The costs of Healey's budget cuts

Jan 09, 2024

MAKING ENDS MEET — Gov. Maura Healey’s plan to slash $375 million from the state budget to help plug a $1 billion revenue hole came as something of a surprise after she initially said she had no plans to scale back spending.

But some budget watchers say the move to control costs was inevitable — and that the governor's timing is right.

After revenues failed to hit benchmarks for six straight months, it was clear “the governor needed to do something like this,” Evan Horowitz, executive director of the Center for State Policy Analysis at Tufts, told Playbook. “This is the right time to deal with this” — ahead of the Jan. 24 deadline for Healey to file the next fiscal year’s budget — “and the right kind of action to deal with the shortfall,” he said.

The plan the administration laid out Monday culls $375 million from 66 line items in the $56 billion fiscal year 2024 spending plan. The governor and her team aren’t cutting school funding or local aid. But they are slashing $294 million from MassHealth, based in part on a lower caseload, and clawing back millions of dollars from programs that range from behavioral health supports to grants for local fire departments.

They're also cobbling together another $625 million in non-tax revenues — primarily through interest from some of the state’s investments — to fill the rest of the shortfall, as well as lowering the overall tax-revenue estimate for the fiscal year by $1 billion and planning for essentially flat revenue growth for the next budget.

“We see this as sort of a 12-to-18-month condition where we have to do some belt-tightening,” Matthew Gorzkowicz, Healey’s administration and finance secretary, told reporters Monday. He said he does not anticipate further spending cuts or layoffs this fiscal year.

It was all smiles last year when top Democrats gathered to sign the $56 billion budget that Gov. Maura Healey is now cutting from amid poorer-than-projected tax revenues. | Steve LeBlanc/AP

Doug Howgate of the Massachusetts Taxpayers Foundation said the cuts “don’t mean the state is in the midst of a terrible recession.” But, he told Playbook, they do reflect “what a lot of us have felt for some time, which is a big slowdown in revenue collections” and an uncertain fiscal future.

While budget watchers say cutting state spending is fiscally prudent, doing so could cost Healey politically. Some progressives and the Massachusetts Teachers Association were quick to pin some of the blame on the $1 billion package of tax cuts and credits the governor signed into law in October.

Republican lawmakers and the state GOP, meanwhile, tried to tie the state’s money woes to uncontrolled spending on the emergency shelter system for migrant and homeless families. Even state Sen. John Velis, a Democrat who was among the National Guard members called up last year to staff shelters at hotels and motels, told The Boston Globe the cuts are a “warning shot” about the financial strain the system is putting on the state.

Gorzkowicz rejected both of those notions. “Let me be clear,” he said, “none of these budget reductions are a result of the recent migrant shelter crisis.”

But Healey will also need more money for the shelter program, and soon. And she’ll need buy-in from the lawmakers whose earmarks she just slashed to get it.

GOOD TUESDAY MORNING, MASSACHUSETTS. We're now two weeks out from New Hampshire's first-in-the-nation primary, and we've got fresh polling to show where things stand. Keep scrolling for more.

TODAY — Healey and Lt. Gov. Kim Driscoll announce the filing of an IT bond bill at 10 a.m. at the State House. Healey is on GBH’s “Boston Public Radio” at noon and attends Boston Mayor Michelle Wu’s State of the City address at 7 p.m. at the MGM Music Hall.

Tips? Scoops? Budget concerns? Email us: kgarrity@politico.com and lkashinsky@politico.com.

MEANWHILE IN NEW HAMPSHIRE

HALEY RISING — Former South Carolina Gov. Nikki Haley has cut into Donald Trump's lead in New Hampshire, two new polls show. But whether she's within striking distance of the former president depends on which survey you read.

The University of New Hampshire/CNN poll shows the gap between Trump and Haley in the single digits, with the former president at 39 percent support among likely GOP primary voters and the former South Carolina governor at 32 percent.

But the Suffolk University/Boston Globe/USA TODAY survey puts Trump at 46 percent and Haley at 27 percent.

Both polls back up what a spate of December surveys showed — Haley, with the backing of popular GOP Gov. Chris Sununu, has surged into a clear second place in New Hampshire. In both new polls, former New Jersey Gov. Chris Christie trails in third place with 12 percent.

Christie, who's rejected calls to drop out and back Haley from attendees at his town halls and, more subtly, from her surrogates like Sununu, isn't seeing his case helped by the CNN survey, which found 65 percent of those backing him would break for Haley if he wasn't in the race.

On the Democratic side, President Joe Biden holds wide leads over his challengers in both polls, despite skipping the New Hampshire primary and forcing his allies to wage a write-in campaign on his behalf: 69 percent of likely Democratic primary voters in the CNN survey say they would write in his name, while nearly 64 percent said the same in the Suffolk survey.

