE HAS TO BALANCE THE BUDGET TO MAKE SURE WE CONTINUE TO HAVE A BALANCE BUDGET FOR FISCAL YEAR 2024.

ADAM: BRIEFLY, WHAT IS SHE CUTTING?

DOUG: $1 BILLION REVENUE DOWNGRADE.

WHAT THE ADMINISTRATION HAS PUT OUT IS ABOUT $675 MILLION OF OTHER REVENUES THEY THINK IN CLOSE 2/3 OF THE GAP AND THERE IS ABOUT $375 MILLION OF SPENDING REDUCTIONS.

WHAT IS IMPORTANT TO KNOW IS A SPENDING REDUCTION IS NOT THE SAME AS A PROGRAM CUT.

WHAT DO I MEAN BY THAT?

IF YOU LOOK AT WHAT SHE HAS DONE THERE ARE A FEW AREAS OF FOCUS.

1 IS PROGRAMS THAT HAVE NOT SEEN THE UTILIZATION THEY EXPECTED SO IT WILL NOT COST AS MUCH AS WE THOUGHT.

IN SOME OTHER AREAS, AS WELL.

THERE HAVE BEEN PROGRAMS WHERE THERE ARE OTHER SOURCES OF FUNDING, WHETHER FEDERAL OR OTHER STATE PROGRAMS, THE CAN OFFSET BUDGET APPROPRIATIONS.

THERE ARE ALSO PLACES WHERE THERE ARE PROGRAMS OR PERSONNEL WHERE THEY ARE DELAYING THE IMPLEMENTATION OF A NEW PROGRAM EXPANSION OR OTHER CHANGES.

THOSE ARE THREE OF THE KEY AREAS , AS WELL AS OTHER CUTS CALLED EARMARKS.

ADAM: JONATHAN, YOU PUT OUT WHEN I THOUGHT WAS A STRIKINGLY TOUGH STATEMENT ABOUT THE GOVERNOR’S CUTS.

I BELIEVE WE HAVE IT AND WE CAN PULL UP THE TEXT.

YOU WROTE, THIS IS PART OF IT, LAST YEAR, ADVOCATES REPEATEDLY STRESSED THAT NOW IS NOT THE TIME FOR PERMANENT TAX CUTS AS SIGNS OF LOWER REVENUE COLLECTION WERE COMING.

THE LEGISLATURE REFUSED TO LISTEN AND INSTEAD PASSED A TAX CUT PACKAGE WHICH INCLUDED REGRESSIVE TAX CUTS ALMOST EQUIVALENT IN SIZE TO THESE PER CONEY IN CUTS.

.

IT SHOULD NOT BE LOST ON US THAT -- EMERGENCY PAUSES OR GIVEAWAYS.

.

THE SOLUTION IS ALWAYS THE ONE THAT FALLS ON THE BACKS OF THE POOREST.

WOULD YOU LIKE TO SEE THE GOVERNOR PAUSING THOSE TAX CUTS?

JONATHAN: I WOULD NOT SAY THAT SPECIFICALLY BUT YOU SHOULD RAISE MONEY BACK.

WHETHER THAT IS CAUSING SOME OF THE TAX CUTS THAT PARTICULARLY BENEFIT HIGHER INCOME INDIVIDUALS LIKE DELAYING IMPLEMENTATION OF THE STATE TAX CHANGES, WHICH I DO NOT SUPPORT EXISTING, POSITING THAT, OR EVEN LOOKING AT OTHER WAYS OF RAISING REVENUE.

ONE PROBLEM I SAW WITH THE TAX PACKAGE BEYOND THAT 1/3 DISPROPORTIONATELY BENEFITED THOSE WITH THE HIGHEST INCOME AND LARGE CORPORATIONS, IT WAS A NET REVENUE LOSS FOR THE TAX PACKAGE.

