The Conference Committee’s Fiscal Year 2026 budget proposal, released Sunday, June 29, allocates over $61 billion in spending for the Commonwealth. Below, MassBudget shares our preliminary analysis of the proposal.
Click here to read our statement in response to the proposal put forward by the Conference Committee.
Additional Fair Share Revenue Supports Critical Education and Transportation Programs
Reassured by Fair Share surtax revenue collections for FY 2025 nearing $3 billion, the Conference Committee opted to use the full estimated Fair Share revenue for FY 2026 of $2.4 billion versus the spending threshold of $1.95 billion. This additional $450 million dollars would bolster programs like free school meals for K-12 children, community college reform, state university operational funding, and supports for child care and preschool.
The Conference Committee allocates $275 million of Fair Share dollars to maintain the current capacity of our child care financial assistance (CCFA) program. Of this total, $192 million is split between two programs: Income-Eligible Child Care and Supportive Child Care. This funding was appropriated via the General Fund in the House and Senate proposals, but is funded by Fair Share revenue in the Conference budget. The remaining $83 million allocated for child care support programs results from a compromise between the House and the Senate proposals which had a significant discrepancy in funding allocation to maintain CCFA caseloads.
For transportation, the Conference Committee budget increases the transfer to the Commonwealth Transportation Fund from $250 million to $550 million, allowing for the potential increase in investments for transportation projects across the Commonwealth.
More Families to Receive Child Care Support
The Conference provided $10.7 million in critical funding to address the CCFA waitlist, less than the House’s $15 million for the CCFA waitlist, but more than the Senate, which did not provide waitlist funding. This funding will create about 600 seats for families on the waitlist. There are currently over 30,000 children on the child care waitlist and the Department of Early Education and Care has not been able to award new income-eligible vouchers since March 2024.
Boosts to Education Funding
In line with both branches’ proposals, state Chapter 70 aid is increased to $7.36B in the conference agreement, an increase of nearly $460M above current levels. A portion of this increase is provided for with Fair Share surtax resources, with the Student Opportunity Act Expansion receiving $497 million in funding through Fair Share revenue. This budget also increases minimum per pupil Chapter 70 student aid to $150, up from $104 in FY 2025. While many districts benefit from the Student Opportunity Act, this increase to minimum aid will provide more support to schools (including those in rural areas or those with declining enrollment) who may not otherwise receive more aid. Additionally, the Conference Committee directs the Department of Elementary and Secondary Education to study the K-12 funding formula, particularly local contributions.
Free Bus Fares Made Permanent
Legislators split the difference between the House and Senate proposals regarding Regional Transit Authorities (RTA). This proposal provides $209 million to RTAs compared to the House’s $204 million and Senate’s $214 million. Importantly, the Conference budget provides $35 million of this funding for fare-free initiatives at RTAs and codifies this program by mandating service be fare-free. Fare-free policies have been very successful at increasing ridership and improving services.
Revenue Shifts to Free up More Money for Budget Appropriations
The Conference Committee adopted the Senate’s proposal to deposit $632 in excess capital gains revenue to various pension funds instead of depositing it all in the Stabilization Fund. (The Senate’s proposal regarding allocation of excess capital gains revenues did not differ radically from the House’s proposal.) In effect, this freed up $632 million in the General Fund, which allowed for greater investments in programs and services funded through FY 2026 budget appropriations. The Conference budget deposits $33 million in excess capital gains revenue into the state’s Stabilization Fund, which currently holds over $8 billion.
Less Funding for Local Aid
Funding for Unrestricted General Government Aid (UGGA) historically increases at a similar rate to tax revenue growth. However, funding for UGGA increased by $14.4 million in the Conference budget as opposed to the Senate proposal of $29 million. Cities and towns rely on this aid to support all local services including public works and first responders. Additionally, a proposal to create a commission to study the current distribution method used to allocate UGGA to municipalities did not make it in the Conference budget.
Housing Safety Net Largely Loses Out in Conference
Housing safety net programs were largely funded at the lower of the two chambers’ proposals. Residential Assistance for Families in Transition (RAFT) received the House’s lower funding proposal of $207.5 million versus the Senate’s proposed $225 million; the Massachusetts Rental Voucher Program (MRVP) received the Senate’s lower funding proposal of $253.3 million instead of $258.1 million; and HomeBASE remains level funded with last year. With rapidly increasing housing costs, anticipated cuts to federal housing assistance programs, and new restrictions on access to state-funded emergency shelter, the adoption of these lower funding levels is detrimental for families at risk of displacement. Based on FY 2025 spending, it is likely that this appropriation for RAFT will run out before the end of FY 2026. Moreover, the state recently announced a partial pause to HomeBASE assistance due to a lack of funds. MRVP is still receiving a funding increase greater than inflation compared to last year, but will need additional investments to meet the level of need we see across the Commonwealth.
Statewide Ban on Mandatory Tenant-paid Broker Fees
On a more positive note for housing, the Conference Committee adopted the Senate’s stronger version of a statewide ban on the practice of requiring tenants to pay real estate broker fees unless the tenant hired the broker. This is an important step toward making our housing market more fair for tenants across the state.
Looming Harmful Federal Funding Cuts
The Conference Committee budget comes at a time when the United States Senate is voting on a reconciliation bill that promises to cut human service programs that low- and middle-income families rely on, like Medicaid and the Supplemental Nutrition Assistance Program (SNAP), while providing tax breaks that largely benefit the wealthiest Americans. The loss of this and other federal funding – such as federal financial aid and changes to the Affordable Care Act – would mean that this Massachusetts budget could experience significant cuts even after it is enacted.
