Massachusetts Legislature Passes Fiscal Year 2026 Budget to Safeguard Financial Health and Protect the State’s Most Vulnerable

Legislature upholds ongoing fiscal responsibility, protects core services, and reinforces the state’s economic foundation in the face of federal uncertainty

(BOSTON—6/30/2025) The Massachusetts Legislature today 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.”

“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.

 

Notable Fair Share transportation investments include:

  • $470 million in direct investment to support Massachusetts Bay Transportation Authority (MBTA) operations, including key initiatives like low-income fare relief, water ferry service and the MBTA Academy. Combined with the $535 million in funding from the recently passed Fair Share supplemental budget, the Legislature provides $1 billion in new investments in FY26 for operational improvements and transportation infrastructure upgrades across the MBTA system.

  • $120 million to support Regional Transit Authorities (RTAs) across the state. Together with resources from the General Fund, the bill provides a record $214 million for RTAs.  

  • $71.8 million for debt service for expanded new bond capacity for the Commonwealth Transportation Fund (CTF) for essential transportation projects across the Commonwealth.

  • $55 million in operating support for the Massachusetts Department of Transportation (MassDOT).

 

Education

The Legislature’s FY26 budget supports students of all ages by maintaining investments in public education at every level. The budget fully funds the fifth year of the Student Opportunity Act, provides a historic funding commitment to the Department of Early Education and Care (EEC), and stands with public and private institutions of higher education at a volatile time.

With a $1.7 billion total investment in early education and care, the Legislature is building on last year’s investments in early education, which supported the sector’s workforce, protected programming, and maintained access to affordable care for families facing economic pressures.

Notable education funding includes:

  • $475 million for the C3 operational grant program, supporting critical operational and workforce initiatives across the early education sector for the third year in a row. 

  • $517.6 million for income-eligible child care, including $100.4 million in Fair Share resources.

  • $448.2 million for Department of Children & Families (DCF) and Department of Transitional Assistance (DTA) related child care, providing critical services for families eligible for subsidized care, including $91.6 million in Fair Share resources.

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

  • $45.4 million for EEC quality improvement initiatives.

  • $20.5 million for the Commonwealth Preschool Partnership Initiative to maintain access to universal pre-kindergarten and preschool opportunities in underserved areas.

  • $20 million for Childcare Resource and Referral Centers to support parents, child care providers, employers, and community groups in navigating the state’s early education and care landscape.

  • $20 million for grants to Head Start programs to promote school readiness for young children in low-income households.

  • $5 million for grants to early education and care providers for childhood mental health consultation services.

  • $1 million to continue a public-private pilot program with employers to create new child care seats.

 

To support schools across the state, the Legislature follows through on the commitment to fully fund and implement the Student Opportunity Act by Fiscal Year 2027 and invests $7.36 billion in Chapter 70 state aid to public schools, an increase of $460 million over FY25. Further, the budget increases minimum Chapter 70 aid to $150 per pupil.

Recognizing the continued fiscal challenges faced by cities, towns and school districts as we near full implementation of the SOA, the budget 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. DESE would be required to hold four public hearings in different regions of Massachusetts before reporting back to the Legislature by June 30, 2026.

For the second consecutive year, the Legislature fully funds, at $120 million in FY26, MassEducate, the Commonwealth’s universal free community college program that became law in last year’s budget. By again delivering free tuition and fees for residents, the FY26 proposal continues its support for this vital initiative that expands economic opportunity in a regionally equitable manner across the Commonwealth.

Other education investments include:

  •  $484.9 million for the Special Education (SPED) Circuit Breaker, in addition to the $190 million included in the Fair Share supplemental budget recently signed into law. Together with Fair Share supplemental funding, the Legislature’s FY26 budget fulfills the promise of 75 per cent reimbursement for eligible tuition and transportation costs, recommending $674 million in total to reimburse school districts for the cost of educating students with disabilities.

  • $199 million for charter school reimbursements.

  • $260.8 million for scholarships to students, including $85 million in Fair Share resources to expand MASSGrant Plus financial aid support for students attending public institutions.

  • $103.7 million to reimburse school districts for regional school transportation costs, including $53.7 million in General Fund resources.

  • $30 million for higher education wraparound services, including $16 million in General Fund resources, to support services for students attending community colleges through MassEducate, and $14 million in Fair Share resources to support wraparound services for students attending state universities.

  • $12 million for rural school aid support.

  • $14.3 million for early college programs and $13.1 million for dual enrollment, along with $8 million for Reimagining High School to empower high school students to take college courses prior to graduation.

  • $5 million to support continued implementation of the Massachusetts Inclusive Concurrent Higher Education law, including $3 million for grants offered through the Massachusetts Inclusive Concurrent Enrollment initiative to help high school students with intellectual disabilities aged 18–22 access higher education opportunities; and $2 million for the Massachusetts Inclusive Concurrent Enrollment Trust Fund.

