The House Ways and Means Committee’s (HWM) FY 2026 budget proposal, released Wednesday, April 16th, allocates $61.4 billion in spending for the Commonwealth.
Transformational Change Continues to Happen Thanks to Fair Share
Revenue from the Fair Share surtax on incomes over $1 million continues to support transformational changes throughout the Commonwealth in the HWM proposed budget. The HWM’s proposal invests $1.19 billion in education funding and $765 million in transportation funding. Some notable Fair Share investments in education include increasing funding by $20 million over FY 2025 levels for universal free school meals, expanding the SUCCESS wraparound support program to UMASS with $10 million, and $20 million to support green energy projects at K-12 schools. The HWM proposal permanently dedicates $500 million of surtax revenue to the Commonwealth Transportation Fund, allowing for additional bonding capacity to help create new infrastructure investments in transportation. The proposal also provides $110 million in funding to Regional Transit Authorities for improvements to regional transit across the Commonwealth, level-funded from FY 2025
It’s worth noting that there is a FY 2025 supplemental budget proposal allocating additional Fair Share revenue. This supplemental budget proposal invests $828 million in transportation and $353.5 million in education.
Commendable Steps, but More Can Be Done
Due to rising program costs and improvements in the quality of care, an additional $100 million investment in the Income-Eligible Child Care program will allow the Department of Early Education and Care (EEC) to serve the same number of low-income children as did the previous fiscal year. The HWM budget proposal adds $15 million for new, contracted child care seats that will allow EEC to serve around 1,000 more children which shows the commitment to providing more children with affordable and quality child care. The child care waitlist currently sits at over 30,000 children and will require significant additional revenue to fully address the child care needs for families with low-and moderate-incomes in the Commonwealth.
With regard to housing, the proposal does not go far enough to address the needs of Massachusetts residents. Though the HWM’s budget proposal includes language in the Outside Sections restricting the practice of forcing tenants to pay real estate broker fees, it is not as strong as the Governor’s proposed language. In the HWM version, this practice would continue to be allowed if the renter initiates contact with a broker or salesperson, including responding to a listing, allowing forced broker fees to continue for a large swath of renters.
Cuts to Emergency Shelter Leave Families Vulnerable
The HWM budget proposes a $50 million decrease to Emergency Assistance Family Shelters compared to the Governor’s FY 2026 proposal. The lower level of funding is attributed to the newly implemented changes restricting access to shelters, but these changes leave many families unable to utilize this critical program. The HomeBase program, a main tool to transition individuals and families out of shelter and homelessness in the Commonwealth, received level funding from FY 2025. The combination of the reduction in emergency shelter funding and level-funding of HomeBase raises concerns about how the Commonwealth will prevent its homelessness crisis from getting worse and be able to re-house families currently in shelter.
While more investments in housing programs are needed, HWM took a positive step in bolstering Residential Assistance for Families in Transition (RAFT), a program that provides short-term emergency funding to help individuals and families faced with eviction, foreclosure, loss of utilities, or other housing emergencies. The budget proposal slightly increased funding for the program (by $5 million) and most importantly protects the current benefit level of $7,000 per 12-month period. It does not grant the authority to the Executive Office of Liveable Communities to alter the benefit level, as proposed in the Governor’s FY 2026 budget proposal.
Funding to Cities and Towns Shifts
The HWM budget proposal level-funds unrestricted general government aid (UGGA), a large source of flexible aid for cities and towns. Historically, this funding increases at a similar rate to tax revenue growth, which was reflected in the Governor’s FY 2026 proposal with an additional $28 million for UGGA. Cities and towns rely on this aid to support all local services including public works and first responders. Instead, the HWM budget proposal prioritizes education funding to cities and towns with $40 million more allocated for Chapter 70 aid. This allows an increase to minimum per pupil aid to $150. While this is helpful, it tends to provide more benefits to wealthier towns that do not receive Chapter 70 funding based on traditional factors like enrollment growth and financial need. However, the combination of the HWM FY 2026 budget proposal and the supplemental Fair Share surtax spending should provide all types of districts with significant additional funds for the year ahead.
Lack of Revenue Raisers and Federal Funding Uncertainty Present a Challenge
The HWM committee did not include any of the Governor’s proposed revenue raisers that would have resulted in over $400 million in additional revenue. Notably, the HWM budget proposal failed to adopt the cap to the charitable contribution tax deduction, which would have raised $164 million in revenue and primarily impacted higher income earners as the majority of tax benefit from the state’s charitable deduction accrues to households with incomes over $1 million.
With unprecedented federal budget cuts looming, it is important to consider additional avenues to raise revenue. Over the past two years, Fair Share has provided a substantial boost to education and transportation funding. However, additional support is still needed for the critical services that low- and middle-income residents rely on. Implementing other policies, such as closing a corporate tax loophole, would provide more resources to sustain these essential programs.
