BOSTON (State House News Service) — Acknowledging the possibility that tax revenues could sink further over the last three months of the budget year, Gov. Maura Healey on Wednesday imposed tighter controls on state government hiring, drawing criticism from some who claim she has already added too many people to the state payroll.
With some exceptions, all new Executive Branch hiring between April 3 and June 30 will need to be approved by the Executive Office of Administration and Finance based on time-sensitivity and the importance of positions, Secretary of Administration and Finance Matthew Gorzkowicz's office said.
The controls were announced hours before the state revealed that tax collections in March outpaced March 2023 receipts by $182 million or 4.7 percent and were $129 million or 3.3 percent above the administration's monthly benchmark.
It was the first time since June 2023 that taxes came in at or above expectations and ended the longest streak of below-benchmark revenue months in more than 20 years.
But the slump-busting numbers were not enough to inject a sense of financial optimism onto Beacon Hill, and Healey's latest maneuvers may signal expectations that tax collections might not live up to expectations in April, May and June.
House Minority Leader Brad Jones called the new hiring restrictions "many months late and many dollars short."
"The reality is they've been doing a lot of hiring up to this point," the North Reading Republican told the News Service. "With less than three months left in the fiscal year -- April, May and June -- if you're hiring an employee at $60,000 a year, that's $15,000 in savings for the remainder of this fiscal year. Is this something that's designed to start to address next fiscal year?"
"I don't think that really saves a lot of money, so I think it would have been something better done, better initiated, earlier on," he added. "Then it might have had some more meaningful impact."
With three months left in the fiscal 2024, a budget year marked by an explosive increase in shelter spending, the state has collected $4 million or 0.01 percent less than collections over the comparable period in fiscal 2023, and $145 million or 0.5 percent less than what the Healey administration projected in January that it would have hauled in by this point in the calendar.
Facing what was then a $1 billion budget gap, Healey in early January announced plans to cut $375 million from the fiscal 2024 budget, to pull in more non-tax revenue than forecast, to downgrade the amount of tax revenue expected this budget year by $1 billion, and to build the next state spending plan on the assumption that even less tax revenue will come in next year.
Until March's figures were released Wednesday, state tax collections had come in below even the administration's downgraded benchmarks, but until Wednesday the administration had not embarked on any additional budget tightening.
Gorzkowicz's office said it is not considering any additional mid-year budget cuts at this time.
House Speaker Ron Mariano told Politico on Wednesday that he was "not surprised" by Healey's new hiring policy. He added that he is "not aware" of any more unilateral budget cuts on the horizon.
With the support of both Healey and former Republican Gov. Charlie Baker, legislative leaders in recent years have overseen a major increase in state spending, especially when Massachusetts was flush with surging tax receipts and federal pandemic aid.
A desire to maintain those outlays is now crashing up against a revenue slowdown and dwindling one-time funds. While the state is still sitting on historically large reserves, Mariano warned last week that "every program that we fund" is susceptible to cuts to help cover costs of the emergency family shelter crisis.
Asked if the administration's shift on hiring would impact his chamber's approach to the fiscal year 2025 budget, Mariano replied, "No, not really."
"She does what's best for her budget, and we're going to do what's best for ours," he said.
Massachusetts Taxpayers Foundation President Doug Howgate called the hiring restrictions "prudent."
"I look at the hiring news and I look at March revenues, and to me, neither of them change the picture we thought we were in a week ago or two weeks ago," Howgate said in an interview. "We're managing our way through a challenging fiscal year with some uncertainty, but hopefully with a plan in place. The reality is in any year as you get toward the end, you see tighter spending controls put in place by an administration, and you often see that during a time when things are both challenging and uncertain."
Healey's team on Wednesday highlighted last year's experience of missing April revenue targets by $1.4 billion as an example of how much can change at the end of the budget year, when most budgeted spending has already occurred.
"One month isn't a trend," Jones said. "Over the aggregate, we're still behind, so I think we still have a long way to go before there should be any sense of optimism."
Reacting to the hiring control news, state Republican Party Chair Amy Carnevale pointed to $15,000 raises granted to Healey's Cabinet members, which she said brought their salaries close to $200,000 a year, and said they should give back their raises.
Referring to Healey, Carnevale also said "the damage has already been done following a term where she embarked on a hiring spree of bureaucrats earning six-figure salaries, and gave raises to her already highly paid cabinet."
