Enacted Budget – Fiscal Year 2027
Massachusetts Governor Maura Healey signed the state’s fiscal 2027 budget into law on July 9.
The fiscal 2027 budget provides for general appropriations of $63.4 billion. This represents a 2.3 percent decrease compared to fiscal 2026 projected spending but a 4.0 percent increase over originally enacted appropriations for fiscal 2026. The state’s January 2026 baseline consensus revenue forecast projected state tax revenues at $44.9 billion (including $2.7 billion in surtax revenue dedicated to education and transportation initiatives). After required statutory tax transfers, consensus tax revenue available for the budget is $34.6 billion. After incorporating tax initiatives and other tax revenue, tax revenues for the budget total $35.0 billion. When including non-tax revenue (federal reimbursements, departmental revenues, and consolidated transfers), total revenue for budgeted funds in fiscal 2027 is $62.6 billion. As of July 2, the Commonwealth Stabilization (or “rainy day”) Fund had a balance of $8.51 billion.
The enacted budget emphasizes affordability, education, transportation, housing, health care, support for local governments, and public safety, while imposing no new taxes or fees. For education, the budget fully funds the sixth and final year of implementing the Student Opportunity Act; invests in student behavioral and mental health services; expands access to affordable childcare and pre-kindergarten; and continues universal free school meals and free community college. The budget also reconvenes the Foundation Budget Review Commission to review the state’s school funding (Chapter 70) formula and expands SUCCESS wraparound supports to public colleges and universities. The budget invests in transportation networks across the state, stabilizes MBTA finances, and supports free fares for Regional Transit Authorities. For local governments, the budget increases unrestricted aid to cities and towns; distributes new funding to better support small and rural communities; and increases the Special Education Circuit Breaker program to help school districts meet rising special education costs. Housing provisions include policy reforms to streamline permitting to accelerate housing production. For health care, the budget extends the ConnectorCare affordability program and increases support for older adults and mental health services. The budget also adopts the governor’s proposals to strengthen protections for survivors of sexual assault. To strengthen the state’s long-term fiscal health, the budget implements recommendations from the Stabilization Fund and Long-Term Financing Task Force, including multi-year budget forecasting and economic stress testing. It also directs a deposit to the Commonwealth Stabilization Fund; dedicates funds to the Disaster Relief and Resiliency Fund; and creates a reserve to fund cost-of-living adjustments for retirees on pensions using excess pension fund investment gains. The enacted budget incorporates the impacts of tax changes enacted separately, including an expansion of the pass-through entity excise tax, phased federal tax conformity, and new tax incentives for housing production, food donations, and sustainable aviation fuel.