By Brooke Thomson
President & CEO

How important are investments by the federal government to the Massachusetts economy?

We may be about to find out.

Massachusetts received $36.5 billion from the federal government in Fiscal Year 2023 for everything from highway infrastructure to clean energy to research grants. Federal investment surged 36 percent between 2019 and 2023, but state officials now confront uncertainty over the flow of federal dollars at the dawn of the Trump Administration.

The stakes for Massachusetts are enormous. Consider recent examples of federal funds and program designations awarded to Massachusetts:

• Cape Cod Bridges: $1.7 billion to replace the bridges and improve safety, mobility, and access.
• North Station Draw Bridge: $472 million to increase capacity, speed, and reliability of MBTA commuter rail and Amtrack trains.
• Northeast Microelectronics Coalition Hub: $57.7 million in CHIPS funding for the Massachusetts Technology Collaborative to lead a regional hub to advance the microelectronics need of the US Department of Defense (DOD) while creating new jobs, workforce training opportunities, and investment in advanced manufacturing and technology sectors.
• Allston Multimodal Project: $335 million to rebuild a section of Interstate-90.
• West-East Rail: $108 million to lay the groundwork for the project.
• Municipal Roadway Safety Improvements: $77 million to improve safety of roadways across the state.
• Clean School Buses: $75 million to replace fossil-fuel powered school buses in 18 school districts.
• ARPA – H: $276 million to date after Massachusetts was chosen to host the ARPA-H Investor Catalyst Hub to foster collaboration among researchers, entrepreneurs, and investors to accelerate innovative ideas that transform health care.

Federal money has seeded some of Massachusetts’ cornerstone industries in recent years, from defense to software to life sciences. Massachusetts received more than $3.2 billion in National Institutes of Health grants in fiscal 2022, the third-highest amount of any state in the country. Boston’s Longwood Medical Area itself took in $1.2 billion thanks to six of its high-profile institutions: Brigham and Women’s Hospital, Harvard T.H. Chan School of Public Health, Boston Children’s Hospital, Harvard Medical School, Dana-Farber Cancer Institute and Beth Israel Deaconess Medical Center.

Governor Healey has made a priority of competing for federal funds.

In September, the governor signed into law a plan supported by AIM to leverage interest from the state’s stabilization fund, without reducing the current balance, to create a matching fund pool of up to $750 million to pursue federal funds. The bill also allocates up to $12 million for technical assistance for local governments and tribes, and up to $50 million for grants, loans and other financial assistance for federal programs.

“There’s a transition at the federal level, and that obviously means that we need to move these projects forward quickly…We are working very hard to lock in the gains that we’ve made,” said Quentin Palfrey, the state’s director of federal funds and infrastructure, a new office Governor Healey established to help Massachusetts compete for federal dollars.

The federal support helps Massachusetts, to be sure, but it also helps the rest of the country and the world as the commonwealth’s unparalleled life sciences, medical, applied Artificial Intelligence and advanced manufacturing capabilities develop products that have global benefit.

AIM strongly urges the state and federal governments to ensure that partnership continues.