With Massachusetts facing a billion-dollar revenue shortfall, Governor Maura Healey is looking to cut $375 million from the state budget. The first-term Democrat put out feelers to legislators over the weekend that earmarks would be slashed as Massachusetts scrambles to fill the gap. The move comes after Healey signed a billion-dollar tax cut package last year that was harshly criticized for being too kind to the commonwealth’s richest residents by progressive groups and organized labor. Alongside the cuts, the Healey administration is assembling $625 million in non-tax revenues to make up the difference. WAMC spoke to Democratic Western Massachusetts State Senator Paul Mark about the proposed cuts.
MARK: They're letting people know that some of the earmarks that we secured in the state budget are going to be reduced in half. And so, what I'm hoping, if revenues start to bounce back and if we come up with a game plan, that half now will later translate to the second half of programs that are really necessary, also being released. For example, a cut I was notified about is, for the small town of Monroe, population 125 people, I was able to secure $12,000 for them to get radio equipment for their firefighters, so that the radio equipment will work in the entire geography of the town. And the notification I got was, that's going to be cut down to $6,000. And so, when you kind of look at cutting that in half, I don't think the town has the money, which is the point of why I secured them the $12,000. And cutting the $6,000 to make up a $375 million gap doesn't seem to be really logical. So, I'm hoping that there's going to be a way to go back and forth and discuss some of these earmarks and get funding where I think it is actually really important to flow. And in good news, a lot of programs that are important, I have not yet heard of cuts. So that's kind of a relief.
WAMC: For your folks listening around Western Massachusetts, Senator Mark, why is this happening? What’s happened to the revenues that's led to this kind of move by the Healey administration?
Yeah, that's what's distressing, is nobody can actually point to anything. So, employment is strong, GDP is strong, growth in the state, economic growth is strong, and so when we look at- People ask me about, what about those tax cuts? Well, those haven't really gone into effect yet, and they're just going to start now in January, for the most part. So that's not where this is coming from. The only thing I can point back to, and it's over a year ago now, was the 62F trigger, when revenues came in too high in 2022 and the automatic give back resulted in over a billion dollars being redistributed directly back to taxpayers. And that kind of derailed the economic development bill that year, that kind of derailed the normal targeted tax cuts that had been planned, that I think we're still seeing like a structural impact from that loss. But in the big picture, everything I'm reading, everything I'm hearing, everything I'm seeing is that all of the metrics in Massachusetts are still strong. We're not suddenly in a recession, we didn't just see a bunch of jobs lost, nothing like that, so, it's a little frustrating, because when you don't know what the solution is, it's really hard to figure out what the next move is. And so, I think we're going to continue to move into a more conservative outlook and a more cautious outlook. The good news, we're still sitting on a billion dollars in the stabilization fund, and then obviously, the shelter crisis has been an unexpected expense that has really ramped up in the past couple of months, and that has the potential to continue to be a drain on our budget as we move forward.
Are folks going to see services cut in Massachusetts as a result of this effort to rein in the budget?
Not by what has been done so far. What I'm seeing is, even with the town of Monroe, is something I think they need, I think it's something that is completely worthwhile, I spent a lot of time working with the town trying to get that earmark into the budget. But that being said, it's not cutting anything. It was something that they were going to buy new. So, I see that style of the management of the situation that were just not releasing money that was going to go to something that doesn't already exist. So, for example, there was no money cut from the Network to End Homelessness, there was no money cut from the opioid task force we were talking about earlier. So, I'm cautiously optimistic.
Do you feel like this could be the source of contention between the legislature and the governor? I mean, no one wants to come home to their constituents saying that they voted for budget cuts or reduced services or anything like that. Do you think that the legislature might push back against this?
Well, I can think of specific items I've seen. I am going to have conversations about, how do we get this money out eventually? Or, how do we make it all happen in the next fiscal year instead of whatever needs to happen? At this point, no, I don't think it's contentious. They tried to notify us [Sunday]. They're trying to keep us informed of what's going on, and pretty soon, I think on the 24th, the governor is going to put out her budget for next fiscal year. And so that's going to start a really robust, engaging, deliberative conversation about where are we in terms of revenue? And what is that going to look like as we head into a new fiscal year?
Drawing on your years of experience on Beacon Hill, Senator Mark, how would you characterize this effort from the Healey administration to sort of soft pedal news of budget cuts? I mean, this is obviously not a vote getter, traditionally- at least in Massachusetts, where there's a strong culture of central government and strong services and high taxes. Talk to me about that, what are you seeing in this strategy from Healey?
Yeah, I think this is the fourth time I've seen these cuts mid-year since I've been in office, and three of them have worked like this, that the governor, under their unilateral power, is taking unilateral steps to mitigate and to try to soften the impact on what you were mentioning earlier, what about day-to-day services? We don't want people to suddenly not be able to go to the DMV, we don't want people to suddenly not be able to go to get health care services, if they need. There was one year where the cuts needed to be so deep that the legislature actually had to then vote to give extra authority to, at the time, Governor [Deval] Patrick. That was a very unpopular move, that was a very difficult year, that's certainly created some of the tension that you were alluding to a little earlier. But, you know, it's tough. And that's what the governor gets paid to do- The governor gets paid to make tough decisions, gets paid to balance a bunch of interests, and to try to keep the state, the commonwealth in as good a position as possible. And so far, she's managing it. She said she was going to manage it, and we'll see where we end up. I think where she's going to get pushback is going to be on, how are we going to emerge from the shelter crisis? What steps are you going to take? How are you going to get some of the costs down? I was reading something that some of the costs of these hotel rooms is over $200 a night, and other places it’s down to the $90 a night range. How do we how do we get a better contract and make sure people are getting the services they need, while making sure that the people of this state are spending the money as efficiently as possible?
Now, this news comes after this huge push last year for Healey to promote her $4 billion affordable housing bill. Can you talk to me- You know, when you look at these two legislative messages that are getting sent out – one is budget cuts, the other is a $4 billion plan to make this historic investment in housing – how do you square away those two goals from the Healey administration?
Yeah, the point there is, when you make an investment, you hope that it's going to save money in the long run. So, by investing in housing, we're going to save money in shelter costs, we're going to save money that's not going to need to go to put people up into hotels, we're going to create workforce housing, we're going to create affordable housing, we're going to create housing that is going to attract more families, is going to attract more people that are going to generate more revenue. There's a lot that we can do in terms of smart investment and smart, smart, smart spending, that ultimately is going to keep Massachusetts on a solid and sustainable fiscal ground, a solid foundation. And again, we're not looking at any sudden crisis that is that is causing any of this. It just appears to be some kind of a rebalancing of maybe the way people spend is a little different, the way people are doing their workplaces is a little different. And we're going to adapt. We've been adapting for almost 400 years, and we're going to continue to do that.
How will the Fair Share Amendment funds work in all of this? Well, that will those remain directed toward public transportation, public education, etc. in the midst of this talk of budget cuts?
Yeah, that's the beauty of the way the Fair Share Amendment was worded and drafted is that that money has to be guaranteed to transportation. So, it's funny that just under a week ago, the governor announced release of funding that I had worked really closely with Senate leadership to ensure that extra road money was going to be available for all communities, and then a separate pot of extra rule of money was going to be available for some of the rural communities. And so, you have that announcement coming, which is in line with the intention of the Fair Share Amendment, and that's apparently not going to be affected by these cuts.
