State Budget Woes: Here We Go Again

With state revenue falling off a cliff and almost $1 billion being spent (on an annualized basis) to house, feed, and care for immigrants who have made their way to Massachusetts from the southern border (and with no end in sight), the outlook is bleak for our state’s finances.

Gov. Maura Healy last week announced a hiring freeze for state employees. In addition, the governor’s $58 billion budget proposal’s allocation for local aid, particularly for education assistance, is falling far short of the needs of many cities and towns who are dealing with the influx of new migrant students.

For those of us who have been around for a while, we are well-familiar with the ups and downs of the state budget cycle. The down cycles seem to hit their trough every 12 years or so. The last downturn occurred during the Great Recession of 2008-09, but the state avoided a down-cycle during the pandemic thanks to the massive federal spending that occurred during COVID and its aftermath.

However, the unrestricted COVID funding stream has run dry and state budgets now have to deal with the new reality of less aid from the federal government amidst a time of falling revenue and increased spending.

Hopefully, with federal infrastructure spending coming on-line and unemployment still at record lows, we’ll get by with a little bit of belt-tightening — and we’ll avoid the starvation-diet mode that marked previous state budget troughs.

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