MIKE KENNEALY, a former private equity manager who spent four years as state housing and economic development secretary under Gov. Charlie Baker, declared his candidacy for governor on Monday and said Massachusetts is “heading in the wrong direction.” 

Jumping into the ring against Gov. Maura Healey, who plans to seek reelection in 2026, Kennealy released a launch video Monday morning. He pointed to rising expenses, education, the emergency family shelter crisis and outmigration as key areas where the Bay State is struggling.

“The political class on Beacon Hill is more concerned with their future than with ours. Our beacon on a hill has become a beacon in the rearview mirror,” Kennealy said in the video. “The people of Massachusetts expect and deserve better.”

Although the press release announcing Kennealy’s campaign launch made no mention of his party affiliation, a spokesperson confirmed he is running as a Republican.

Other Republicans mentioned as potential candidates for governor include Worcester County Sheriff Lew Evangelidis, former MBTA Chief Administrator Brian Shortsleeve, former U.S. Senate candidate John Deaton, and Sen. Peter Durant, who said last month he would make his decision “relatively shortly.”

Kennealy spent nearly two decades working in private equity before joining the public sector in 2013 as part of the leadership team that worked on turning around Lawrence Public Schools, according to his campaign.

He became an assistant secretary under Baker, and rose to the Cabinet-level role of housing and economic development secretary in December 2018. Healey, who succeeded Baker, later split that job into two separate positions of housing secretary and economic development secretary.

Kennealy stayed in that job for the remainder of Baker’s tenure through 2022, helping to lead the state’s response to the economic upheaval inflicted by the COVID-19 pandemic. Following his time on Beacon Hill, Kennealy worked as senior advisor and chief strategy officer at the Boys and Girls Club of Boston.

His campaign appears poised to spotlight affordability issues, a steady theme on Beacon Hill for Healey and the House and Senate Democratic supermajorities. Kennealy named “a state we can all afford” as his top priority, followed by “a great future for everyone” and “government we can believe in.”

Healey in February announced her intention to seek reelection, saying she believes “there’s a heck of a lot more to do.”

Massachusetts voters over the years have elected a succession of Republican governors while preferring to keep Democrat supermajorities in the House and Senate, as well as an all-Democrat congressional delegation.

A UMass Amherst-WCVB poll of Massachusetts voters conducted in mid-February found about 52% approve of Healey’s job performance so far compared to 36% who disapprove.

Pollsters also asked at the time about hypothetical matchups between Healey and potential Republican challengers, including Kennealy. Four in 10 voters said they’d back Healey over Kennealy, 15% said they would pick Kennealy, and another 39% were not sure.

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ON THE EVE of a legislative hearing on her surtax surplus plan, Gov. Maura Healey submitted another spending bill for the Legislature’s review, filing a $756 million supplemental budget she said would address “time-sensitive deficiencies” in state government accounts.

The proposal Healey filed Wednesday afternoon (HD 4540) includes $134.5 million for supplemental payments to safety-net hospitals, $60 million for direct care for older adults, $240 million for state employee health care costs through the Group Insurance Commission, and more. It would carry a net state cost of $544 million after federal reimbursements, she said.

Healey’s office pitched the $190 million the bill includes for a child care financial assistance program as a way to “support Massachusetts residents at a time of rising costs.” Another $43 million would go toward the Residential Assistance for Families in Transition (RAFT) program that offers aid to families facing potential eviction, which has faced increasing demand during a period of housing strain.

The legislation additionally includes $15 million for grants and marketing related to the American Revolution 250th anniversary celebration, and $15.5 million for more secure electronic benefits transfer cards that Healey said would “help combat food benefit theft.”

“This budget bill proposes targeted investments that improve quality of life in Massachusetts, such as ensuring access to health care, supporting families with child care costs, and making sure veterans get their benefits,” Healey said in a statement alongside the bill. “We’ve also heard clearly from local officials and medical professionals across the state, especially in communities impacted by Steward Health Care’s closures, that they need more support. That’s why we’re proposing significant funding for EMS providers that have faced extraordinary costs. Our administration remains committed to maintaining a responsible state budget that tangibly benefits the people of Massachusetts.”

Other sections of the 25-page bill would ratify collective bargaining agreements with public employees, raise procurement thresholds under public construction laws, and allow Massachusetts Emergency Management Agency vehicles to use red and blue lights when responding to emergencies.

The Legislature’s Joint Committee on Ways and Means is partway through a series of hearings about Healey’s $62 billion fiscal 2026 state budget, and the panel will meet Thursday to consider Healey’s separate $1.3 billion proposal (H 55) to spend surplus surtax revenue.

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AT A TIME when lawmakers are wrestling with cost, access and regulatory questions, health care industry power players continued to dominate the Beacon Hill lobbying world last year, spending the most on employing influential insiders who sway development of public policy.

The Massachusetts Association of Health Plans spent $1.3 million on lobbyists in 2024, more than any other individual client in the Bay State, according to data from Secretary of State William Galvin’s office. The organization representing insurers newly supplanted the Massachusetts Health and Hospital Association, which topped lobbying spending in 2022 and 2023 but ranked second last year with $1.1 million.

Those organizations were the only two clients that spent more than $1 million apiece on lobbying last year.

