Governor Healey Files Fiscal Year 2027 Budget That Controls Spending, Prioritizes Affordability and Continues Transformative Investments in Education, Transportation
Boston — Today, Governor Maura Healey filed her budget recommendation for Fiscal Year 2027 (FY27), which controls spending, protects key services, and invests in programs that residents rely on to make their lives better and more affordable.
The $62.8 billion budget, filed as House 2, does not propose any new taxes or fees and represents 1.1 percent growth over estimated FY26 spending, the lowest spending rate since taking office and well under the rate of inflation. This includes $2.7 billion in Fair Share surtax spending. Alongside House 2, Governor Healey also filed a Fair Share supplemental budget bill to spend $1.15 billion in surplus FY25 surtax revenue on education and transportation initiatives.
“This budget is about making life easier and more affordable for Massachusetts residents and businesses,” said Governor Healey. “At a time when budgets across the country are tight, this proposal maximizes our resources to deliver on what matters most while controlling spending, protecting taxpayer dollars and driving economic growth. We’re lowering costs by continuing free school meals, no-cost community college, and expanding universal pre-K. We’re fixing our roads and bridges so you can get where you need to go faster and investing in our schools so that every child gets the best education possible. While President Trump is cutting federal funding and driving up costs, we’re focused on making a positive difference in people’s lives – and we’re doing it without any new taxes."
“We’re working every day to deliver the resources our communities need to run excellent schools, fix our roads and bridges, support our local businesses and make sure our residents are healthy,” said Lieutenant Governor Kim Driscoll. “This is a balanced budget that ensures each dollar is spent efficiently, preserves critical services, and requires no new or increased taxes or fees.”
Governor Healey's budget makes key investments that will reduce the cost of housing, transportation, education, health care and doing business in the state. It continues the Governor’s key affordability initiatives from the past few years, including her tax cuts, free school meals, no-cost community college, major transportation upgrades and her nation-leading investments in child care that have enabled over 8,000 child care programs to remain open and added over 22,000 seats statewide. This budget will also secure the necessary funding to deliver on Governor Healey’s pledge to achieve universal pre-kindergarten funding in all Gateway Cities this year. Governor Healey is also proposing $10 million for Accelerating Achievement, a new multi-year K-12 school improvement initiative focused on rapidly improving student outcomes in the state’s lowest-performing schools.
Governor Healey’s budget continues to deliver on her $8 billion plan to upgrade roads, bridges and public transportation across the state. Between House 2 and the Fair Share supplemental budget, she is proposing $3.6 billion for transportation, including $2.54 billion for the MBTA. This funding will allow the T to continue making progress on improving safety and reliability across the system, while fully addressing their projected operating deficit in FY27. Governor Healey is also investing $75 million in the new Funding for Accelerated Infrastructure Repair (FAIR) program to help municipalities work through their backlog of municipal bridges in need of repair, enabled by leveraging Fair Share as part of the Governor’s $8 billion transportation plan.
Governor Healey is also proposing new affordability initiatives. To reduce costs for Massachusetts businesses, she will create a new Workforce Productivity Fund to provide grants to small employers to help fill workforce gaps to best fit their needs. She is also simplifying the process for cancelling subscriptions, requiring companies to make it as easy to cancel as it is to sign up, and extending the ConnectorCare pilot, which expands eligibility for subsidized health insurance to individuals earning between 300 and 400 percent of the federal poverty limit. This will provide over 47,000 residents access to more affordable health insurance. Governor Healey is also proposing to create a new tax credit up to $5,000 for Massachusetts farmers that donate excess food to food banks and pantries. This will help to cut down on food waste and provide needed resources for food banks and pantries, all while supporting farmers.
Governor Healey is also fully funding the implementation of the Maternal Health Law for the first time, ensuring that Massachusetts remains a leader in advancing maternal health equity and care. And to better ensure justice for survivors of sexual assault, Governor Healey filed an outside section clarifying that all Sexual Assault Evidence Collection Kits (SAECKs) must be stored for a minimum of 15 years and eliminating the statute of limitations in cases of rape when a DNA match exists, allowing for prosecution beyond the 15-year statute of limitations when DNA technology has identified a suspect. The House 2 proposal would allocate $100 million for the Commonwealth Stabilization Fund, $136 million for post-retiree benefits, and $20 million for the Disaster Relief and Resiliency Fund to help the state prepare for unforeseen natural disasters. It also includes $5.131 billion for pension funding, which puts Massachusetts on a sustainable path to fully fund the state’s pension systems.
The Governor’s budget proposal controls spending and protects taxpayer dollars, particularly in response to President Donald Trump’s billions of dollars in funding cuts to Massachusetts. Not including the $2.7 billion in proposed Fair Share investments, House 2 spending growth is limited to 1.1 percent over estimated FY26 spending and 3.5 percent over the FY26 GAA.
