- Maura T. Healey, Governor
- Kimberley Driscoll, Lieutenant Governor
To the people of Massachusetts,
As we begin the fourth and final year of our first term in office, the Healey-Driscoll Administration remains as focused as ever on making Massachusetts a more affordable place to work, learn and do business, while also protecting our people, our communities and our economy.
These principles have guided our decision making and informed our agenda, leading to the enactment of the first major tax cuts in Massachusetts in decades and the passage of legislation to speed housing production, improve education, strengthen businesses and upgrade our roads, bridges and public transportation.
We have filed new proposals to curb energy costs, rebuild our higher education campuses and bolster our research and innovation economy. And we look forward to partnering with the Legislature to pass these and more as we work every day to improve the lives of constituents from Boston to the Berkshires.
While our goals have not changed, the challenges confronting us have.
For the past year, it has become clear that we no longer have a partner in Washington. In fact, since President Donald J. Trump took office in January 2025, we have had an adversary in the White House working to undo and undermine our efforts to provide accessible and affordable health care, prepare our young students for the future, grow our economy, bring more energy into our state to lower costs, and keep our communities safe.
From tariffs and attacks on offshore wind to a retreat from science that continues to disrupt our higher education, life sciences and research ecosystem, President Trump and Republicans in Congress are doing more than ever before to make life harder and less affordable in Massachusetts.
Our challenges are not unique. Other states, like Massachusetts, are confronting rising health care and energy costs. Reduced federal support is putting pressure on governors and state legislatures to balance budgets while continuing to help schools prepare our young people for college and careers, care for those with mental health challenges and support cities and towns straining to deliver basic services.
But this is no time to back down. Instead, Massachusetts must lead. And that’s exactly what we are doing.
Whether that means making sure children have access to life-saving vaccines or making sure families can afford their health insurance, we are fighting every day to move Massachusetts forward despite the roadblocks being put in our way. Our House 2 budget proposal for Fiscal Year 2027, along with companion legislation to spend surplus Fair Share dollars, is just the latest example of that.
Our $62.8 billion budget is a balanced, fiscally-responsible blueprint that meets this moment we are in, showing how we can simultaneously navigate the federal upheaval, live within our means and invest in our people and our institutions. Importantly, this budget does not propose any new taxes or fees. Instead, we worked hard to limit the growth in spending and keep it more in line with projected tax revenue growth, and to direct the dollars we do have to programs and services we know will make a difference.
Our economy is resilient and continues to grow. However, we face intense pressure in our budget due to the rising cost of paying for health care through MassHealth and for our state workforce, made worse by decisions out of Washington. Our revenue estimate of $44.9 billion for FY27, agreed to with the Legislature, forecasts modest 2.9 percent growth, including revenue collected from the Fair Share surtax. As a result, we have limited budgeted spending growth to 1.1 percent over estimated spending in FY26, not including surtax, and just 3.5 percent over the signed FY26 budget.
We are also putting forward a number of proposals through both legislation and executive action to help make it more affordable to call Massachusetts home. This includes immediate winter relief on electric and gas bills, new regulations to prohibit the reporting of medical debt to consumer reporting agencies, and new capital support for first-time homebuyers to help with downpayments and lowering mortgage rates.
We propose to extend for another year the ConnectorCare pilot using available federal dollars to protect health insurance subsidies for people earning between 300 percent and 400 percent of the federal poverty level. A new Workforce Productivity Fund will help small businesses fill their workforce needs due to employee medical leave. And we have proposed a new tax credit for farmers that donate food to help reduce hunger and close the gap created by cuts and instability in the federal Supplemental Nutrition Assistance Program (SNAP).
We have also sought ways to make people’s lives easier and more affordable without requiring new funding, such as our proposal to require businesses to simplify the process for cancelling subscriptions.
Affordability doesn’t stop at the state’s doorstep. We value our partnership with our cities and towns and know the importance of giving our communities the tools and resources they need to ensure our schools, parks and downtowns remain vibrant.
This House 2 budget proposal provides for a 2.5 percent increase in Unrestricted General Government Aid and fully funds the sixth and final year of the Student Opportunity Act. This reflects a 10 percent, or $125 million, increase in UGGA and a 27 percent, or $1.6 billion, increase in Chapter 70 aid since we took office. Overall, our Administration is proposing to dedicate $10.4 billion in local aid for cities and towns, representing a $438.6 million (4.4 percent) increase over the FY26 GAA.
Furthermore, our FY27 budget expands our commitment to school transportation by investing an additional $154.3 million to reimburse school districts for a significant share of transportation costs across key programs, including regional school transportation and transportation for homeless and out-of-district students.
Our House 2 budget continues to commit the funding necessary to make community college free for anyone who wants to attend and guarantees that school meals will remain free for all Massachusetts K-12 public school students. We also continue our nation-leading support of child care with $475 million for Commonwealth Cares for Children (C3) grants, which have been instrumental in stabilizing the state’s child care system, enabling early education programs to remain open and supporting system-wide growth through investments in workforce, quality, and affordability.
This budget also invests $36.95 million in universal access to high-quality pre-K through the Commonwealth Preschool Partnership Initiative (CPPI) to meet our administration’s goal of delivering universal, high-quality preschool access for four-year-olds in all Gateway Cities by the end of 2026.
In Fiscal Year 2025, the state collected just over $3 billion in surtax. We expect similar collections in FY26 and FY27, and collectively with the Legislature have agreed to budget for $2.7 billion in Fair Share spending in FY27. We are also filing a supplemental budget that proposes to augment our programming with $1.15 billion in one-time surtax surplus from FY25.
Our Fair Share package proposes to use this resource to advance my $8 billion transportation funding plan we released last year and continue to stabilize the MBTA’s finances. We are also investing in fare-free regional transit, early literacy, high-dosage tutoring and financial aid for our higher education students.
While this budget has been challenging given the demand for limited resources, I am confident it’s a plan that minimizes negative impacts on our constituents and furthers the progress we have made together over the last three years to protect our most vulnerable citizens, support our employers and our economy, and set Massachusetts up for success in the future. I’m excited for our administration to once again partner with our friends and colleagues in the Legislature to enact a budget that reflects our shared goals and ambitions.
Sincerely,