Many health care- and pharmaceutical-adjacent groups ranked near the top in 2024 lobbying spending, too, including the Massachusetts Biotechnology Council ($866,139), Massachusetts Nurses Association ($519,191), Blue Cross Blue Shield of Massachusetts ($460,403) and the Association for Behavioral Healthcare ($459,070).

Health care policy is one of the thorniest and most complex topics for lawmakers to tackle. The Legislature enacted a pair of major reform bills in 2024, including one intended to lower prescription drug costs and another imposing more financial oversight on hospitals following the collapse of Steward Health Care.

But the problems plaguing both providers and patients remain potent. Sen. Cindy Friedman, the Senate’s point person on health care reforms, warned last week that the health care system is “falling apart.”

The total amount paid to lobbyists by all clients across different topics crossed into nine figures in 2024, climbing to $104.1 million.

The same top lobbying shops continue to command the most money from clients.

Each of the five top-earning firms in 2023 retained the same ranking in 2024, led by Smith, Costello and Crawford, which hauled in $6.2 million last year.

Like many lobbying entities around Beacon Hill, Smith, Costello and Crawford counts well-connected former public officials among its ranks. The firm is partly led by former Democrat Reps. Michael Costello, and another former representative, Carlo Basile, is a senior policy advisor. That’s the same title held by Marylou Sudders, who served as health and human services secretary under Gov. Charlie Baker.

Smith, Costello and Crawford’s top-paying client — $180,000 last year — was energy giant Avangrid, a key figure in the state’s push to build out cleaner energy sources including offshore wind.

Tremont Strategies Group earned the second-most of any lobbying firm with about $4.5 million. Former Congressman Chet Atkins, who also served in the Massachusetts House and Senate, is a partner at Tremont.

Rounding out the five top-earning firms were O’Neill and Partners ($4.28 million), Dempsey Associates ($3.77 million) and Kearney, Donovan and McGee ($3.5 million).

The next five ranking spots were all captured by the same firms as 2023, but in a slightly different order. ML Strategies jumped from seventh-most in earnings in 2023 to sixth-most in 2024, flipping with Bay State Strategies Group. Similarly, Issues Management Group climbed from ninth in 2023 to eighth in 2024, swapping places with TSK Associates. The Suffolk Group landed in 10th both years, earning about $2.26 million in 2024.

No individual lobbyist earned more in 2024 than former Senate President Robert Travaglini, who founded what is now known as TSK Associates after leaving the Legislature.

Travaglini hauled in $854,000 from his lobbying clients in 2024, according to data from Galvin’s office. Basile, who was the top earner in 2023, landed in second last year with $830,000 in lobbying salary.

The private sector can be much more lucrative for lawmakers than remaining in the Legislature. The current Senate president, Karen Spilka, earned $203,286 in total pay last year, according to state payroll records, less than one-quarter as much as Travaglini brought in from lobbying clients.

Fourteen lobbyists earned more than half a million dollars from their firms last year, and 56 brought in at least $250,000.

Three other registered lobbyists were paid at least $250,000 directly by clients: Mass. Association of Health Plans President Lora Pellegrini ($469,233 from MAHP), Clark University Vice President for Government and Community Affairs Joseph Corazzini (nearly $235,000 from the Trustees of Clark University), and OpenCape CEO Steven Johnston ($246,159 from OpenCapeCorporation).

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ATTORNEY GENERAL ANDREA CAMPBELL and nearly two dozen of her peers sued the Trump administration and federal health care agencies Monday, alleging that they unlawfully moved to cut crucial federal dollars for research.

Twenty-two attorneys general, all Democrats, filed a complaint in federal court in Massachusetts seeking to block an abrupt cut in National Institutes of Health (NIH) funding that goes toward administrative and overhead costs associated with research projects.

The NIH announced Friday that it would limit the amount of money available for so-called indirect costs — which it defines as covering “facilities” and “administration” — at 15 percent of new grants. That change, agency officials said, would ensure taxpayer dollars are directed primarily toward research costs instead of related overhead.

It would represent a significant shift: according to the NIH, in fiscal year 2023, the agency spent about $26 billion on “direct costs for research” and $9 billion on “overhead through NIH’s indirect cost rate.”

The policy was set to take effect Monday, the first business day after officials announced it.

Opponents argued that the sudden change runs afoul of a federal law known as the Administrative Procedure Act and could lead to layoffs, trial suspensions and laboratory closures.

“High-level research requires funds not just for the costs that can be directly attributed to the specific work of a particular project, but also the indirect costs that support multiple projects. These costs are broken up into ‘facilities’ and ‘administration’ costs,” plaintiffs wrote in their lawsuit. “For example, in order to conduct research, a university needs buildings, and needs to maintain those buildings and supply them with heat and electricity. A university also needs the infrastructure necessary to comply with legal, regulatory, and reporting requirements. These facilities costs cannot be attributed to any particular research project, but are still necessary for any research to occur.”

The attorneys general argued that research institutions negotiate indirect cost rates with the federal government, then execute agreements that apply to “all of that institution’s federal grants.”

They noted that President Donald Trump during his first term sought to reduce the indirect cost rate for research institutions to 10 percent, but that Congress stepped in to block the change.