YOU COULD HAVE DONE SOMETHING REVENUE NEUTRAL OR POSITIVE TO MEASURE ANY CHANGES THAT DID BENEFIT MIDDLE AND LOWER INCOME TAXPAYER RESIDENTS OF THE STATE WERE PAID FOR.

WE WOULD STILL END UP ON A SOUND FISCAL BASIS.

ONE THING I THINK ABOUT WITH THIS, THERE WAS A STUDY A FEW YEARS AGO THAT WE SPENT ABOUT $1 BILLION EACH YEAR IN VARIOUS TAX INCENTIVES TO SPECIFIC INDUSTRIES.

WHETHER TARGETING SOME OF THOSE OR SIMPLY REEVALUATE IF THEY ARE EVEN DELIVERING.

THAT IS SOMETHING THAT MAKE SENSE TO ME.

ADAM: I WANT TO ASK YOU TO ELABORATE AND THEN I WILL COME BACK TO YOU.

YOU USED THE TERM DRACONIAN TO TALK ABOUT THE BUDGET CUTS.

THE DESCRIPTION YOU OFFERED DID NOT SOUND THAT WAY AT ALL.

WHAT DO YOU SEE THAT MERITS JONATHAN: JONATHAN: THAT?

THE PART THAT I WOULD TARGET THE MOST ARE DELAYS OR PROGRAM EXPANSION, WHICH DOUG HAD NOTED.

THE PEOPLE WHO BENEFIT FROM THOSE ARE THE PEOPLE WHO HAVE THE LEAST.

ONE THING THAT GOT CUT WAS EXPANSIONS OF WELFARE BENEFITS FOR THE NEEDIEST FAMILIES IN THE STATE.

WHEN YOU HAVE INDIVIDUALS WHO HAVE EVERY LITTLE TO BEGIN WITH AND THEY ARE SEEING A LOSS OF IN-STATE SUPPORT AT THE SAME TIME THE STATE THINKS IT IS OK TO GIVE A $99,600 TAX CUT A MULTIMILLION DOLLAR ESTATE, THAT SEEMS LIKE A MISALIGNMENT OF BASIC PRIORITIES.

SOME OTHER PROGRAMS, -- ADAM: GIVE ME ONE MORE.

JONATHAN: WHEN I OFTEN THINK OF, IF THINGS ARE NOT BEING UTILIZED AS PREDICTED, TO ME IT IS NOT CLEAR THE STATE IS EVEN DOING THE OUTREACH NECESSARY TO REACH THE FULL UTILIZATION.

MANY PEOPLE DO NOT EVEN KNOW THEY HAVE ACCESS TO PROGRAMS.

I LIKE TO LOOK AT SPENDING FROM THE PERSPECTIVE OF ARE NEEDS BEING MET?

ADAM: WHAT DO YOU SAY IN RESPONSE TO JONATHAN’S OBJECTION?

DOUG: IT IS IMPORTANT FOR FOLKS TO KNOW AT FISCAL YEAR 2024, SPENDING GREW YEAR OVER YEAR BY 7% IN THE BUDGET THAT GOVERNOR HEALEY SIGNED.

WITH THESE 9C REDUCTIONS, SPENDING WILL GROW AT 6%.

HISTORICALLY SPEAKING THAT IS A HIGH RATE.

IN THE THREE YEARS PRIOR TO THE PANDEMIC THE AVERAGE WAS 2.9%.

YOU CAN ARGUE WHETHER THAT IS RIGHT OR WRONG BUT 7% THIS YEAR, 8% LAST YEAR ARE HISTORICALLY HIGH LEVELS OF GROWTH.

THEY INCLUDED INTERPERSONAL SCHOOL MEALS, I THINK YOU CAN CONTINUE TO SEE A BUDGET THIS YEAR THAT HAS HUGE EXPANSIONS IN AREAS LIKE HOUSING, K-12.

