Massachusetts continues to grapple with economic and political challenges as 2025 unfolds. Governor Maura Healey's proposed $61.5 billion budget for fiscal year 2026 relies heavily on Fair Share surtax revenue to fund education and transportation initiatives. However, the budget faces criticism for potentially underfunding housing and health programs amid ongoing affordability concerns.

The state's economy shows signs of slowing, with Massachusetts GDP growing at just 1.1% in Q4 2024, lagging behind national growth. Employment has stagnated, and the unemployment rate rose to 4.1% in December, matching the national rate. Business leaders express worry about potential federal funding cuts, particularly to Medicaid, which could impact the state's healthcare sector and economy.

Drought conditions persist across much of Massachusetts despite winter precipitation. As of mid-March, moderate drought remains in parts of New York and New England, with extensive areas of abnormal dryness. This has raised concerns about wildfire risk and water resources as spring approaches.

In education, a major shift is coming as the MCAS exam will no longer be required for high school graduation starting in 2025, following a 2024 ballot measure. Governor Healey and Attorney General Campbell recently issued guidance affirming the state's commitment to diversity and equal access in education, pushing back against federal directives they view as potentially limiting these efforts.

The state continues to implement new laws passed in 2024, including expanded tax credits for families, easier construction of small apartments, and the right for job applicants to know salary ranges. Massachusetts is also preparing to commemorate the 250th anniversary of the start of the American Revolution in April 2025, with $1.5 million in state grants allocated to promote Revolutionary War history.

Looking ahead, Massachusetts faces key challenges in addressing housing affordability, managing drought conditions, and navigating potential federal policy changes. The state will also be watching the development of several high-profile trials, including Karen Read's second trial for the death of her police officer boyfriend. As the 2025 legislative session progresses, lawmakers will likely focus on economic stability, environmental resilience, and maintaining the state's progressive stance on social issues.