Massachusetts

Massachusetts

Budget Cycle
Annual

Budget Links

FY2027 (proposed)
FY2026 (enacted)
FY2025 (enacted)
FY2024 (enacted)
FY2023 (enacted)
FY2022 (enacted)

Proposed Budget - Fiscal Year 2027

On January 28, Massachusetts Governor Maura Healey introduced her fiscal 2027 budget recommendation. The budget recommends spending in fiscal 2027 of $60.11 billion, a 3.5 percent increase over original fiscal 2026 appropriations levels and a 1.1 percent increase over current estimated spending for fiscal 2026; this amount excludes spending from the Fair Share surtax and Medical Assistance Trust Fund. When including $2.7 billion in education and transportation fund spending from projected income surtax revenue and $548 million from the Medical Assistance Trust Fund, total appropriations in the House 2 budget recommendation for fiscal 2027 are $63.4 billion, a 1.1 percent increase compared to current estimated spending levels. When expenditures from Federal, Trust, and ISF funds are included, total spending in fiscal 2027 is projected at $89.5 billion. The House 2 budget recommendation is based on a consensus tax revenue estimate of $42.2 billion in baseline (non-surtax) tax revenue (a 2.4 percent increase) and $2.7 billion in surtax revenue (a 12.5 percent increase), for a total tax revenue increase of 2.9 percent over current fiscal 2026 estimates. These estimates reflect the phased-in implementation of certain tax provisions under the federal One Big Beautiful Bill Act (OBBBA), with an estimated revenue impact in fiscal 2027 of $108 million. The budget also reflects the proposed expansion of the pass-through entity excise tax, which is expected to generate $296 million in fiscal 2027 tax revenue. After a series of tax revenue transfers to the pension fund, public transit, school building authority, rainy day fund, disaster fund, state retiree benefits trust fund and workforce training trust fund, $34.1 billion in net tax revenue is available to support spending, excluding surtax revenue. Total available tax and non-tax revenue for all budgeted funds is estimated at $62.6 billion (including $56.9 billion in general fund revenue).  The budget proposes to continue using some excess capital gains to grow the balance in the Stabilization Fund (rainy day fund), which is projected to have an ending balance in fiscal 2026 of $8.2 billion. Including the rainy day fund, reserved balances, and the undesignated balance, the state’s total balance is projected at $8.7 billion at the end of fiscal 2027. 

Proposed Budget Highlights 

The governor’s budget takes steps to make the state more affordable to live and do business in while making strategic investments to help reduce the costs of housing, transportation, education, and health care. At the same time, the budget takes steps to control spending while allocating funds for the Commonwealth Stabilization Fund, post-retiree benefits, and the Disaster Relief and Resiliency Fund. Highlights of the budget include:

Affordability

• Requires businesses to simplify the process of cancelling subscriptions.
• Creates the Workforce Productivity Grant Program to help small businesses meet workforce needs while employees are on family or medical leave.
• Proposes a new tax credit for farmers that donate food to help reduce hunger.
• Provides funding to continue implementing the governor’s Energy Affordability Agenda through direct aid to municipalities as well as statewide policy changes to bring down costs for consumers and businesses.

Housing

• Makes record-level targeted investments in affordable housing.
• Provides a 9 percent annual increase in funding for housing voucher programs and a 2 percent increase in funds for public housing programs.
• Adjusts funding for emergency assistance for family shelters downward based on a reduced family shelter caseload driven by the governor’s reforms.
• Proposes funds for the Residential Assistance for Families in Transition (RAFT) program.
• Funds a 2 percent increase for Local Housing Authorities subsidies.

Education

• Makes historic investment in Child Care Financial Assistance programs to achieve universal pre-kindergarten funding in all Gateway Cities.
• Proposes a new multi-year K-12 school improvement initiative focused on improving student outcomes in the lowest-performing schools.
• Provides a 2.5 percent increase in unrestricted general government aid and fully funds the sixth and final year of the Student Opportunity Act.
• Increases funding for the Special Education Circuit Breaker.
• Invests additional funds to reimburse school districts for transportation costs.
• Continues to support free community college through MassEducation and MassReconnect programs, as well as provides funding for scholarship and other financial aid programs.
• Sustains universal free school meals funding statewide.

Transportation

• Proposes a 4 percent increase in total transportation funding in House 2, including from dedicated sales tax revenue for public transit and revenue from the Fair Share surtax.
• Provides funding to continue improving safety and reliability across the T transit system.
• Invests in new Funding for Accelerated Infrastructure Repair (FAIR) program to help municipalities address their backlog of municipal bridge repairs.
• Includes funding for snow and ice removal, aligned with five-year average annual spending.

Health Care

• Extends the ConnectorCare Pilot using available federal funds to protect subsidized health insurance for individuals earning between 300 and 400 percent of the federal poverty level for one year through the end of calendar year 2027.
• Fully funds implementation of the Maternal Health Law for the first time.
• Proposes steps to promote sustainability of MassHealth (Medicaid) budget, including expanding program integrity initiatives, imposing a moratorium on provider rate increases, targeted service reductions, and implementing one-time cost-saving measures.
• Provides a 5.1 percent increase for the Nutrition Services Program to address food insecurity among the elderly.
• Provides a 2 percent increase to the Department of Transitional Assistance that serves the most vulnerable state residents through direct cash assistance, food support, and workforce programs, including additional funds to support staff needs to ensure compliance with new federal SNAP requirements. 

Proposed Budget Information 
Fiscal Year 2027 Budget Proposal

Governor's Message

Budget Briefs

Press Release