Proposed Budget - Fiscal Year 2025
On January 24, Massachusetts Governor Maura Healey introduced her fiscal 2025 budget recommendation. The budget proposes gross spending in fiscal 2025 of $56.2 billion, a 2.9 percent increase over fiscal 2024, excluding spending from the Fair Share surtax and Medical Assistance Trust Fund. When including $1.3 billion in education and transportation fund spending from projected income surtax revenue and $682 million from the Medical Assistance Trust Fund, total appropriations in the governor’s budget recommendation for fiscal 2025 are $58.1 billion. When expenditures from Federal, Trust and ISF funds are included, total spending in fiscal 2025 is projected at $85.1 billion. The budget is based on a consensus tax revenue estimate of $40.2 billion, not including surtax revenue, a 2 percent increase above revised fiscal 2024 estimates but a 0.5 percent decrease compared to projections used to build the fiscal 2024 General Appropriations Act (GAA). The figure incorporates the impact of the second full year of a tax relief package proposed by the governor and signed into law last year. After a series of tax revenue transfers, $32.4 billion in net tax revenue is available to support spending, a 1.6 percent decrease from the fiscal 2024 GAA. Total available tax and non-tax revenue for all budgeted funds is estimated at $57.9 billion (including $53.5 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 2025 of $9.1 billion. The governor also proposes to use interest earned on the Stabilization Fund to support matching funds to compete for various federal grant opportunities. Including the rainy day fund, reserved balances, and the undesignated balance, the state’s total balance is projected at $9.7 billion at the end of fiscal 2025.