Legislature Finalizes Fiscal Year 2027 Budget, Delivers Record Investments Without Raising Taxes

Agreement completes Student Opportunity Act commitment, expands housing production, and strengthens the MBTA

(BOSTON—7/1/2026) Without raising taxes on Massachusetts residents, the Massachusetts Legislature today delivered a Fiscal Year 2027 budget that drives down costs for residents, boosts the state's economy, and adds to the state’s savings account.

The plan makes record investments in public education, unlocks new housing production, strengthens the state’s public transportation systems, and protects vulnerable residents from the impact of federal cuts.

The bill spends $63.4 billion, a 4 percent increase from last year, and includes $2.7 billion in Fair Share funds that will support public education and transportation as voters intended. The budget raises no taxes and adds $51 million to the state’s ‘Rainy Day’ Stabilization Fund, which is projected to reach a historic $8.2 billion balance by the end of Fiscal Year 2027.

“Our budget is a chance each year to make life more affordable for residents while strengthening the public services we all rely on, including our schools and transit systems—and the Senate delivered for FY27,” said Senate President Karen E. Spilka (D-Ashland). “As a longtime advocate for expanded public education from cradle to career, I am especially proud of our commitment to reexamining how we address K-12 costs at the very moment we fulfill the promise of the Student Opportunity Act. Overall, this final budget protects our residents, grows opportunities, supports our municipalities and cuts costs for individuals and families. I want to thank Chair Rodrigues, Vice Chair Comerford, and Senator O’Connor for their diligent work to reach a final compromise bill, the members and staff of the Senate Ways and Means Committee, and my Senate colleagues, as well as Speaker Mariano and our partners in the House, for their hard work in getting this budget completed on time.”

“As a result of the Trump Administration’s sweeping federal funding cuts, reckless trade policies, and war with Iran, this budget has come during a period of significant economic uncertainty. That’s why I’m incredibly proud of the investments that this budget makes despite those challenges, from funding for free school meals and for the final year of the Student Opportunity Act, to robust support for the MBTA, to nearly $10 billion for cities and towns across the Commonwealth – all without raising taxes,” said House Speaker Ronald J. Mariano (D-Quincy). “I want to thank Chairman Michlewitz and my colleagues in the House, along with our partners in the Senate, for working to ensure that this budget delivers for every community across Massachusetts.”

“Grounded in fiscal responsibility, the FY2027 Budget leads with a steady hand and delivers a spending plan that does not raise any taxes or fees on residents and businesses of the Commonwealth, while making major investments in education and local aid, emphasizing our continuing commitment to supporting all 351 cities and towns,” said Senator Michael J. Rodrigues (D-Westport), Chair of the Senate Committee on Ways and Means. “Thank you to my friend Chair Michlewitz, and our conferees, especially Senators Comerford and O’Connor, whose collaboration, partnership, and thoughtfulness resulted in delivering an on-time budget to the Governor’s desk for the second year in a row. Also, thanks to my colleagues for their advocacy that helped shape this budget to address our shared Senate priorities. Thank you to both committee staffs, whose tireless work was responsible for producing and finalizing this balanced budget plan. Lastly, I would like to offer a deep and heartfelt thank you to Senate President Spilka and her team for their ongoing trust in me, and for their steadfast leadership as we work to build a more resilient and affordable future for our residents and our communities.”

“This final $63.4 Billion Fiscal Year 2027 conference committee report will better position the Commonwealth for the challenges that lie ahead while also ensuring that we protect the programs that some of our most vulnerable populations rely on the most. Whether it is greater investments into programs like housing stability, food security, or early education the initiatives contained in this budget are a reflection of our shared values,” said Representative Aaron Michlewitz, Chair of the House Committee on Ways & Means (D-Boston). “By reinvesting in the people of the Commonwealth we will continue to assist those in need while making our economy more competitive and equitable for years to come. I want to thank Speaker Mariano for his leadership during this budget process, as well as my fellow House conferees, Representative Diggs and Representative Smola. I also want to thank my counterparts in the Senate, specifically my co-chair Senator Rodrigues, for their partnership in bringing this proposal over the finish line.”

