Next Steps
Implementing the Task Force’s recommendations would require a mix of legislative actions and administrative policy actions. For example, an adjustment to the Section 5G capital gains threshold and future adjustment policy will require statutory changes. Meanwhile, establishing best practices and guidelines for Stabilization Fund withdrawals and better formalizing a recession toolkit can be done via non-statutory planning efforts.
In terms of next steps for the Task Force itself, it will be critical for the Administration, Legislature, and key fiscal partners to determine an appropriate cadence for re-establishing the group. A regular conversation around reserves and long-term liabilities will help the state’s future fiscal health and allow the group to evaluate previous policy recommendations.
Conclusion
The state’s policies around financing the Stabilization Fund and other long-term liabilities have positioned Massachusetts well. The Massachusetts Stabilization Fund is positioned near the top of all states and puts us in a relatively strong position to manage any future economic downturns. The Commonwealth has also made significant strides to amortize its unfunded pension liability ahead of the statutory deadline of FY 2040.
With that in mind, the state’s active review and management of its resources, via multi-year budget forecasting and stress testing, will ensure that the most fiscally prudent policies are upheld as conditions and best practices change. By implementing best practices, actively reviewing our funding strategies, and making appropriate adjustments periodically, the Commonwealth can optimize its preparedness for any future fiscal uncertainty and ensure that it can uphold its top priorities in all circumstances.