State Legislature Passes FY2026 Budget to Safeguard Financial Health and Protect the State’s most Vulnerable

Special to the Transcript

The Massachusetts Legislature has enacted a $61.01 billion state budget for Fiscal Year 2026, a fiscally responsible plan that protects core services for the state’s most vulnerable residents, maintains critical investments, and positions the Commonwealth to confront the underlying budget challenges that are a result of federal funding uncertainty.

Approved on a bipartisan basis in both chambers, the budget neither raises taxes on residents and businesses nor spends dollars from the state’s stabilization fund—also known as the ‘Rainy Day Fund’—which currently stands at a historic $8.1 billion.

“This budget is a commitment to a more affordable, accessible, and inclusive Commonwealth. It responsibly manages taxpayer dollars while at the same time investing in the areas that matter most to every region of Massachusetts—housing, education, transportation, and protecting residents threatened by federal actions,” said Senate President Karen E. Spilka (D-Ashland). “No matter what part of our state you live in, this budget will expand opportunity, reduce everyday costs, and protect the services people rely on. I am deeply grateful to Chair Rodrigues, Vice Chair Comerford, Assistant Vice Chair Feeney, the committee, and all my Senate colleagues and staff for their thoughtful and collaborative work on this budget, as well as Speaker Mariano and our partners in the House who worked to get this done for Massachusetts.”

“This FY26 budget makes key investments that better support Massachusetts students and families, that increase access to affordable health care, and that provide for a safer and more reliable public transportation system – all without raising taxes. In a moment of incredible uncertainty at the federal level, this budget is proof that government can be both fiscally responsible and an agent of good, the kind of government that our residents deserve,” said House Speaker Ronald J. Mariano (D-Quincy). “I want to thank Chairman Michlewitz and my colleagues in the House, as well as our partners in the Senate, for working diligently to craft a budget that delivers for our constituents in a fiscally responsible manner.”

“The Fiscal Year 2026 budget agreement of $61.01 billion reached by the House and Senate supports the Commonwealth’s priorities by making highly impactful and transformative investments in education, transportation, local aid, health and human services, housing, public safety, and other vital areas. Our final figure is a smart reduction of almost $1 billion from the original House 1 number, laying a strong foundation for the many challenges that lie ahead. This budget is centered on the principle of fiscal responsibility, never more important with the continuing economic uncertainty at the federal level,” said Senator Michael J. Rodrigues (D–Westport), Chair of the Senate Committee on Ways and Means. “The budget reflects the Legislature’s deep and steadfast commitment towards achieving long-term sustainability while protecting core services for our most vulnerable populations. Thank you to Chair Michlewitz and the conference committee conferees, whose thoughtful input, advocacy, and collaboration resulted in the first on-time budget in 15 years. Thank you to both committee staffs, whose tireless work was largely responsible for producing this budget. Lastly, I would like to offer a heartfelt thank you to Senate President Spilka for placing her trust in me, and for her compassionate and resolute leadership as we work together to rebuild our economy and grow our state’s long-term economic health.”

“This final $61 billion Fiscal Year 2026 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 Ferrante 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.”

“As federal cuts continue to cause chaos and harm, the Legislature is delivering an on-time budget with record levels of investment in education, transportation, and local aid,” said Senator Jo Comerford (D-Northampton), Vice Chair of the Senate Committee on Ways and Means. “This regionally equitable budget supports our people, institutions, and communities at a critical time. Thank you to Senate President Karen Spilka, Ways and Means Chair Michael Rodrigues, fellow conferees, and our teams for this responsive budget.”

“At a time when our partnership with the federal government is uncertain, the Legislature has recommitted to the values that make Massachusetts a leader in the nation, producing a fiscally responsible and balanced budget that meets the moment,” said Representative Ann-Margaret Ferrante, Vice Chair of the House Committee on Ways and Means (D-Gloucester). “With investments to strengthen public education and promote economic and workforce development, this budget reinforces our long-term competitiveness and works to make sure that Massachusetts remains a place where families and businesses can grow and thrive.”

“This budget was passed on time for the first time in many, many years and reflects our collective belief in accountability and good governance. Along with this important accomplishment, this budget continues the Commonwealth’s commitment to maintaining the nations best public school system, dramatic improvements in our public transportation system, road, sea and rail, as well as significant investments in our communities. I am grateful that a new error of collaboration has produced such a good result despite the fiscal uncertainties facing us,” said State Representative Jeffrey Rosario Turco (D. Winthrop).

