BACKGROUND: Italy has experienced a resurgence in measles since 2015. Although much emphasis has been placed on the role of individuals opting out of vaccination, here we test the hypothesis that large budget reductions in public health spending were also a contributing factor. METHODS: Multi-variate statistical models were used to assess the relationship between measles, mumps and rubella (MMR) coverage and real public health expenditure per-capita across Italy's 20 regions covering the period 2000-14. RESULTS: Between 2010 and 2014 Italy's public health expenditure fell by over 2%, although varying among regions. Fixed effects models estimate that each 1% reduction in per-capita public health expenditure was associated with a decrease of 0.5 percentage points (95% CI: 0.36-0.65 percentage points) in MMR coverage, after adjusting for time and regional-specific time trends. The consequences can be illustrated by comparing two regions, Lazio, where public health spending fell by 5% and MMR coverage by over 3 percentage points, and Sardinia, a historically deprived region, where public health spending partly rose and MMR rates remained approximately steady. CONCLUSION: Adoption of austerity policies in the Italian health system was found to be significantly associated with declining vaccination rates for MMR. However, the recent introduction of mandatory vaccination for Italian children may help counteract this trend.