“In 2018, Congress enacted an appropriations rider prohibiting HHS or NIH from spending appropriated funds ‘to develop or implement a modified approach to’ the reimbursement of ‘indirect costs’ and ‘deviations from negotiated rates,'” plaintiffs wrote. “That rider has remained in effect through every appropriations law governing HHS to this day.”

Campbell’s office warned that the shift could have massive impacts on Massachusetts, which is home to many research institutions and sizable pharmaceutical and biomedical industries.

In fiscal year 2024, NIH provided $3.46 billion to 219 Massachusetts organizations, according to Campbell’s office.

“Massachusetts is the medical research capital of the country. We are the proud home of nation-leading universities and research institutions that save lives, create jobs, and help secure a better future,” Campbell said in a statement. “We will not allow the Trump Administration to unlawfully undermine our economy, hamstring our competitiveness, or play politics with our public health.”

Explaining the new policy, NIH officials said many private foundations that fund research have lower tolerances for the share of funds that go toward overhead than do federal grants. Some organizations, they said, charge indirect rates of up to 60 percent from the NIH.

NIH leaders said the agency is “obligated to carefully steward grant awards to ensure taxpayer dollars are used in ways that benefit the American people and improve their quality of life.”

“The United States should have the best medical research in the world. It is accordingly vital to ensure that as many funds as possible go towards direct scientific research costs rather than administrative overhead,” NIH leaders wrote in a memo announcing the new limit.

The indirect cost rate cap and the ensuing lawsuit represent the latest chapter in Trump’s sweeping efforts to realign federal spending with his political priorities.

A federal judge previously blocked the administration’s proposed grant funding freeze. On Monday, the same judge said the administration has been violating his order to resume the spending, according to POLITICO.

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THE TRUMP ADMINISTRATION’S move to pause trillions of dollars in federal spending triggered an avalanche of uncertainty, panic and outrage, including a lawsuit from Attorney General Andrea Campbell and several of her counterparts.

Policymakers, nonprofit leaders, watchdogs and other affected parties spent most of Tuesday trying to unravel the implications of a sweeping freeze on grants and loans while President Donald Trump’s deputies try to align government spending with his political and ideological aims.

They could have at least a few more days to figure out the landscape. A federal judge in Washington, DC, temporarily blocked the proposed freeze late Tuesday afternoon, according to POLITICO. The judge’s order is due to expire at 5 p.m. Monday.

Reports emerged over the course of the day about federal dollars left out of reach, including for Medicaid in Massachusetts, even as Trump’s team sought to clarify that some popular aid programs are exempt.

Campbell joined with at least five other Democratic attorneys general to pledge a lawsuit challenging the pause, which they argued is unconstitutional.

“Congress controls the purse strings, and the executive branch cannot decide to halt funding just because they don’t like how Congress chooses to spend it,” Campbell said.

The full impact of the administration’s pause remains unclear. Campbell said Massachusetts has been unable to access tens of millions of Medicaid dollars it tried to withdraw Monday. Nonprofit leaders in the state worried they might have to reduce employee hours or lay off workers. School superintendents warned that programs providing meals to students might be affected.

Gov. Maura Healey said she worries the pause will impact funding for a host of services, ranging from child care to road maintenance to energy affordability.

“It’s devastating, and it touches all aspects, which is why I don’t understand this,” Healey said. “Donald Trump ran on a promise to lower costs. All he’s done is offer proposals and take actions that are going to raise costs for people, raise costs for businesses and hurt our economies.”

The interim head of the federal Office of Management and Budget on Monday wrote to the heads of federal executive departments and agencies instructing them to “temporarily pause all activities related to obligation or disbursement of all Federal financial assistance” while undertaking a review of their funding distributions.

While federal aid is governed in part by congressional appropriations and longstanding funding formulas, OMB Acting Director Matthew Vaeth said the administration wants to ensure trillions of dollars the federal government spends in grants and loans match Trump’s goals.

“Financial assistance should be dedicated to advancing Administration priorities, focusing taxpayer dollars to advance a stronger and safer America, eliminating the financial burden of inflation for citizens, unleashing American energy and manufacturing, ending ‘wokeness’ and the weaponization of government, promoting efficiency in government, and Making America Healthy Again,” Vaeth wrote in the memo, a copy of which was published by The New York Times. “The use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve.”

Medicare and Social Security benefits would not be impacted by the pause, the memo said.

The memo dated Monday said the pause would take effect at 5 p.m. Tuesday. The White House reportedly sent a second memo Tuesday pledging that some programs such as the Supplemental Nutrition Assistance Program would not be affected.

White House press secretary Karoline Leavitt defended OMB’s move in a briefing Tuesday afternoon, saying it was “not a blanket pause on federal assistance and grant programs from the Trump administration.” Individual assistance programs such as welfare and nutrition aid would not be affected, she said.

“The reason for this is to ensure that every penny that is going out the door is not conflicting with the executive orders and actions that this president has taken. So what does this pause mean? It means no more funding for illegal [diversity, equity, and inclusion] programs. It means no more funding for the green new scam that has cost American taxpayers tens of billions of dollars. It means no more funding for transgenderism and wokeness across our federal bureaucracy and agencies. No more funding for Green New Deal social engineering policies,” Leavitt said. “Again, people who are receiving individual assistance, you will continue to receive that. And President Trump is looking out for you by issuing this pause, because he is being [a] good steward of your taxpayer dollars.”