“House 2 is a fiscally responsible spending plan that advances our administration’s strategy of protecting the integrity of Massachusetts’ budget despite significant national economic headwinds. This budget will strengthen Massachusetts' leadership in sectors like education and health care, provide for critical state programs and services, and drive down costs for residents,” said Administration and Finance Secretary Matthew J. Gorzkowicz. “As we look ahead to FY27, this budget recommendation will keep spending under control and ensure that every dollar we invest generates the maximum return for Massachusetts residents.”
Fair Share
Across House 2 and the Supplemental Budget, the administration is proposing to use a total of $3.85 billion in Fair Share revenues to continue making transformative improvements to Massachusetts’s education and transportation systems.
Fair Share Investments in House 2 and the Supplemental Budget Bill:
Education ($ in millions) | | |
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Commonwealth Cares for Children (C3) Program | | |
EEC Child Care Financial Assistance | | |
Commonwealth Preschool Partnership Initiative (CPPI) | | |
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Student Opportunity Act (Ch. 70) | | |
Universal Free School Meals | | |
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Mental Health Systems and Wraparounds | | |
Special Education Circuit Breaker Reserve | | |
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K-12 Accelerating Achievement | | |
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State Financial Aid Supplement | | |
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Transportation ($ in millions) | | |
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MassDOT Service Investments | | |
Sustainable Aviation Fuel (SAF) Credit | | |
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Micro Transit and Last Mile Innovation Grants | | |
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Local Aid
The Healey-Driscoll Administration is committed to strengthening municipal capacity statewide through robust local aid investments. In House 2, the administration recommends more than $10.4 billion in local aid, a $439 million (4 percent) increase over the FY26 GAA, in addition to fully funding the final implementation phase of the Student Opportunity Act and dedicating $7.6 billion for Chapter 70 school aid (a $242 million increase over the FY26 GAA). House 2 also proposes full funding for Charter School Reimbursements at $200.4 million, $20 million for rural school aid and the administration’s legislative package fully funds the Special Education Circuit Breaker at $802.7 million. This budget recommendation also expands the administration’s commitment to school transportation by investing an additional $154.3 million to reimburse school districts for a significant share of transportation costs.
Unrestricted General Government Aid (UGGA) supports local government functions including public safety, public works, and economic development, and remains the only fully flexible, unrestricted source of state local aid available to cities and towns. Continuing the established approach of growing UGGA in line with consensus tax revenue growth, the House 2 budget recommends $1.356 billion in funding, an increase of $33 million (2.5 percent) over the FY26 GAA.
Highlights
Housing
$1.2 billion in targeted investments at the Executive Office of Housing and Livable Communities to make housing more affordable and accessible in Massachusetts
$278.3 million for the Massachusetts Rental Voucher Program (MRVP) to support more than 11,500 mobile and project-based rental vouchers
$258.6 million for Emergency Assistance (EA) for Family Shelters, a $17.8 million decrease from FY26 funding, reflecting the lowest family shelter caseload in decades due to Governor Healey’s reforms
$201.2 million for the Residential Assistance for Families in Transition (RAFT) program
$117.8 million for subsidies for Local Housing Authorities, an increase of $2.2 million (2 percent) over FY26
$114 million for Homeless Individual Shelters to preserve about 2,800 shelter beds for individuals experiencing homelessness, including triage, diversion and rapid rehousing programs
Education
$1.22 billion to support Child Care Financial Assistance programs to funds help families afford care and ensure providers are paid a fair rate regardless of where they live
$802.7 million ($127.7 million more than the FY26 GAA) for Special Education Circuit Breaker
$475 million to maintain the Commonwealth Cares for Children (C3) program to maintain stability of the state’s child care system
$198 million for universal free school meals, an $18 million increase over FY26 GAA
$154.3 million for education transportation reimbursement
$137.05 million to maintain free community college
$103.3 million to sustain the MASSGrant Plus expansion and other financial aid
$53.4 million for Governor Healey’s Reimagining High School initiative ($3 million more than the FY26 GAA), which supports programs like Early College and Innovation Career Pathways
$38 million for student SUCCESS programming at public colleges and universities, including $10 million for UMass for the first time
$36.95 million for universal access to high-quality pre-K through the Commonwealth Preschool Partnership Initiative (CPPI) to meet Governor Healey’s goal of delivering universal, high-quality preschool funding for four-year-olds in all Gateway Cities by the end of 2026
$25 million for the third year of Literacy Launch
$25 million for the second year of no-cost high dosage early literacy tutoring to an estimated 10,000 students
$10 million for Accelerating Achievement, a new multi-year K-12 school improvement initiative focused on rapidly improving student outcomes in our lowest-performing schools
$17 million to support student mental and social-emotional health, addressing the youth mental health crisis
$500,000 to support food security on college campuses
Transportation
