Healey set to unveil $375m in budget cuts
Earmarks said to be 50% of the plan
Governor Maura Healey plans to announce $375 million in spending cuts Monday, including slashing 50 percent from an array of local earmarks and hundreds of millions from other programs, according to lawmakers briefed on the administration’s plans.
Seven lawmakers told the Globe that they received calls from senior administration officials Sunday that the budget for local earmarks — items that may include funding for nonprofits, local projects, or economic development programs for their districts — will be slashed in half.
Other planned cuts will affect state programs, including in health and human services, the lawmakers said. But details weren’t immediately available Sunday night about where Healey’s budget office planned to specifically prune spending from the state’s $56 billion budget.
State Senator Jamie Eldridge, a Democrat from the Middlesex and Worcester district, said he was “very troubled” to hear about the cuts, especially given the $1 billion tax bill passed last year that included many benefits targeted to the business community, heirs of sizable estates, and investors.
Eldridge was one of two “no” votes on the bill.
“At the end of the day, earmarks are not going to cover this budget deficit,” he said. “I am very troubled that we just passed a tax reform package where over a third of the tax cuts went to the wealthy. I think that’s extremely concerning.”
The cuts appear to be prompted by tax collections that have persistently fallen short of expectations. Healey administration disclosed last week that tax revenues are running $769 million, or about 4 percent, behind projections midway through the current fiscal year.
The soon-to-be-announced spending cuts mark a reversal for the governor, who just weeks ago waved off the possibility of mid-year cuts. Healey told the State House News Service last month — before the latest revenue figures came in — that she was not considering them.
”No. No, we’re going to manage the situation,” Healey told the news service.
Matthew Gorzkowicz, Healey’s budget secretary, did not directly comment on the administration’s plans, but said in a statement to the Globe that Healey “directed me to evaluate any and all necessary steps to ensure that the [fiscal year 2024] budget can be balanced
at the end of the fiscal year.”
“We will provide more information in short order,” Gorzkowicz said.
Officials also plan to announce on Monday that they have reached a consensus revenue forecast for next fiscal year, which is expected to fall about $200 million below the revenue figure it based this year’s budget on, according to one lawmaker. This figure provides a basis for expected tax revenue that both the administration and Legislature use to craft their upcoming budgets for fiscal year 2025.
After years of sometimes record-breaking budget surpluses, tax revenues began trailing off last year. The state’s take plummeted last April before it ended the fiscal year, having collected roughly $600 million less than it expected. The vast majority of that shortfall, roughly $593 million, involved lower-than-expected capital gains taxes, a volatile revenue source, officials said at the time.
Still, the Healey administration wasn’t forced then to make widespread unilateral cuts during the year. The planned spending cuts now are likely to sow tension in the chambers.
Healey has already signaled she plans to submit a plan asking for more money for the state’s overloaded emergency shelter system, a request that has been received in the past with skepticism. When she asked for $250 million to support the shelter system in September, House Speaker Ronald Mariano initially said that he was not sure if his chamber would support it, and that lawmakers wanted “hard numbers” related to the request.
The Healey administration disclosed last month that it plans to submit a proposal to dip into a state surplus account to help cover mounting costs in the project, projecting it will need $224 million more this fiscal year and a whopping $915 million in the next.
At the time, administration officials said they planned to file a supplemental spending proposal “in the coming weeks.”
State Senator Michael Barrett said after six months of “disappointing” tax collections, he expected there to be cuts in the Healey administration’s current spending plan. He said while some of the earmarks for his district, which includes Concord, Lexington, and Waltham, were affected, he understands the administration’s calculus.
“But we can’t spend money that we don’t have. I do tend to think we have to maintain a healthy rainy day fund,” he said. “It’s sprinkling now, but in a few months it could be pouring bad news.”