Blowback came from the left, too. Progressive Massachusetts Policy Director Jonathan Cohn castigated Healey and the Legislature for having approved a series of targeted tax cuts last year after voters in 2022 "made clear that they support higher taxes on the rich and greater investment in our commonwealth." He said the governor's January budget cuts and her hiring restrictions "are the result of such decisions."
"The Legislature should not operate from a standpoint of scarcity. Whether that means putting a pause on the regressive tax cuts from last year's bill or finding new ways to raise money (e.g., by closing corporate loopholes or ending misguided corporate tax incentives), the Governor and Legislature can't pretend there isn't money available," Cohn said. "Even more, the rainy day fund remains flush, and adding more money to it each year is not a badge of honor if it can never be used."
He added, "When voters gave Massachusetts a Democratic trifecta, it was not out of a desire for tax cuts for the rich and hiring freezes; it was to make the Commonwealth better for all."
The Massachusetts Fiscal Alliance said Healey was showing a "false sense of restraint" after moving to fill jobs that Gov. Charlie Baker had left vacant, and creating a new climate chief post and a new Executive Office of Housing and Livable Communities.
Citing a Boston Herald analysis, the alliance said the number of six-figure overtime earners in state government soared 25.4 percent in Healey’s first year based on data compiled by the state comptroller.
"Governor Maura Healey spent the last year and a half, completely unrestrained in her hiring spree, with the taxpayers footing the bill. Like a child taking their parent's credit card to the mall for the first time, Governor Healey hired every position imaginable, created new positions, and then let overtime costs go completely unchecked," MassFiscal spokesman Paul Craney said.
According to state financial disclosure documents released in January, the total state workforce in June 2023 stood at 87,426 people, up from 84,652 in June 2022. Healey took office in January 2023.
The state workforce under the governor's authority in June 2023 totaled 43,650, according to state documents, compared to 41,787 in June 2022.
Jobs in the judiciary, public higher education and some other government agencies do not fall under the governor's authority.
Direct care and public safety positions are exempt from the new "hiring controls," as are seasonal jobs, positions that have to be filled as part of a court order or settlement, and returns from leave.
Interim Chief HR Officer Melissa Pullin sent a memo Tuesday to Cabinet secretaries and top staff, laying out the terms of the administration's hiring constrictions.
"Agencies should immediately pause their hiring processes, including scheduling any new interviews or extending offers," Pullin wrote. "For any current job postings for positions that are not in the exception categories, agencies must either: a. Remove the job posting and notify current job applicants that the job opening has been temporarily suspended due to fiscal constraints; or b. Apply for a waiver for these positions no later than Tuesday April 16th by 5pm. A&F will review waivers for currently posted positions as soon as possible."
Pullin's memo alludes to the possibility that the hiring restrictions could remain in place beyond the initial end date of June 30. If Gorzkowicz determines before June 30 that "the conditions necessitating the institution of the hiring control policy remain, the policy may be extended until a further date set by the Secretary," Pullin wrote.
The list of job titles exempted from the hiring restrictions, the memo said, includes power plant engineer, bacteriologist, captain, chaplain, child care licensing specialist, clinical social worker, correction officer/head cook, developmental services worker, epidemiologist, food and drug inspector, forensic scientist, law enforcement dispatcher, mental health worker, nurse practitioner, nursing assistant, parole officer, physical therapist, ranger, registered nurse, X-ray technician, and youth services group worker.
"The Healey-Driscoll administration is implementing hiring controls within the Executive branch for the remainder of the fiscal year as one tool at our disposal to responsibly manage spending over the next three months. These hiring controls, while temporary, will help ensure that the administration can balance the budget at the end of the year and preserve critical funding for core programs and services," Gorzkowicz said in a statement.
One other potential cost driver is not as big a weight on Mariano's mind: the roughly $2.5 billion in unemployment benefits Massachusetts mistakenly paid using federal funds during the Baker administration.
Federal officials still have not said whether the state will need to repay that sum or how.
"Am I as worried about it? No, obviously I think there are other pressing issues that are more urgent than that," Mariano said. "The federal government will work with us on repayment of that. We can do that over time. There are ways to massage that so it's not as big a direct impact."
Written by Colin A. Young, Michael P. Norton, and Chris Lisinski/SHNS.
Follow WBZ NewsRadio: Facebook | Twitter | Instagram | iHeartmedia App | TikTok