Editor’s note: The day after this story first appeared, a spokeswoman for MassHealth said representations made by the Healey administration’s administration and finance office about a reduction in the Medicaid caseload were incorrect. Instead, the spokeswoman said, the $294 million reduction in MassHealth spending was “due to members using fewer services than we had originally budgeted. The remainder, a smaller part, is from modest, targeted adjustments to what is paid to managed care plans.”

THE HEALEY ADMINISTRATION on Monday took a series of steps to bring state spending in line with tax revenues that are growing more slowly than expected.

The governor scaled back the tax revenue estimate for the current fiscal year (which ends on June 30) by $1 billion and made up that difference by unilaterally cutting $375 million in spending while finding $625 million in additional revenue primarily by skimming interest on state bank accounts.

The spending cuts were scattered across 66 accounts, with the biggest one a $294 million reduction in MassHealth. Officials said the cut in Medicaid spending was possible because far more people than expected were being moved off of MassHealth amid an ongoing effort to redetermine the eligibility of participants who had been retained on the program during COVID. [See editor’s note above.]

Officials said roughly $400 million of the $625 million in “non-tax revenue” came from interest earned on state money stashed in various accounts, with the rest coming from agency fee revenue that was coming in higher than expected.

Overall, the belt-tightening outlined by Matthew Gorzkowicz, the secretary of administration and finance, was relatively mild, given a state budget of more than $50 billion. The spending cuts, for example, represented just 0.7 percent of the overall budget. No layoffs are planned, local aid to municipalities is not being touched, and no money from the state’s stabilization fund, which has a balance of more than $8 billion, is being used, according to the secretary.

Gorzkowicz described the spending cuts, which Gov. Maura Healey had ruled out several months ago, as an adjustment needed while state revenues fall back to earth after several years of astounding growth. “What we’re experiencing right now is a bit of a soft landing,” he said. “The economy is growing year over year, but just not as fast as we anticipated.”

Flat growth in tax revenue is expected to continue in the next fiscal year. Gorzkowicz said the Healey administration also scaled back the revenue estimate for next year by $1 billion, leaving budget writers with just 2 percent more than the newly updated revenue estimate for this year. Gorzkowicz said the money from the millionaire tax, which must be set side for transportation and education, should grow from $1 billion to $1.3 billion next year.

The wild card in the Healey administration’s budget-balancing equation is the emergency shelter crisis. The governor intends to file a spending bill soon that would tap $700 million from an account holding leftover surplus money from previous years to help address shortfalls this year and next year in the emergency shelter program. If the Legislature declines to go along with that plan or goes in a different direction, the budget for this year could fall quickly out of balance again.

The emergency shelter program started the year with $325 million in state funding. The Legislature provided another $250 million in December and Healey says she needs another $224 million to make it through the remainder of this fiscal year. She says she needs $915 million to cover expected costs in the coming fiscal year. The cost of the program has ballooned as growing numbers of migrants from outside the country have come to Massachusetts seeking shelter.

Doug Howgate, the president of the Massachusetts Taxpayers Foundation, said the governor’s plan to use one-time funds to address the emergency shelter crisis makes sense if in the meantime the state takes a number of steps to decrease the cost of the program.

“Turning a $300 million program into a $900 million program is not supportable,” said Howgate.

The emergency shelter program is governed by a state law that requires shelter to be provided to those who are eligible. Healey unilaterally changed the law last year, capping the program’s population at 7,500 families and putting any eligible families above that number on a waiting list.

Gorzkowicz was asked what the Healey administration would do if the Legislature failed to provide sufficient funds to keep the emergency shelter program afloat this year and next. “That’s a what-if scenario we haven’t necessarily encountered yet,” he said.

Asked if the governor could just unilaterally change the contours of the law again if the Legislature fails to provide sufficient funding, Gorzkowicz did not answer directly. “I think we have a plan to deal with the costs associated with the crisis,” he said. “We’ve put that plan out and we’ll see what the Legislature wants to do.”