Administration makes 9C budget cuts, but avoids cutting local aid

After six months of state tax collections falling short of benchmarks, the Healey-Driscoll administration today announced $375 million in mid-year emergency budget cuts for fiscal 2024.

The reductions do not directly impact core municipal and school aid accounts, but some reduced budget earmarks will have impacts at the local level. Click here for the list of affected line items.

To close the remaining $625 million of the shortfall, the administration has identified certain opportunities to increase non-tax revenue.

Section 9C of Chapter 29 of state law gives the governor the authority to make unilateral budget cuts via executive branch agencies to balance the current fiscal year’s budget.

In light of the recent shortfall in tax collections, Administration and Finance Secretary Matt Gorzkowicz has advised the administration to take multiple steps to reduce spending and rebalance the fiscal 2024 state budget, including directing spending reductions at Executive Branch agencies under the governor’s authority.

State tax collections for the first half of fiscal 2024 were $769 million (or 4.1%) below the year-to-date benchmark, and December was the sixth consecutive month of below-benchmark tax revenue collections. As a result, the Healey-Driscoll administration reduced the estimate for fiscal 2024 tax collections by $1 billion, to $40.41 billion, including revenue from the surtax on personal incomes over $1 million (known as the Fair Share Amendment).

The administration will be holding a conference call on Friday, Jan. 12, with municipal officials to discuss details of the 9C cuts. Invitations were emailed from the MMA to the chief municipal official in each city and town.