The Senate Ways and Means Committee’s FY 2026 budget proposal, released Tuesday, May 6, allocates over $61.3 billion in spending for the Commonwealth.
Click here to read our day-of reactions.
Fare-Free Programs at Regional Transit Authorities Receive a Much-Needed Boost
The Senate Ways and Means (SWM) Committee is proposing $214 million for Regional Transit Authorities (RTAs). This is $10 million more than the House Budget proposal. These additional dollars would go to the fare-free programs at RTAs, increasing its appropriation from $30 million in FY 2025 to $40 million. The fare-free programs have been very successful at increasing ridership and improving services. The SWM proposed increase addresses expansion needs and the ridership growth for the RTAs. For instance, two of the RTAs have not yet adopted fare-free policies and reportedly not all the fare-free RTAs started the program at the beginning of the fiscal year. This increase is much-needed with more riders, additional months of service, and potentially more fare-free RTAs.
Lower Funding for the MBTA May Lead to a Deficit
The SWM budget proposal would transfer $500 million to the Commonwealth Transportation Fund to support MBTA operations, $187 million less than the House proposal. The lower level of investment in the MBTA proposed in the SWM may lead to a budget deficit and force the MBTA to cut service and/or increase fares to make ends meet.
The SWM proposal would also increase the transfer from the Education and Transportation Fund (revenue from the Fair Share surtax) to the Commonwealth Transportation Fund from $250 million to $600 million. While the MBTA receives a portion of this money, the fund also supports other transportation needs. This proposal is $100 million more than the House proposal.
Increased Investments in Financial Aid Expand Access to Free College Education
MASSGrant Plus would receive a $20 million increase from FY 2025 funding in the SWM proposal, which would bring the program’s total funding to $100 million. The program provides scholarships to cover the remainder of tuition not covered by financial aid for students enrolled across state colleges and universities. Previous increases to the program benefitted 25,000 students across the Commonwealth. This increase, along with continued investment in tuition-free community college, wraparound student support services in the FY 2026 budget proposal and higher education capital investments proposed in the SWM FY 2025 supplemental budget, constitutes a strong investment in higher education funding. While this is an important investment to support students, in light of recent boosts to scholarship programs, even more funding may be necessary to support the new influx of students drawn to attend free community colleges and more affordable opportunities at UMass and state universities.
Funding for Child Care Vouchers Does Not Address Need
The SWM budget proposes $1.06 billion for the Child Care Financial Assistance (CCFA). This is a $2 million increase compared to the combination of the House FY 2026 budget proposal and FY 2025 supplemental budget. It is important to note that the Senate FY 2025 supplemental budget proposal is still pending. The FY 2026 SWM budget proposed funding level for CCFA would maintain the projected caseload, but is unlikely to reduce the income-eligible child care waitlist, which currently exceeds 30,000 children. The Department of Early Education and Care has not been able to release new income-eligible vouchers since March 2024. At this funding level, the freeze on vouchers will likely continue through Fiscal Year 2026, leaving tens of thousands of low-income Massachusetts families without access to affordable child care.
In light of recent federal cuts to Head Start, it is worth noting the SWM budget proposal would increase Head Start state grants by $1.5 million over the House budget proposal for a total of $20 million.
Expanding Affordable Retirement Access to Small- and Medium-Sized Nonprofits
The SWM budget proposal would expand access to retirement savings by allowing more nonprofits to offer their employees the CORE plan, a state administered retirement program. SWM proposes increasing the employee cap from 20 to 100 for the publicly-managed retirement savings program for small non-profits. Increasing the employee cap will make this retirement program more accessible to people across the Commonwealth and will significantly decrease the administrative costs that nonprofits pay for traditional 401k programs.
Funding to Cities and Towns Shifts Back to the Norm
The SWM proposal increases funding for Unrestricted General Government Local Aid (UGGA), a large source of flexible aid for cities and towns, by approximately $29 million (totaling $1.34 billion). This increase is on par with historical increases to the program and differs from the House proposal to provide level funding from FY 2025.
Additionally, the SWM budget proposal would create a commission to study the current distribution method used to allocate UGGA to municipalities. The commission would consist of the chairs and ranking members of the Joint Committee on Ways and Means and representatives from other organizations, including MassBudget.
Funding for Housing Falls Short of Adequately Addressing the Housing Crisis
The SWM budget proposal would increase Residential Assistance for Families in Transition (RAFT) by $17.5 million over the House budget proposal. This significant increase would allow the program to keep up with rising housing costs and help more people, which is urgently needed. The SWM budget proposal matches the Governor’s proposed $34 million increase to the Massachusetts Rental Voucher Program, but does not build on it as the House did.
Despite these increases, the SWM budget proposal decreases funding for Emergency Assistance shelter by approximately $50 million compared to FY 2025 (matching the House proposal), and maintains level-funding for HomeBASE, which is effectively a cut due to inflation.
The SWM budget also proposes language banning the practice of requiring tenants to pay broker fees when renting a home. This is a positive change to better protect tenants from these unfair practices. The SWM proposal is stronger than the House proposal, as it does not contain a loophole that would allow landlords to pass on broker fees to people who respond to listings.
Looming Federal Cuts Create an Uncertain Revenue Picture for the Commonwealth
With federal budget cuts on the horizon, neither the House or SWM budget proposals include significant revenue raisers. The SWM budget proposes directing $33 million of the $666 million in excess capital gains collections to the Stabilization (“rainy day”) Fund and the rest to various pension funds. This frees up some $633 million in the general fund for budgeting purposes, or about $100 million more than the Governor’s and House budget proposals. While this is a helpful step, at present it appears very likely that additional revenue will be needed to offset the anticipated federal budget cuts. 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 other critical services that low- and middle-income residents rely on. Implementing other revenue generating policies, such as closing a corporate tax loophole and capping the state charitable deduction, would provide more resources to sustain these essential programs.
In the coming weeks, MassBudget will issue an in-depth analysis of the final FY 2026 Senate budget proposal after amendments are considered and the budget is finalized. The Senate is also currently debating amendments to the FY 2025 Senate supplemental budget proposal which uses one-time Fair Share surtax dollars. We will share more on where that proposal lands in our in-depth analysis.