Leavitt described the pause as “temporary,” but did not specify an end date.

States across the country reported Tuesday they were unable to access federal payment portals for Medicaid, which funds health insurance coverage for millions of low-income Americans. Democratic Sen. Ron Wyden of Oregon said the platform was down in all 50 states.

During a virtual press briefing alongside other AGs, Campbell said Massachusetts officials on Monday tried to draw almost $40 million in Medicaid funding “and haven’t received the payment yet.”

“This is just one potential funding stream that could be impacted by this reckless order,” she said.

After a rapid back-and-forth with a reporter at the White House, Leavitt was asked if Medicaid would be affected by the freeze.

“I gave you a list of examples — social security, Medicare, welfare benefits, food stamps — that will not be impacted this federal pause. I can get you the full list after this briefing from the Office of Management and Budget,” she replied.

Another reporter followed up later in the briefing and asked for clarification from Leavitt about whether any individuals on Medicaid would see their coverage cut off.

“I’ll check back on that and get back to you,” Leavitt said before turning to the next question.

Later in the afternoon, Leavitt posted on social media that the White House was aware of a “Medicaid website portal outage.”

“We have confirmed no payments have been affected — they are still being processed and sent,” Leavitt wrote. “We expect the portal will be back online shortly.”

New York Attorney General Letitia James described several other reports of frozen funding, including Head Start grants in Michigan, child development block grants in Maryland, and child support enforcement in another unnamed state.

The AGs on the call, all Democrats, pledged to file a lawsuit asking a court to intervene. It was not immediately clear Tuesday in which jurisdiction they would file their case.

“The president in this country is powerful. He is not a king,” New Jersey Attorney General Matt Platkin said. “He does not get to wake up in the morning or after an afternoon nap and direct his entire government to stop funding critical services that Congress has duly authorized and appropriated, that millions and millions of Americans, Republicans, Democrats, independents, children, adults, [and] seniors depend on for life-saving care because he doesn’t like something that he woke up thinking about.”

Federal aid is a major source of revenue for states. According to Pew Charitable Trusts, federal grants represented 36.4 percent of total revenue for state governments in fiscal year 2022.

State records show Massachusetts expects to receive more than $15 billion in federal reimbursements in fiscal year 2025, a year when the state budget carries a $57.78 billion bottom line.

Healey did not say if she would file legislation to put state dollars to work to cover any lost federal funding, telling reporters that “we’ve got to take everything a step at a time.”

Asked about options to keep payrolls flowing amid a federal funding pause, Healey replied, “We’ve got to see what happens in the courts.”

“This is not just a blue state issue. This is a blue state, red state, every state issue,” she said. “All of our states rely on this federal funding, so my hope is that a court will quickly put an end to his overreach of executive authority. He doesn’t have the power to do this, and more than that, it’s really, really harmful.”

Doug Howgate, president of the Massachusetts Taxpayers Foundation, noted that Medicaid reimbursements are the second-largest source of revenue in the state budget. He called the OMB pause “incredibly problematic.”

“The uncertainty in and of itself is a huge problem, and there’s a chance that when we get past uncertainty to more certainty, the problem is even bigger,” Howgate said.

Significant federal money also flows to nonprofits, local governments and many other entities, which use it to fund a suite of programs and services.

Massachusetts Nonprofit Network CEO Jim Klocke said the freeze would affect nonprofits “in every city and town in Massachusetts, large, medium and small,” even if federal funding for individual assistance programs is not affected.

Nonprofits on Tuesday had to “immediately shift into triage mode,” Klocke said, calling the risk of cutting employee hours or layoffs “very real.”

“Federal funding is hugely important to the nonprofit sector, and more importantly, to the people served by nonprofits. Billions of dollars come every year from the federal government to nonprofits in Massachusetts. Tens and tens of thousands of nonprofit jobs depend on that funding,” Klocke said. “It’s in every sector. Housing, crime prevention, research, after-school care — they all have federal funding in them to one degree or another. So when OMB says we’re going to put a blanket freeze in place … what that does is it freezes all those services.”

Associated Industries of Massachusetts, one of the state’s largest business groups, sent an alert to members just before 1:30 p.m. urging them to get in touch with the organization to share concerns.

“Many Massachusetts companies receive federal grants and loans for a variety of purposes. Some of those companies could now face issues making payroll at the end of the month,” AIM wrote in its alert. “AIM is working with members of the Massachusetts Congressional delegation to determine the moratorium’s potential effect on employers.”

Federal offices and agencies must identify “any legally mandated actions or deadlines for assistance programs arising while the pause remains in effect” and report that information to OMB under the memo Vaeth issued Monday. They are also required to submit detailed information about affected spending activity by February 10.

Vaeth instructed agencies to review pending federal financial assistance announcements to ensure they comply with Trump’s priorities. To the extent allowed by law, agencies could modify unpublished aid announcements, withdraw already-announced funding or cancel awards “that are in conflict with Administration priorities” under the OMB memo.

The administration also ordered agencies to give a “senior political appointee” responsibility to ensure each federal aid program “conforms to Administration priorities,” and to investigate programs to “identify underperforming recipients.”

