Gov. Maura Healey is slashing $375 million from the state budget, part of a strategy to cover an expected billion-dollar revenue shortfall.
In a letter to lawmakers Monday, Healey said her team was not making any cuts to school funding or local aid.
She said her team did “our very best to protect investments that are critical to Massachusetts’ future, limit impacts to programs and services and to avoid negative impacts to the most vulnerable of our residents.”
Over the last six months, state tax collections have consistently fallen below the projections used to build this year’s $56 billion budget.
Matthew Gorzkowicz, Healey’s secretary of administration and finance, said budget-writers are lowering their overall revenue estimate for the year by $1 billion. Along with the cuts, they plan to use $625 million in other, non-tax revenues to plug the gap.
"This is about fiscal responsibility and ensuring that our budget remains in balance with the resources we have available to us," Gorzkowicz said. "We can't spend what we don't have."
He said he does not anticipate a need to make further spending cuts this fiscal year or lay off any state workers.
The cuts span an array of accounts, ranging from a $294 million gross reduction to the MassHealth insurance program to $50,000 for the office of the State House superintendent.
The MassHealth cut, Healey's largest by dollar amount, represents 8% of the $3.6 billion budgeted for MassHealth fee-for-service payments. Budget officials said they are reducing funding to reflect lower utilization rates, but making no eligibility changes.
Healey also halved the funds earmarked for various local projects involving travel and tourism, economic development, public safety, parks and recreational areas and fire departments. Gorzkowicz said the local earmark cuts total less than $20 million.
The Massachusetts Constitution grants governors the authority to unilaterally make budget cuts when state spending exceeds projected revenue. The last time a governor exercised that power was in December 2016, when Gov. Charlie Baker shaved $98 million from what was then a $39-billion budget.
This year’s cuts come months after lawmakers passed and Healey signed a $1 billion tax relief package that included breaks for parents, renters and seniors.
They also land as Healey and her team are preparing to ask lawmakers to approve another $700 million for the emergency shelter network that has stretched past its limits to accommodate an influx of migrant families.
Healey wants to use money stashed in a state surplus account to pay the shelter bills. Gorzkowicz said that proposal, which needs to be approved by the state Legislature, has "insulated" the overall state budget from too much of a squeeze as shelter costs climb.
"Let me be clear. None of the budget reductions are a result of the recent emergency shelter crisis," he said. "These revenue reductions are a result of underperforming revenue."
The current fiscal year ends June 30. Healey is due to file her budget for the following year by Jan. 25. Gorzkowicz and legislative budget writers expect another year of slow revenue growth in fiscal 2025.
