- Charles D. Baker, Governor
- Karyn E. Polito, Lieutenant Governor

To the Honorable Senate and House of Representatives,
We are pleased to submit to you the Fiscal Year 2023 (FY23) House 2 budget recommendation, the eighth proposal of the Baker-Polito Administration.
This balanced budget recommendation continues to protect core services for the most vulnerable and makes significant investments to promote growth and opportunity while sustaining our administration’s commitment to supporting the Commonwealth’s cities and towns and fully funding the Student Opportunity Act.
This budget is submitted alongside a comprehensive tax relief proposal that will relieve the tax burden for very low-income residents, provide significant relief for housing and childcare costs, and improve the state’s competitiveness.
The House 2 proposal maintains our administration’s fiscally responsible approach to carefully managing the state’s tax dollars and available federal resources as it responds to ongoing impacts from the COVID-19 pandemic. As these needs continue to be addressed, this budget proposal aims to define and pay for core, ongoing state spending with permanent revenue sources. At the same time, we will continue to work with you to utilize federal funds and state surplus dollars through other legislation to support Massachusetts’ families and communities and promote a strong and sustainable recovery.
The budget includes a $749 million increase to the Stabilization Fund, which will bring the balance to an all-time high of $6.64 billion by the end of FY23. The fund currently has a balance of $4.64 billion – more than four times greater than its balance at the start of our administration. We are proud of our collaborative work with the Legislature to bring the budget into structural balance, which has enabled the Stabilization Fund to continuously grow since 2015 and will help ensure the continuity of critical government services in future crises.
The Administration recommends a total of $48.5 billion in authorized spending and transfers, which is approximately 0.5% above Fiscal Year 2022 (FY22), excluding transfers to the Medical Assistance Trust Fund.
In keeping a commitment first made when we took office, this budget proposal increases support to cities and towns at the same rate of growth of revenues, providing $1.2 billion in Unrestricted General Governmental Aid (UGGA). This funding level reflects a 2.7% increase, consistent with the expected consensus tax revenue growth forecast as announced on January 14, 2022. House 2 supports programs that provide all 351 cities and towns opportunities to access resources to improve local services for residents, including $6 million for Community Compact-related programs and $3 million for district local technical assistance.
Further, the budget recommends fully funding the Student Opportunity Act, providing an increase of $591.4 million in new funding. This includes an increase of $485 million in Chapter 70 funding, for a total investment of $5.989 billion, an increase of $64.8 million for charter school tuition reimbursement, and $41 million in additional support for special education circuit breaker reimbursement for cities and towns. House 2 also includes $31.1 million to scale up proven programs that develop and expand college and career pathways for high school students, with a focus on equity and recruitment of high-need student populations.
To address the rising cost of higher education, this budget proposes the largest increase in financial aid in over two decades with the expansion of the MASSGrant Plus program. A proposed $18 million increase will enable all low-income, in-state undergraduate students to attend public higher education without incurring debt for mandatory tuition and mandatory fees. The budget also maintains support for the Career Technical Initiative, which offers industry-recognized credentialing opportunities in vocational technical school settings to high school students and adults, providing career pathways to high-demand trades.
To continue promoting racial equality and opportunity, the budget continues support for programs aligned with the recommendations of the Black Advisory Commission (BAC) and the Latino Advisory Commission (LAC), including programs for workforce skills, career pathways, English-language acquisition, small business development, and more.
Increasing access to childcare is also a priority of our administration, and the FY23 proposal includes $53.9 million to annualize a more equitable parent fee scale that improves childcare affordability across the Commonwealth, along with over $15 million in other new initiatives to expand affordable childcare options.
Since taking office, we have been focused on supporting more housing production across Massachusetts, directing significant funds toward the production of more affordable and workforce housing units. Building on that commitment, this budget includes significant investments and policy reforms for rental assistance, re-housing benefits, and housing vouchers with the goal of reducing evictions and shelter entry. An increase of $132.4 million across several housing programs paired with proposed changes to expand eligibility and increase benefits will allow for long-lasting improvements in housing stability and access to homeownership and expedite recovery for families whose need has been exacerbated by the COVID-19 pandemic.
Investments are also proposed in House 2 to expand health care services for the most vulnerable, while improving the accessibility of equitable care for all residents. The budget proposes an increase of $21 million to further expand the Medicare Savings Program to reduce out-of-pocket prescription drug costs for 34,000 low-income older adults and disabled individuals. The budget also includes $115 million to expand outpatient and urgent behavioral health services, informed by the Roadmap for Behavioral Health Reform, which was developed in collaboration with hundreds of families, individuals, providers, and other stakeholders from the behavioral health community. The budget continues to support core social safety net programs and services for MassHealth members, children and families, individuals with disabilities, veterans, and older adults.
House 2 continues to invest in other critical priorities exacerbated by the COVID-19 pandemic, including $543.8 million for substance addiction prevention and treatment services and $123.4 million for sexual assault and domestic violence services.
With the FY23 budget recommendation, our administration is also continuing strong support for economic development, workforce training, transportation, the environment, and public safety.
For the past seven years, our administration has focused on making investments that help Massachusetts’ families and communities grow and thrive. Through careful management of the Commonwealth’s tax dollars in partnership with the Legislature, we have been able to grow the Stabilization Fund to historic levels, without broad-based tax increases on residents.
Our administration’s FY23 budget proposal sustains this approach, making key investments to support the Commonwealth’s economy, schools, and communities. At the same time, this plan continues to build up the state’s reserves and enables us to propose a comprehensive tax cut proposal targeted toward providing relief to low-income families and residents.
We are pleased to again partner with the House and Senate as the FY23 budget process moves forward. We appreciate your prompt consideration of these recommendations.
Sincerely,