“OMB may grant exceptions allowing Federal agencies to issue new awards or take other actions on a case-by-case basis,” Vaeth wrote. “To the extent required by law, Federal agencies may continue taking certain administrative actions, such as closeout of Federal awards (2 CFR 200.344), or recording obligations expressly required by law.”

Sam Doran and Ella Adams contributed reporting.

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GOV. MAURA HEALEY proposed increasing state spending to more than $62 billion next fiscal year, relying on burgeoning income tax collections from the state’s wealthiest and a slew of other budget-balancing strategies in a spending plan unveiled Wednesday.

Healey filed a fiscal year 2026 budget that would continue popular but pricey programs such as universal school meals, begin to implement a major overhaul of transportation financing, pursue new policies such as traffic violation enforcement cameras, and much more.

The plan relies on about $1 billion in one-time revenues, though administration officials plan to mitigate that by replenishing some trust funds and reserves over the course of the year. The governor’s plan would newly apply the sales tax to candy sales but otherwise does not call for new or higher broad-based taxes or any draws on the state’s “rainy day” savings account, whose balance is set to surpass $9 billion.

Under Healey’s proposal, the state would stash less money in the rainy day fund in fiscal 2026 than is required under current law, and instead redirect money that might be bound for savings to pay down a greater share of pension and retiree benefit liabilities.

Healey’s budget would fund another year of K-12 school aid increases under the Student Opportunity Act, for the first time tapping into surtax dollars to pay for part of the growth, while continuing to cover free school meals, C3 grants to early education providers and a ConnectorCare pilot expanding public insurance eligibility.

It also seeks to execute much of her transportation funding plan, including $687 million in direct support for the cash-strapped MBTA, and launch a similar approach to modernize higher education infrastructure.

The spending bill would increase unrestricted general government aid to cities and towns by 2.2 percent, which officials said is about in line with the growth in non-surtax revenues that budget-writers expect.

Including use of a larger surtax pool and hundreds of millions of dollars for the Medical Assistance Trust Fund, the bill would increase state spending about 7.4 percent over the fiscal 2025 budget that Healey signed in July. Beacon Hill regularly adds hundreds of millions of dollars more in appropriations via mid-year bills.

Much of the proposed annual growth is fueled by the surtax on higher earners. Administration and legislative budget-writers agreed to spend $620 million more from that pool in fiscal 2026 than they did in fiscal 2025, whose budget was built on a more conservative estimate of how much money the levy would generate.

Areas outside the surtax-funded transportation and education worlds are due for smaller growth or, in some cases, trimming. Excluding surtax and MATF dollars from both bills, Healey’s fiscal 2026 budget proposes about 6.8 percent more spending than the budget she signed in the summer.

Healey’s team sought to portray the budget as proposing 2.6 percent more spending than all of what the state will spend in fiscal 2025, including supplemental spending, calling that rate lower than inflation.

The governor and her deputies plan to roll out their budget bill at a press conference Wednesday afternoon.

Healey also has related legislation in the works: a $1.3 billion supplemental budget that uses surplus surtax revenues collected in fiscal 2025; a borrowing bill targeting capital improvements on college and university campuses; a bond bill to fund local road and bridge work; and a new version of her Municipal Empowerment Act, which did not receive a vote in either chamber after Healey first rolled it out in the 2023-2024 term.

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PRESIDENT DONALD TRUMP’S executive order attempting to redefine birthright citizenship drew an immediate lawsuit from immigrants’ rights groups, including the ACLU of Massachusetts, and another subsequent complaint from Attorney General Andrea Campbell and more than a dozen of her peers.

Trump signed a series of immigration-related orders soon after being inaugurated, including one that seeks to end more than a century of practice awarding US citizenship to everyone born on American soil, even if their parents are not citizens.

Trump’s order instructs federal departments and agencies not to issue citizenship to anyone born here to a mother who is unlawfully present and a father who is not a citizen or lawful permanent resident, or to a mother who is here lawfully but temporarily and a father who is not a citizen or lawful permanent resident.

The order would take effect for births 30 days after January 20, 2025, and would not apply to current US citizens born to noncitizen parents.

Groups filed a federal lawsuit in New Hampshire within hours, alleging that the Trump administration is “flouting the Constitution’s dictates, congressional intent, and longstanding Supreme Court precedent.”

“Denying citizenship to US-born children is not only unconstitutional — it’s also a reckless and ruthless repudiation of American values,” said Anthony Romero, executive director of the American Civil Liberties Union. “Birthright citizenship is part of what makes the United States the strong and dynamic nation that it is. This order seeks to repeat one of the gravest errors in American history, by creating a permanent subclass of people born in the US who are denied full rights as Americans.”

Plaintiffs in the case — New Hampshire Indonesian Community Support, League of United Latin American Citizens and Make the Road New York — say they work with families whose children would be denied citizenship under the order.

Several state branches of the ACLU, including Massachusetts, the NAACP Legal Defense and Educational Fund, and the State Democracy Defenders Fund also signed onto the complaint.

The legal debate will likely focus on interpretation of the Fourteenth Amendment to the US Constitution, which declares that “all persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.”

Trump’s executive order contends the amendment “has always excluded from birthright citizenship persons who were born in the United States but not ‘subject to the jurisdiction thereof.'”