  • $3 million for the Genocide Education Trust Fund to continue the state’s commitment to educate middle and high school students on the history of genocide.

  • $2.5 million for the Civics Education Trust Fund to maintain and support a statewide civic infrastructure, provide professional development to teachers, and ensure that every student can access high quality civics education.

  • $1 million for Hate Crimes Prevention Grants to support education and prevention of hate crimes and incidences of bias in public schools. 

 

Community Support

Highlighting the Legislature’s longstanding commitment to sustainable partnerships between the state and local governments, the budget agreement provides significant resources to support all Massachusetts cities and towns, ensuring that the state can meet the needs of every region, city, and town—and leave no corner of the Commonwealth behind.

The proposal includes $1.323 billion in funding for Unrestricted General Government Aid (UGGA), the primary source of direct flexible state aid to Massachusetts towns and cities, an increase of $14.4 million over FY25. UGGA funding supports resources for municipalities as they collectively confront increased fiscal constraints at the local level.

In addition to traditional sources of local aid, the Legislature’s FY26 budget also increases payments in lieu of taxes (PILOT) for state-owned land to $54.5 million. PILOT funding provides a supplemental source of local aid for cities and towns working to protect and improve essential services and programs.

Other local investments include:

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

  • $115.6 million for local housing authorities.

  • $52.4 million for libraries, including $19 million for regional library local aid, $20 million for municipal libraries and $6.2 million for technology and automated resource networks.

  •  $30.8 million in grants to Councils on Aging, increasing assistance per elder to $16 from $15 in FY25.

  • $27 million for the Massachusetts Cultural Council to support local arts, culture, and creative economic initiatives.

  •  $5 million to implement an immigration legal services program distributed by the office for refugees and immigrants to designated non-profit organizations to increase access to legal representation, advice, and advocacy for immigrants and refugees who are facing enhanced legal threats from the federal government.

The FY26 budget codifies fare-free RTA service, which will require all RTAs to eliminate passenger fares for fixed routes and ADA-required paratransit service. With this measure, the Legislature continues to prioritize regional equity, support RTAs as an essential public service that connects communities, and provide a crucial connection for commuters, students, seniors, and people with disabilities.

Health, Mental Health, and Family Care

The Legislature’s FY26 budget funds MassHealth at $22.1 billion, an increase of over $2 billion over the last fiscal year. As the largest cost driver in the state’s budget, MassHealth alone accounts for 62 per cent of the total spending increase over the FY25 budget. Amid ongoing uncertainty in Washington, this budget maintains access to comprehensive health care coverage for over 2 million Massachusetts residents. MassHealth covers affordable, accessible, and comprehensive health care services for more than one in four residents, nearly half of all children, and seven out of every ten nursing facility residents.

Other health investments include:

  • $3.26 billion for a range of services and focused support for people with intellectual and developmental disabilities, including $2 billion for community residential services and $287 million for the Department of Developmental Services (DDS) Community Day and Work program.

  • $1.82 billion to support the Personal Care Attendant program and its historic collective bargaining agreement which raised the wage scale to $25 per hour.

  • $694 million for adult support services, including $19 million to support jail diversion initiatives to better serve individuals with mental illness and substance use disorders and connect them with appropriate treatment.

  • $650.1 million for nursing facility Medicaid rates, including $25 million in additional base rate payments to maintain competitive wages in the Commonwealth’s nursing facility workforce.

  • $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.

  • $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.

  • $187.1 million for the Bureau of Substance Abuse Services (BSAS), including $500 thousand in new funding to develop the state’s recovery coach workforce, which will support key initiatives from last session’s Substance Use Disorder and Recovery Coach Licensure Act.

  • $132 million for children’s mental health services.

  • $102 million for nursing facility enhanced Medicaid rates to begin implementation of the 2024 Long-Term Care Act, including $25 million to support the nursing home workforce.

  • $73.1 million for domestic violence prevention services.

  • $39.3 million for Early Intervention (EI) services, maintaining necessary support and services for infants and young toddlers with developmental delays and disabilities.

  • $35 million for Family Resource Centers (FRCs) to maintain mental health resources available to families.

  • $26.5 million for family and adolescent health, including $11.2 million for comprehensive family planning services and $6.7 million to enhance federal Title X family planning funding.

  • $22.7 million for school-based health programming and services, including $3 million for school-based mental health services.

  • $14.3 million for suicide prevention and intervention, with an additional $1.8 million for Samaritans Inc. and $1.1 million for the Call2Talk suicide prevention hotline. This investment protects and fully funds 9-8-8, the 24/7 suicide and crisis lifeline.

  • $14.7 million for maternal and child health, including $10.8 million for pediatric palliative care services for terminally ill children and a policy adjustment to ensure that children up to age 22 can continue to be served through the program.