TWO OTHER THINGS I WOULD NOTE, IN TERMS OF THE BENEFIT ON WELFARE FAMILIES, I THINK ONE OF THE THING SO CHALLENGING ABOUT BALANCING THE BUDGET AND ACHIEVING FISCAL GOALS IS HOW YOU MANAGE ALL THESE PRIORITIES.

WE HAVE SEEN THREE CONSECUTIVE YEARS OF BENEFIT INCREASES FOR WELFARE FAMILIES.

I THINK THE HEALEY ADMINISTRATION IS PROUD OF THAT.

BENEFITS HAVE GROWN BY 33%.

THE CHALLENGE THE ADMINISTRATION HAD ITS WE ARE ABOUT TO KICKOFF THE FY 25 PLANNING PROCESS.

THIS WOULD GO INTO EFFECT IN APRIL.

THE COST THIS YEAR HAS A LARGE COST NEXT YEAR UNLESS YOU ARE GOING TO START THE NEW BENEFIT AND CUT IT BACK AGAIN.

ONE THING YOU SEE IN TERMS OF THE PLAN IS PRESSING PAUSE ON THAT AS WE START THE DEVELOPMENT PROCESS FOR NEXT YEAR AS WELL.

ON THE TAX FRONT, I THINK WHERE WE THINK IT IS CRITICALLY IMPORTANT AND WHY WE THINK THE TAX PACKAGE THAT WAS SIGNED INTO LAW IN OCTOBER IS IMPORTANT IS WE NEED TO MANAGE OUR FINANCES NOW, MAKE CRITICAL INVESTMENTS IN THE LABOR FORCE, HOUSING SYSTEM, K-12 SYSTEM AND THINK ABOUT THE CHALLENGES MASSACHUSETTS HAS.

THE FIRST MAJOR TAX CHANGES IN 20 YEARS ARE REFLECTIVE OF ELEMENTS OF THE TAX CODE THAT HAVE NOT HAD THE ADJUSTMENTS THEY NEEDED AS WE HAVE SEEN MAJOR CHANGES TO OUR ECONOMY AND THE ECONOMY RESIDENTS ARE LIVING IN.

ADAM: JONATHAN, DOUG MENTIONED THEY WILL BE GETTING READY FOR THE NEXT BUDGET CYCLE.

THERE HAVE BEEN SIX MONTHS OF TAX RECEIPTS COMING UP SHORT?

I AM WONDERING, DO YOU THINK THAT SUGGESTS THE MODEL THAT THE PEOPLE WHO PUT THE BUDGET TOGETHER ARE USING IS MAYBE IN NEED OF SOME ADJUSTMENT?

ARE THEY MAKING FUNDAMENTAL ASSUMPTIONS THIS SHOULD NOT BE?

JONATHAN: I WILL SAY -- I CANNOT SAY I KNOW THE FULL DETAILS OF THE MODEL THEY USE.

CHANGES TO THE OVERALL ECONOMY THAT ARE NOT REFLECTIVE.

THE MAIN THING THAT COMES TO MY MIND IS THE REVENUE PROJECTIONS ARE DOWN AND THAT UNDERSCORES THE POINT IT IS NOT A GOOD TIME FOR REDUCING OVERALL REVENUE.

THERE NEEDS TO BE REAL ATTENTION TO MAKE SURE WE ARE ABLE TO DO EVERYTHING IN THE BUDGET WE NEED TO DO.

EVEN THOUGH THE BUDGET HAS GROWN IN RECENT YEARS, AS LONG AS WE HAVE HIGH INCOME INEQUALITY IN THE STATE, THERE ARE A NUMBER OF PEOPLE STRUGGLING TO GET BY, WE HAVE SOME OF THE MOST EXPENSIVE CHILDCARE IN THE COUNTRY IN MASSACHUSETTS AND THERE ARE PEOPLE AT RISK OF DISPLACEMENT IF THEY HAVE NOT ALREADY BEEN DISPLACED FROM BOSTON OUT OF RHODE ISLAND, WE HAVE NEEDS NEED TO MEET.

