State Freezes Holyoke’s Local Aid Over Unreconciled Finances for the Second Time in 2025

For the second time in 2025, Massachusetts has halted millions in local aid payments to Holyoke due to the city’s failure to reconcile its cash accounts and submit required financial reports. State officials say delays in completing audits and Schedule A reports dating back to fiscal 2023 have left the city’s finances in disarray, preventing certification of free cash that impacts future tax rates.

The state’s Division of Local Services gave Holyoke 60 days to finish cash reconciliations for 2023–2026 and submit missing audits. Monthly check-ins are now scheduled, and the state may hire outside help to complete the work if progress isn’t made, with costs deducted from future payments.

Mayor Joshua Garcia has advocated for hiring a chief administrative and financial officer to improve oversight. City Council members have debated whether stronger state intervention, including potential receivership, may be necessary to restore fiscal accountability.