Plaintiffs pointed to the US Supreme Court’s 1898 decision in United States v. Wong Kim Ark, which ruled that the Constitution granted citizenship to a child born in the US to parents who were Chinese nationals.

“The Citizenship Clause enshrined in the Constitution the fundamental common law rule of birth by citizenship, whereby all people born in the United States are citizens. The term ‘subject to the jurisdiction’ excludes only a few inapplicable categories — today, just the children of foreign diplomats,” plaintiffs argued in the suit. “All other children born in the United States are citizens, no matter the immigration status of their parents.”

Attorneys general in more than a dozen states including Massachusetts added to the legal fight after 1 p.m. Tuesday, filing their own case US District Court for the district of Massachusetts.

The AGs — including Campbell —  similarly argued that the Fourteenth Amendment “unambiguously and expressly confers citizenship” to everyone born in the United States.

“President Trump now seeks to abrogate this well-established and longstanding Constitutional principle by executive fiat,” the AGs wrote in their complaint.

Campbell was joined in the case by attorneys general from New Jersey, California, Colorado, Connecticut, Delaware, Washington, DC, Hawaii, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, New York, North Carolina, Rhode Island, Vermont, and Wisconsin, as well as the city attorney for San Francisco.

Gov. Maura Healey said Tuesday she supports the lawsuit, calling the executive order “something that I think most Americans are opposed to.”

“Birthright citizenship is something that’s in the Constitution. If you’re born here, you’re a US citizen,” she told reporters after an unrelated event. “I think the polls are pretty overwhelming, most Americans agree with that as a principle.”

An Associated Press-NORC Center for Public Affairs Research poll conducted between January 9 and January 13 found 51 percent of US adults oppose changing the Constitution to children born to parents in the country illegally are not granted automatic citizenship. Twenty percent said they neither favor nor oppose the idea, and 28 percent backed it.

More than 30 other countries, including neighbors Canada and Mexico, have unrestricted birthright citizenship policies similar to the US, according to the World Population Review. Another 32 offer citizenship to newly born babies with some restrictions, such as requiring one parent to be a citizen.

Trump targeted immigration in other executive orders, including measures suspending refugee resettlement and instructing agencies to expand vetting and screening of migrants.

His hardline stance on immigration has long worried advocacy groups. Elizabeth Sweet, executive director of the Massachusetts Immigrant and Refugee Advocacy Coalition, called Monday “a dark day for America.”

“This clear deviation from American values is why the MIRA Coalition is more dedicated than ever to stand up for the rights of immigrants and refugees in Massachusetts and across the country. We remain focused on ensuring that all immigrants, regardless of status, know their rights and have access to legal representation,” Sweet said. “At the same time, we call upon Beacon Hill to pass policies including the Safe Communities Act, which protects immigrants and prevents state and local law enforcement from doing the work of ICE agents.”

In his order, Trump described US citizenship as a “priceless and profound gift.” The plaintiffs refer in their suit to the “priceless treasure” of citizenship, and allege that Trump’s order violates the constitution’s “citizenship clause.”

“The Constitution and Congress – not President Trump – dictate who is entitled to full membership in American society,” according to the lawsuit.

[Colin A. Young contributed reporting.]

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MASSACHUSETTS MUST PAY the federal government $2.1 billion over the next decade after the Baker administration mistakenly used federal pandemic funds to cover unemployment benefits, officials said Monday.

Gov. Maura Healey, who succeeded Baker in 2023, and her deputies unveiled details of a settlement they reached with the outgoing Biden administration Friday in which the Bay State will repay most but not all of the amount it owed due to the error committed years ago.

The settlement saddles the state with a major new cost at a time when budget-writers are grappling with a series of other headaches and the unemployment insurance system already faces fiscal problems.

Healey announced in the summer of 2023 that her team discovered the Baker administration improperly used about $2.5 billion in federal pandemic relief funds to cover jobless benefits that should have been paid by the state.

With fees and interest, the total liability surpassed $3 billion, according to Healey’s office, who said talks with with the US Department of Labor reduced the amount owed to $2.1 billion over the next 10 years.

The parties reached a deal at the end of last week, before Republican President Donald Trump took office.

“We were dismayed to uncover early on in our term that the previous administration misspent billions of dollars in federal relief funds and that our state was facing what could have been a more than $3 billion tab to pay it back,” Healey said in a statement on Monday. “For the past year and a half, we have engaged in extensive negotiations with the US Department of Labor to minimize the impact on Massachusetts residents, businesses and our economy. Today, we have reduced our potential liability by over $1 billion and negotiated a decade long payment window to mitigate the impact.”

She added: “It is incredibly frustrating that the prior administration allowed this to happen, but we are going to use this as a moment to come together with the business and labor community to make meaningful reforms to the Unemployment Insurance system,” she added.

Payments will begin December 1, 2025, and continue each year for the next decade, the Healey administration said.

The agreement calls for principal payments to come from the Unemployment Insurance Trust Fund. which is funded by a tax on employers and is also used to pay benefits. Interest payments will come instead from the state’s General Fund.

Healey’s office said businesses will not face higher rates on their unemployment insurance payments through at least the end of 2026. After that, rates will depend on system reforms, Healey’s team said.

Healey pledged to pursue changes to lighten the burden on employers, who already face higher costs to cover a surge of claims during the COVID-19 pandemic.

