Massachusetts Gov. Maura Healey announced Monday that she will cut the current fiscal year's budget by $375 million as the government seeks to close a projected $1 billion shortfall due to slower-than-expected monthly income.
The biggest cuts will be to MassHealth, the state's Medicaid program, but will not affect eligibility to apply for the health insurance plan.
The remainder of the expected $1 billion shortfall will be covered by $625 million, which officials have described as an opportunity to raise revenue without having to raise taxes.
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The spending cuts outlined Monday can be made unilaterally by the governor and do not require approval from the state Legislature.
Matthew Goshkowitz, Healy's chief budget officer, said the government chose not to put money into the state's Rainy Day Fund, which currently exceeds $8 billion, because the money is He said this was to prepare for a more serious financial crisis.
June 14, 2023, Boston, Massachusetts Governor Maura Healey speaks as an interpreter. (Pat Greenhouse/Boston Globe via Getty Images)
“We see this as a situation that will require some tightening for 12 to 18 months, but overall we do not see this as a recessionary environment and the economy will continue to grow in 2025,” Gošković said. I believe that,” he said. reporters.
He said the cuts were less than 1% of the national budget and no layoffs were made to fill the funding gap.
Goshkovic also said the state's struggle to find emergency shelter for immigrants and other homeless families was not a factor in the budget cuts.
“None of the budget cuts are a result of the recent emergency shelter crisis,” he said.
In a letter to lawmakers explaining the budget cuts, Healey said the state cannot wait until the start of the new fiscal year in July to address the budget shortfall. According to him, sales in December were lower than expected for the sixth consecutive month.
“As we seek to reduce spending, we have done our best to protect investments that are critical to Massachusetts' future,” Democrats wrote, including protecting local aid funds for cities and towns and school funding.
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Also Monday, Healey administration officials and Massachusetts House and Senate leaders announced a new estimate of state revenue for fiscal year 2025 at $40.2 billion, which is lower than the amount used in the current budget. That's about $208 million less, officials said.
