Enacted Budget – Fiscal Year 2026
Massachusetts Governor Maura Healey signed the state’s fiscal 2026 budget into law on July 4. The fiscal 2026 budget provides for general appropriations of $60.9 billion, after line item vetoes of $130 million. This represents a 0.8 percent decrease compared to fiscal 2025 projected spending but a 5.5 percent increase over originally enacted appropriations for fiscal 2025. The state’s January 2025 baseline consensus revenue forecast projected state tax revenues at $41.2 billion, excluding surtax revenue, reflecting 2.2 percent annual growth. The forecasting group also estimated $2.4 billion in “fair share” revenue from the surtax for education and transportation initiatives. As of July 30, 2025, the Commonwealth Stabilization (or “rainy day”) Fund had a balance of $8.64 billion.
The adopted budget focuses on improving affordability, economic growth, transportation, and education, while also limiting spending due to economic uncertainty and impacts of federal funding reductions. The enacted budget directs surtax revenue towards a series of education initiatives including MassEducate to make community college free for all, supporting literacy through Literacy Launch, and funding MASSGrant Plus scholarships, as well as transportation efforts including regional transit grants and income-eligible fare relief for mass transit. Also for education, the budget provides for a 7 percent spending increase to fully fund the fifth year of implementation of the Student Opportunity Act and additional funding for special education. The budget directs funding to stabilize the state’s public transit system (MBTA) and transfers a portion of fair share surtax revenue to the Commonwealth Transportation Fund to enhance borrowing capacity for infrastructure investments. To make housing more affordable, the budget funds at least 10,000 housing vouchers for low-income tenants and eliminates broker’s fees paid by renters. The budget also increases health care affordability by extending the ConnectorCare expansion pilot program. Additionally, the budget increases funding to programs supporting veterans, including fully funding the HEROs Act that supports various benefits for the veteran population. In her Budget Filing Letter, the governor also noted the administration’s plans to continue the state’s hiring freeze, freeze salaries for certain employees, and delay funding earmarks, as well as her intent to file a supplemental budget to create a flexible reserve to respond quickly as needed to “time-sensitive federal actions and respond to critical unfunded spending needs for FY26.”