“This budget proposal reflects the Legislature’s deep commitment to a Commonwealth where every community can thrive,” said Senator Jo Comerford (D-Northampton), Vice Chair of the Senate Committee on Ways and Means. “At a time of rising costs and fiscal uncertainty, this budget makes meaningful investments in education, food security, health care, and municipalities that will make a real difference in people’s lives. By reviving the Foundation Budget Review Commission, the Legislature is taking an essential step toward a more equitable school funding formula that recognizes the unique challenges facing rural and regional districts. This budget also delivers critical support for rural communities, affirming that our small towns and regional economies are vital to the strength and future of Massachusetts. I am grateful to Senate President Karen Spilka and Senate Ways and Means Chair Michael Rodrigues for their leadership in advancing a budget that centers equity, opportunity, and care for every corner of the Commonwealth.”

“Over the past several months, the Joint Committee on Ways and Means traveled across the Commonwealth to hear directly from communities about their needs and challenges. Those conversations made clear that every region of Massachusetts deserves a budget that is responsive, practical, and focused on delivering resources where they are needed most,” said Representative Kip A. Diggs (D-Barnstable), Assistant Vice Chair of the House Committee on Ways and Means. “The FY27 Conference Committee Report reflects that work. It is the product of listening and collaboration across the Legislature to strengthen quality of life and invest in the economic health of communities across the Commonwealth. As a former athlete, I have always believed that meaningful progress depends on teamwork, discipline, and shared purpose. This budget is no different. I am grateful to Speaker Mariano, Chair Michlewitz, Chair Rodrigues, and my colleagues across the Legislature for their leadership and partnership in advancing a budget that responds to real needs and helps communities move forward.”

“I’m proud that we have come to finalize the Fiscal Year 2027 budget, which I believe is reflective of the hard work and commitment of so many throughout this process,” said Senator Patrick M. O’Connor (R-Weymouth). “I’d like to thank my colleagues in both the Senate and the House, for their collaboration in passing a fiscally responsible budget that makes meaningful investments in our communities. As education, transportation, and local aid remain top priorities of our municipalities that residents rely on every day, I’m glad that we were able to secure an increase in funding in these areas. This year’s budget is a strong example of what can be accomplished when we stay focused on delivering results for the residents of the Commonwealth. I’m grateful to have been part of this effort and look forward to continuing our work in the year ahead.”

“This budget reflects the priorities of residents, community organizations, and advocates who made their voices heard throughout the process,” said Representative Todd M. Smola (R-Warren), Ranking Minority, House Committee on Ways and Means. “It increases unrestricted local aid for cities and towns, provides additional support for education, and reestablishes the Budget Foundation Review Commission to conduct a comprehensive review of the K-12 funding formula—an area where there is broad agreement that reform is needed. The budget also makes critical investments in human services and public safety, strengthens our financial reserves, and demonstrates a continued commitment to addressing the Commonwealth’s most pressing needs.”

Education

The agreement completes the Legislature’s commitment to fully fund and implement the Student Opportunity Act with $7.66 billion in Chapter 70 aid to public school districts, an increase of $297 million over Fiscal Year 2026 and the highest level ever, along with a record $160-per-pupil minimum in local school aid.

The budget also revives the Foundation Budget Review Commission (FBRC) to examine the K-12 funding formula and assess how the state can address rising costs in special education, student transportation, personnel, and educator health care statewide.

The agreement funds the Special Education Circuit Breaker at $654.6 million to help students who need support, which, combined with $152 million from the recent Fair Share supplemental budget, brings the total investment to $806.6 million, reimbursing school districts for 75 percent of the costs of educating students with disabilities and complex needs.

Other education investments include $475 million for the Commonwealth Cares for Children (C3) grant program to support early education and care providers’ day-to-day operational and workforce costs, $137 million for the MassEducate and MassReconnect free community college programs, $20 million for rural school districts, and $180 million for universal free school meals, which serve nearly 150 million free meals to Massachusetts kids every year.

