Gov. Healey Concerned About Impacts of Federal Funding Cuts & Tariffs, Sees Housing as State’s Biggest Challenge

NEWTON — Gov. Maura Healey worries about the uncertainty in the economy created by policies coming out of Washington, as well as federal funding cuts negatively impacting some of Massachusetts’ biggest industries, she told an audience at the Charles River Regional Chamber event on Monday.

Other challenges to maintaining one of the strongest economies in the United States includes creating more housing and the cost of energy, Healey said at the Chamber’s Government Affairs Forum at the Newton Marriott. Congressman Jake Auchincloss also appeared at the event.

Massachusetts receives the most NIH (National Institute of Health) funding per capita, but that funding — some of which is used for life science research and development — may be at risk if cuts are made by the Trump Administration.

“We want cures. We want treatments. But I sure would prefer it if those were developed and innovated right here in the United States of America,” she said. “So we need to fight hard for this and we need to continue to speak up. I said a couple of weeks ago you may not be in the life sciences business, but life sciences is in you all the construction jobs to build out, lab space, office space, research space, the real estate firms, the law firms, intellectual property. They’re all the folks who make stuff and then deliver it as part of the supply chain for R&D. That happens all over our state.”

Healey also said she expects the tariffs announced by the President to have a negative impact on Massachusetts by creating uncertainty for businesses and price increases.

“Just last week, we had a number of economists come out and universally condemn tariffs. They’re just going to raise costs and raise prices on everything,” Healey said, adding that tariffs could impact materials needed to build houses, such as lumber from Canada and gypsum — used for wallboards — that comes from Mexico.

Housing is one of the biggest challenges for the Bay State, she said, with the high cost of housing creating a hurdle when companies are hiring. Massachusetts needs to create “a couple 100,000 housing units” to make up the shortage of housing units, Healey said. The $5.2 billion of funding in the Affordable Homes Act, passed in 2024, is a step, but the units still have to be built. Other places in the country have already started doing so.

“We need to move, and we need to move on this, now,” Healey said. “And what they did in (Austin,) Texas was they were able to get their vacancy rate back to a healthy level. And by the way, if you’re looking for statistics, average rents dropped by 22 percent. Basic supply and demand. That’s what we need to do.”

The MBTA Communities Act is another effort to encourage more housing production by creating more places where multi-unit housing projects are allowed by-right. Healey praised Watertown for “passing plans that are now in interim compliance status.” The zoning changes were part of the Watertown Square Area Plan, approved by the City Council in November 2024.

Reducing the cost of energy is another focus. Healey said she recently “went hard at the utilities” to make some changes, and she also wants to bring more sources of energy into the state.

“At the end of the day, that’s what we need. We need more energy into this region so that crisis will go down,” Healey said. “I’m glad that hydro is going to come in from Canada this year. We’ve got to take advantage of all sources that we have here. I wish we could get the modular nuclear up faster and running.”

At the end of the Q&A portion of the event, Chamber President and CEO Greg Reibman asked what period of history Healey would visit if she could back and observe, but not change what happened.

“How can I not say April 19, 1775,” she said, referring to the day when the American Revolution began in Concord and Lexington. “… I think about that because we got to remember, this is the birthplace of American democracy … as imperfect or challenging as it may be, what an amazing, amazing thing that was created. And remember, it was created not by a lot of high falutin’ politicians, actually, many of them at the time, remember, were subservient to a king. It came about because there were tradesmen, there were farmers, there were people who were fighting for a better life, a better world for themselves, who found within them the guts, the fortitude to stand down.”

See Newton’s NewTV full video of the Chamber event here.