The governor instructed Labor Secretary Lauren Jones and Administration and Finance Secretary Matthew Gorzkowicz to “conduct a comprehensive review of the solvency of UI and assess potential reforms,” her office said. Officials will seek input from business and labor leaders, and present ideas to Healey.

Even before accounting for $2.1 billion in additional payments, the Healey administration projected the UI Trust Fund will be hundreds of millions of dollars in the red by the end of 2028.

“The Massachusetts UI system is arguably the most abused, costly and anti-employer system in the country,” said Retailers Association of Massachusetts president Jon Hurst. “Negotiating the $2.5 billion liability down to $2.1 billion is important, but this high cost cannot be simply added to the very high cost of doing business in the Commonwealth. The bad news is that this liability is very costly. The good news is that there is also now an opportunity to reform what has been for decades an impediment to new investment and job growth in Massachusetts.”

The retailers group said the state should draw from its $9 billion rainy day reserves “to pay for this state government error.” The retailers said UI taxes paid by businesses are already spiraling upwards.   

Christopher Carlozzi, state director of the National Federation of Independent Business Massachusetts chapter, said the “only solution” is for Beacon Hill to embrace major changes to reform a “broken” UI system.

“It is incomprehensible that the state made a monumental error, and it’s Massachusetts small employers that are required to today foot the $2.1 billion bill,” he said. “Add this to the $2.7 billion they are currently paying back as a result of state-mandated Covid shutdowns that were beyond their control, and it paints a very clear picture as to why Massachusetts’s businesses correctly feel like they are being crushed by one the worst unemployment insurance taxes in the nation.”

Healey’s office rolled out details of the $2.1 billion settlement agreement alongside statements from Associated Industries of Massachusetts president Brooke Thomson and Mass. Taxpayers Foundation president Doug Howgate, both of whom called for urgency in pursuing UI reforms.

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STATE HOUSE NEWS SERVICE

HOUSE AND SENATE Democrats moved Monday to redirect more than half a billion dollars headed for the state’s long-term savings account and instead use it to close a budget gap and fund some additional spending.

Lawmakers surfaced and quickly approved their final plan (H 5132) for closing the state’s financial books on fiscal year 2024, sending it to Gov. Maura Healey’s desk minutes before Beacon Hill budget-writers formally kicked off the process of planning for fiscal year 2026.

The newly approved “closeout” budget has a $701.2 million bottom line, with a projected net cost to the state of $133.6 million after federal reimbursements, according to a House Ways and Means Committee official.

The proposed appropriations address accounts underfunded in the annual budget and fill a fiscal 2024 budget gap that materialized in part due to non-income surtax revenue collections that didn’t hit projections, leaving a shortfall of about $233 million.

Legislative Democrats moved Monday to bridge the shortfall and fund some spending by using more than half a billion dollars that would have otherwise flowed into a state savings account.

Each year, capital gains tax revenues above a certain level are split up with 90 percent deposited into the state’s “rainy day” stabilization fund, 5 percent used to fund pensions, and 5 percent used for other post-retirement benefits.

The new spending bill would dramatically change that formula on a one-time basis. It would steer 85 percent of excess capital gains — about $502 million — to the general fund, and direct only 5 percent or $29.5 million to the stabilization fund, according to the House Ways and Means official. Pensions and other post-retirement benefits would each receive the same 5 percent as the traditional formula.

That’s a shift from the approach the House and Senate first sought to take. The original House bill directed 47 percent of excess capital gains revenue to the General Fund and 43 percent to the stabilization fund. The original Senate bill sought to use 15 percent of excess capital gains revenue for the General Fund, and would have steered higher shares toward pensions and other post-retirement benefits.

Healey proposed navigating the gap by using surtax collections that surpassed projections to backfill education- and transportation-related spending in fiscal 2024, freeing up originally appropriated dollars to plug the hole.

But Healey also agreed to use capital gains tax collections as a similar type of backstop in the current cycle. The fiscal year 2025 budget she signed in July allows the state to divert up to $375 million in excess capital gains tax revenue from the rainy-day pipeline and instead use it to balance the books for the cycle that runs from July 1, 2024, to June 30, 2025.

After previously drawing scrutiny from ratings agencies for dipping into the rainy day fund, Beacon Hill in recent years has worked to build up a sizable nest egg and resisted calls to spend its more than $8 billion balance.

A House Ways and Means committee official said the funding shuffle will also allow about $162 million to be swept into the Student Opportunity Act reserve fund, which helps pay for increases in K-12 state aid outlined in a 2019 law, bringing its balance to about $460 million.

Spending in the bill would flow to a range of areas, including $7.3 million for the Residential Assistance for Families in Transition program, $8.7 million for the state’s universal school meals program, and $2.5 million to cover start-up costs for online Lottery games.

The vast majority of the spending, about $565 million, would go to MassHealth. Senate Democrats previously estimated that line item would carry a $0 net cost to the state after federal reimbursements.

Healey will get 10 days to review the bill. Lawmakers were once again weeks late on completing the closeout budget, at least according to deadlines written into statute. The state comptroller by law is supposed to file a key financial report by October 31, but cannot do so until the governor signs into law a closeout budget.

Lawmakers have made a habit in recent years of blowing past that date and delaying the comptroller’s work as a result. Michlewitz and Rodrigues have completed a closeout budget before October 31 only once in their six cycles as Ways and Means Committee chairs.