  • $12.75 million for Meals on Wheels and other nutrition programs for seniors.

  • $9.3 million for community health centers, including $1 million for gender affirming care services.

  • $5.5 million for children advocacy centers to maintain critical support available to children that have been neglected or sexually abused.

  • $5.5 million for the Office of the Child Advocate.

  • $3.75 million for the Massachusetts Center on Child Wellbeing and Trauma.

  • $3 million for Social Emotional Learning (SEL) grants to bolster social emotional learning support for K-12 students.

  • $2.5 million for clinical care, veterans’ mental and behavioral health issues, including post-traumatic stress, traumatic brain injury, substance use disorder and suicide prevention administered by the Massachusetts General Hospital Home Base Program.

  • $2 million for grants for improvements in reproductive health access, infrastructure, and safety.

  • $1.25 million for 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.

  • $150,000 for Reproductive Equity Now Foundation, Inc. to operate a free and confidential abortion legal hotline for Massachusetts-based health care providers and helpers, as well as patients obtaining care in-state.

 

The budget establishes a legislative commission to study the future of the Pappas Rehabilitation Hospital for Children, including a review of the hospital’s finances and programs.

To help residents manage high prescription drug costs, the budget also extends the right of consumers to use coupons to pay for prescription drugs. The provision is extended through 2031.

Additionally, it requires the Department of Public Health to form a strategic task force to prepare recommendations for the continuity of abortion and abortion-related care in the Commonwealth in the event of the federal government ending support for reproductive care. 

Expanding and Protecting Opportunities

The Legislature is committed to expanding opportunity and supporting the state’s most vulnerable residents. This budget therefore maintains the annual child’s clothing allowance, providing $500 per child for eligible families to buy clothes for the upcoming school year. The budget also fully annualizes the FY25 10 per cent increase to Transitional Aid to Families with Dependent Children (TAFDC) and Emergency Aid to the Elderly, Disabled and Children (EAEDC) benefit levels to help families move out of deep poverty. Additionally, the budget ensures that pregnant women can access TAFDC, regardless of where they are in their pregnancy.

The Legislature’s budget dedicates $86 million to support food security and child nutrition initiatives, including $50.5 million for Emergency Food Assistance to assist residents in navigating the historical levels of food insecurity, $20.1 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.

Economic opportunity investments include:

  • $5 million for the Secure Jobs Connect Program, providing job placement resources and assistance for homeless individuals.

  • $3.1 million for the Innovation Pathways program to continue to connect students to training and post-secondary opportunities with a focus on STEM fields.

  • $1 million for employment programs for young adults with disabilities.

 

Housing

As the state envisions a more fiscally sustainable path for its future, increasing affordable housing opportunities and addressing housing challenges remain at the forefront of the Legislature’s agenda. This budget therefore invests more than $1.15 billion in housing initiatives, dedicating resources for housing stability, residential assistance, emergency shelter services, and homelessness assistance programs. 

Housing investments include:

  • $253 million for the Massachusetts Rental Voucher Program (MRVP).

  • $207 million for Residential Assistance for Families in Transition (RAFT).

  • $115.6 million for local housing authorities.

  • $113.3 million for assistance for homeless individual shelters.

  • $57.3 million for the HomeBASE program to support sustainable exits from shelter.

  • $19.5 million for the Alternative Housing Voucher Program (AHVP), providing rental assistance to people with disabilities.

  • $18.2 million for homeless program administration to move people from the Emergency Assistance shelter system.

  • $16 million for the Executive Office of Housing and Livable Communities.

  • $10.6 million for assistance for unaccompanied homeless youth.

  • $10 million for sponsor-based supportive permanent housing to support 16 new housing units and case management services for vulnerable individuals.

  • $8.9 million for the Home and Healthy for Good re-housing and supportive services program, including funding to support homeless LGBTQ youth.

  • $6.5 million for resident service coordinators to help residents maintain stable tenancies at local housing authorities, which are required to provide households with the services they need.

  • $5.85 million for housing consumer education centers.

  • $2.5 million for access to counsel.

In addition to these investments in housing, the budget includes a provision requiring that residential rental broker’s fees must be paid by the contracting agent, often the landlord of an apartment, ensuring that renters are not burdened with unexpected and extraordinary costs.

The budget also kickstarts two studies on ways to bring down housing costs for Massachusetts residents and increase 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.  The budget further creates a commission to help begin to explore solutions to address the remediation of concrete housing foundations that have crumbled because of the presence of pyrrhotite.

Further, the budget includes a provision that will allow candidates for elected office in Massachusetts to use their campaign funds for adult care services being provided to that candidate’s parent or other adult dependent, that occur because of campaign activities. In the 2024 economic development bill, the Legislature approved the use of campaign funds for child care.

Both chambers of the Legislature having voted to enact the legislation, the budget will now be sent to the Governor for her signature.

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Releases & StatementsSarah Blodgett