Read MassBudget’s Statement on Governor Healey’s FY 2027 Budget Proposal.
Below, MassBudget provides a preliminary analysis of Governor Maura Healey’s Fiscal Year (FY) 2027 budget proposal. MassBudget will release an in-depth analysis of the Governor’s FY 2027 Budget Proposal in the coming weeks.
Fair Share surtax revenue continues to support critical education and transportation programs
Governor Maura Healey proposed a Fiscal Year (FY) 2027 budget of $62.8 billion, which includes $2.7 billion from the Fair Share surtax. The proposal also includes a FY 2026 supplemental budget proposal totaling $1.15 billion also from Fair Share, the voter-approved ballot initiative that enacted a surtax on the highest-income earners in Massachusetts. Revenue from Fair Share enables the state to continue making substantial investments in education and transportation programs, including free school meals, free community college, free bus service at Regional Transportation Authorities, and support for early education and child care programs. The Governor’s FY 2027 budget proposes allocating $300 million more in Fair Share revenue compared to FY 2026’s $2.4 billion to fund other programs such as Health and Human Services and Education transportation services.
With federal government funding cuts, the state needs to do more to raise progressive revenue
Changes from the federal government have already impacted the state. Premiums for health care plans available via the Affordable Care Act have increased exponentially after the expiration of enhanced premium tax credits on December 31, 2025, making health care unaffordable for many Massachusetts residents. Looming federal cuts and new harsh eligibility requirements to critical food assistance programs, such as the Supplemental Nutrition Assistance Program (SNAP), the Women, Infant, and Children nutrition program (WIC), and Medicaid will be felt in Massachusetts for years to come. To help the state’s financial stability, the governor’s FY 2027 budget proposal assumes some revenue will be retained by their recently filed legislation to temporarily delay some federal corporate tax changes that would have a detrimental impact on the state budget. The Department of Revenue projects this proposed legislation would save the Commonwealth about $463 million in FY 2026. This is a meaningful first step to ensure the Commonwealth has the revenue to balance its budget and invest in critical programs that help people across Massachusetts thrive. The governor’s budget, however, fails to include other significant revenue raising policy proposals like reclaiming more of the profits multi-national corporations shift to off-shore tax havens.
Resources for K-12 Education support equity
The budget proposal funds the sixth and final year of the Student Opportunity Act (SOA), legislation that makes K-12 education funding more equitable by increasing funding rates for students from low-income families and English language learners. The governor’s FY 2027 budget proposal fully funds the final year of SOA implementation using Fair Share funds. While it is important the SOA is fully funded in its final year, the budget proposal does not address the eroded value of the funding due to recent high levels of inflation.
New asset limit for elderly, disabled and children who are experiencing poverty
The governor’s FY 2027 budget proposes implementing a $2,000 asset limit for the Elderly Disabled and Children (EAEDC) program. This program provides cash support to help older and adults with disabilities, children being cared for by a non or distant relative, and adults taking care of a person with disabilities make ends meet. The EAEDC already has income eligibility limits, meaning that to be eligible the applicant cannot exceed a certain income. Establishing such a low limit on assets in the eligibility criteria, which could include cash, vehicles, property, and retirement accounts, would restrict access for people who critically need this program and discourage people from saving, and potentially transitioning out of poverty. Additionally, enacting asset limits could increase the administrative costs of the program because it requires additional staff and time to determine an applicant’s assets for eligibility purposes.
Budget proposes additional support for housing programs, but increased need requires more significant investments
The governor’s budget proposes just over $1.2 billion in Housing and Livable Communities investments. Compared to the final enacted budget for Fiscal Year 2026, this would be an increase of approximately 2.1 percent after adjusting for inflation. The governor’s proposal includes $82.3 million for HomeBASE, which helps families exiting shelters to afford stable housing. This is a significant increase from the FY 2026 initial appropriation of $57.3 million, but lower than total spending so far in FY 2026 (just over halfway through the fiscal year) after including appropriations later in the year which came from a reserve fund. For Residential Assistance for Families in Transition (RAFT), which provides short-term assistance to residents facing eviction, foreclosure, or other housing emergencies, the governor proposes a decrease of just over $6 million. Due to the continued severity of the Commonwealth’s housing and homelessness crisis, additional funding will likely be needed in order to fully meet the need for these programs.
Grants for child care providers continue to support the sector
Commonwealth Cares for Children (C3), which provides operational funding to Early Education and Care (EEC) licensed providers, would receive $475 million in funding in the governor’s FY 2027 budget proposal. This is the same level of funding the program has received each year since FY 2024. Massachusetts is the only state that continues to sustain this type of program, first enacted during the COVID-19 pandemic with federal funding, but high levels of inflation means that this amount of funds does less and less every year. For example, according to the Department of Early Education and Care, approximately 600 providers who are new to the sector in FY 2026 do not receive C3 grants. With level funding, policymakers are faced with a tough decision: either to include all the providers (current and new) and reduce the level of financial support, or continue to exclude providers who weren’t licensed before the start of FY 2026.
