News Healey administration announces $375 million in budget cuts following tax collection shortfalls

Governor Maura Healey announced today that her administration is cutting $375 million in spending from the FY ’24 budget, due to inadequate tax collection halfway through the fiscal year.

According to the State House News Service, “the spending reduction includes $1 billion worth of “solves” to close the existing gap – a net $375 million in spending cuts along with $625 million in newly-tapped non-tax revenues. The plan is meant to address the existing revenue shortfall of $769 million while also providing some breathing room for the second half of the budget year.”

In terms of tax revenue, the state is 4.1 percent behind the projections it used to craft an annual budget. While tax revenue is up slightly from one year ago – $60 million or 0.3 percent – the tax revenue increase did not keep pace with projected increases built into the FY ’24 budget, which was $56 billion.

Several of the 60+ line items being cut in the budget are in human services accounts. The full list of cuts is here, and some impacting the human services sector include:

  • MassHealth Fee for Service Payments saw a reduction of $294 million. The state noted it was reducing the item “to the amount projected to be necessary due to anticipated utilization, adjustments to planned rate updates, and timing of rate updates,” according to comments provided alongside the decreases.
  • DDS line items saw a reduction of approximately $55 million. These came from 5920-2000, Community Residential Services ($40.3m); 5920-2025, Community Day and Work ($13.75 million); and 5920-3010, Autism Division ($1m). DDS officials on Monday noted the decreases would have been reversions and they did not believe there would be any impact on services nor would any contracts need to be amended.
  • The TAFDC grant (4403-2000) saw a reduction of $13.2 million, while Emergency Aid to the Elderly Disabled and Children (4408-1000) saw a reduction of $4.4 million. Both had notes stating the reduction would allow the state to “maintain current benefit levels that have increased by an average of 30 percent since FY ’21.”
  • The Center-Based Child Care Rate Increase (3000-1042) was reduced by $12 million, though it was noted that “$5 million of the reduction will align the early educator scholarship program with FY ’23 funding levels and $7 million of the reduction will be offset by funding rolled over from FY ’23 to still enable the planned $65 million provider rate increase.”
  • Behavioral Health Supports (4513-2020) and DMH Loan Forgiveness (5095-0017) were reduced by about $5 million each, with the state noting the reductions were happening “because there are alternate funding sources that can support the goals of this program.”
  • Residential Services for the Committed Population (4200-0300) saw a decrease of about $3.5 million “due to delayed implementation of programs with paused or unfulfilled contract bids. This reduction is not expected to cause any operational or programmatic impact.”
  • Several Elder Services line items saw reductions, including Home Care Services (9110-1630) of $2.6 million, Protective Services (9110-1636) of $2.3 million, Congregate Housing (9110-1660) of $1.4 million, Nutrition Services Programs (9110-1900) of $1 million, and Grants to the Councils on Aging (9110-9002) of $950,000.

If you believe these reductions will impact your programs, services, clients or workforce in any way, please contact Stefan Geller to let him know about the impacts.

Back to All News