ADAM: WHAT IS YOUR TAKE ON THAT?

DOUG: I AM SADLY FAR TOO FAMILIAR WITH THE BUDGET FORECASTING PROCESS IN MASSACHUSETTS.

IT IS A CHALLENGE IN ANY YEAR.

WHAT WE SAW FROM 2019-2020 AND FORWARD, WE SAW THE STATE’S TAX COLLECTIONS GROW BY 20% IN A TWO YEAR.

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TAXES GREW BY 40%.

OUR REVENUE PROJECTIONS AT THE TIME LOWBALL THAT BY BILLIONS OF DOLLARS.

NOW THE QUESTION COMING OUT OF FY 22 IS WHAT IS GOING TO HAPPEN?

ARE WE GOING TO KEEP THE REVENUE?

THE CONSENSUS WAS WE WOULD GIVE IT BACK.

DOES THAT HAPPEN SLOWLY OR ALL AT ONCE?

WHAT YOU SAW IN LAST YEAR’S BUDGET PROJECTIONS AND THIS YEAR’S IS WE KNOW TAX COLLECTIONS WILL SLOW DOWN.

THANKFULLY DURING THE PANDEMIC AND THOSE GREAT REVENUE GROWTH YEARS, THE STATE DID SOME GOOD PHYSICAL THINGS IN TERMS OF SOCKING MONEY AWAY AND INVESTING AT THE SAME TIME.

THERE ARE ALWAYS THINGS THAT CAN BE IMPROVED.

FROM A CONTEXT STANDPOINT, YOU ARE TALKING ABOUT A $40 BILLION BUDGET BASE.

YEAR TO DATE, WE WERE $779 MILLION UNDER BUDGET.

TAX REVENUES HAVE GROWN OVER THE LAST YEAR, THEY ARE BELOW THE EXPECTATION.

THE OTHER QUICK POINT OF CLARIFICATION, THE TAX RELIEF PACKAGE THAT HAS BEEN OUT THERE, THIS DOWNGRADE HAS NOTHING TO DO WITH THAT.

THE TAX RELIEF PACKAGE WAS FULLY BAKED INTO THE BUDGET.

THIS DOWNGRADE WAS BASED ON A REVENUE PROJECTION THAT HAD ALREADY PRICED IN THE TAX RELIEF.

ADAM: AT THE SAME TIME, THAT MONEY WOULD HAVE BEEN IN HAND WERE IT NOT FOR THE TAX-CUT PACKAGE.

IT PROBABLY WOULD HAVE BEEN SPENT ON SOMETHING ELSE.

DOUG: THAT IS THE CRITICAL POINT.

THE TAX PACKAGE IS SCORED AT $580 MILLION.

THAT GETS TO THE SPENDING AND TAX DECISIONS.

IF THE DECISION WAS MADE BY THE HOUSE SENATE AND ADMINISTRATION TO NOT USE THAT FOR TAX RELIEF, IT WOULD HAVE BEEN SPENT.

ADAM: YOU HAVE ABOUT 15 SECONDS TO ANSWER THIS.

A REPORT RECENTLY THE SENATE WILL REDOUBLE ITS PRESSURE FOR FREE COMMUNITY COLLEGE FOR ALL MASSACHUSETTS RESIDENTS.

WILL THIS DIMINISHMENT MAKE THE LEGISLATURE HOLD OFF ON A NEW PROGRAMS LIKE THAT?

JONATHAN: I THINK FREE COMMUNITY COLLEGE IS AN IMPORTANT THING TO DO.

THEY DO NOT ASK FOR NEW REVENUE WHEN THEY WANT TO CUT TAXES SO I DO NOT THINK THEY SHOULD SUDDENLY USE THAT TO MAKE NO EXPANSIONS.

ADAM: JONATHAN COHN, DOUG HOWGATE, THANK YOU BOTH.

THAT WILL DO IT FOR TONIGHT.

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