MassDOT
$645 million for core MassDOT operations, including $85 million in funding for snow and ice removal
$220 million to bolster MassDOT services in House 2, with an additional $43 million in the Fair Share supplemental budget
The Fair Share supplemental budget establishes a new tax credit that incentivizes the use of sustainable aviation fuel by airlines through 2028
MBTA
$470 million in contract assistance to support MBTA operations in House 2, and $523 million to further support MBTA operating stabilization in the Fair Share supplemental budget, for a total of $993 million
This amount fully addresses the MBTA’s operating deficits through the end of fiscal year 2027 and continues the MBTA’s progress toward fiscal stability
Supports affordability initiatives including income eligible reduced fare program and reliability, workforce and service investments in water transportation, MBTA Academy, and commuter rail
$122 million for the FTA reserve in the Fair Share supplemental budget to continue MBTA’s progress on safety and workforce investments
Regional Transit Authorities (RTAs)
$185 million for RTA supports in House 2, with an additional $45 million in the Fair Share supplemental budget
$94 million to maintain the historical annual operating transfer to RTAs
$66 million in supplemental State Contract Assistance to expand service hours, operate weekend service, and enhance routes and other operational improvements for RTAs
$35 million to support systemwide, year-round fare-free transit on RTAs
$15 million for micro transit and last mile innovation grants in the Fair Share supplemental budget to extend transit and mobility opportunities to underserved populations and communities
Economic Development
$40 million for the Life Sciences Tax Incentive Program
$30 million for the new refundable climatetech tax credit to support research and development, manufacturing, and deployment
$30 million for the recently reformed Economic Development Incentive Program (EDIP) Tax Credit to allow larger refundable awards, broader eligibility, and stacking with certain incentives
$10 million for an operating transfer to the Massachusetts Life Sciences Center (MLSC)
$10 million for a new Community Workforce Partnerships Program grant program
$7 million for the Live Theater Tax Credit, enabling it to continue in its second year to support qualifying live theater productions
$5 million for Small Business Technical Assistance (SBTA) grants
$3.5 million for programming at MassTech Collaborative
Labor and Workforce Development
$15.4 million to support summer and year-round youth employment through the YouthWorks program
$8.9 million for Career Technical Institutes (CTIs), which aim to close skills training gaps by expanding access to vocational education
$8 million for the Workforce Competitiveness Trust Fund
$3.3 million to leverage registered apprenticeship as a career pathway for untapped talent in growing industries
Modernizes the youth work permit process making it easier for teens to get jobs and improving compliance through better data tracking
Health and Human Services
One year extension of the ConnectorCare pilot, which expands eligibility for subsidized health insurance to individuals earning between 300 and 400 percent of the federal poverty limit, providing over 47,000 residents access to more affordable health insurance
$175 million for new Chapter 257 rates for human service providers, as well as $131.6 million in annualize FY26 rate increases
Historic investments in supporting our most vulnerable populations, including:
$33.1 million to fully fund new enrollees in FY27’s Turning 22 class
$29.7 million for the Healthy Incentives Program
$15 million for grants to local boards of health
$5 million for the Massachusetts Access to Counsel Initiative (MACI)
$4.3 million to fully fund and implement the Maternal Health Law
MassHealth
MassHealth, the Commonwealth’s Medicaid and Children’s Health Insurance Program (CHIP), provides coverage of health care and related critical services to about two million members, including over 45 percent of Massachusetts children and over 70 percent of Massachusetts residents living in nursing facilities. In recent years, MassHealth spending growth has been driven by dramatic sector-wide health care cost growth and a sharp increase in the cost per individual MassHealth member. Most recently, the three largest contributors to spending growth are prescription drugs, behavioral health services, and long-term services and supports for the state’s aging population. These spending challenges have been made worse by President Trump and Congressional Republicans stripping Massachusetts of billions of federal health care dollars.
House 2 proposes necessary, but measured, initial steps to put MassHealth on more sustainable footing. MassHealth’s budget is filed at $22.701 billion in total spending.
To bring FY27 spending down to proposed levels, the administration will:
Continue to aggressively expand program integrity initiatives
Institute a moratorium on all provider rate increases or program expansions not required by federal law
Make targeted service reductions that bring MassHealth in line with peer states and commercial payors
Implement one-time measures that bridge to FY28, allowing time for policy development and stakeholder engagement over the next 18 months
Veterans
Energy and Environment
$141 million for the Department of Conservation and Recreation to keep parks, forests, beaches, trails, rinks, pools, and campgrounds open, safe and accessible
$59.6 million for administration, expedient permitting, and compliance across DEP
$55 million for the Massachusetts Emergency Food Assistance Program
$28.9 million for the Department of Public Utilities to continue to strengthen interagency coordination to reduce delays while maintaining rigorous environmental and safety standards
$15 million for Hazardous Waste Cleanup
$7.4 million for the Department of Energy Resources (DOER) to prioritize energy efficiency and the expansion of energy supply