The budget also includes $11.7 million to support students receiving special education services through the DESE/DDS Residential Prevention Program, and $2 million for a new grant program helping schools address young people’s social media use.

Transportation

The agreement provides $465 million in direct investment for the MBTA, which, combined with $595 million from the recent Fair Share supplemental budget, brings the total new investment in the system to over $1 billion for Fiscal Year 2027. It also includes $217 million for Regional Transit Authorities (RTAs), including $40 million to sustain fare-free transit service statewide. The state’s fare-free Regional Transit program has resulted in ridership exceeding pre-pandemic levels.

The budget also responds to a string of fatal wrong-way driving incidents on Massachusetts highways, including the tragic line-of-duty death of State Trooper Kevin Trainor, by directing MassDOT to implement new infrastructure and officer training, including directional striping, signage, lane delineators, and motorist alert systems.

Municipalities and Housing

The agreement provides record support to cities and towns across the state, including $1.363 billion for Unrestricted General Government Aid (UGGA), a $40 million increase over Fiscal Year 2026 and the highest level ever. For new dollars, the legislation implements a new funding formula to equitably distribute the increase throughout all of the state’s 351 communities.

In another step toward addressing the housing crisis and building homes faster statewide, the budget builds on last session’s Affordable Homes Act by streamlining local permitting, supporting development on nonconforming properties, providing reasonable timelines for projects under existing zoning, and modernizing the variance standard, all aimed at boosting housing production and driving down costs.

Health Care

The agreement extends the ConnectorCare expansion pilot program through 2027. Since 2024, the pilot has helped more than 115,000 residents access more affordable insurance through lower premiums, no deductibles, and reduced co-pays.

The budget also codifies existing federal protections requiring comprehensive insurance coverage of HIV pre-exposure prophylaxis (PrEP) without cost sharing or utilization management barriers and directs a new study to modernize and improve the long-term sustainability of emergency medical services in the Commonwealth.

Retiree COLA Reform

This budget includes comprehensive, fiscally prudent reforms to cost-of-living adjustments (COLAs) for retired public employees, based on recommendations from the Special COLA Commission. It establishes a COLA Reserve Fund financed in part by pension investment returns above target, provides enhanced COLA benefits for certain current retirees based on years in retirement, and allows the base amount used to calculate future COLAs to increase in $1,000 increments as funding allows.

Food and Economic Security

The agreement protects access to benefits through Transitional Aid to Families with Dependent Children (TAFDC) and Emergency Aid to the Elderly, Disabled and Children (EAEDC), and includes a $500 clothing allowance per child for families receiving TAFDC benefits.

It repeals the Learnfare law, which cut off TAFDC benefits when children had too many unexcused school absences and ended up hurting families who lost needed assistance.

It also provides $56.1 million for Emergency Food Assistance, an increase of $6.1 million over Fiscal Year 2026, and $21.5 million for the Healthy Incentives Program (HIP), which supports local farmers and access to healthy food.

Protecting Vulnerable Residents

The agreement includes provisions protecting children aged 16 and 17 from sexual interactions with mandated reporters and others responsible for their care and oversight, including teachers, coaches, police officers, and social workers.

In response to the tragic fire at Gabriel House in Fall River, the agreement provides $500,000 to implement recommendations from the Assisted Living Residences (ALR) Commission to improve safety standards, emergency preparedness, and oversight at assisted living facilities statewide.

The budget also establishes a commission to study transitional youth services for individuals with disabilities whose access to special education services will end due to high school graduation or turning 22, as the Legislature works to preserve community-based care options amid federal challenges to the Olmstead decision.

Sports Wagering Revenue

The agreement adjusts the distribution of sports wagering revenue, directing 5.5 percent to the Sports and Entertainment Fund and 2 percent to the Economic Development Trust Fund, dedicating new resources to support the Commonwealth’s economic growth.

The full text of the Fiscal Year 2027 budget is available online.

Having been passed by the Legislature, the bill has been sent to Governor Healey for her signature.

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