Alison Kuznitz and Sam Drysdale contributed reporting.

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DUBBING PERSISTENT DEBT the “original sin” saddling public transportation, a watchdog group called on Beacon Hill to make debt relief a central part of the next MBTA financial rescue plan.

The MBTA Advisory Board, an independent group that represents cities and towns that help fund the T, took a deep dive through the history of public transit in Boston for its latest report about funding woes, reaching as far back as the quasi-public control of the Boston Elevated Railway that began in 1918.

The 66-page analysis highlighted nine public takeaways, including a warning against austerity measures that trim MBTA spending and a declaration that “debt is toxic to public transportation.”

“In examining the history of how public transportation has been governed, funded and overseen in greater Boston for the past 106 years, in addition to the nine lessons described above, one other is paramount – the original sin of public transportation in Boston is debt, or more specifically a lack of debt relief,” MBTA Advisory Board Executive Director Brian Kane wrote.

The state inherited the Boston Elevated Railway’s debt when it effectively began leasing the predecessor agency in 1918, Kane wrote. When the BER gave way to the Metropolitan Transit Authority in 1947, the MTA inherited even more debt. Additional debt went to the MBTA when the agency took over in 1964, and then again in 2000, when the T also took on about $1.7 billion in debt from Big Dig-related transit mitigation projects.

Costs to manage that debt continue to increase, according to Kane. The T spent about $292 million on debt service in fiscal 2001; by fiscal 2024, the budget for debt service had nearly doubled to $517 million.

In fiscal 2025, debt principal and interest payments represent about 23 percent of the T’s $2.5 billion operating budget, Kane wrote.

“Perhaps the simplest and quickest way to solve the Authority’s underlying structural and cyclical deficits [is to] repent for public transportation’s original sin, and relieve it of its crippling debts,” he said.

The report concluded that the “most important factor to success” is strong leadership from the governor, secretariats and MBTA higher-ups. Other takeaways highlight the link between large-scale economic trends and public transportation financing, the value of independent oversight and the need for revenue to factor into any reforms.

Kane worked at the MBTA from 2011 to 2018 under former Govs. Deval Patrick and Charlie Baker in roles including operating budget manager and director of operations analysis. He’s led the outside Advisory Board since 2020.

His recap of MBTA funding history is dotted with skepticism about the effects of past reform efforts.

For much of the 20th century, the MBTA would ask municipalities and then the state to backfill its deficits. That shifted in 2000 when the T embraced a plan known as “Forward Funding,” under which the state guarantees a share of sales tax revenue to the MBTA each year.

Initially, officials were optimistic that the change would reinvigorate the T, but many experts — including leaders at the MBTA — say the plan failed to live up to expectations because of weaker-than-forecast growth in sales tax collections.

“The MBTA achieved a balanced budget without financial gimmickry once under Forward Funding, in fiscal year 2001, and has been in a structural deficit ever since,” Kane wrote.

Kane described the eight-year stretch during former Gov. Michael Dukakis’s second and third terms as “perhaps the most stable period of leadership in the 60 years of the [MBTA]’s existence, as well as among its best periods of performances.”

His assessment of later administrations was more critical: Kane said Govs. William Weld and Paul Cellucci made “privatization of MBTA activities and cost cutting” their priorities, and he dubbed the Gov. Charlie Baker era as “experiments in the effects of austerity on the MBTA.”

“Whereas during the 3 Dukakis administrations, a stable executive leadership seemed more focused on performance, operational efficiency and expansion, during the Weld/Cellucci/[Jane] Swift administrations a more inconsistent executive leadership seemed more focused on privatization, cost cutting and the Big Dig than on other matters,” Kane wrote. “Similarly, during the [Mitt] Romney and 1st and 2nd Patrick Administrations, unstable leadership at both the secretary and GM levels seemed more focused on implementing, or at least attempting to show results from, so-called reforms, cost cutting and deficit management rather than on performance, operational efficiency and or customer service.”

The new report about public transit’s history of hamstringing debt comes ahead of renewed debate about transportation financing expected as soon as early next year.

Gov. Maura Healey created a task force — of which Kane is a member — to review transportation funding options, and the group must file its report by the end of the year.

Meanwhile, after regularly turning to Beacon Hill for financial assistance, the MBTA is careening toward its latest financial crisis. For years, the agency’s expenses have outpaced its revenues, and the mismatch has gotten even worse after the COVID-19 pandemic permanently shrunk ridership.

T budget-writers forecast a gap of nearly $700 million in the fiscal year that starts July 1, and they’ve said the agency could run out of cash within months unless it receives more help or significantly trims spending.

Kane invoked the 2009 “Born Broke” report he authored as a budget and policy analyst for the Advisory Board, which detailed lackluster growth in state sales tax revenue and debt stifling the T’s budget.

“In 2009, when the original Born Broke was written, a political window of opportunity opened for all of those who cared to finally fix the MBTA’s governance, funding, and oversight for good. That obviously did not happen,” he wrote. “Heading into 2025, when the MBTA has a strong General Manager, and a solid Board of Directors, perhaps this time we can get the funding and oversight pieces correct? History shows us what works and what does not work. The question is, can we get it right this time?”

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