Fact Sheet and Highlights: Legislature’s Fiscal Year 2026 Budget

Top Line Spending

Total Budget. The budget agreement totals $61.01 billion in spending, an increase of $3.3 billion over Fiscal Year 2025.

The final bottom line represents a reduction of nearly $1 billion from House 1, and nearly $500 million below either branches original bottom line. This reduction in overall spending better prepares the Commonwealth to address underlying budget challenges and navigate potential economic turmoil in the months ahead. 

Total Fair Share Funding. Reflective of strong surtax revenue collections to date, the budget agreement totals $2.4 billion in Fair Share spending to support quality public education initiatives and upgrades to the state’s transportation infrastructure. Together with the $1.39 billion Fair Share supplemental budget signed into law earlier this month, the Legislature has directed nearly $3.8 billion in Fair Share funding support this year to invest in education and transportation.  Additionally, the budget agreement increases the annual dedication of fair share revenues into the Commonwealth Transportation Fund from $250M to $550M, which will unlock billions of dollars of transportation investments in the years to come.

Taxes and Stabilization Fund

Taxes. The Legislature’s budget does not raise taxes or fees on Massachusetts residents or businesses.

“Rainy Day” Savings. The Legislature’s budget invests an additional $33 million in the 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% as of FY24.

New Initiatives and Investments

Residential Broker Fees. Requires any broker fee to be paid by the party that reaches out to the broker, ensuring that fee agreements worked out between a landlord and a broker are not passed on to a tenant.

Permanent Fare-Free Regional Transit. Codifies fare-free regional transit into the state’s budget and funds fare-free regional transit service, so anyone can use the regional transit network for no cost.  Regional transit use surged since the fare free initiative began, with 26.5 million rides in FY24.

Campaign Funds for Adult-Care Services. Allows the use of campaign funds for care services provided to a candidate’s parent or other adult dependent. Last year, the Legislature similarly approved the use of campaign funds for child care.

Housing Sales Tax Exemption Study and Local Property Tax Exemption Study. Kickstarts two studies on lowering housing costs for Massachusetts residents and increasing housing production. One study for a sales tax exemption for multifamily housing projects stalled by federal tariffs. Another that would incentivize new affordable housing developments when considering local tax levy requirements.

Annuity Eligibility for Remarried Gold Star Spouses. Allows Gold Star Family spouses to remarry without the penalty of losing their annuity benefit. The Legislature increased annuity payments to $2,500 by passing the HERO Act last session.

Local Education Funding Study. Directs the Department of Elementary and Secondary Education (DESE) to study components of the state’s K-12 school funding formula related to local contribution requirements and report back to the Legislature by June 30, 2026.

Employee Retirement Savings Creates a statewide retirement savings program that would enroll private sector workers, at no cost to the employer, who lack access to a savings plan at work, helping to preserve a secure retirement for thousands of Massachusetts workers.

Pappas Rehabilitation Hospital Special Legislative Commission. Establishes a special legislative commission to conduct a comprehensive study into the future of the Pappas Rehabilitation Hospital for Children, including a review of the hospital’s finances, programs, pediatric services and infrastructure. The budget provides $31 million in funding to maintain operations for the fiscal year while the commission conducts its work, and the report is due back to the Legislature by December 31, 2026.

Crumbling Concrete Commission. Tasks a working group to recommend new legislation and regulatory changes needed to address the remediation of concrete foundations that have crumbled because of the presence of pyrrhotite.

ROCA Young Mothers Experiencing Acute Trauma Pilot Program. $1.25 million to support the Young Mothers Experiencing Acute Trauma Pilot Program, a behavioral intervention program that works to stabilize and support young women, most of whom are mothers, who are traumatized survivors of abuse and neglect.

Gender-affirming Care Access Program. $1 million to bolster health centers that recently experienced cuts to their Title X federal funding.

Firefighter Health and Wellness. $250,000 for a municipal grant program for firefighter cancer screenings, including advance blood testing and imaging. Additionally, the Fiscal Year 2026 budget increases funding for the On-Site Academy to $2 million, providing critical incident stress management and mental health support for firefighters, police officers, EMTs, and corrections officers.

Continued Initiatives

Student Opportunity Act. Fully funds and implements the fifth year of the Student Opportunity Act, investing a record-breaking $7.36 billion in Chapter 70 state aid to public schools, an increase of $497 million over FY25. Further, the budget also increases minimum Chapter 70 aid to $150 per pupil.

Unrestricted General Government Aid. Provides $1.323 billion in funding for Unrestricted General Government Aid (UGGA), increasing the primary source of direct state aid to Massachusetts towns and cities by $14 million over FY25.

Universal Free Community College. $120 million to fully fund the MassEducate program, ensuring any Massachusetts high school graduate can attend community college at no cost. Free community college was codified into law in the FY25 budget and community college enrollment surged by 14% in fall of 2024, the first increase since 2013. The FY26 budget adds non-credit courses for EMT and Paramedic training to the list of programs that can be offered at no cost.

Commonwealth Cares for Children (C3) Grant Program. For the third year in row, the budget invests $475 million for the C3 operational grant program, supporting critical operational and workforce initiatives across the early education sector. The FY25 budget made the grants permanent, and in 2023 the C3 program contributed to a 7 percent increase in child care programs, adding more than 10,600 child care slots across the state.

Free School Meals. The budget agreement includes $180 million for universal free school meals, ensuring all students in Massachusetts can receive free breakfast and lunch at school, regardless of their family’s income. The first year of the program served 97.5 million lunches total, and about 557,000 students every day, and many were served with locally sourced food.

MBTA. $470 million in direct investment to support the MBTA system, which combined with the $535 million in funding from the recently passed Fair Share supplemental budget, provides $1 billion in new investment in Fiscal Year 2026 for operational improvements and transportation infrastructure upgrades across the MBTA system. Recently, the MBTA’s Track Improvement Program removed more than 220 speed restrictions and replaced more than 250,000 feet of rail, saving riders 2.4 million minutes every weekday and generating $1 million per day in economic benefits.

Regional Transit Authorities. $209 million for Regional Transit Authorities to support regional public transportation systems, including $115 million from Fair Share funds to maintain regional bus service, sustain systemwide fare free transit service, and support commuter operations.

Attorney General. $83 million for the Attorney General’s Office, a nearly $9 million, or 12%, increase over FY25 as she helps defend Massachusetts residents from the impact of federal actions.

Food Insecurity Investments. $86 million to support food security child nutrition initiatives, and local farmers, including $50.5 million for Emergency Food Assistance to assist residents in navigating the historical levels of food insecurity, $20 million for the Healthy Incentives Program (HIP) to ensure access to healthy food options, and $15.5 million for the Women, Infants, and Children (WIC) Nutrition Program.

MassHealth Investments. Amid continued uncertainty in Washington, the budget agreement maintains access to comprehensive health care insurance coverage for over 2 million Massachusetts residents, providing a significant $22.1 billion investment in MassHealth, an increase of over $2 billion from FY25. MassHealth serves nearly 2 million residents.

Jail Diversion. $19 million for adult services programs at the Department of Mental Health, helping people with mental illnesses find alternatives to incarceration when they are involved in the criminal justice system.

DPH Hospital Operations, Pappas Rehabilitation Hospital. $237.7 million for Department of Public Health (DPH) hospital operations, including $31 million to fully fund and maintain operations of the Pappas Rehabilitation Hospital for Children through the duration of FY26.

DMH Community-Based Services. $381 million for Department of Mental Health (DMH) hospital and community-based services, including $4.8 million to fully fund the operation of the Pocasset Mental Health Center.