“I am filled with optimism as I reflect on the outcome of the FY26 Budget conference committee. Through strong bipartisan collaboration, we in the House and Senate reached a consensus that not only addresses current needs but also sets a positive precedent for future partnerships. This final agreement reflects our shared commitment to the people of the Commonwealth and our ability to work together for the greater good” said Senator Patrick M. O’Connor (R-Weymouth), Ranking Member of the Senate Committee on Ways and Means. “The success of the FY26 budget underscores the incredible potential we unlock when we come together across party lines. We’ve made meaningful investments in critical areas, addressing urgent funding gaps and expanding access to higher education. These among other achievements demonstrate that balancing fiscal responsibility with community-focused priorities is not just possible, it is reality when collaboration leads the way. As the Ranking Minority Member of the Senate conferees, I am immensely proud of the cooperation and mutual respect that shaped our discussions.”

“This budget reflects the priorities of our communities and many advocates that have worked to make their voices heard throughout the process. Massachusetts remains focused on making improvements in education, public safety, human services and sending resources to programs that make a difference in the lives of children, families and seniors,” said State Representative Todd Smola, Ranking Member, Committee on Ways and Means (R-Warren). “We are mindful of the challenges that may be ahead, which is why we have settled on a balanced number. In the final analysis, we stay focused and committed to the greatest needs in our state so that we can prosper in the future.”

The Legislature’s final budget increases spending by $3.3 billion over Fiscal Year 2025, with the much of the increase attributed to MassHealth. Aligned with estimated tax revenue growth, the spending plan is based on a consensus tax revenue estimate of $41.214 billion for the coming fiscal year, a 2.25 per cent increase over the current fiscal year’s benchmark. Based on strong Fair Share surtax revenue collections to date, the Legislature’s budget includes $2.4 billion in available Fair Share generated revenues to support education and transportation investments, an increase of $1.1 billion over the last fiscal year.

The Legislature’s budget invests an additional $33 million in the Commonwealth Stabilization Fund. With the addition, the Fund’s balance would reach a historic high of $8.26 billion by the end of FY26. Since 2017, when the Fund’s balance was $1.3 billion, the Legislature has grown the account by 523 per cent as of FY24. 

Fair Share Investments

The Legislature’s budget includes $2.4 billion in Fair Share surtax spending, which is dedicated to  investments in public education and state transportation infrastructure.

Notable Fair Share education investments include:

• $360 million for the Commonwealth Cares for Children (C3) grant program, which is matched with $115 million in funds from the Early Education and Care Operational Grant Fund, for a total investment of $475 million. Despite the loss of federal funds after the COVID pandemic, the Commonwealth has maintained this vital early education program which has lowered costs for families and increased opportunities for teachers in the field.

• $460 million for Student Opportunity Act (SOA) expansion to support the fifth-year implementation of the SOA and provide $150 in minimum per-pupil aid for school districts.

• $180 million for universal free school meals.

• $120 million for MassEducate, the Commonwealth’s universal free community college program, including non-credit tuition funding for those seeking to become emergency medical technicians and paramedics.

• $192 million to provide child care financial assistance to families in need, which is in addition to the $773.7 million funded through general revenue.

• $91.6 million to maintain Department of Children & Families (DCF) and Department of Transitional Assistance (DTA) related child care, which is in addition to the $356.5 million funded through general revenue.

• $85 million to maintain financial aid programs for in-state students attending state universities through MASSGrant Plus, which is in addition to the $175.8 million for scholarships funded through general revenue.

• $83 million for child care supports to maintain current capacity and rates of the child care financial assistance program.

• $50 million for school transportation reimbursement costs, which is in addition to $53.7 million funded through general revenue.

• $14 million for the State University SUCCESS Program, providing wraparound supports to students at public state universities.

• $15.5 million for the Commonwealth Preschool Partnership Initiative (CPPI), matching $5 million in general revenue for a total of $20.5 million, to support a pathway to universal pre-kindergarten expansion, including in Gateway Cities and the Summer Step Up program.

• $15 million for early literacy initiatives and programs.

• $8 million for the Reimagining High School Initiative.