WHILE BEACON HILL Democrats press ahead with plans to significantly increase state spending, Gov. Maura Healey on Wednesday paused executive branch hiring due to what her office described as “widespread economic uncertainty at the national level and a tightening budget outlook.”
Healey announced a “hiring freeze” will take effect May 27, blocking executive branch agencies and departments from bringing on most new employees for a period that could last several months. Exemptions will be available for some positions such as public safety officers and direct care providers.
Unlike the “hiring controls” the administration implemented for more than five months last year, the new policy will not offer a waiver process for agencies to request permission to onboard new workers.
The governor’s office said the freeze will help insulate against “further anticipated federal funding cuts and spending pressures created by ongoing inflation and demand for services.”
Massachusetts has had more than $350 million in federal funding cut so far by the Trump administration, according to a dashboard Healey’s team rolled out less than an hour after Healey announced the hiring pause.
“The people of Massachusetts expect us to protect and maximize their tax dollars, and that’s exactly what we’re doing,” Healey said in a statement. “Tariffs and funding cuts from Washington are causing so much economic damage and instability. We are taking this step to prepare for more uncertain economic times, protect taxpayer dollars, and move our state forward while ensuring funding will be available for the vital services people need.”
Budget-writers in Massachusetts are sweating the prospect of declining federal funding, especially to Medicaid, as Republicans in Congress advance a package of tax reform and spending cuts.
Federal dollars play a key role in balancing the state’s spending plan. Healey’s budget expected federal reimbursements to increase to $16 billion in fiscal 2026, the vast majority of it for MassHealth.
Any cuts to that total would force Beacon Hill to trim their own spending, scale back services for Bay Staters, or look to reserves or new tax policies to maintain spending.
Administration and Finance Secretary Matthew Gorzkowicz said the hiring freeze “will give us added flexibility in the budget to respond and react to unforeseen program needs and other deficiencies that may arise.”
“Our uncertain economic future in FY26 has been made less predictable by the threat of federal funding cuts and recent market upheaval,” Gorzkowicz said in a statement. “While we hope for the best, it is both prudent and responsible to be prepared and take control of what we can now.”
Healey’s office said the administration will reevaluate the hiring freeze once the fiscal 2026 budget “has been signed and implementation is underway.” Lawmakers typically take until several weeks into the fiscal year that starts July 1 to complete their work on the budget.
State tax collections with two months left in fiscal 2025 are running $2.7 billion or 7.8 percent above collections through the same stretch of fiscal 2024, and $1.9 billion or 5.5 percent above benchmarks. The surtax on high income households and capital gains tax revenues, two streams with limitations on how they can be used, are driving the growth. Gorzkowicz said Tuesday that non-surtax collections are “flat or slightly below benchmark.”
Healey and top Democrats in the Legislature so far have opted not to revise their revenue collection forecasts for fiscal year 2026, including a tax revenue estimate crafted in January before Trump took office.
The governor, the House and the Senate Ways and Means Committee all moved to increase state spending by between $3.6 billion and $4.2 billion next fiscal year, according to the Massachusetts Taxpayers Foundation, growth fueled in part by a larger available pot of surtax dollars.
Healey’s version of the bill featured a series of new taxes and tax increases, including a charitable donation cap and a tax on prescription drug manufacturers for excessive price increases, estimated to generate $471 million in revenue. The House dropped those provisions, leaving them ineligible for further consideration.
Senators will begin debate next week on their chamber’s budget bill, which will hit the floor with a proposed 6.3 percent increase in spending over the plan Healey signed last summer. Lawmakers typically add to the budget’s bottom line during proceedings, mostly via local earmarks.
A spokesperson for Senate President Karen Spilka declined to comment Wednesday on whether she still views that spending increase as prudent amid the new hiring freeze and warnings about economic uncertainty.
House Speaker Ron Mariano’s office did not reply to a News Service inquiry on the topic.
Senate Minority Leader Bruce Tarr described Healey’s move to freeze hiring as “a canary in the coal mine.”
“Those concerns are understandable with all of the uncertainty we face, the potential for an economic downturn,” Tarr said in an interview. “I think those are things we need to consider as we move forward with the budget debate.”
The Gloucester Republican said it might not be possible to reduce the size of the Senate budget bill before it hits the floor next week — amendments were due Friday — but he signaled he would be open to negotiators scaling back spending during the conference committee process.
“It’s always a difficult situation when a conference committee … makes significant changes to bills that have been voted on by each branch,” he said. “But in the past, necessity has dictated that some conference committees have had to significantly reduce the amount of the budget, and we could be headed for one of those situations.”
It’s the second straight year that Healey has imposed new limits on executive branch hiring. In April 2024, the administration implemented what officials at the time called “hiring controls” — not a “freeze” — that required Executive Office for Administration and Finance approval of new employees.
The administration allowed those measures to expire on Nov. 1. In the roughly six-month span the controls were in place, executive branch agencies hired more than 2,000 employees, and officials said at the time that the limits saved about $21 million.
[Alison Kuznitz contributed reporting.]