UP FOR DEBATE — New Hampshire’s primary is only a problem because Biden and national Democrats wanted South Carolina to vote first. And so, as Biden bypasses New Hampshire’s Democratic contest, his longshot primary challengers, Rep. Dean Phillips (D-Minn.) and Marianne Williamson, met for a debate in the Granite State Monday in which they warned the party will lose in November without a new standard-bearer. Neither hit double digits in the polls out today.

CEASE AND DESIST — The New Hampshire attorney general’s office told the Democratic National Committee to quit claiming the state’s upcoming Democratic primary is “meaningless” in a cease-and-desist order Monday that accused the party of engaging in unlawful voter suppression.

DATELINE BEACON HILL

— “Senate Poised To Leverage Rainy Day Fund Interest,” by Sam Drysdale and Michael P. Norton, State House News Service (paywall): “In October, [Gov. Maura] Healey proposed using interest generated from the state rainy day fund as matching funds for federal grants. The policy proposal was pitched to better help Massachusetts vie for billions of federal dollars up for grabs in a competition among states. The Senate Ways and Means Committee on Monday advanced their own version of Healey's bill (S 2482), and the Senate placed it on their agenda for action at a formal session scheduled for Thursday.”

MASK-ACHUSETTS

— “Coronavirus levels in Boston-area waste water have surged to second-highest point since pandemic began,” by Christina Prignano, The Boston Globe: “Those levels are about 10 times higher than early November, and higher than any point since January 2022. Still, it’s important to note that in terms of waste water levels, the current surge is a small fraction of the Omicron surge two years ago.”

FROM THE HUB

STATE OF THE SPEECHWRITER — Ahead of Michelle Wu's State of the City speech tonight, The Globe's Danny McDonald sat down with her chief speechwriter, Ezra Zwaeli, for a behind-the-scenes look at the making of the address that will effectively mark the midway point in the mayor's first term. There have been at least a dozen versions of the speech so far. No pressure.

— “Wu pushes plan to streamline Boston’s complex zoning,” by Catherine Carlock, The Boston Globe: “The Boston Planning and Development Agency is readying a plan that will pave the way for denser housing and mixed-use areas to be allowed by right — without special approvals for each project — within the zoning code that sets the rules for what can be built and where around the city.”

— “Political leaders brave storm to stand up for civics education for local youth,” by Paul Singer, GBH News.

IT'S NOT EASY BEING GREEN

— “Electric school buses are coming to Worcester,” by Henry Schwan, Telegram & Gazette: “Boston, Fall River and New Bedford are the other districts getting the new buses, paid for by federal dollars from the U.S. Environmental Protection Agency. The announcement came Monday from the offices of U.S. Senators Elizabeth Warren and Edward Markey.”

— “Climate Forestry Committee releases report with state forest management recommendations,” by Bella Levavi, Greenfield Recorder.

FROM THE 413

— “Who complained to police about 'Gender Queer' and the Great Barrington teacher? The teacher's lawyer wants to know,” by Heather Bellow, The Berkshire Eagle: “The lawyer for a teacher questioned about a controversial book in her classroom is asking school and town officials to immediately conduct an ‘independent investigation’ to find out how police got involved in what is typically a school matter.”

THE LOCAL ANGLE

— “New Bedford mayor urges halt to residency requirement,” by Bruce Mohl, CommonWealth Magazine: “New Bedford Mayor Jon Mitchell is making another bid to do away with the city’s residency requirement for nonunion management employees, saying the three-year-old ordinance has put the city at a ‘major competitive disadvantage.’”

— “Mass. employers are feeling optimistic about the economy heading into 2024,” by Zeninjor Enwemeka, WBUR.

— “State reckons with its history: Efforts to change school mascots, state seal make slow, steady progress,” by Stella Tannenbaum, Daily Hampshire Gazette.

HEARD ‘ROUND THE BUBBLAH

TRANSITIONS — Ryan Dominguez has been appointed to the Cannabis Social Equity Advisory Board. He is the founder and executive director of the Massachusetts Cannabis Coalition and Mass CultivatED.

— Jorge Fanjul is now ED for Latinos for Education’s Massachusetts region.

HAPPY BIRTHDAY — to former Rep. Mike Capuano, state House Minority Leader Brad Jones, Dan Black, Amy Mahler, Sasha Goodfriend, Shanice Wallace, Kevin Walther, Gustavo Quiroga, American Institute for Economic Research’s William Ruger, Linda Greenhouse, Josh Seidel and Boston state Rep. Christopher Worrell.

Want to make an impact? POLITICO Massachusetts has a variety of solutions available for partners looking to reach and activate the most influential people in the Bay State. Have a petition you want signed? A cause you’re promoting? Seeking to increase brand awareness among this key audience? Share your message with our influential readers to foster engagement and drive action. Contact Jesse Shapiro to find out how: jshapiro@politico.com.

Follow us on Twitter