State Hiring Freeze Thaws to Tune of $87 Million

Gov. Maura Healey in April imposed controls on state government hiring, citing slumping state tax collections. Since then, tax receipts have rebounded and the Executive Branch has quietly hired 1,304 new employees.

The total cost of new hires to Healey's administration has been $87.1 million since the hiring restrictions went into effect on April 3, according to publicly available payroll data confirmed by the comptroller's office and the Executive Office of Administration and Finance.

For comparison: the administration's hiring of 1,304 new employees in the 76 days since April 3 compares to the hiring of 1,811 new state employees, at a cost of $127 million, during the 76-day period stretching between Jan. 18 and April 3.

The numbers reflect a 28 percent reduction in hiring since the controls went into effect this spring.

The Executive Office of Administration and Finance estimates that the state saved about $17 million since April in what Healey's team otherwise would have spent on new employees. As of June 12, a total of 246 job postings have been removed without being filled.

"The administration implemented hiring controls on April 3 as one tool at its disposal to responsibly manage spending over the last three months of the Fiscal Year," Administration and Finance spokesman Matthew Murphy said in a statement. "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."

Secretary of Administration and Finance Matthew Gorzkowicz warned local officials last week that more work may need to be done to balance the fiscal year 2024 budget, which ends on June 30.

Several media outlets reported in April that the restrictions were a "hiring freeze," though Healey used the term "hiring controls," since there were a number of exceptions to the policy, and departments could apply for waivers to bring on new employees.

"I think [the number of new hires] shows it really wasn't a freeze," House Minority Leader Brad Jones said on Tuesday. "This clearly is much more of, at best, a cooling off -- not even a chill -- just a cool breeze on a hot summer's day. When you see the secretary of A&F saying they may need to do more work to close out the fiscal year ... I think it shows that the promise of a hiring freeze was more of an illusion than a reality."

Exemptions were carved out for direct care and public safety positions, seasonal jobs and returns from leave. The list of exempt job titles included clinical social workers, epidemiologists, food and drug inspectors, nurses, parole officers, and youth services workers, among others.

Since the announcement of hiring controls, the Executive Office of Administration and Finance says it has approved 305 waivers for a department to bring on a new hire.

"It was always assumed and communicated that hiring would continue during this period through exempt positions and waivers for critical need," Murphy said.

The hiring restrictions followed $375 million worth of budget cuts Healey implemented in January, which cut funding for early educator scholarships, local economic development projects such as 250th American Revolution celebrations and the Addiction Treatment Center of New England, and behavioral health supports, among other programs.

"We did these [budget] cuts and cut a number of areas, some of which were members' priorities. But they've still gone on, I won't classify it as a hiring spree, but considering that it was called a hiring freeze or a slow down, in reality it's been pretty minimal," Jones said. "That sort of highlights that there's not the same amount of shared sacrifice."

Discussing continued uncertainty around fiscal 2024's revenue picture in its final month, Gorzkowicz said last week that the budget cuts and hiring restrictions were the right choice.

"It does, I think, add to the prudence in terms of budgeting and the rebalancing steps that we took in January. It also, I think, goes to some of the fiscal controls that we've put in place and continue to keep in place while we sort through what some of the revenue pictures look like," he said.

Through May, with one month left in the fiscal year, state tax collections were running $700 million ahead of benchmarks. However, most of that overage came from excess capital gains and income surtax revenue -- which is statutorily set aside for specifically mandated and limited purposes, and cannot be used to balance the budget if other tax collections are lacking.

Revenues appeared to bounce back from a nine-month slump in March when collections came in 4.7 percent above the administration's monthly benchmark, and again in April, when tax collections beat expectations by more than $1 billion. However, collections fell again in all major tax types in May, and uncertainty swirls around what June's revenue will look like.

The administration's hiring restrictions are currently set to end on June 30, with the possibility for Gorzkowicz to extend the policy if "the conditions necessitating the institution of the hiring control policy remain," according to a memo sent to Cabinet secretaries and top staff on April 3 by interim Chief HR Officer Melissa Pullin.

"We will continue to evaluate the state’s fiscal needs and make determinations about hiring and whether the timeline needs to be extended as we approach the end of June based on revenue collections, year-end spending, and other fiscal conditions," Murphy said.

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, and municipalities across the state are also struggling to balance their budgets.

"A number of communities at the local level are faced with overrides this year, and quite frankly I would have rather seen some of that $87 million have gone to local public safety and fire and other areas that have been cut from municipal budgets," Jones said.

According to state financial disclosure documents released in May, 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. There is no data yet available for June 2024.

Jobs in the judiciary, public higher education and some other government agencies do not fall under the governor's authority.